Published Research Papers in Economics
Corporate Governance and its Impact on Firm Risk
The aim of this research is to explore the relationship of corporate governance with firm risk. This study establishes a link between corporate governance variables and firm risk for a sample of 106 Pakistani firms over a time of six years (2005-2010). Based on the estimation results, family control and bank control have negative impact on the firm risk whereas ownership structure and chairman/CEO duality posit positive relationship with risk. This provides a direction for firms to introduce more non-family control to the board of directors and not allow banks to have majority shareholding in their stocks. Also, directors should be asked to have a reasonable ownership in the stocks of the firm so that they can decide in the best interest of the firm and for the increase of their stock value. Chief executive should also hold the chair in order to have unity of command and a better decision-making influence.
Terrorism and Stock Market Development
The aim of this paper is to explore the relationship between terrorist activities in Pakistan and the stock market development. Using Terrorism Impact Factor (TIF), a unique score developed for this paper, an insight is provided into the causal relationship that exists between terrorism and Karachi Stock Exchange (KSE) index. Quantitative significance of the impact of terrorist activities on stock index is also discussed in the paper. Through the empirics of the study, it is analyzed that terrorism negatively impacts stock market returns in the long run; whereas no significant relationship between stock market returns and terrorism is estimated in the short run. It is recommended that governments pay particular attention to economic recovery in the aftermath of terrorist attacks. Policies aimed at combating terrorism must be the priority of the government, so that its harm can be reduced, if not exterminated.
Crisis Transmission: Global Financial Crisis
The aim of this paper is to explore, empirically, the channels of crisis transmission with regard to the Global financial crisis. EMP-based crisis proxy is used for eight countries, which include Argentina, Brazil, Canada, Indonesia, Japan, Korea, Mexico and Russia. The period considered for estimation was Q1 2001 – Q2 2010. Based on the Vector Auto-Regression (VAR) and Ordinary Least Squares (OLS) specification, it is concluded that the competitive devaluation effect did not play significant role in the transmission of the crisis. Wake-up call and Cash-in effects were the major contributing transmission channels for Global financial crisis. Indonesia, Japan and Russia showed signs of wake-up call effect, whereas Brazil and Japan recorded cash-in effect.
Financial Crisis in Asia: The Transmission
Primary objective of this paper is to empirically explore the nature of crisis transmission in Asian countries. We used estimation techniques based on Vector Auto-Regression (VAR) and OLS specifications and found out that: i. During the crisis, Japan and Jordon did not respond significantly to the crisis from other countries. Indonesia was impacted by crisis from Nepal and Thailand. Sri Lanka was subject to crisis from Indonesia and Thailand. ii. Israel had strong impacts on the almost all the countries. iii Except for Indonesia, competitive devaluation did not play important role in the transmission of crisis. Indonesia, Sri Lanka and Thailand showed significant signs of wake-up call effect. iv During the Asian Financial Crisis, crisis transmission was more significant than non-crisis periods.
Home Equity Bias: The Downward Trend
The aim of this paper is to empirically explore the factors that contribute towards lessening of home equity bias or increase in foreign diversification. Using the foreign diversification of nine developed countries over a period of fifteen years and studying the effects of six influential variables in this regard, we have tried to understand some aspects of the home equity biasness. We have seen that home equity bias is a phenomenon that is becoming extinct now, with investors diversifying their portfolios internationally. Our panel regression (random effects) results estimate that trade openness and easy access to information are two of the main reasons that have majorly contributed towards lessening of home equity bias.