British Journal of Economics, Management and Trade 

About: British Journal of Economics, Management and Trade is an academic journal. The journal publishes majorly in the area(s): Cointegration & Profitability index. It has an ISSN identifier of 2278-098X. Over the lifetime, 454 publications have been published receiving 2206 citations.

The Relationship between Working Capital Management and Profitability: Evidence from Saudi Cement Companies

Abstract: Aims: This paper investigated the relationship between the working capital management (WCM) and the firms’ profitability for the Saudi cement manufacturing companies. Methodology: There are 13 Saudi cement manufacturing companies operating in the market. Only eight companies were included which are listed in the Saudi stock exchange market (Tadawul) and were established before the year 2005, and the rest were excluded for the period of 5 years from 2008-2012. Results: The study results showed that, Saudi cement industry current ratio is the most important liquidity measure which effected profitability, therefore, the cement firms must set a trade-off between these two objectives so that, neither the liquidity nor profitability suffers. It was also found, as the size of a firm increases, profitability increased. Besides, when the debt financing increased, profitability declined. Linear regression tests confirmed a high degree of association between the working capital management and profitability. Conclusion: The Saudi cement firms could strengthened their working capital in more efficient ways by adopting more advanced financial devices which will help them to manage cash, accounts receivables and inventories, and will ultimately increase their profitability. There is much to be done about working capital in Saudi Arabia in future. Original Research Article British Journal of Economics, Management & Trade, 4(1): 146-157, 2014 147

Agricultural Credit Allocation and Constraint Analyses of Selected Maize Farmers in Ghana

Abstract: The study analyzes factors influencing agricultural credit allocation and constraint condition of maize farmers in the Upper-Manya Krobo District in the Eastern region of Ghana. The study uses primary data solicited from 130 maize farmers through the administration of a structured questionnaire. Using the paired sample t-test to test for significant differences between the amounts of credit demanded and the amount received by farmers, it is revealed that the amount of credit received was significantly lower than the amount of credit demanded by farmers. The Probit regression model was then used to estimate the parameters of the determinants of credit constraint condition of the farmers. The empirical results reveal that gender, household size of farmers, annual income of farmers and farm size have significant influence on credit constraint conditions of the farmers. The Tobit regression model was also used to estimate the parameters of the determinants of the rate of agricultural credit allocated to the farm sector. The empirical results of the Tobit regression model reveal that age, bank visits before credit acquisition and the amount (size) of credit received have significant influence on the rate of agricultural credit allocation to the farm sector. The study provides the following recommendations: it is imperative that bank officials visit farmers on their farms before granting them loans, and also farmers must be granted the required amounts of loan to enhance the rate of agricultural loan allocation to the farm sector to ensure increased productivity of crops grown for increased welfare and livelihood of these farmers and the citizens of the country as a whole. Research Article British Journal of Economics, Management & Trade, 2(4): 353-374, 2012 354

Financial Development and Economic Growth: Is Schumpeter Right?

Abstract: Aim: The aim of the study is to test the validity of Schumpeter’s prediction that finance promotes growth using annual time series data from South Africa. Study Design: Case Study Place and Duration of Study: South Africa. Time series data ranging from 1965 to 2010. Methodology: The study employs unit root testing, co-integration analysis, Fully Modified Ordinary Least Squares (FMOLS) regression, Two-Stage Least Squares (2SLS) regression, Error Correction Model and Pairwise Granger Causality test technique to analyze annual time series data from South Africa. Two measures of financial development are used: domestic credit as a share of GDP measuring the degree of financial intermediary services; and broad money supply as a share of GDP measuring the overall size of the financial intermediary sector. Control variables included in the model are inflation, size of government, openness of the South African economy, and a dummy variable accounting for financial reforms that began in South Africa in the 1980s. Results: Contrary to the prediction of Schumpeter that finance promotes growth, the empirical results suggest that financial development does not promote economic growth both in the short run and in the long run. The Pairwise Granger Causality test result supports the assertion that there is a unidirectional causality from financial development to economic growth in South Africa. Conclusion: The paper concludes that Schumpeter may not be right in theorizing that finance promotes economic growth. Case Study

Determinants of Economic Growth in Laos

Abstract: This paper identifies the key determinants of economic growth in Laos, using annual timeseries data from 1980 to 2010. To avoid the problems of non-stationary associated with time series analysis, the Dickey-Fuller unit roots statistic is checked in order to ascertain whether the variables are stationary. This prevents problems of spurious results in the regressions by transforming the dependent and independent variables in the first different operator form. This paper contributes on the on-going research issue whether foreign aid and trade liberalization help developing countries to foster their growth. The findings show that trade openness and foreign aid contribute to economic growth in Laos. Furthermore, foreign direct investment, domestic investment, government expenditure, labour force and being a member of ASEAN also found to have positive effects on the performance of the economy, whereas the population growth has a negative impact. This is in line with the argument that a large population is related to the capacity of government expenditure to provide the people with social services efficiently, thereby negatively impact development. To sustain a high rate of growth, this paper suggests improving the trade policy orientation, based on value-added products for exporting, together with investment policy adoption and tourism promotion based on the potential resources of the country. The foreign aid allocation should be focused on specific areas, such as (1) promoting economic growth and (2) direct intervention for the poor, and ensured the positive effectiveness with accountability and transparency methods for aid allocation.

Empirical Analysis of the Causal Relationship Between Electricity Consumption and Economic Growth in Nigeria

Abstract: This paper investigates the relationship between electricity consumption and real GDP growth in Nigeria during a period of thirty six years (1970-2005). The paper adopts Vector Auto Regressive (VAR) and Error Correction Model (ECM) to test the causality between real GDP and electricity consumption. The order of integration of the two variables was determined using Augmented Dickey Fuller (ADF) test which was followed by co-integration and causality test. The result shows that there is unidirectional causality from real GDP to electricity consumption without a feedback effect. This could be attributed to the low level of electricity consumption, engendered by low level of electricity generation, which is too small to cause economic growth. There is need for government to diversify the energy mix to include all the untapped potentials of renewable power options such as small hydro, wind, solar and biomass among others in all the states and local constituencies. Energy wastages should be curtailed through proper efficiency measures and different pricing system. It is also suggested that government should make policies which will create an enabling environment for the private sector to generate electricity from renewable sources in terms of fiscal incentives such as tax rebate, subsidies and low import duties for the imported equipment among others. Furthermore, there is a need to review the 2003 National Energy Policy so as to come up with a sound, robust and technological Research Article British Journal of Economics, Management & Trade, 3(3): 277-295, 2013 278 energy policy that will be able to solve the challenges of the electricity sector. Political commitment through investment in energy infrastructures and capacity building of the citizens in renewable energy technologies are critical towards the improvement of electricity generation, which could then cause electricity consumption to have a significant impact on economic growth in Nigeria.