Original Research Article

MODERATING EFFECT OF BOARD INDEPENDENCE ON THE RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND PROFITABILITY OF LISTED INDUSRIAL GOODS COMPANIES IN NIGERIA

HABIB ABDULKARIM, SALEH MOHAMMAD BAHAMMAN

Journal of Economics and Trade, Page 1-12

Owing to inconclusive results on the relationship between capital structure and profitability world over, there is need to take into consideration a moderating variable to strengthen the relationship. This study therefore, introduces board independence as moderator to examine its effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria for the period 2006-2018. The population of the study comprises of all the twenty one (21) listed industrial goods companies in Nigerian Stock Exchange (NSE) as at December, 2018. Out of which ten (10) companies constitute the sample of the study. The study utilized documented data collected from annual reports and accounts of the sampled companies, data was first analysed by means of descriptive statistics to provide summary statistics for the variables subsequently, correlation analysis was carried out using Pearson correlation technique for the correlation between the dependent and independent variables and OLS regression technique was employed. The results revealed that capital structure proxy by debt to equity ratio has a significant positive impact on profitability while board independence provides negative and significant effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria. Based on these findings the study recommends that policy makers as well as the management of industrial goods companies should identify the optimal capital structure as well as complying with the code of corporate governance in ensuring perfect mixture of board independence as some of the companies are not abiding by the 50% mixture between the executive and non-executive directors in the board.

Original Research Article

TARIFF RATE PASS-THROUGH: BUYER POWER AND PRODUCT DIFFERENTIATION EFFECTS

RALPH SONENSHINE, MICHAEL LIFSCHUTZ

Journal of Economics and Trade, Page 13-23

A key tenet of economic theory is that the economic actor who pays the tax is not necessarily the same as the actor who bears the burden of a tax. Tariffs, like any tax, result in higher domestic prices.  The question is whether tariffs completely pass through to domestic prices, or whether foreign producers will bear part of the burden.  This study seeks to shed light on this issue by assessing how tariff rate pass-throughs vary with product differentiation and buyer market concentration. The study covers selected manufacturing sectors from 1996 to 2015, a period when tariff rates were declining. We find that tariffs pass through incompletely to import prices in more differentiated domestic product-markets. We also find tariffs incompletely pass through in more concentrated product markets, but tariffs will completely pass through in more commodity-oriented product-markets, as buyer market concentration increases.

 

Original Research Article

ANALYZING THE UNCONVENTIONAL MONETARY POLICY AND CORONA VIRUS (COVID-19) PANDEMIC IN NIGERIA: ITS IMPLICATION TO THE ECONOMY

CHINONSO TAMUNOWARIYE, OTEKENARI DAVID ELISHA

Journal of Economics and Trade, Page 24-33

The CBN's reaction to the highly regarded COVID-19 pandemic had become unavoidable given its critical unfavorable ramifications for both the worldwide and the Nigerian economies. The advancement had prompted "remarkable disturbances in worldwide gracefully chains, a sharp decrease in unrefined petroleum costs, unrest in worldwide stock and money related markets, far reaching undoing's in brandishing, amusement and business occasions, the lockdown of huge areas of developments of people in numerous nations, and intercontinental travel limitations across basic air courses on the planet. These results have had genuine antagonistic ramifications for key areas, including yet not restricted to oil and gas, carriers, assembling, exchange and customer markets. It is on this scenery that the CBN presented some unconventional monetary policy focused to impact macroeconomic results development, swelling, and conversion scale during this pandemic emergency. Its devices incorporates, resource buys (quantitative facilitating), broadened liquidity activities, negative financing costs and forward direction. The effect of the unconventional monetary policy incorporates, supporting budgetary soundness and financial action, staying away from a lot further downturns that would somehow have happened in Nigeria because of the COVID-19 pandemic. Discoveries from the investigation uncovers the need to corporate unconventional monetary policy measures with counterbalancing policy measures to sanctioning certain large scale prudential measures and fortifying the financial association, upgrading the structure of liquidity infusions with proper motivating force plans demonstrated helpful in diminishing unfavorable impacts and others. The examination presumed that CBN is as a rule proactive in adverting the effect of the COVID-19 and further suggested the expansion of the ban on the peak bank's intercession, fortifying the CBN's Loan to Deposit Ratio (LDR) policy and administrative self-control, augmentation of mediation offices to give advances to pharmaceutical organizations aiming to grow/open their medication producing plants in the nation.

Original Research Article

PERFORMANCE EVALUATION OF CROP INSURANCE SCHEMES IN HARYANA

DEEPAK KUMAR, SUNIL PHOUGAT

Journal of Economics and Trade, Page 34-39

Agriculture sector performs a vital role in developing the Indian economy and it can be considered the backbone of the industry and service sector. Agriculture sector still depends upon the weather and climate conditions, which is always uncertain and unpredictable. Crop insurance is one of the ways through which the farmers may be protected from the financial loss of their crops against the natural disasters. The study is an attempt to assess the performance of the crop insurance schemes implemented in Haryana. Economic survey of Haryana and the annual reports of the Agriculture Insurance Company (AIC) for several periods were examined. The result of the study indicates that only few schemes are implemented in the Haryana in comparison to other states of India. The Pradhan Mantri Fasal Bima Yojana performs better continuously and proves beneficial for the farmers of Haryana. As a policy implication, policymaker should frame a provision of no claim bonus for the farmers to encourage them towards crop insurance scheme.

Original Research Article

A STOCK PRICE CRASH RISK EXPERIENCE AND ITS EFFECTIVE FACTORS IN COMPANIES LISTED IN THE TEHRAN STOCK EXCHANGE

ALBERT BOGHZIAN, MOJTABA MIRLOUHI, NASER ASGARI, MORVARID KHAJEH

Journal of Economics and Trade, Page 40-48

Mispricing of assets usually leads to a stock price crash. Therefore, identifying the effective factors of mispricing can facilitate the forecast of this phenomenon and help agents to predict future stock return more accurately and diagnose the price bubble in their portfolio at the right time. In this way, they maintain low-risk stocks and reduce stock price crash risk. This study aims to study the experience of stock price crash risk in companies listed in the Tehran Stock Exchange over the period 2009-2020. For this purpose, the generalized method of moments (GMM) is used. Monthly data are used for the research. The results indicate a positive and significant relationship between stock price volatilities, stock price crash risk, and future stock return.