Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Eurasian Journal of Economics and Finance

Vol.10 No.1
March 2022

 Page Number

 Article Information


A Meta-Analysis of the Impact of Working Capital on Profitability

Samuel Tabot Enow

DOI: 10.15604/ejef.2022.10.01.001


Working capital and profitability are two important core concepts in financial management and accounting. The management of these two concepts can affect an investor’s decision to invest in a firm. Thus, there have been many publications stressing the need to effectively manage working capital because of its significant impact on profitability. However, working capital has been hardly mentioned by any senior manager or executive as one of the value drivers that enhances profitability. Therefore, the aim of this study is to investigate the strength and the extent to which profitability depends on working capital. This study is motivated by a lack of research in this area. Using a meta-analysis of 32 published journal articles and dissertations, the study finds that working capital accounts for 37.8% of the variability in profitability. Also, the results of a Kolmogorov-Smirnov test reveal that the distribution of the coefficient of determination is not normally distributed and is not a good fit to explain the effect of working capital on profitability, hence independent of each other. The implication of this study is that research entitled “the effect of working capital management on profitability” should be scrutinized before being accepted for publication.

Keywords: Working Capital, Kolmogorov-Smirnov Test, Profitability, Meta Analysis


Cointegration of Equity Markets in Three Country Groups of OECD Countries

Dosse Toulaboe

DOI: 10.15604/ejef.2022.10.01.002


This paper investigates the stock market integration in North America, the Eurozone, and other OECD countries. The main questions addressed include whether the stock markets in each of the three country groups are cointegrated and whether the relationships are stable over time. The linkages are modeled using different statistical tools, including correlation, cointegration, vector-error correction, and Granger causality tests. The results show that the correlation coefficients are noticeably higher for the two country groups that are members of a trade or currency zone (NAFTA and the Eurozone) compared to the other OECD countries. Considering full samples, the results from the cointegration tests point to no cointegration for NAFTA markets, while they are mixed in the case of the other two country groups. After controlling for structural breaks by estimating the models for different sub-periods, the verdicts from the two cointegration tests were unanimous as the results unveil evidence of cointegration in each sub-periods for each of the three country groups. The results support the hypothesis that financial markets in the OECD countries are cointegrated. They also confirm the existence of structural breaks, the dynamic nature of the long-run integration of equity markets, and the argument that markets exhibit time‐varying long-run interdependence.

Keywords: Cointegration, Stock Market Integration, NAFTA, Eurozone, OECD, Granger Causality


Financial Development, Integration, Inclusion, and Economic Growth: Co-Integrating Relationships and Threshold Analysis

Oscar Chiwira

DOI: 10.15604/ejef.2022.10.01.003 


This study examines the short and long-run relationships between financial development, integration, inclusion, and economic growth in SADC, as well as the corresponding threshold levels. Covering the period 1995 to 2020, the ARDL technique was used to test for co-integrating relationships, and the GLS was utilized for the determination of the respective threshold levels. The study establishes that bank credit to the private sector negatively affects economic growth in the long run. Most SADC countries were still operating below their respective minimum financial development threshold levels. It is observed that there are no threshold levels for financial integration in SADC, although the result, compared with the threshold levels of financial development seems to suggest that the financial domestic system and some level of economic development are a prerequisite for financial integration decisions. The financial inclusion threshold level for poor SADC countries is low. Yet most of these countries had the highest mobile banking facilities in the region. One possible indication can be that these countries may be operating at financial inclusion levels detrimental to economic growth. Financial development, along with its facets of financial integration and financial inclusion, is found to be the driver of economic growth in SADC. SADC countries, therefore, need to establish a strategic mix of these facets of financial development for the realization of significant economic growth. 

Keywords: Economic Growth, Financial Development, Financial Integration, Financial Inclusion, SADC, ARDL

Eurasian Publications
(Esra Barakli)
Aksemsettin Mah. Kocasinan Cad.
Erenoglu Is Merkezi
Fatih – Istanbul, TURKEY
Email: [email protected]
Copyright 2013-2024 © Eurasian Publications | Terms Of Use | Privacy Statement

This work is licensed under a Creative Commons Attribution 4.0 International License.