Macroeconomic Instability and Terrorism Nexus: Empirical Evidence in Case of Pakistan

The current study is an attempt to analyze the association between macroeconomic instability and terrorism in Pakistan over the period of 1970 to 2020. Six important variables are taken as a proxy to measure macroeconomic instability which includes external debt, budget deficit, trade deficit, real effective exchange rate (REER), inflation and unemployment. Results indicate that there exists a long run cointegration relationship between the indictors of macroeconomic instability and terrorism. FMOLS is employed to obtain the estimates and it reveals that budget deficit and external debt is negatively associated with terrorism. It indicates that government expenditures on different project such as infrastructure create economic opportunities, therefore, reduces terrorism. Furthermore, welfare programmes also improve the performance of socioeconomic variables that translates into harmonized environment which lessens violence. The variable of trade deficit, inflation and unemployment has positive impact on terrorism while REER is insignificant. In context of trade deficit, higher imports results in job loss of domestic industries, hence, it hits the vulnerable groups. Therefore, the opportunity cost of life of these groups reduces and it increases the probability to become a part of terrorist activities. Inflation also pushes the vulnerable groups in poverty by reduces the purchasing power and unemployed individuals are also easy target to get involve themselves in acts of aggression. This study also constructs the macroeconomic instability index including the six variables through principal component analysis (PCA). Results of this model show that macroeconomic instability index and GDP has positive effect on terrorism. In case of GDP, the plausible reason could be uneven income distribution that increases terrorist activities. For the policy implications, government need to divert the resources from non-productive to productive uses through the investment in such projects which has direct and indirect impact on the welfare. In this way deprived group will enjoy economic perks and engage themselves in productive activities rather than becoming a helping hand in terrorism.

Impact of Intangible Assets on Cash Flows and Operating Efficiency: An Empirical Analysis of Listed Companies of Psx

In the modern business era of competition, companies are required to find out the ways to survive in the market and they try to maintain an upper hand over competitors. It is evident from the literature that investing in the intangible assets is as important as investing in the tangibles. This study is based upon determining the relations between the intangible assets and operating cash flows, and operating efficiency with the control variables of company age and company size by taking the panel data of companies listed on Pakistan Stock-Exchange (PSX) from period 2007-2017. STATA is used in this study to analyze the panel data of selected listed companies and has been found that the intangible assets have the significant positive influence upon the operating cash flows while the intangible assets have the negative insignificant influence upon the operating efficiency of the non-financial companies of PSX. In order to reap the true benefits of intangible assets by way of improved cash flows, the management of the companies is also required to set the policies and procedures to manage the operating expenses.