wordpress-themes.org wordpress themes wordpress themes

April, 2014

now browsing by month

 

Procedure for Creating a Virtual Multibank Agent: Introduction

Procedure for Creating a Virtual Multibank Agent: IntroductionOver the past twenty years, banking has undergone a profound and rapid transformation, due to the liberalization and deregulation of the financial markets and the technological innovation applied to the fields of computer science and information technologies. Investors have benefited from an increase in the number of possibilities available for investing their money, whereas active clients can have access to cheaper financing, in a process of banking disintermediation.
The loss of banking business due to the competition of online business and the reduction of margins through financial intermediation has had to be compensated, generating revenue by providing services and reducing costs.
The new Internet technology has enabled and considerably simplified the tasks of capturing, storing and processing information, although the offer of online banking services has been growing exponentially over the past few years, at times causing banking consumers to feel ”flooded”‘ by such an amount of information, and at the same time in need of advice that, until now, consumers were obtaining by physically going to the bank. On the other hand, online distribution increases the range of products and services that banking institutions are able to offer their customers, offering interesting conditions on products in which consumers are more sensitive to the price: checking accounts, mortgage loans, etc., given that the presence of this channel enables banking institutions to apply differentiated pricing policies and practice cross-selling new products. For all of these reasons, it becomes essential to offer banking consumers a method for accessing financial information about products and services in a quick, efficient and direct way.

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Conclusion

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: ConclusionThe findings are consistent with the findings of recent studies conducted in most cases for Latin America, Sub Saharan Africa and Asia found that migrants and households spend a share of remittances on savings and investment (Mesnard, 2001), (Mishra, 2005), (Adams et al. ), (Balde, 2010). Some studies analyze that if remittances are totally spent on consumption of imported and domestically produced good and services, but there is still benefit to the receiving countries (Iqbal and Sattar, 2005).A recent studies also finds the positive impact of remittances on savings and growth(Khan and Hye,2010),(Ahmed et al,2011). The results of Error Correction Model are given in Table 3. The lagged error correction term Ecmt-1 is negative and highly significant at 1 percent level. Its co-efficient (1.55) indicates a very rapid adjustment process indicating that disequilibria of the previous period shock will be rapidly adjusted to long run equilibrium(155% discrepancy is corrected in every year) in the current year. This result is consistent with khan and Hye study in which the error correction term indicates the high speed of adjustment from the short-run fluctuation to the long-run equilibrium (201% discrepancy is corrected each year).

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Empirical Results

The results of DF and ADF Unit Root tests for checking the stationary of the data are shown in Table1a. In order to scrutinize the integrating level of variables, standard tests like DF and ADF (Dickey & Fuller, 1979) are applied. The results of Dickey Fuller and Augmented Dickey Fuller tests show that the three variables are stationary at level (RRID, FDI and LTRM) because null hypothesis of the existence of unit root is rejected showing stationary of series I existed in long run among variables. If it lies under the lower critical bound, then null hypothesis will be accepted. Finally, if it lies within the critical bound values, the result seemed inconclusive.
When two variables has been co integrated in long run, then in the second step, the error correction mechanism will be used to examine the dynamics of the model in short run. This technique was first analyzed by (Sargan, 1964) and after this was famous by (Engle and Granger, 1987).
The basis of error correction model was Granger representation theorem. In error correction model, the short-term dynamics of the variables in the system were influenced by the deviation from the equilibrium. ECM model was best for co-integration as it included both long-run and short run information and ECMs were formulated in the terms of first differences, which eliminated the trends from variables and resolved the problem of spurious regression and it also measured the correction from disequilibrium of the previous period. The remaining variables (LRGDPC and LPS) are non-stationary at level but become stationary after taking their first difference.i.e. I.

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Methodology

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: MethodologyThe use of an appropriate technique was considered as the center of any research study, without making a right choice for empirical analysis, the impact of study seems futile exercise. Therefore adoption of an appropriate technique was very important.
To analyze the connection between worker remittances and savings, one would need to use an appropriate model for empirical analysis. To examine the relationship between the variables in long and short run, many studies adopted the Johansen-Juselius and Engle Granger cointegration technique for checking the co-integration between variables in the long run. By using Johansen-Juselius technique, for co integration analysis, all variables deemed integrated at same order.
Therefore, to solve this issue, this study utilize Autoregressive Distributed Lag model (ARDL) developed by Pesaran, et al..This was a relatively new econometric technique used to estimate the relationship between savings and worker remittances and among other variables which are used in the study. This technique tests the co integration relationship without considering the same order of integration of all variables, either they were integrated of 1, 1 or mutually integrated.

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Methodological Framework

The study used the time series data for examining the behavior of the balance of payments (Employee compensation and migrant transfers) that are conceptually different and behave differently than workers’ remittances. In particular, employee compensation is frequently related to either seasonal labor or the employment in embassies, while migrant transfers submit to the one-time movements in funds associated with changes in home. The results suggest within countries, correlations between worker remittances and employee compensation tend to be small and negative in many cases (Chami et al., 2008).
There is very little evidence that official transfers have contributed much to the growth of developing economies. The result of this study also concluded that private income transfer (remittances) have contributed little to economic growth in remittance-receiving economies and retarded growth in some cases. There does not exist strong and positive significant effect of remittances on long-term growth, and find a negative relationship between remittances and growth (Chami et al. 2009) and the effect of remittance flows on growth appears to be inconclusive, covering the full range from negative effects to positive effects (Catrinescu et al., 2006).
However, more recent studies conducted in most cases for Latin America, Sub Saharan Africa and Asia found that migrants and households spend a share of remittances on savings and investment ( Mesnard, Mishra, Adams et al., and Balde ).

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Effect of Remittances

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Effect of RemittancesA recent study empirically examines the effect of remittances, exports, money supply on economic growth in Pakistan. The short-run effect of remittances and exports is significant, contributing to about 0.034 and 0.078% to economic growth while money supply was found insignificant to contribute to economic growth (Ahmed et al. ).
The remittances has played important role in the development of Pakistan. Foreign exchange reserves has significantly affected and maintained the Pakistan’s financial sector. Moreover remittances are stable source of development finance rather than capital flows that put different checks on policies makers (Shahbaz et al., 2008).
Khan and Hye analyzed the effect of financial sector reforms, per capita income, agriculture sector GDP, remittances on household savings in Pakistan by using time series data. The remittances, per capita income and agriculture GDP positively affected the household savings both in short and long run while financial liberalization negatively affected the household savings both in short and long run and real deposit rate negatively affected the savings in long run but positive impact in the short run.

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Literature Review

Pakistan received a significant amount of workers’ remittances, during the last three decades which are received by Pakistanis working abroad. For capital deficient economies, like Pakistan, workers’ remittances are considered to be an important source of foreign exchange. These remittances have a positive impact on Pakistan’s economy through improved balance of payments position and by reducing dependency on external borrowing. Remittances are also helped the Pakistan to recover from the adverse effects of oil price shocks, unemployment problem, and improved standard of living of recipient households.
In Pakistan, many studies found that majority of remitted flows were spent on consumption. However, some evidences also found that significant portion of remittances were used into productive investment. However, a number of researchers have suggests that even if remittances are totally spent on consumption of imported and domestically produced good and services, there is still benefit to the receiving countries (Iqbal and Sattar, 2005).
The role of workers’ remittances in domestic resource mobilization of recipient countries is considered to be an important area of research. In particular, sound research in this area is necessary in order to make policies to channel these flows into productive investment.
While acknowledging the ongoing debate over migrant issues, and their role in the promotion of savings and investment, the objective of this study is to view remittances as a source of capital accumulation and source of income for Pakistan. i. To determine the relationship between remittances and private savings. ii. To analyze the effectiveness of remittances and foreign direct investment in promoting savings.

Read the rest of this page »

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: Introduction

Effect of Workers’ Remittances on Private Savings Behavior in Pakistan: IntroductionSavings and investment play a significant role in capital accumulation. Variations in these variables have a major impact on economic growth. Savings are the key to increasing a country’s capital-output ratio. It has neglected the one very important source: migration and worker remittances in particular because migration has an important role by integrating developing countries into the global economy. Specifically, through remittances, migration has brought new opportunities for economic and social changes in rural areas and changes their social activities. The worker remittances are an important component of national savings, increased enormously at the rate of 30 percent per annum during the last eight years and be around $ 5.5 billion by June, 2007. With higher increase in worker remittances and rate of return on deposits the level of national savings would increase more.

Read the rest of this page »