Volume 49 / 2019

Exploring the Underlying Factors Affecting Capital Structure Decision:A Quantitative Analysis

Author: Nazmul HOSSAIN

Author: Nikhil Chandra SHIL

Author: Nayamot ULLAH

Abstract: Objective: This study deploys an earnest effort to understand the factors that affect the managers involved in managing the portfolio of funding in companies. Capital structure decision is one of the important decisions that finance managers are involved with. This study tries to identify a host of factors controlling the attitude of finance managers in choosing different sources of financing as reflected in financials of respected companies.    

Design/methodology/approach: An exploratory form of research is applied here based on the data available in different secondary sources like the financial statements published by sampled companies. Sample for the study is selected from companies listed in Dhaka Stock Exchange in pharmaceutical, textile and banking sectors. Different descriptive and inferential statistical tools are used to present the data and test relevant hypotheses by using SPSS.

Findings: The study has identified couple of factors affecting capital structure decision based on literature review. These factors are replicated in selected Bangladeshi firms to understand their implications. And the study fails to report any determinants having strong relationship which is statistically significant, however, the model passes goodness-of-fit test and residual analysis shows the presence of normality. 

Research limitations/implications: The findings of the study couldn’t be generalized due to some inherent limitations of the research. The study only covers selective companies from three sectors leaving others from the preview of analysis which limits the scope of the study. However, the finding of the research could be helpful for individual firms to find their status in the recent trend of practicing capital structure decision and thereby they can adopt or revise their policy in this regard. Another major limitation of the study is that it applies a quantitative forms of analysis based on data published in general purpose financial statements. It would be better if quantitative findings could be validated through qualitative analysis to bring data triangulation which is left for further study. Extending the analysis to cover all the firms listed in DSE can give a better look on capital structure issues in Bangladesh.

Originality/value: This study is being conducted for the first time in Bangladesh in order to identify determinants from different theories which will help the future researchers to extend the analysis. Thus, the study adds significant value to the current body of knowledge.

Classification-JEL: C 12; G 32; O16

Keywords: Capital structure; determinants; Dhaka Stock Exchange; Bangladesh

 

 

 

 

Human Development:“Can money buy Happiness?”

Author: Benjamin YAMB

Author: Jean Louis EKOMANE

Abstract: What is the relationship between the amount of money in circulation in an economy and the level of development of that economy? This is the question we seek to answer in this work. It falls within the scope of development monetary macroeconomics, applied to one hundred (100) countries selected among the 186 classified by the UNDP. This classification is done according to their Development index level, represented by the Human Development Index (HDI). For all these countries, we analyze the impact of money, measured by the macroeconomic liquidity ratio M2/GDP on HDI level. Empirical verification is based on data from the 2015 World Bank’s ranking. This aims at determining the meaning and degree of money impact on human being’s integral development. Our study finds that "money provides happiness" much more in poor countries than in rich ones, while this link is much more mitigated in emerging countries.

 Classification-JEL: E51, I31, O11, O15, O57

Keywords: money, Human Development Index, happiness, poor and rich countries, BRICS

 

Infrastructure, Employment And Income Convergence

Author: Didit Welly UDJIANTO

Author: Joko SUSANTO

Author: PURWIYANTA

Abstract:  This study analyses the income convergence in the Gunungkidul Region, Indonesia and the role of infrastructure and employment in supporting this convergence. The data published by the Central Bureau of Statistics is used in this study. Then, this study uses the regression analysis of dynamic panel data to see whether the poor district will tend to grow faster than rich ones so that all economies will eventually converge in terms of per capita income. The results show that there is an income convergence in Gunungkidul Region. The infrastructure and employment are a useful tool for supporting income convergence.

Classification-JEL: O18; R11

Keywords:  infrastructure; employment; income; convergence; growth

 

Iterative data quality management system

Author: Svetlana JESIĻEVSKA

Author: Daina ŠĶILTERE

Abstract:  High-quality data are the precondition for analyzing and using statistics and for guaranteeing the value of the data. In this paper, the Iterative data quality management system is proposed. The methodology consists of two methods developed by the authors - the Iterative method for the reducing the impact of outlying data points in 2015 and the Data Quality Scale in 2018. The novelty of the Iterative method for the reducing the impact of outliers is the following: an iterative approach for determining the outlying data points is proposed; outliers are determined considering the impact of conjoined factors; estimation of weight coefficients of the outliers and estimation of the total measurement error of the non-linear regression model is carried out. The Iterative method received the Young Statistician Prize of the International Association for Official Statistics (IAOS) in 2015. The Data Quality Scale has good expansibility and adaptability as makes it possible to evaluate the quality of data at various levels of detail: at indicators’ level, at the level of dimensions, and to determine the entire quality of data. The Data Quality Scale gives an opportunity to identify certain shortcomings of the quality of statistical data and to develop proposals to improve the quality of the data. The research results enrich the theoretical scope of the statistical data quality and lay a solid foundation for the future by establishing an assessment approach and studying evaluation algorithms.

Classification-JEL: C10, C80

Keywords:  data quality, data quality dimensions, Data Quality Scale, Iterative method for reducing the impact of outlying data points

 

Curvatures of Productivity, Elasticities of the Output and Stages of Production

Author: Florin Marius PAVELESCU

Abstract: As a rule, the concept of marginal productivity is used in order to determine the efficient distribution of incomes or optimal levels for inputs allocations in the context of diminishing marginal returns. But the definition of the concept of the endogenous economic growth imposed the relaxation of assumptions on the feature of the marginal returns, admitting that it is possible, in certain situations, to deal with both increasing and decreasing marginal returns. This paper defines a neoclassical production function with one input, which admits both the increasing and decreasing marginal returns and, in certain manner, the existence of the Jevons paradox. The respective production function is then used for the analysis of the curvature of the marginal and average productivity and of the elasticity of the output. On this basis, we are able to reconfirm the neoclassical assumptions on the size of the elasticity of the output in the context of the decreasing marginal returns and output maximization, on the one hand, and to show that in the context of a convex curvature and of increasing of both average and marginal productivity the elasticity of the output is higher than 2, on the other hand. Also, it is propsed a redefinition of the notion of stages of production considering the features of the curvature of the average productivity and of the elasticity of the output.

 Classification-JEL: B13, C02, D21, D24, J24

Keywords: non-constant marginal returns, third derivative, neoclassical production function, efficiency parameter, Jevons paradox, elasticity of the output, inflection point, stages of production