Imtiaz Arif

Validity of capital asset pricing model in Pakistan: Evidence from Karachi Stock Exchange

This study investigates the validity of capital asset pricing (CAP) model in Karachi Stock Exchange (KSE). The data used in this study were collected from 387 companies of 30 different sectors on monthly, quarterly and semi-annual basis. The Paired sample t- test is applied to find the difference between actual and expected returns. Results show that capital asset pricing model (CAPM) predict more accurately the expected return on a short term investment as compare to long term investment. It is recommended that the investors should more focus on CAPM results for short term as compare to long term investments in KSE.

Students’ dependence on smartphones and its effect on purchasing behavior

Purpose – The purpose of this paper is to explore how social need, social influence and convenience affect dependence on smartphones and purchasing behavior among university students in Pakistan’s emerging economy. Design/methodology/approach – Survey methods and non-probability purposive sampling were used to collect data from 337 respondents, and structural equation modeling was used to test the hypothesis. Findings – Overall the results provided evidence that social need, social influence and convenience significantly affect students’ dependence on their smartphones. A significant relationship also existed between students’ dependence on smartphones and their purchasing behavior. Originality/value – The availability of 3G/4G mobile networks and the growth in smartphones’ computing power have meant that this form of mobile technology is in great demand. This study provides an exclusive viewpoint concerning students’ dependence on smartphones and the effect of this on their purchasing behavior, which is ...

Working capital management and firm's profitability in Pakistan: A disaggregated analysis

This study investigates the effects of working capital management on firm’s profitability in Pakistan by using average annual cross sectional data from 2004 to 2009. Four different sectors namely textile, chemical, engineering and sugar and allied are considered. Inventory turnover, average payment period, current ratio, firm size, average collection period and debit ratio are used. Regression results indicate that average collection period has insignificant effects on profitability except in sugar and allied sector. At the same time debit ratio also has insignificant effect on profitability except in engineering sector. Furthermore average payment period has insignificant effect only in sugar and allied sector. Inventory turnover, current ratio and firm size has significant effects on profitability in all sectors. Sensitivity analysis confirms that the results are robust. n n xa0 n n Key words:xa0Working capital, firm’s profitability, cross section data, sensitivity.

Comparison of Islamic Banks with Conventional Banks: Evidence from an Emerging Market

This paper evaluates and compares the performance of Sharia-compliant banks with their conventional counterparts operating in Pakistan. Data of five full-fledged Islamic banks and fifteen conventional banks, all from Pakistan, have been used for the study. Study period comprises of six years from year 2008 to year 2013. Banks orientation, competence, quality of assets and stability are the measures used to compare the performance of Shariah compliant and conventional banks. The Islamic banks in Pakistan are younger in age and smaller in size compared to the conventional banks. Based on the financial ratios of two types of banks, we find that the business model of Islamic banks is inferior to the model of conventional banks. Islamic banks are less cost efficient than conventional banks. However, Islamic banks have superior asset quality with better bank stability position. Further, we have compared the market efficiency measures of Shariah-compliant and Conventional banks. Liquidity and volatility measures are examined to compare the two banking systems based on daily observations from January 1, 2007 to June 30, 2013. Only two Islamic banks and fourteen conventional banks are listed on the Karachi Stock Exchange of Pakistan. Bid-Ask Spread and Amihud illiquidity ratio are used to check liquidity in the market, whereas, relative high-low price volatility is the measure to check daily price volatility. We find that Islamic bank stocks are less volatile compared to conventional banks after controlling for factors that influence price volatility measure. But we find mixed evidence on liquidity measures for two types of banks.

Corruption, governance, and tax revenue: evidence from EAGLE countries

Abstract This study addresses the influence of corruption and governance on the tax revenue collection in emerging and growth-leading economies (EAGLE). To serve the purpose, the study employed a panel dataset of 10 EAGLE nations from 2001 to 2015. After checking the data for unit root and cointegration, the study employs pooled mean group estimations to formulate empirical findings. The results suggested that corruption and governance has a positive and significant impact on the tax revenue collection of the emerging economies. The study emphasizes on enhancing the governance quality and reducing rate of corruption. To do so, the countries need to implement certain policy reforms such as an efficient and strict judicial system, introducing monetary benefits for the tax officers to reduce the opportunity of corruption, and more importantly to broaden the tax base instead of increasing the tax rates. By doing so, the tax administration will become better and hence the overall tax revenue collection of the economy will improve.

Where does a nation's wealth go? Evidence from a third world country

Purpose The Study determines the preferable destinations of money laundered from Pakistan through Walker’s Gravity Model and also estimate the amount of money laundered through data consist of 156 countries. The research aims to facilitate policy makers and regulators to provide more efficient guidelines to counter the problem of money laundering. Design/methodology/approach The paper goes for the descriptive and quantitative approach. This study uses Walker’s Gravity Model updated by (Unger et al, 2006) to measure money laundering in Pakistan, Walker’s Gravity Model was first developed by John Walker in 1994. Findings Results indicate that Pakistani money launderers preferred countries having large financial sectors and political stability to hide their illegal money. Research also estimates the amount of money laundered and shows that Pakistan has lost the bulk of funds. Research limitations/implications The major limitation is non availability of reliable data as the activity is hidden. Reliable data i...

External resources and economic growth: New evidence from EAGLE countries using PMG framework

ABSTRACT This study attempts to explore the relationship between economic growth and external resources in the case of emerging and growth-leading economies (EAGLE). Among these economies, a panel of eight countries was studied over the period of 1986–2014. Empirical analyses were performed using panel cointegration and pooled mean group framework. Our findings support positive long- and short-run relationships between imports and gross domestic product (GDP). The results also reveal a negative and significant long-run relationship between foreign direct investment and GDP, whereas no significant evidence has been noted for the short run. Moreover, remittances in EAGLE countries have failed to justify any contribution to GDP in both long and short runs.