Higher education and growth performance of Pakistan: evidence from multivariate framework

This study investigates the relationship between higher education and economic growth in Pakistan by using the annual time series data from the period of 1980–2011. The ARDL bound testing cointegration approach confirms the valid positive relationship between higher education development and economic growth in long run as well as in short run. Results of Granger causality test, Toda and Yamamoto Modified Wald causality test and variance decomposition test confirm the bidirectional causal relationship between higher education and economic growth in Pakistan. Results of rolling window estimations suggest that the contribution of higher education in economic growth is significantly increased after the formation of higher education commission of Pakistan in 2002. It is clear from our findings that higher education commission plays an important role in the development of higher education in Pakistan which leads to enhance economic growth. It is recommended that policy makers should make policies to strengthen the higher education commission to ensure continuous and rapid economic growth in Pakistan.     

The impact of oil prices and the financial market on cost efficiency in the insurance and Takaful sectors: Evidence from a stochastic frontier analysis

The Gulf Cooperation Council’s (GCC) insurance industry, including conventional insurance and Takaful, has witnessed remarkable growth during the last decade. However, the economies of this region rely on oil as the primary stream of revenue and lack development in financial markets. This could affect the insurance industry. For this reason, this paper examines the impact of oil prices and the financial market on the cost efficiency of the insurance and Takaful sectors in GCC countries using a stochastic frontier cost function with data from 2009–2016. The results show that the relationship between oil prices and efficiency changes from positive to negative when the prices increase, whereas the relationship between the financial market and efficiency is negative. No clear evidence of the impact of oil prices on efficiency arises from the differences between conventional insurance and Takaful. However, there are differences regarding the financial market, with a negative impact on conventional insurance and a positive one on the Takaful business. The results of this study have implications for regulators and management. The Takaful industry is rapidly growing compared to conventional insurance in the GCC and, therefore, the financial market may have added benefits for the GCC region. However, caution is required in relation to the impact of the financial market on conventional insurance. Furthermore, management may require the development of strategies to deal with the nature of GCC economies to avoid shocks to oil prices.     

Target's organisational form and returns to Australian bidders in cross‐border acquisitions

We present large sample evidence on return performances of Australian acquirers who bid for public and private targets in cross‐border acquisitions. While placing a particular emphasis on the method of payment and the shareholder protection offered by the target country, we analyse the impact of various bid, firm and foreign‐acquisition‐specific characteristics on bidding firms' abnormal returns. We find that Australian investors perceive cross‐border acquisitions as value‐creating exercises regardless of the organisational form of the target acquired. However, bidders for private targets earn higher return when the method of payment is stock and the targets are located in high investor protection countries. We further find that the abnormal returns are conditional to the relative size of the target, bid frequency, target country destination and the preacquisition financial performance of bidding firms.     

Foreign capital inflows, economic growth and stock market capitalization in Asian countries: an ARDL bound testing approach

This study investigates the effects of foreign capital inflows and economic growth on stock market capitalization in 18 Asian countries by using the panel data from the period of 2000–2010. The ARDL bound testing cointegration approach confirms the valid long run relationship between the considered variables. Results indicate that foreign direct investment has significant negative and economic growth has significant positive relationship with the stock market capitalization, whereas, the results of workers’ remittances is found insignificant in long run. The error correction model confirms the significant positive relationship of economic growth and workers’ remittances while, FDI has negative and significant impact on stock market capitalization in short run. Results of causality test based on Toda and Yamamoto (J Econom 66: 225–250, 1995) show the bidirectional causal relationship of foreign direct investment and economic growth with stock market capitalization. However, no causal relationship is found in between workers’ remittances and stock market capitalization. It is suggested that investor should not idealize the inflow of workers’ remittances to invest in Asian stock markets in long run. Simultaneously, size of the economy is a better leading indicator for Asian stock markets. On the other hand, inflows of FDI may mislead the investor to invest. Investor should keep on eye whether FDI come in the competition of domestic market or not? If this happens so investor should not invest in the stock market of host country.     

Does the famine experience of board chair hamper innovation?

This study examines whether and how the famine experiences of board chairs influence the innovation of their firms. Results using a sample comprising 8882 firm-year observations from Chinese firms during the period 2003 to 2017 reveal that the board chair's famine experience has a negative effect on innovation. This negative effect is strengthened by famine intensity and high uncertainty. The obtained results are robust to alternative measures, endogeneity issues, omitted variables, and sample selection bias. Additional analyses showed that the relationship between board chair's famine experience and innovation is mediated by cash holdings and R&D investment. The overall results contribute to imprinting theory by explaining that early-life famine experiences of board chairs create survival threat imprints among them, eventually affecting their later-life behaviors. The findings also provide implications by highlighting how the early-life traumatic experiences of executives adversely influence their firms outcomes.     

Spillover effects of FDI inflows on output growth: An analysis of aggregate and disaggregated FDI inflows of 13 MENA economies

This paper examines the effect of foreign direct investment (FDI) inflows on overall growth, as well as its sector-specific spillovers in the Middle Eastern and North African region during the period from 2000 to 2020. Our major innovation is our ability to disaggregate FDI into primary, secondary and tertiary and examine their individual impact on growth, as well as their sector-specific spillovers by using dynamic panel GMM methodology. We find prima facie evidence that total FDI significantly stimulates growth. However, when we turn to the disaggregated FDI data, primary sector FDI adversely affects the gross domestic product (GDP) growth in the service sector and overall GDP growth. On the other hand, secondary FDI has a ‘double-edged’ effect, benefiting its own sector (the service sector's GDP growth), but not other sectors. In contrast, service sector FDI stimulates GDP growth in mining, manufacturing and service sectors, thereby enhancing overall economic growth. Our findings have important policy implications regarding the incentives provided by governments to encourage FDI, which need to be fine-tuned to attract certain types of FDI (tertiary), with less focus on the primary sector     

Board gender diversity and acquisition choices

We investigate the influence of gender diversity on the acquisition choices of bidding firms and find that firms with greater gender diversity are more likely to acquire nonlisted targets, use cash as the method of payment, and purchase firms in similar industries. Results show that these preferences are significantly influenced by female directors' financial expertise, target industry experience, mergers and acquisitions (M&A) experience, academic and professional qualifications, and networks. The percentage of female directors on boards is positively correlated with the market response to the announcement of acquisition choices preferred by female directors. Furthermore, bidders improve efficiency and accumulate long-term value gains through the contributions made by their female directors to these acquisition choices.     

The pattern of specialization and economic growth: The resource curse hypothesis revisited

This paper explores the relation between countries’ pattern of trade specialization and long-term economic growth. It shows that countries specializing in the export of natural resource based products only fail to grow if they do not succeed in diversifying their economies and export structure. This conclusion follows from an empirical investigation that has three innovative features. First, it uses a dynamic panel data analysis. Secondly, it employs disaggregated trade data sets to elaborate different measures of trade specialization that distinguish between unprocessed and manufactured natural resource products and are informative about the countries’ trade diversification experience, their link to world demand trends and involvement in intra-industry trade. The final innovative aspect of the paper relates to our empirical findings: it is only specialization in unprocessed natural resource products that slows down economic growth, as it impedes the emergence of more dynamic patterns of trade specialization.     

The internationalization of an Arab bank: The case of Ahli United Bank of Bahrain

Ahli United Bank of Bahrain (AUB) has “leapfrogged” over early stages of internationalization by means of multiple rapid acquisitions of competitors. Use of this high‐cost, high‐risk strategy is well known among companies with the resources to invest in international expansion, but its application has not yet been studied in depth among companies based in the Middle East. This theory‐driven case study examines the growth record of AUB, its place in the regional banking industry in the Gulf, and its successful internationalization as an Arab bank. The article concludes with a detailed assessment of managerial and theoretical implications arising from the case study, and proposes further research to understand better the process of internationalization by companies expanding from a base in the Middle East. © 2011 Wiley Periodicals, Inc.     

Intraday trading volume and international spillover effects

The objective of this paper is to explore whether lagged trading activity in one market contributes to the return and volatility process in other markets, using 5-min concurrent data from German and British equity market. Our results lend support to our initial premise that if international investors have access to the same information set as domestic traders, then after observing foreign trading activity, market makers adjust prices to reflect their expectation of the security value, conditional upon all available information, including prior trades. Our findings clearly indicate that intraday trading volume contains predictive power for cross-border return and volatility processes. Moreover, these volume effects are found to be asymmetric in the sense that the impact of positive volume changes upon foreign stock market volatility is greater than is the impact of negative changes.