Advance Journal of Econometrics and Finance
The Advance Journal of Econometrics and Finance is a valuable resource for economists, finance professionals, and students alike. This journal provides an up-to-date analysis of the latest economic trends, data, and research from around the world. It also covers topics such as asset pricing, financial engineering, macroeconomics, and microeconomics. With its comprehensive coverage of the field of econometrics and finance, this journal is an invaluable source for anyone looking to stay informed on the latest developments in this field.
FinTech Adoption under Perceived Risk: The Mediating and Moderating Role of Trust, Usefulness, and Digital Literacy
The rapid expansion of financial technologies (FinTech) has transformed financial service delivery; however, user adoption remains uneven in emerging economies where concerns related to security, trust, and digital capability persist. Addressing this gap, this study investigates how risk perception influences behavioral intention to adopt FinTech services by integrating the Technology Acceptance Model (TAM) and Protection Motivation Theory (PMT). Specifically, the study examines the mediating roles of trust and perceived usefulness, alongside the moderating role of digital literacy, to explain users’ adoption intentions under conditions of perceived risk. The proposed model is tested using survey data collected from 410 banking customers in Pakistan through structural equation modeling (PLS-SEM). The findings reveal that risk perception exerts a significant negative effect on behavioral intention. However, this relationship is partially mediated by trust and perceived usefulness, indicating that users cognitively and relationally process perceived risk before forming adoption intentions. Furthermore, digital literacy significantly moderates the risk intention relationship, weakening the deterrent effect of perceived risk among more digitally competent users. This study advances FinTech adoption by integrating threat appraisal and benefit evaluation mechanisms into a unified framework, extending both TAM and PMT. The findings offer actionable insights for policymakers and FinTech providers seeking to enhance trust, promote digital capability, and foster inclusive digital financial adoption in emerging economies. FinTech adoption, Risk perception, Behavioral intention, Trust, usefulness, Digital literacy.
Copyright (c) 2026 Advance Journal of Econometrics and Finance
Impact of Net Export on Gross Domestic Product (GDP) of Pakistan
This study analyses the effects of net exports upon Pakistan's GDP with an analysis of annual time-series data covering 1978 to 2017. The dependent variable will be GDP in this research with exports, imports, gross fixed investment, Government expenditure, interest paid on external debt and Private consumption representing the independent variables. The ADF unit root test results indicated that the variables are stationary primarily at first differencing which allows the ARDL approach to be employed. The ARDL bounds test provided evidence of long run cointegration between the variables through a F-statistic of 5.080 which was above the 5% upper bound (3.61). Long run results indicated that exports have a positive influence on GDP; (β=0.1735; p<0.001) alongside a positive effect from gross fixed investment (β=0.1862; p<0.001), government expenditure (β=0.1740; p<0.001) and private consumption (β=0.9041; p<0.001). Imports were found to have a negative impact upon GDP (β=-0.2735; p<0.001) whilst interest paid on external debt also has a negative affect (β=-0.0272; p=0.020). The short run results were also found to be significant with an ECM coefficient of negative significance (β=-0.9989; p<0.001) confirming that adjustments to long-run equilibrium occur rapidly. This study recommends the promotion of export activity through improved productivity; increased levels of productive investment; and an emphasis on the importation of capital goods as means of achieving such growth in exports and GDP. Keywords:Gross domestic product, time series, trade balance, cointegration
Do Remittances Promote or Constrain Growth? Evidence from South Asian Economies
This study examines the remittance–growth nexus in Pakistan, India, Bangladesh, and Sri Lanka over 1980–2015 using a panel ARDL model with Pooled Mean Group (PMG) estimation. The approach captures both short-run dynamics and long-run relationships while allowing for cross-country heterogeneity. Results indicate that a 1% increase in remittances is associated with a 1.38% decline in long-run GDP growth. Dumitrescu–Hurlin tests show no bidirectional Granger causality, suggesting remittances operate largely outside the productive economy. In contrast, foreign direct investment and exports have positive and significant long-run effects. Short-run impacts are heterogeneous—positive in Pakistan, negative in Bangladesh, and insignificant in India and Sri Lanka. Overall, the findings support dependency and Dutch disease perspectives, highlighting the need to channel remittances toward productive investment through financial and institutional reforms. Keywords: Remittances; Economic Growth; South Asia; Panel ARDL; Pooled Mean Group; Dutch Disease
Forecasting Pakistan Stock Returns Using Economic Policy Uncertainty: Deep Learning Evidence from an Emerging Market
Accurate forecasting of stock returns remains a persistent challenge in financial economics, particularly in emerging markets characterized by policy uncertainty, macroeconomic volatility, and evolving institutional structures. Pakistan offers a relevant setting due to recurring political transitions, inflationary pressures, exchange rate instability, external financing constraints, and periodic policy shifts that frequently influence investor sentiment and market behavior. This study examines whether Economic Policy Uncertainty (EPU) improves the forecasting of Pakistan stock returns and whether advanced deep learning models outperform conventional econometric approaches. Using monthly data from 2010 to 2024, traditional benchmark models, including ARIMA, GARCH, and ARDL, are compared with modern deep learning architectures comprising Long Short-Term Memory (LSTM), Gated Recurrent Unit (GRU), CNN-LSTM, and Transformer models. Forecasting performance is evaluated using root mean squared error (RMSE), mean absolute error (MAE), and mean absolute percentage error (MAPE). The empirical findings show that incorporating EPU significantly enhances predictive accuracy across competing models, confirming the informational relevance of policy uncertainty for financial markets. Deep learning models consistently outperform benchmark econometric models, indicating the presence of nonlinear, dynamic, and time-varying relationships in Pakistan’s stock market. Among all competing approaches, Transformer and CNN-LSTM models deliver the strongest forecasting performance, with gains becoming more pronounced during crisis periods, including COVID-19-related disruptions and episodes of macroeconomic stress. The study contributes new evidence from an underexplored emerging market and demonstrates the value of integrating uncertainty indicators with modern artificial intelligence techniques for financial forecasting. The findings provide practical implications for investors, regulators, and policymakers seeking to strengthen decision-making, risk management, and market monitoring under uncertain economic conditions.
Internal Control Effectiveness as a Moderator in the Relationship Between Corporate Social Responsibility and Firms' Financial Performance: Evidence from Pakistan
Corporate Social Responsibility (CSR) has become a decisive strategic issue in companies in developing economies but its nexus with financial performance is still the matter of continuous empirical discussion and especially in the institutional sphere of weak governance structures, unclear regulations and heterogeneous stakeholders. This paper explores the moderating position of internal control effectiveness in the connection among multi-dimensional CSR and financial performance of firms in the Pakistani corporate environment. Based on a synthesized theoretical context, rooted in the Stakeholder Theory, Legitimacy Theory, Agency Theory, Social Contract Theory, and Environmental Theory and supported by Resource-Based View (RBV) and Institutional Theory, the research hypothesis is that the strong offices of internal control enhance the CSR-performance connection through quality of governance, transparency, and optimization of resources. The proposed study will have a mixed-method quantitative design which involves the use of both primary and secondary data. The structured questionnaire surveys conducted on a five-point scale (likert scale) were used to measure firm level practices of CSR across seven theoretically based dimensions: Economic, legal, ethical, philanthropic, environmental, stakeholder and governance as a primary source of data. Two globally accepted compliance framework networks were used to operationalise the internal control effectiveness: the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework and the Sarbanes-Oxley Act (SOX) compliance indicators. To create three performance proxies of financial performance Return on Assets (ROA), Return on Equity (ROE) and the Q ratio of Tobin, which reflects accounting-based and market-based aspects of performance, secondary data were obtained through audited financial statements and Bloomberg databases. Four control variables at firm level are included: the size of firms, the age of firms, financial leverage, and high levels of research and development (R&D). The sample includes non-financial Pakistani companies that belong to the Pakistan Stock Exchange (PSX) during [202025]. The hypothesized relationships are tested using moderate regression analysis (hierarchical with moderated) with the help of panel data methods, such as fixed-effects and random-effects. Two-Stage Least Squares can resolve the endogeneity issues. (2SLS) estimation. The empirical evidence indicates that: (i) the CSR dimensions are positively and differentially related to the financial performance; (ii) internal control effectiveness positively mediates the CSR-financial performance relationship, which supports the governance-sustainability nexus. (iii) The size of the firm, leverage, age and R&D all play a significant role in determining the strength of this relationship in the Pakistani institutional environment. This research has taken part in the emerging yet developing literature on CSR in the South Asian emerging markets by offering the first work of exhaustive empirical analysis of internal controls as a boundary to the CSR performance relationship. The results have important policy and regulatory implications to corporate boards, regulators, and investors in Pakistan, guiding the design of CSR mandates, governance codes enforced, by the Securities and Exchange Commission of Pakistan (SECP), and the internal audit standards that comply with international best practice. Keywords: Corporate Social Responsibility (CSR); the Internal Control Effectiveness; Financial Performance; COSO Framework; SOX Compliance; Return on Assets; Return on Equity; Tobins Q; Stakeholder Theory; Legitimacy Theory; the Agency Theory; the Social Contract Theory; the Environmental Theory; the Institutional Theory; the Resource-Based View; the Pakistan Stock Exchange; the Emerging markets, the Corporate Governance
Corporate Social Responsibility (CSR), Consumer Trust, and Financial Performance: A Triangular Model of Management–Marketing–Finance Integration
This study examines the relationship between Corporate Social Responsibility (CSR), consumer trust, and financial performance within an integrated management, marketing, and finance framework. As organizations increasingly invest in CSR initiatives, understanding their impact on consumer behavior and financial outcomes is essential. A quantitative, cross-sectional design was employed, with data collected from 300 consumers familiar with CSR activities using a structured questionnaire. The proposed mediation model was analyzed using Structural Equation Modeling (SEM) and bootstrapping techniques. Results indicate that CSR significantly enhances consumer trust (β = 0.514, p < 0.001), which in turn positively influences financial performance (β = 0.478, p < 0.001). Furthermore, consumer trust partially mediates the CSR–financial performance relationship, with an indirect effect (β = 0.246) accounting for 52.8% of the total effect (β = 0.466). These findings validate a triangular model linking behavioral and financial outcomes and offer practical insights for leveraging CSR to achieve sustainable performance. Keywords: CSR, trust, financial performance, consumer behavior, sustainability, SDGs, marketing.
Exploring the Impact of Digitalization on Economic Growth: Evidence from Emerging Markets
Digitalization has emerged as a critical driver of economic growth in emerging markets yet its causal mechanisms remain underexplored amid infrastructure gaps and digital divides. This study employs Panel ARDL-ECM analysis on 25 emerging economies (2010-2026) including Pakistan, India and Brazil to examine digitalization's impact on GDP growth. Findings reveal a robust long run elasticity of 1.45a one standard deviation increase in the Digitalization Index (DI) yields 1.45% higher GDP growth, with human capital index (HCI) moderating effects (0.89). Error correction term (-0.38) indicates 1.8-year adjustment half life while digital divides elevate unemployment by 0.67%. Pakistan exhibits transitional dynamics (1.22 elasticity, 2.8 year half life) due to infrastructure constraints. Robustness via GMM-SYS, quantile regression and regional heterogeneity confirms leapfrogging potential for laggards. Results validate digitalization as an economic "preservation coating" against stagnation, urging infrastructure investments and literacy campaigns.Simulations using policy models predict a cumulative 2.5% increase in real GDP due to greater than 10% DI improvements. Digital transformation is necessary to realise the trillions of dollars of potential in many emerging markets (EM’s).
The Practical Application Of Hedge Accounting Under Ifrs 9 And Its Impact On Financial Reporting
Background: The study aims to review the practical applications of hedge accounting IFRS 9 to understand its impact financial reporting. Hedge accounting gives a clear idea that how the true economic risk management is possible based on the currency interest rates and commodity price rates. The role of the profit and loss is a prominent parameter in this context. It also demands for the risk management to reveal the handling based on currency market dealing for highly effectiveness on financial tools. Method: The study employs a mixed method where primary data is taken from the respondents’ sample of 150 samples. 4 hypotheses are justified and proved in the end. Smart PLS is employed in this regard to help the data analysis. Secondary data is taken from the literature and supports the thematic analysis for research questions to be answered. Findings: The hedge accounting affects the income statements and equity where the balance sheets are also influenced because accurate representation of financial performance is based on the perspective of handling hedge accounting as an accountable and important system. Recommendations: Training the accounting professionals about IFRS 9 and using effectiveness testing is playing an essential role in handling the challenges of financial risks are recommended.
China's Belt and Road Initiative: Opportunities and Challenges for Renewable Energy Cooperation
China's Belt and Road Initiative (BRI) transformed global renewable energy cooperation delivering 73 GW operational capacity across 68 countries by 2026Q142.1% of $141.8B energy portfolio versus coal's 18.2% post 2021 Xi coal halt. Staggered difference in differences analysis (N=2,847 projects) confirms +23.1 GW BRI treatment effect (p<0.01) with green public procurement (GPP) mediating 47.2% of impact. PV prevents (42.3 GW, 3.8¢/kWh LCOE, 14.2% IRR) $18.4B of annual imports, creates 329K jobs, and reduces CO₂ emissions by 187 MT. There are regional disparities with MENA leading & achieving 87% (UAE at record 1.35¢/kWh) while Pakistan struggles from grid constraints (8.2% curtailment, $140M in losses). 45.3% of local content is achieved through technology transfer by training 42,000 technicians at 12 technical training academies. Integrating VRE at 42% penetration (780 MW/min ramp rate) results in BESS (Battery Energy Storage Systems) mandates of four hours. Phase III scenarios project 302-532 GW by 2040 ($184-324B savings) through GPP scaling green RMB bonds hybrid storage. BRI redefines South to South cooperation, positioning China as Global South decarbonization anchor despite debt distress grid fragility challenges.
Impact of Financial Development and Trade Liberalization on Total Factor Productivity: Evidence from Export and Non-Export Firms of Pakistan
This paper examines the impact of financial development, trade liberalization and corporate tax on Total Factor Productivity (TFP) of the export and non-export industrial firms listed over the Pakistan Stock Exchange. The analysis used data for the post liberalization period from 1997 to 2017 using System Generalized Method of Moments (Sys-GMM). We used three proxies for financial development to analyze their impact on TFP. The Financial Development Index and Financial Institution Depth Index that capture multidimension effect had significant positive impact on TFP of both the export and non-export firms, however, the impact is stronger in case of exporting firms. Besides, trade liberalization proxied by average tariff rate, customs duty and sales tax, the results are statistically significant. The reduction in average tariff rate exerted positive impact on TFP for exporting firms while negative for non-export firms. The impact of customs duty is insignificant. Reduction in sales tax exerted positive impact on TFP of export-firms while negative for non-export firms. Reduction in corporate tax asserted significant positive influence on TFP growth of exporting and non-exporting firms, however, the impact is greater for export-firms. Keywords: Financial Development, Trade Liberalization, Total Factor Productivity, Corporate Tax, Export and Non-Export Firms
Growth, Foreign Direct Investment And Environmental Outcomes In South Asian Economies
This study investigates the relationship between economic growth, foreign direct investment, energy consumption and environmental degradation in South Asian countries over the period 1997–2022. Using balanced panel data for eight countries and employing a fixed effects estimation approach, carbon dioxide emissions are used as a proxy for environmental degradation. The results provide robust evidence in support of the Environmental Kuznets Curve hypothesis, revealing an inverted U-shaped relationship between economic growth and carbon emissions. Economic growth, foreign direct investment, non-renewable energy consumption and trade openness are found to exacerbate environmental degradation, whereas renewable energy consumption significantly reduces carbon emissions. These findings suggest that economic expansion and investment-led growth in South Asia have occurred largely at the expense of environmental quality. The study highlights the importance of strengthening environmental regulations, promoting renewable energy adoption and guiding foreign investment toward environmentally sustainable activities to achieve long-term sustainable development in the region.
Economic Growth, Foreign Direct Investment, Carbon Emissions, Environmental Kuznets Curve, Fixed Effect Model.
Harnessing Solar Potential in Pakistan: A Review of Renewable Energy Policies and Future Prospects
Pakistan's chronic energy crisis, marked by 20-hour load shedding and $22B annual fossil import bills, confronts unparalleled solar potential (5.3 kWh/m²/day average irradiation). This study evaluates renewable energy policies' efficacy in harnessing 50 GW economic capacity. Findings reveal explosive growth from 885 MW (2019) to 35 GW (2026)69% of generation capacity exceeding AREP 2019 targets by 142-1,420%. Distributed solar dominated (95% capacity): 6.2 GW net metered (1.42M prosumers) and 27.1 GW off grid driven by 2.4-year payback periods amid PKR 65/kWh tariffs. AREP catalyzed transformation: net metering enabled 4.2M households GPI auctions secured 1 GW utility scale at PKR 5.5/kWh (47% furnace oil discount). Economic impacts crystallized: $22.5B import savings 1.75M jobs 50.1 MtCO₂ avoided annually. Technical excellence confirmed 79.8% performance ratios 1,780 kWh/kWp yields. Grid challenges emerged at 69% VRE penetration (780 MW/min ramps) demanding 4 GW storage by 2028. Phase II requires net billing transition, agrivoltaics mandates and HVDC corridors to scale 100 GW by 2035, positioning Pakistan as South Asia's solar superpower.
Determinants Of Female Labor Force Participation In Developing Asian Economies: A Structural, Demographic, And Digital Perspective
This research examines macroeconomic, demographic and technological factors determining the level of female workforce participation in 23 developing economies in Asia. Based on a balanced panel dataset from 2003-2024 we utilize Fixed Effect (FE) and 2SLS models. The findings indicate that the GDP per capita has a weak negative correlation with female labor force participation implying that structural transformation in the area has not yet been reflected into inclusive jobs to the women population and the fertility rate has a string negative correlation, whereas female life expectancy positively and significantly impacts participation. Health infrastructure is significant because of the negative influence of infant mortality. The increase of urban population is not statistically significant. However, to the contrary, Internet engagement has impacted negatively, showing that there are ongoing gendered digital divide. These results emphasize that demographic and institutional variables are still decisive in the matter of women labor market participation.
Behavioral Biases And Stock Market Volatility: Evidence From Individual Investors In The Pakistan Stock Exchange
This study examined the impact of behavioral biases on stock market volatility in the Pakistan Stock Exchange (PSX), focusing on the investment behavior of individual investors. Grounded in behavioral finance and Prospect Theory, the study investigated how overconfidence, herd behavior, loss aversion, anchoring, and representativeness biases influence market volatility. A quantitative, cross-sectional research design was adopted, and data were collected from 356 individual investors through a structured questionnaire using a five-point Likert scale. The data were analyzed using statistical techniques to test the hypothesized relationships among variables. The findings revealed that all behavioral biases have a significant positive impact on stock market volatility. Among them, herd behavior and loss aversion were identified as the most influential factors driving market fluctuations. The results indicate that irrational investor behavior, driven by psychological and emotional factors, plays a crucial role in increasing volatility in the PSX. The study concludes that behavioral factors are essential in explaining market dynamics in emerging economies where financial literacy is relatively low and market inefficiencies are prevalent. This research contributes to behavioral finance literature by providing empirical evidence from Pakistan and highlights the importance of investor psychology in financial market stability. It also offers practical implications for investors, regulators, and policymakers to improve financial decision-making and reduce market instability. Behavioral Biases; Stock Market Volatility; Pakistan Stock Exchange; Herd Behavior; Overconfidence Bias; Loss Aversion; Anchoring; Representativeness Bias; Behavioral Finance; Individual Investors
Behavioral Biases And Equity Investors Investment Decisions: Moderation Role Of Age And Marital Status
The study examines the Pakistani equity market, where many investors unknowingly fall prey to these biases, affecting both individual investment outcomes and the investor-advisor relationship. The study is carried out by considering that humans are not fully rational agents and their decision making is based on heuristic and shortcuts. Primary data were collected using a structured questionnaire from the 1015 individual equity investors. The data were analyzed by using the multivariate analysis, followed by the Confirmatory Factor Analysis (CFA) and Structural Equational Model (SEM). The results show that there is statistically significant effect of representative bias, overconfidence bias, anchoring bias, and availability bias on investment decision making whereas optimism bias is no effect of investment decision making. The results highlight the varying influence of demographic factors (Age and Marital Status) on the relationship between different biases and investment decision-making, providing valuable insights into the nuanced impact of individual characteristics on financial choices.
The Role of Education In Agricultural Output And Labor Allocation: A Case Study of Rural Pakistan
The purpose of this study is to highlight the impact of education on farm activity (Productivity) given the movement of labor (Labor allocation) from off-farm to on-farm. Therefore, this study aims to assess the labor allocation across the farm and off-farm activity by considering human capital (level of education attained). This sector contributes 20.71% to the GDP of Pakistan. However, the contribution of the agriculture sector in GDP has shrunk from 27% in 2000-01 to 19% in 2018-19. Mostly the skilled or individuals with some human capital investment allocate their labor to nonfarm activity instead of in farm activity. Hence allocation of labor specifically skills labor in agriculture/ farm activity matters. In this study, only rural areas are focused on analyzing the objectives of this research. For estimation purposes, OLS, Heckman Selection Technique (two-stage method) is used. Furthermore, Probit is employed for evaluating the marginal effects of the coefficients for understanding the true meaning. Results indicate that wage differential, dependency ratio, educational level, and unemployment in educational level are showing a mixed trend toward farm activity. The wage differential is positive and significantly related to farm activity, which indicates that when off-farm wages increase, individuals move toward the off-farm activity. Unemployment at the educational level is negatively related to farm activity. Physical input and cultivated land show a negative impact on farm wages. Whereas human capital, land tenure, access to water, and livestock are positively related to it. The study suggested that it is necessary to increase the enrolment rate at all education levels so education-based policies should be introducing. Policies should be introduced that provide technical training related to farm equipment and skills. It helps those farmers that are uneducated and having less knowledge. Livestock is an asset for the farmworkers. The policies should be introduced to the farmers to have healthy and better upbringing facilities.
Impact Of Capital Structure On Decision Making: A Study Of Financial Flexibility, Profitability, And Organizational Growth
This research explores how capital structure, which refers to a company’s combination of debt and equity financing, impacts an organization’s strategic and operational decision-making processes, particularly as it relates to financial flexibility, profitability, and growth. In an environment characterized by increasing levels of competition and uncertainty, organizations are forced to use sound financial decision-making processes that effectively balance risk, return, and sustainable growth. This study is explain on examining the relationship in between the management of decisions and capital structure, with a secondary intention of reviewing how capital structures affect profit potential and long-term growth within an organization. There are two objectives that have been researched through two hypotheses. This research adopts qualitative research methods (i.e., secondary data review) in order to conduct an in-depth investigation of the literature (i.e., published journals), financial records, and company case studies from recent years in order to build thematic and comparative analyses for identifying trends and relationships between different financing options and business outcomes. This research also focuses on understanding how the managerial perspective, financial strategy, and contextual influences affect capital structure in various types of organizations. The results suggest that having an optimal capital structure can greatly improve financial flexibility, thus allowing companies to allocate resources more efficiently, manage risk more effectively, and respond appropriately to changing industry conditions. Companies that have an appropriate mix of debt and equity much more likely to maintain their liquidity while taking advantage of growth opportunities. In addition, it appears that an effective capital structure has a positive effect on a company's profitability through a reduction in the average cost of capital and an improvement in utilising financial resources efficiently. This research demonstrates that companies with a well-defined financing strategy are more likely to achieve long-term sustainable growth and maintain a competitive edge. Overall, the capital structure of an organisation has a significant influence on all three HRM activities of organisational governance, organisational performance and organisational profitability. A manager's decision to develop the equity capital and debt structure of their organisation needs to take into account both the external factors and internal (organisational) factors that may affect their financial strategy. The manager also needs to consider the financial flexibility associated with their decisions. Such actions increase profits, support sustainable organisational growth, and ultimately improve an organisation's overall resiliency to change in today’s ever changing global economy. Capital Structure, Financial Flexibility, Profitability, Organizational Growth, Decision Making, Debt Financing, Equity Financing, Cost of Capital, Financial Performance, Strategic Management
Green Banking Practices, Sustainable Environmental Performance and Profitability of Commercial Banks
The growing focus on environmental sustainability has prompted financial institutions to promote environmentally friendly practices in their operations. Green banking in this regard has become a significant strategy by which commercial banks can help in protecting the environment and still be viable financially. This research paper has found that there is association amongst green banking practices, sustainable environmental performance and profitability of commercial banks. In addition, the main purpose of the study to examine the effects of green banking practices on the environmental performance of commercial banks and whether the practices lead to higher rate of profitability. The research design is quantitative and the primary data used in the research is a structured questionnaire. Moreover, the survey involved 300 respondents who were members of commercial banking institutions. Partial Least Squares Structural Equation Modeling (PLS-SEM) is used to analyze the relationships between the study variables. The green banking practices are measured using a number of indicators such as green banking policies, daily operations that are environmentally responsible, and green investment initiatives. The most important study outcome variables are the environmental performance and profitability that are employed in assessing the success of green banking programs in commercial banks. Furthermore, the research results indicate that green banking activities have a strong positive impact on sustainable environmental performance and profitability of commercial banks. Besides, the findings indicate that banks with environmentally friendly policies and practices in their operations do not only help in ensuring environmental sustainability, but also enhance their financial performance and corporate image. These results have significant implications on banking institutions, policymakers, and regulatory bodies in ensuring sustainable banking practices in the financial sector. Moreover, the research paper adds to the body of literature on the subject of green finance by highlighting the importance of commercial banks in promoting sustainable economic growth.
The Effect of An Increase in Money Supply On GDP, Price and Interest Rate” Case study of Pakistan (1982-2016)
Money supply is a key variable in many monetary models, as its fluctuations significantly influence output, prices, and interest rates within an economy, particularly in developing countries such as Pakistan. This study aims to examine whether changes in money stock affect major macroeconomic indicators—namely interest rates, output, and inflation—in Pakistan, using annual data from 1982 to 2016. The results of the Johansen–Juselius co-integration test confirm the existence of a long-run relationship between the dependent variable, broad money (M2), and the independent variables, including Gross Domestic Product (GDP), Consumer Price Index (CPI), and the money market rate. Furthermore, the Error Correction Model (ECM) results indicate a significant short-run relationship between money supply (M2) and these macroeconomic variables. The normalized co-integration coefficients reveal that the signs of GDP and the money market interest rate are consistent with theoretical expectations. However, the negative coefficient of CPI suggests that increases in money supply are not associated with higher inflation in the case of Pakistan. Additionally, the results of the Granger causality test indicate a bidirectional causal relationship between money stock (M2) and CPI. In contrast, GDP and the money market rate exhibit a unidirectional causal relationship running toward money supply. Money Supply, Ganger Causality, Money Market Rate
Copyright (c) 2025 Advance Journal of Econometrics and Finance
Terrorism and Political Economy in Balochistan: Assessing the Structural Disruptions to Regional Development
Balochistan, the largest province of Pakistan in terms of landmass, holds immense geopolitical and economic significance due to its strategic location bordering Iran and Afghanistan and its access to the Arabian Sea through Gwadar Port. Despite its resource-rich landscape, the province remains underdeveloped, largely due to persistent terrorism, insurgency, and security instability. This research article examines how terrorism has structurally disrupted the political economy of Balochistan by weakening governance, discouraging investment, obstructing infrastructure development, and deepening socio-economic inequality. It highlights major events, key political and military leadership responses, and critical locations affected by conflict, including Quetta, Gwadar, Turbat, Mastung, and Dera Bugti. The article argues that terrorism has not only slowed regional development but has also reshaped the governance and economic priorities of t
Corporate Governance as a Constraint on Earnings Management: Evidence from Emerging Economies
This paper investigates the impact of corporate governance on the earnings management in the selected South Asian firms over the period of 2013 to 2024. Using panel data, the study analyzed how key governance indicators, such as board size, CEO duality, audit Committee, and Institutional Ownership effects the earnings management. The findings provide empirical evidence that corporate governance plays a significant role in shaping managerial reporting behavior. It offers useful insights for the policymakers and regulators aiming to strengthen the corporate governance mechanism so as to improve the transparency of the financial reporting.
Earnings Management, Corporate Governance, South Asia
Impact of Corporate Social Responsibility on Internal Control Effectiveness: Evidence from Pakistan
This paper will discuss effectiveness of Corporate Social Responsibility (CSR) within the corporate sector of Pakistan as far as internal control is concerned. CSR is conceptualized based on the stakeholder, legitimacy and agency theories and is a multidimensional construct with its dimensions as economic, legal, ethical, philanthropic, environmental, stakeholder and governance. The COSO framework measures the effectiveness of the internal controls by using such important elements as control environment, risk assessment, control activities, information and communication, and monitoring. The research design will involve a quantitative research design where primary data will be used in terms of structured five point Likert scale questionnaire to the respondents that will be finance and audit professionals. Statistical techniques like reliability and validity analysis, correlation, and multiple regression and controlling the variables of the firm, including firm size, age, leverage, and research and development, are used to investigate the relationship. The findings indicate that CSR practices and internal control effectiveness have a strong positive relationship meaning that better companies with regards to CSR activities have effective internal control mechanisms. Among the CSR dimensions, the most influential one is on the governance dimension and ethical responsibilities. The study presents the evidence that is founded on empirical studies within the developing economy and strategic importance of introducing CSR in corporate governance to facilitate transparency, accountability and risk management.
CSR, Internal Control, COSO, Pakistan, Corporate Governance, Risk Management
The Feminine Financial Lens: A Qualitative Inquiry into Women Investors behaviour at Pakistan Stock Exchange
The purpose of this study is to investigate the investment behavior of female investors who are entering the market as competitors and to identify the underlying variables affecting their attitudes toward investing in the Pakistan Stock Exchange. The study will utilize a qualitative inquiry technique, comprising in-depth exploratory interviews to determine the underlying factors influencing the investing behavior shown by females investing in the Pakistan Stock Exchange, a growing segment of the investment market. The collected data will be examined using manual coding techniques. According to the survey, female investors tend to be somewhat conservative and risk-averse when making investment decisions for their businesses. Additionally, this study claims that individuals will take more chances in their investing endeavors if they devote quality time and receive superior instruction about the subtleties of various investment instruments. For this study, a major, globally connected Pakistani cities Lahore, Pakpattan, and Gujranwala will be chosen as the sample. It is necessary to do research in different nations that take cultural and ethnic factors into account to broaden our understanding of the investing behaviors of female entrepreneurs. The findings of this study will assist policymakers in minimizing risk and maximizing return opportunities, service providers in developing consulting training centers, and investment managers in better-understanding women's psychology to provide meaningful portfolio recommendations. This study will be appears to be the first in Pakistan to use an inductive technique in this field, to promote female investing behavior in the Pakistan Stock Exchange.
Women Investors, Pakistan Stock Exchange (PSX), Female Investor Behavior, Stock Market.
Impact Of Fintech On Financial Performance And Risk Of Commercial Banks In Pakistan
The study looks on how Financial Technology (FinTech), shown by the quantity of ATMs, affects the overall performance and risk of commercial banks in Pakistan. It includes four major elements, namely Net Interest Margin, Yield on Earning Assets, Non-performing Loans, and Return on Equity. The data used in this research is secondary and is from 2019 to 2024. Statistical techniques like correlation and regression analysis used for this study. Due to abnormal data, log transformation was used before testing. Findings show that more ATMs generate more profits and better efficiency for banks. It also helps to improve interest margin and return on equity, while its effect on loan yield or bad loans is low. Finally, future studies on this topic should use better methods and more detailed data.
Fintech, Banks Performance, Risk, Pakistani Banking Industry
Untapped Potential: Assessing Pakistan-China Trade Using a Gravity Model Framework
This study assesses untapped trade potential between Pakistan and China using an augmented gravity model on panel data (1990-2025), revealing Pakistan's exports underperform predictions by 28-35% despite CPEC's $62 billion investments and PCFTA tariff reductions. Poisson PPML estimation yields theoretically consistent elasticities exporter GDP (0.87), importer GDP (1.05), distance (-1.18) with CPEC generating 73% trade creation and NTMs imposing 27% drag (40% of total gap). Sectoral analysis identifies agriculture (48% untapped), textiles (32%), and minerals (25%) as priority sectors. Robustness across GMM, sub-periods, and HS2 disaggregation confirms findings. Counterfactual simulations project $1.2 billion export gains (42% uplift) from NTM harmonization, logistics optimization, and PCFTA Phase III, halving the $25 billion 2025 deficit. Results inform Pakistan's 2026-2030 Export Policy, aligning with SDGs 8/17 while advancing BRI-South Asia gravity literature.
Does Family Ownership Matter in Tunneling? Moderating Role of Corporate Governance.
This research empirically examines the impact of family ownership (FO) on tunneling (Tun) and moderating role of corporate governance (CG). The relationship between family ownership, tunneling, and corporate governance as moderators was established after an extensive literature review. The generalized Method of Moments (GMM) is applied to the data collected from 200 non-financial firms for 14 years (2009-2023) listed at National Stock Exchange (NSX) India. The empirical analysis confirmed that family ownership impacts tunneling activities, while corporate governance acts as a moderator between family ownership and tunneling. Hence, this study theoretically contributed by highlighting the Type-II agency conflict between controlling shareholders of family-owned firms and minority shareholders. This study also provides insight to investors, policymakers, regulators, and watchdog groups of minority shareholders to assess expropriation issues and formulate strategies and policies for protecting their rights.
Cash Flow Tunneling, Corporate Governance Index, Emerging economies, Family ownership, General Tunneling
Financial Development, Renewable Energy, and CO₂ Emissions: A Method of Moments Quantile Regression Analysis of Next-11 Countries
The paper examines environmental degradation in Next-11 economies using the MM-Quantile Regression approach to examine the interplay among renewable energy consumption (REC), financial development (FD), economic growth (GDP) and CO2 emissions over the period 2000-2024. The findings reveal a long-run association between the study variables. The findings indicate that REC significantly reduces CO2 emissions, whereas GDP and FD enhance emissions. Evidence of distributional heterogeneity is observed. To ensure robustness, the FGLS model is used to evaluate the reliability and consistency of the main model. The MMQR findings show that the impact of REC on CO2 emissions is negative and statistically significant across all quantiles, with a stronger mitigating effect at higher-emission levels. In contrast, FD increases emissions across the distribution, but its effect diminishes at higher quantiles. Likewise, the positive and significant impact of GDP on CO2 decline as quantiles move from lower to higher. The study’s outcomes suggest that REC plays an essential role in enhancing environmental quality, while FD and GDP in Next-11 countries remain closely linked with carbon-intensive development.
Phasing Out Tobacco Leaf Supply: A Study On Farmers’ Willingness And Transition Potential
Tobacco use has been associated with detrimental health issues and kill more than 8 million people on annual basis causing monetary cost of more than 1.4 trillion USD. Various demand reduction measures have attracted much of the scholarly work as compared to tobacco leaf supply reduction measures. The current study has focused on how tobacco leaf supply, a major and important input for cigarettes, can be phased out with minimal adverse effects on tobacco farmers. Objectives of the study are to explore the willingness and the extent of decrease in tobacco quantity of tobacco farmers. Furthermore, it is also aimed to determine the factors which influence the farmers’ willingness of tobacco leaf supply reduction while it is hypothesized that a more diversified livelihood portfolio is positively associated with farmers’ willingness for tobacco leaf supply reduction. The study employed cross-sectional data collected from Swabi, Mardan and Charsadda districts of the Khyber Pakhtunkhwa province of Pakistan collected through face interview using a well-designed and structured questionnaire applying multistage sampling techniques for sampling. Both descriptive and econometrics techniques were applied to determine the willingness for phasing out tobacco leaf supply. The study found that there is mixed situation as some farmers are willing while others need incentives for decreasing and phasing out tobacco leaf supply. The fact that non-contract farmers produced less than half the quantity of license holders indicates the effectiveness of contract-based tobacco production. There was a significant difference in production and prices of tobacco between license-holder and non-license-holder farmers. The study recommends that consent of all those farmers who want to cultivate tobacco should be sought in advance, and then the required tobacco quota should be distributed among them according to their farm size, tobacco infrastructure and their previous history. Moreover, tobacco leaf supply can be decreased further by ensuring quota compliance by contract-holder farmers. Keywords : Tobacco Farming Transition, Farmer Willingness, Crop Diversification, Sustainable Livelihoods
Experiential Learning As An Effective Human Resource Development Intervention At The Public Sector Universities Of Sindh
The aim of this research study is to examine the projection of experiential learning as an effective human resource development intervention at the public sector universities of Sindh by analyzing the essential factors of experiential learning; informal learning, deputation, delegation and secondment. Research is provoked in get up of global discontent above formal training programs that the public sector universities of Sindh mostly resort to. Three (03) public sector universities, situated at Jamshoro were chosen for this research study randomly. Of these universities, 633 out of 1439 faculty members along with different ranks of positions were picked up randomly as respondents. The study reveals the positivity and significance about predictions of effective system of experiential learning as an informal human resource development (HRD) intervention in the public sector universities of Sindh. Research findings and conclusion show the positive and significant relationship between experiential learning and growth of the employees which provide implications for implementing hands-on learning as HRD intervention in view of the fact that it bears an ideal emancipation of employees’ involvement and work place support in contrast to formal training regime. This theory is likely to be a good direction for the organizations following HRD programs dynamically.
The Impact Of Financial Inclusion And Institutional Quality On Bank Efficiency Moderated By Economic Freedom: Evidence From Low-Income Countries
This study examines how financial inclusion and institutional quality influence bank efficiency in low-income countries, with a specific focus on the moderating role of financial freedom. Using panel data and IV-2SLS estimation techniques to address endogeneity, the analysis explores two measures of bank efficiency: Bank Overhead Costs to Total assets (BOC) and Bank cost to Income Ratio (BIC). The findings reveal that financial inclusion (FI), political stability (POL), and control of corruption (COR) significantly affect banking costs, while rule of law (RL) is exogenous in this context. FI and POL are associated with increased banking costs, potentially due to the financial and administrative burden of expanding access and ensuring political stability. In contrast, stronger control of corruption reduces banking costs by improving governance and reducing inefficiencies. The study also finds that financial freedom (FF) significantly moderates these relationships: it weakens the cost-increasing effects of FI and POL and reduces the cost-saving impact of COR. This suggests that while FF can improve efficiency in weaker institutional settings, it may offset benefits in contexts with stronger governance mechanisms. The study recommends that policymakers in low-income countries pursue an integrated strategy that promotes financial freedom alongside institutional strengthening to achieve optimal bank efficiency and broader financial sector development. JEL Classification: G21, O16, O43, and C33
Financial Inclusion, Institutional Quality, Economic Freedom, Bank Efficiency, Financial Freedom.