Tag Archives: Diversification

Domestic Macroeconomic Drivers of Industrialization in Nigeria: Status and Prospects from the Manufacturing Sub-Sector (Published)

While most advanced economies are in the process of industrializing their economies, plots by successive governments to transform the economy Nigerian, from a commodity-driven to an industrialized one, has not yielded much fruits despite several industrial policies and reforms. Based on the United Nations/World Bank success yardsticks with theoretical framework rooted on the Prebisch-Singer Hypothesis and the endogenous growth model, this study utilized K-class estimation procedure on Nigeria’s time series between 1990 and 2016. The result obtained indicates that infrastructural development, institutional framework, bank credit,foreign direct investment, electricity, stable exchange rate, low inflation and economic diversification are key drivers of industrialization. The findings also confirm that except the Nigerian economy achieves improved infrastructure delivery and institutional framework as well as stable domestic and currency prices, the efforts towards economic diversification agenda may be counterproductive. It is therefore expedient that Nigeria focuses on building strong macroeconomic fundamental that would accentuate its take-off to industrialization.

Keywords: Diversification, Gross Domestic Product, Industrialization, Macroeconomy, Manufacturing, Nigeria

Examining the Integration between Vietnamese Stock Market and Markets from US, UK, China, Japan and ASEAN (Published)

Portfolio diversification has long been in spotlight, however, the growing integration among stock markets lowers the diversification opportunities. This paper examines the integration of Vietnamese stock market with markets of ASEAN countries as well with the leading global markets such as US, UK, Japan and China. The investigation has taken place over two periods: long-term period 2007-2017 (normal period); and short-term period 2007-2008 (crisis period). The study employs unit root test, Engel and Granger co-integration, and Granger causality in order to test whether Vietnamese stock market has co-integration with stock markets of US, UK, China, Japan and other ASEAN countries. The results reveal that there is no relationship between Vietnam stock market and other stock markets in short-term period. However, in the long-term period, Vietnamese stock market is found to have positive relationship with the Chinese stock market. The result is not unexpected keeping in view the fact that Vietnam and China have close relationships in multiple fields including but not limited to geography, trading, history, and politics. Moreover, Granger causality test results reveal that Vietnam has mono-directional causal relationships with stock markets of US, Japan and Indonesia in short as well as long term.

Keywords: Diversification, Granger Causality, Long-Run Relationship, Stock Market Integration

Is Oil Forever? Saudi Government Revenue Diversification is Now Necessary (Published)

This research aims to identify the potential government revenue diversification sources in Saudi Arabia. The purpose behind this was the fact that the Saudi economy rely on oil as main source of export and fiscal revenue. That said, the shock in oil prices directly affect government revenue. The current Saudi economic model has weaknesses due to its over-reliance on oil revenue. Therefore, an increasing economic divarication is paramount as it would reduce exposure to volatility and uncertainty in oil market. To achieve above stated aim, secondary data is collected from the Saudi Ministry of Finance, IMF, world bank and OPEC from 2000- 2015. The data analysis approaches used in this research is a great contribution to knowledge as it covers three main analysis tools: Trend analysis, Correlation and Contribution analysis. Trend analysis revealed that although Saudi revenues are showing an increasing trend but the high proportion of oil revenues cause a fall in total revenue due to dropping oil prices in global market. This finding was further supported by correlation analysis. The results show strong positive correlation between total revenue, oil revenues and non-oil revenues before financial crisis 2007-2008 however, the situation changed to a negative correlation between total revenues and non-oil revenue sector signalling to a presence of revenue diversification effort. Similarly, the correlation between oil prices and revenues show high positive correlation but negative correlation with production proving the fact that oil production increases in Saudi Arabia when oil prices drop to cover the revenue need of the economy. These results led the researcher to examine the potential sources that can help Saudi policy makers to diversify revenues and reduce revenue volatility. Contribution analysis is employed to examine the proportion of other sectors in total revenues. Investment, document fee and taxes are recognized as main predictors of total revenues other than oil revenues. This research concluded that revenue diversification is necessary not only for Saudi economy but the results can be generalized to those economies too which are relying on only one or few revenue sources. The study shows great implications for policy makers, government and authorities responsible for stabilizing the economy

Keywords: Diversification, Revenues, Saudi Arabia, oil

Does Gender Makes Any Difference In Livelihoods Diversification? Evidence from Northern Ghana (Published)

The fact that rural livelihood portfolios is expanding and diversifying beyond agriculture is not contested. However, very little is known on gender dimension of rural livelihoods diversification and whether gender makes any difference in rural dwellers construction of livelihood portfolios. This paper therefore presents findings of analysis of data obtained from USAID sponsored Feed The Future population baseline survey conducted in 2012 in their Northern Ghana Zone of Influence, with the view of examining gender dimension of livelihoods diversification among the 13,580 respondents who were 15 years or older. Results of the analysis revealed significant gender differentiation in number of livelihood activities engaged in by men and women. The results established that livelihoods diversification is common across gender in Northern Ghana, but men are more likely to engage in more livelihood activities than women. Significantly more men than women were found to have been engaged in paid wage labour within the last 12 months, with women dominating the non-farm self-employed livelihood enterprises. This paper therefore recommends that, measures aim at women economic empowerment, should target providing training and financial support to enable women improve their non-farm livelihood enterprises

Keywords: Diversification, Gender, Livelihoods, Non-farm, on-farm

DOES GENDER MAKES ANY DIFFERENCE IN LIVELIHOODS DIVERSIFICATION? EVIDENCE FROM NORTHERN GHANA (Published)

The fact that rural livelihood portfolios is expanding and diversifying beyond agriculture is not contested. However, very little is known on gender dimension of rural livelihoods diversification and whether gender makes any difference in rural dwellers construction of livelihood portfolios. This paper therefore presents findings of analysis of data obtained from USAID sponsored Feed The Future population baseline survey conducted in 2012 in their Northern Ghana Zone of Influence, with the view of examining gender dimension of livelihoods diversification among the 13,580 respondents who were 15 years or older. Results of the analysis revealed significant gender differentiation in number of livelihood activities engaged in by men and women. The results established that livelihoods diversification is common across gender in Northern Ghana, but men are more likely to engage in more livelihood activities than women. Significantly more men than women were found to have been engaged in paid wage labour within the last 12 months, with women dominating the non-farm self-employed livelihood enterprises. This paper therefore recommends that, measures aim at women economic empowerment, should target providing training and financial support to enable women improve their non-farm livelihood enterprises.

Keywords: Diversification, Livelihoods, non-farm and gender, on-farm

An Empirical Test of Factor Likelihood Arbitrage Pricing Theory in Nigeria (Published)

The study employs the Principal Component Analytical (PCA) technique to derive proxies for the factor likelihood APT of Rose using monthly security returns of 53 companies listed in NSE over the period 1 Jan 2003 to 31 Dec 2011. The results of the PCA methodology reveal that 17 latent factors are identified in the Nigerian equity market; while the estimated results of the cross-sectional APT pricing model show that only 4 of the factors are priced. However, the evidence of systematic hypothesis is not ascertained in this study. Thus, the unsystematic risk associate with arbitrage portfolios in the market cannot be reduced/ eliminated no matter the level of diversification

Keywords: APT, Arbitrage Portfolios, Diversification, Idiosyncratic risk, Latent factors, PCA