Roles of Corporate Governance and Ownership Structure in Dividend Smoothing Behavior of Asian Firms

by: Shakil Ahmad, Zulfiqar Ali Shah, Arshad Ali Bhatti

The study explores the determinants of dividend smoothing behavior of Asian firms for 2009-2018. The study used a firm's specific characteristics, corporate governance, and ownership structure variables as determinants of dividend smoothing in some Asian markets (Pakistan, India, Sri Lanka, Malaysia, and Singapore). Based on gender critical mass theory, the study finds the presence of gender-critical mass is positive and significantly associated with firm dividend smoothing behavior; whereas, the presence of fewer women depicts a negative or insignificant association with dividend smoothing behavior. The moderating role of gender diversity between family ownership and dividend smoothing is also examined. Further, contrary to the agency theory-based explanations of dividend smoothing, we find that family firms follow a smooth dividend policy. These findings suggest that gender-critical mass, family ownership, and higher market to book value contribute positively to dividend smoothing behavior in the Asian market.

Publication Link: https://tuengr.com/V11A/11A13TM.pdf

The Income Tax Impact on Macroeconomic Indicators: A CGE Inquest for Pakistan Economy

 By: Ghulam Moeen-ud-Din, Arshad Ali Bhatti, Hasnain Abbas Naqvi

This study is to analyze the impact of an increase in income tax on Pakistan economy`s selected indicators like GDP, national income, imports, exports, the balance of trade, private and public sector investment. The assessment utilizes the latest SAM 2010-11, developed by Dorosh et al. (2015), for Pakistan`s economy and uses a Computable General Equilibrium Model, consistent with Lofgren et al. (2002). To investigate the effect, two experiments of 5%, and 10% increase in income tax are performed. The results reveal that increase in direct tax results in improvement with regards to all important macroeconomic indicators. However, rural households’ categories express lesser improvement in comparison to urban households’ groups. Our experiment suggests that an increase in income tax should steadily be implemented to overcome the deficit in the public budget. 

Publication Link: https://qurtuba.edu.pk/jms/default_files/JMS/14_2/14_2_10.pdf

Developing a Financial Stress Index for Pakistan

by: Haleema Sadia, Arshad Ali Bhatti, Eatzaz Ahmad

Abstract 

This paper develops a financial stress index for the Pakistan economy covering the post-reform period. We use time series data for the period 1993M1-2016M12 and employ principal component analysis to aggregate various components of financial markets, real economic activity, and political risk in a single financial stress index. The computed index successfully explains the known periods of financial stress in Pakistan. It stresses upon the political and economic risks as important contributors of financial stress along with financial market factors. This composite index assesses the stability of the financial system, which is a public policy concern in most emerging economies. Thus, we believe that it can serve as an important benchmark to describe the systemic risk in the financial system.

Pub. Link: https://imsciences.edu.pk/files/journals/vol11_2019/New%205%20M.pdf

Measurement and Determinants of Multi‐Factor Productivity: A Survey of Literature

By: Tauqir Ahmed &  Arshad Ali Bhatti

This paper surveys and synthesizes fast‐growing literature on the measurement and determinants of multi‐factor productivity (MFP). We identify three strands of the literature to measure MFP: the first is growth accounting, which decomposes observed economic growth into the contribution of factor inputs and technological change, called the Solow Residual; the second is index number methods, accompanied by frontier techniques; the third is growth regressions and econometric methods used to estimate productivity across countries and regions. We keep our focus on assessing the major strengths and weaknesses of commonly used methods for MFP measurement and categorize existing literature on the determinants of MFP growth into macroeconomic and institutional factors. We attempt to provide a reassessment and thematic survey of literature on the drivers of aggregate productivity, enabling policymakers to formulate effective economic policy.

Publication Link: https://onlinelibrary.wiley.com/doi/abs/10.1111/joes.12360