Applied Economics and Business

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Financial Economics and Econometrics, Human Resource Development, Water & Resource Economics, Agricultural Economics and Agribusiness, Banking

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Testing the Weak-Form Efficiency of the Palestinian Securities Market
(EuroJournals Publishing, 2009-10-03) Awad, Ibrahim; Daraghma, Zahran
This paper examines the efficiency of the Palestine Security Exchange (PSE) at the weak-level for 35 stocks listed in the market by using daily observations of the PSE indices: Alquds index, general index, and sector indices. Parametric and nonparametric tests for examining the randomness of the PSE stock prices were utilized. The parametric tests include serialcorrelation test, and Augmented Dickey-Fuller (ADF) unit root tests. The nonparametric tests include runs test, and Phillips-Peron (PP) unit root test. The study utilized nonparametric tests for investigating the efficiency of the PSE at the weak level, especially, the results of Jarque-Bera test for normality showed that the daily returns of the PSE are not normally distributed. The serial correlation tests and the runs tests both revealed that the daily returns are inefficient at the weak-form. Also, the unit root tests (Augmented Dickey-Fuller (ADF) unit root test and Phillips-Peron (PP) unit root test) suggest the weak-form inefficiency in the return series. However, the PSE is inefficient at the weak level; as a result, this is likely to be an evidence that the prudent investor who deals with the PSE will achieve abnormal returns using historical data of stock prices, and trading volume.
Toward Efficient, Equitable and Sustainable Municipal Water Supplies for Domestic Purposes in the West Bank: A Contingent Valuation Analysis
(E.W., 2010-05-03) Awad, I.; Hollander, R.
This paper is an empirical work dealing with municipal water services in the West Bank where the emphasis is put on the analysis of water management. Toward that end, the study used Contingent Valuation Method (CVM) to estimate the Total Economic Value (TEV) of domestic water uses. The application of this approach consists of the construction a hypothetical market. The dichotomous choice with follow-up format question was utilized in developing the CV questionnaire; this elicitation technique was used to model Willingness to Pay (WTP) utilizing Tobit econometric model, binary-Logit econometric model and Ordinary Least Squares (OLS). The estimated coefficients of the econometric models were utilized to determine the relationship between WTP and socioeconomic variables, Log- likelihood and adjusted coefficient of determination (adjusted R2). Furthermore, the marginal impacts of the coefficients of Tobit model were used to measure the elasticities of the coefficients of the explanatory variables. The CVM was applied to a sample of 520 households in the Ramallah and Al-Bireh governorate including urban and rural areas, and refugee camps. The face to face (in-person) interview survey was adopted. To assess the performance of water pricing policy, a questionnaire survey was directed to the personnel staff of water institutions. This method was administrated to a sample of 117 employees in the water institutions. Descriptive statistics enhanced by non- parametric tests were used. The main findings of this study were measured the WTP with key socioeconomic variables suggested by economic theory and CV studies including income, age, gender, location, educational level, employment status, family size, water consumption, and use of water filters. Also, the pricing policy of municipal water services was examined.
Examining the Long Term Relationship Between Crude Oil and Food Commodity Prices: Co-integration and Causality
(JEMS, 2011-08-15) Ibrahim Awad; Ghaith, Ziad
Recently a new debate has started regarding food and energy issues because food has become an alternative source of energy and energy becoming the main input of agriculture. However, this study attempts to investigate the possible long-term relationship between the prices of crude oil and food commodities represented by maize, wheat, sorghum, soybean, barley, linseed oil, soybean oil, and palm oil. Time series econometric techniques (Unit root tests, Co-integration, and Granger causality) were applied. The study utilizes monthly data over the period of 1980 to 2009. The results of this study reveal that there is a strong evidence of long-term relationship between crude oil and the food commodities prices. A traditional Granger Causality is used to check whether causality exists between two product prices. The outcome suggests that there is unidirectional causality between the prices crude oil and some of the food commodities under examination.
Toward Efficient Management of Working Capital: The case of the Palestinian Exchange
(International Scientific Press, 2012-02-28) Awad, Ibrahim M.; Al-Ewesat, Abdel-Rahman
The importance of this study comes from the truth that financial statements' users need reliable, relevant, and useful financial information that should be reflected in stock prices. However, this study aims at investigating current ratio, receivables turnover, inventory turnover, and earnings per share for 18 companies listed on PEX over the period from 2006 to 2011. Regression analysis and econometric techniques of Unit root test, Co-integration, and Granger causality are applied. The study outcomes indicate that stock prices of companies listed on PEX are affected by working capital components. The results of traditional Granger Causality reveal that there is no causal relationship between stock prices and working capital components. In addition, there is a positive relationship between CR and EPS and stock prices whereas there is a negative relationship between RT and IT. The paper concludes that cash, times of receivables collection and inventory turnover are necessary to be taken into account by both investors and companies for improved the management of working capital at the PEX.
Using econometric analysis of willingness-to-pay to investigate economic efficiency and equity of domestic water services in the West Bank
(Elsevier, 2012-10-07) Awad, Ibrahim M.
The paper is aimed at providing evidence on economic efficiency, and equity of distribution of domestic water services in the West Bank. The study utilizes the CVM as a means of monetizing public preferences and households’ WTP. In the CVM questionnaire, the dichotomous choice with follow-up debriefing questions format is followed by an open-ended follow-up question was undertaken. A second questionnaire survey was directed to employees from water institutions, which was mainly designed to investigate the reasons behind the full absence of private sector in the provision of water supply. The two samples were selected to ensure a representative samples in accordance with the Palestinian case. The main findings of this paper gauged the WTP with key socioeconomic variables suggested by economic theory and previous CVM studies. These results provide information on economic efficiency and equity of water distribution. The results will allow decision makers to develop new policies that can achieve more efficient and equitable domestic water services.
The Intrinsic & Market Value of the Common Stocks: Evidence from Palestine Exchange
(Center for Research Promotion, 2012-12-04) Awad, Ibrahim M.; Murrar, Abdullah; Ayyad, Hind
In analogues way to the sayings “What goes around comes around” the market price of the company stock’s is closely related to its performance, the more optimistic, the more the investors will be and hence willing to pay a higher price for the company's share and vice versa. Seamlessly, given that the goal of the firms is to maximize the value of the shareholders, the more the intrinsic value of the company stock, the more market value of the stock price, so that there is a positive correlation between the intrinsic and market value of a particular common stock. This is founded in the first test of this study. Ironically, the positive correlation does not always imply that the intrinsic value causes the changes in market value; that is, empirical results of the co-integration test of this paper reveals that the market value is what causes the changes in intrinsic value, meaning that stock prices in Palestine Exchange does not significantly depend on fundamentals, but rather on supply and demand forces, other things being equal.
Working Capital Management, Liquidity and Profitability of the Manufacturing Sector in Palestine: Panel Co-Integration and Causality
(Scientific Research, 2013-10-02) Awad, Ibrahim; Jayyar, Fahema
This study aims at providing an idea about the directional effect of working capital management and liquidity on prof-itability and vice versa. Econometric techniques of the unit root tests, co-integration, and two-step Engle and Granger method with error correction model are all applied on a panel data for 11th manufacturing firms listed in the PEX over the period from 2007 to 2012. The findings show that there is a bidirectional causal relationship between working capi-tal management and profitability, and a unidirectional causal relationship running from liquidity to profitability. Ac-cordingly, the paper concludes, in its attempt to investigate the directional long run relationship between gross operating profit, cash conversion cycle and current ratio, that managers should concentrate on managing working capital effi-ciently in order to generate cash and profits to their firms, besides mangers of profitable firms tend to manage their working capital efficiently. For policy makers, this study, confirms the necessity of future researches about efficiency of working capital management, tradeoff between liquidity and profitability, and directional relationship of components of working capital management on profitability.

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