Revista de Economía y Negocios

The paper examines the relationship between stock market returns and selected macroeconomic variables and examine the impact of macroeconomic uncertainty on stock market volatility in Sri Lankan stock market. Interest rate, inflation, money supply and exchange rate are selected as a set of exogenous variables to represent the macroeconomic factors that influence the stock market, returns and volatility. The sample includes monthly stock market index and macroeconomics data from 1998 to 2016 covering 228 data points. In achieving research objectives, Vector Error Correction Model (VECM) and Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH) models are specified and estimated.

The results of Johansen Juselius co-integration test indicate a long run relationship between macroeconomic variables and stock returns. Particularly, the results of co-integration test suggest that there is a significant negative effect of Treasury bill Rate (TBR) and Exchange Rate (EXR) on stock returns while significant positive long run effect of Money Supply (MSI)/Inflation (INF) on stock returns. The Error Correction Term (ECM) in the VECM model indicates only 4.1 percent of the long run shock adjusted in the short run period and supports the argument of weak form of market efficiency in the Colombo Stock Exchange (CSE), Sri Lanka. Further, the results of the EGARCH model evidence the presence of asymmetric volatility in the monthly stock returns which suggest that the bad news in the CSE has larger effect on the volatility of the stock market than the good news. Similarly, the model establishes that interest rate and money supply create macroeconomic risk to the volatility of the stock market returns in Sri Lankan context. Accordingly, this paper, as a whole, conclusively establishes that the stock returns and market volatility are dependent on macroeconomic variables.

These findings hold managerial and policy implication at least to the Sri Lankan policy makers, market regulators, investors and market analysts. The test results suggest the information inefficiency in the Colombo stock market. Further, Investors in the market should look at the systematic risks revealed by the money supply and short term interest rates when structuring portfolios and diversification strategies. Policymakers may need to take these macroeconomic variables into account when formulating economic and financial policies.

This paper investigates the role that investor sentiment plays in asset pricing and risk measure, research will focus on the relationship that came from the point that a firm stock level is a derivative not only of a fundamental rational environment but at the same time is a part of a human mental being, reflecting personal sentiment and group narratives. In the current paper we incorporate behavioral sentiment variables into beta model, analyzing cluster peculiarities of sentiment dependent companies in US tourism industry, finding out which type of companies has strong regression between beta and sentiment. We found that the level of regression between systematic\risk coefficient and sentiment is dependent on period of sentiment, it is stronger during high and low sentiment period. We also found that high-low period of sentiment affects differently on companies from different clusters and sentiment affected companies have low level of financial stability.

The purpose of this study was to establish the effect of corporate income tax incentives on investment using private sector manufacturing companies in Kigali special economic zone, Rwanda. The study adopted descriptive research design and the study population comprised of thirty-nine manufacturing companies in free zone in Rwanda which are registered by the private sector. The sample size comprised of 36 private companies determined from a total population of 39 companies. Only two employees that are acquainted with decision making from each manufacturing companies registered by the private sector were targeted hence the target population respondents was 72 respondents. The stratified random sampling technique was used to select the respondents. Data was collected from both primary and secondary data using questionnaires and documentation. The findings in the study revealed that tax incentives have significant positive effect on investment in private sector manufacturing companies in Rwanda. The p-values for all the variables are lower than 5% this implies that are significant. From the study the p-values are 0.009, 0.000, 0.003 and 0.000 for company income tax, capital allowance, value added tax and capital gains tax incentives respectively. The capital allowance incentive has the highest t value of 4.656, followed by company income tax incentives with 3.954, and next is capital gains tax incentives with 3.184, while the lowest is the value added tax incentives with 2.954. Based on the empirical evidences and results of the analysis, there is positive and statistically significant relationship between the tax incentives and investments. The study recommends that Government and policy makers should concentrate on efforts at ensuring that more CIT incentives and strategies that are specifically addressing small and medium enterprises are introduced.

This study was conducted on assessing the impact of NAADS programme on agricultural economic performance in Mbarara district. Agricultural Economic performance was assessed in terms of household income and commercialization. The study was done in two Sub-Counties i.e., Nyamitanga and Mwiizi S/County to represent Mbarara district. A sample of 132 respondents was used of both NAADS and Non-NAADS farmers in both Goat rearing and Piggery and NAADS Coordinators who were involved in the programme from the district to Parish level in Mbarara district. Both stratified and purposive sampling were used to select the sample in both Mwiizi sub-county and Nyamitanga division as, 63 NAADS farmers of both enterprises (goat and pig rearing) and 6 NAADS Coordinators from two S/Counties as well as 63 Non-NAADS farmers from the same enterprises in both sub-counties. The study used both questionnaire survey and interview methods in collecting data from the field.

The study adopted a Quasi-experimental research design where difference in difference model was used. The Difference between means was used to determine if there is a significant difference between NAADS and Non- NAADS on economic outcomes of commercialization and household income in Mbarara district. The primary data was collected using questionnaire survey and interview methods and analyzed using SPSS.

The findings show that there was no significant difference on level of commercialization in terms of technology adoption; household income in both NAADS and Non-NAADS farmers involved in goat rearing and piggery in Mbarara district.

Basing on the findings, the level of monitoring and supervision, distribution of farm inputs and service delivery, fund flows to facilitate the coordinators and service providers, and purchase inputs, farm inputs to distribute to farmers, attitude of farmers towards government programmes and corruption and embezzlement of funds were the most important factors that greatly affected the economic performance of NAADS programme in Mbarara district.

In recommendation, the government should increase the level of monitoring and supervision at different levels, increasing in the accessibility of inputs and service delivery, anti-corruption and embezzlement laws, allocation of enough funds, empowerment of the institutions like the local government, farmer groups and other civil society organisations (CSOs), increase on the level of accessibility through fair distribution of farm inputs and encourage pilot studies in area where the programme is to be implemented.

Countries are encouraging firms to adopt corporate governance mechanisms to enhance monitoring over firms, and at the same time to achieve economic growth. This study investigated the effect of the CGC on foreign ownership. Particularly, the study aims to investigate board independence, board size, and audit committee characteristics have an effect on foreign investment in domestic UAE firms. Using panel data analysis, the study was based on a sample from the UAE financial market. The study is based on 72 sampled firms from 2010 to 2013. The findings indicated the importance of corporate governance in the UAE in attracting foreign ownership. Mainly, board size and AC independence had a significant positive effect on attracting foreign investments. While, foreign investors, who considered it an indicator of weak supervision, did not prefer board independence. The current study contributes to the literature related to the professional practice of corporate governance by introducing the role of corporate governance and consequences in the firms. Moreover, this study studied the preferences of foreign ownership in absence of firms’ performance factor. The results of this study have major implication that corporate governance application should concentrate on the mechanisms that could achieve the intended goal.

Internal control systems can provide reasonable but not absolute assurance to an entity’s management and board of directors that the organization’s objectives will be ascertained. Internal control actions on quality financial report state positive goals more especially when all the parties involved adhere to their duties; thus making the quality of financial reporting comparable, understandable, relevant, and reliable. An organizations framework of financial control plays a key role in the management of risk that is important to the satisfaction of its operational objectives. In this regard, this study investigated the impact of government internal control systems on financial reporting quality in Ghana using Ghana Revenue Authority as the case study. Specifically, the study sought to examine the nature and quality of financial reporting in the GRA and to analyze the impact of government internal control systems on financial reporting quality. Both quota and simple random sampling techniques were used to select fifty (50) persons as the sample size of the study. Questionnaires were used to obtain data from the employees of Ghana Revenue Authority in Ghana. The correlation matrix was used to establish a positive relationship between government internal control systems and financial reporting quality. The study find out that contrary to apriori expectation sign monitoring as an element of internal control system has a negative impact on the financial quality reporting but was however statistically significant. The study also revealed that with a unit increase in the collection performance quality of financial reporting of GRA will improve. The study recommended that the government should ensure that the internal control system is periodically monitored and evaluated.

Maize is an important cereal crop in South Sudan. This article assesses the determinants of consumers’ consumption and purchasing of local maize. A survey of randomly selected sample of 160 consumers was carried out to collect primary data. Logistic regression model was employed to analyze data. Results obtained showed that environmental concern, environmental benefits, marital status, age and education positively and significantly influenced consumers’ consumption and purchasing of local maize, whereas, health consciousness, food safety concern, quality and health benefits and food ethical concern had negative effects. On the other hand, income and residency status positively and significantly influenced consumers’ consumption and purchasing of local maize on a regular basis, whereas environmental benefits and education had negative effects. Thus, the effective marketing strategies to increase domestic maize market include targeting married consumers, who are educated, middle-aged, reside in the city and with middle household income. To attract new consumers, stakeholders should improve the quality and safety of local maize to meet consumers’ expectations of quality standards.