Impact of ethical leadership on creativity: the role of psychological empowerment

This study examines the relationship between ethical leadership and employee creativity with mediating role of psychological empowerment. Data were collected from 183 supervisor–subordinate dyads in different hotels across Pakistan. Confirmatory factor analysis confirmed the distinctiveness of variables used in our study. The results also confirmed that ethical leadership promotes creativity at workplace, while psychological empowerment mediates the effect of ethical leadership on creativity. The cognitive evaluation theory was used to support findings. Implications are also discussed.     

EQUITY CAPITAL, PROFIT SHARING CONTRACTS, AND INVESTMENT: THEORY AND EVIDENCE

The potential effect of financial variables on the level of investment is among the key issues in contemporary financial economics. Some researchers have claimed that there is an inherent risk in the Islamic profit-and-loss sharing scheme that replaces the western fixed-interest rate system. This paper argues that such concerns are baseless. In an Islamic framework, equity capital (i.e., strong financial position) and the profit-sharing ratio are primary determinants of investment. It is shown that both factors could enhance the firm's business reputation and its investment activities. The paper, in so doing, constructs a two-period equilibrium model of profit-sharing contracts. An optimal solution for the investment function is derived for the banking firm. Besides equity capital and the profit-sharing ratio, other relevant determinants of investment are also considered, including depreciation and expected inflation. Moreover, unlike most previous research in this area, the resultant investment (and profitsharing ratio) functions are subjected to empirical testing using data from a representative Islamic bank.     

Risk and marketing behavior: pricing fed cattle on a grid

A seven‐year comparative study of grid pricing versus average pricing of slaughter cattle was conducted to evaluate carcass quality market signals. The primary objectives of the study are to determine: (1) if market signals sent through the grid pricing system indicate an improvement in the grid incentive mechanism over time, (2) how changes in the grid premium and discount structure associated with carcass quality affect the market risk premium, and (3) if changes in price risk (variance) affect producer marketing decisions. An Exponential‐Autoregressive‐Conditional‐Heteroskedasticity‐in‐Mean (EARCH‐in‐Mean) modeling procedure was adopted. Empirical results suggest that the grid premium and discount structure is slowly adjusting carcass quality market signals to encourage marketing on a grid and discourage marketing by the pen. The inclusion of the conditional variance in the empirical model indicates that variance associated with the carcass quality risk premium adds financial risk associated with the adoption of grid pricing.     

A note on pro-poor social expenditures

This study extended the concept of ‘pro-poor growth’ in terms of social expenditures that measure whether social expenditures are pro-poor or not pro-poor. Using the idea of pro-poor growth, this study examines as to what extent the poor benefited from the growth of social expenditures i.e., human development, rural development, safety nets and community services. The monotonicity axiom sets out a condition that the proportional reduction in poverty is a monotonically increasing function of the pro-poor growth. This study satisfies the monotonicity criterion relative with social expenditures and proposes a ‘poverty equivalent social expenditure rate’, which takes into account both the magnitude of social expenditures growth and how the benefits of these expenditures are distributed to the poors and the non-poors. This methodology is applied to Pakistan’s unit record household surveys during the periods of 1964–2011 (21 household surveys) and examines the interrelationship between social expenditures, inequality, and poverty. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The results found that the social expenditures in Pakistan are not intrinsically pro poor. Although it was strongly pro poor in the 1980s and pro poor in the 1990s, growth in the 1970s and 2000s was anti poor, if the poverty related social expenditures still remains anti-poor in the subsequent years as reflected in the years 2008–2011, there is a likelihood that these expenditures may not trickle down to the poor but instead to the non-poor. It is indicative that to achieve rapid poverty reduction, the poverty equivalent growth rate ought to be maximized rather than the actual growth rate of social expenditures in Pakistan.     

Fiscal and External Deficits Nexus in GIIPS Countries: Evidence from Parametric and Nonparametric Causality Tests

International Advances in Economic Research - This paper investigates the relationship between fiscal and external deficits in five European Union countries (Greece, Ireland, Italy, Portugal, and...     

Labor Inflow Induced Wage Inequality and Public Infrastructure

By making use of a simple general equilibrium model of a small open economy, the author examines the link between labor mobility and the size of wage inequality in the presence of productive public infrastructure. The paper shows that the provision of public infrastructure plays an important part in determining the size of labor inflow induced wage inequality. Specifically, it shows that, irrespective of the relative factor intensities, a small inflow of either skilled or unskilled labor does not affect the size of wage inequality if private industries derive equal benefits from public infrastructure provision. A small inflow of skilled (unskilled) labor increases (decreases) wage inequality if skilled (unskilled) labor intensive industry derives more benefits from public infrastructure.     

Value chains in the informal sector: income shares of home‐based subcontracted workers in Pakistan

This article attempts to contribute to the literature by carefully documenting home‐based work in four sectors in Pakistan in a value chain context. We attempt to isolate and compare the unit remuneration of workers relative to unit value added at the lowest tier of the chain as a measure of income share. These income shares are not adequate to move home‐based workers above the poverty line.     

Financial Restructuring and Economic Growth in Thailand

Abstract

After a sharp downturn in 1998, the Thai economy has up until 2003 registered a strong growth. There has also been a significant increase in exports as a percentage of the gross domestic product (GDP). While examining the performance of the Thai economy, this paper pays special attention to the factors that contributed to the Asian financial crisis of 1997–1998. Owing to increased financial rather than trade liberalization facilitated by improvements in communications technology, it is virtually impossible to eliminate the possibility of crises in the future. Through sound macro-economic management polices it is however possible to reduce the frequency of crises and their subsequent impact on the real economy. This paper suggests policies that may help to reduce the risk of similar crises in the future.