Alaa Soliman - Academia.edu (original) (raw)
Papers by Alaa Soliman
Technological Forecasting and Social Change
Theoretical Economics Letters, 2017
The purpose of this research paper is to examine the proposition that capacity utilisation is an ... more The purpose of this research paper is to examine the proposition that capacity utilisation is an important factor in the determination of unemployment and wages. Underlying this proposition is the notion that capacity utilisation helps to determine the future path of the economy and is a significant factor in the response of the economy to different supply and demand shocks. We derived capacity utilisation and unemployment relationships, which were estimated and tested using data covering from 1997 to 2016 for three West Africa countries. The results suggest that long-term unemployment and capacity utilisation have a significant impact on unemployment. The policy implications of our findings are that in view of the strong effect of capacity utilisation on unemployment, programmes that enhance efficiency in production and investment enhancing policies may allow unemployed to regain access to the labour market.
Journal of economic development, Jun 1, 2004
Stock market is an indicator of an economy financial health. It indicates the mood of investors i... more Stock market is an indicator of an economy financial health. It indicates the mood of investors in a country. As such, stock market development is an important ingredient for growth. The stock exchange of West African monetary union is fairly new compared to many countries. This paper examines the impact of stock market development on growth in West African monetary union. A time series econometric investigation is conducted over the period 1995-2006. We analyze both the short run and long run relationship by constructing an ECM. Two measures of stock market development namely size and liquidity are used. We define size as the share of market capitalization over GDP and liquidity as volume of share traded over GDP. We found that stock market development positively affect economic growth in West African monetary union both in the short run and long run.
1 Abstract: This study derives an optimal macroeconomic policy combination for financial sector s... more 1 Abstract: This study derives an optimal macroeconomic policy combination for financial sector stability in the United Kingdom by employing a New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) framework. The empirical results obtained show that disciplined fiscal and accommodative monetary policies stance is optimal for financial sector stability. Furthermore, fiscal indiscipline countered by contractionary monetary stance adversely affects financial sector stability. Financial markets, e.g. stocks and Gilts show a short-term asymmetric response to macroeco- nomic policy interaction and to each other. The asymmetry is a reflection of portfo- lio adjustment. However in the long-run, the responses to suggested optimal policy combination had homogenous effects and there was evidence of co-movement in the stock and Gilt markets.
Political Economy: Government Expenditures & Related Policies eJournal, 2017
This study offers new insights into fiscal policy management by providing an alternative to the t... more This study offers new insights into fiscal policy management by providing an alternative to the traditional way of estimating guarantee It therefore takes away the need for guesswork amongst policy makers in estimating contingent liability. The findings confirm the long held belief that fundamental risk consideration should influence the choice of method in calculating value at risk which will be guaranteed by government. The study confirms that political consideration influences the governance risk indicator which is used to calculate the governance risk factor and that a default by government on guarantees for public private partnership transactions will have a negative impact on the debt while also providing a valuable path in the choice of “fundamental risk” indices in determining the value at risk.
Economic Issues Journal Articles, 2016
This study, using quarterly data from Egypt and Iran, extends the literature on demand for money ... more This study, using quarterly data from Egypt and Iran, extends the literature on demand for money by examining the stability of money demand functions in two different monetary policy regimes, an Islamic banking system and a conventional banking system. A stable demand for money enables central banks accurately to predict the demand for money and hence attain a price stability objective through the adjustment of the money supply. This paper adopts a restructured form of Friedman's (1956) model, which considers real demand for money as an extension to the theory of demand for durable goods. The study estimates the long-run demand for money functions in Iran, which represents an Islamic banking system, and Egypt, which represents a conventional banking system. The study then examines empirically the stability of the demand for money function under two different financial systems. The study finds that the demand for money function is stable under the Islamic banking system and unsta...
Theoretical Economics Letters, 2017
This paper provides both theoretical and empirical evidence for assessing the relationship betwee... more This paper provides both theoretical and empirical evidence for assessing the relationship between bank capitalisation and stock market liquidity. It estimates a bivariate VAR-GARCH (1.1) model to examine the linkage between bank capitalisation and stock market liquidity in Nigeria using annual data covering the period from 1986 to 2014. The findings of this paper show that bank capitalisation enables banks to give out more loans to the public and this increase in lending has a positive impact on stock market liquidity growth. The findings support the view that capitalised banks are well equipped to absorb and diversify risk, give out more loans, improve liquidity in the economy and improve stock market performance.
The Quarterly Review of Economics and Finance, 2021
Abstract This paper contends that the use of alternative constructs as Enterprise Risk Management... more Abstract This paper contends that the use of alternative constructs as Enterprise Risk Management (ERM) measures has made a partial contribution to the different and contradictory results provided by various empirical studies. It further argues that the comprehensive nature of Enterprise Risk Management implies that its adoption and implementation affect different aspects of firms and, therefore, the most appropriate construct to measure it should be equally comprehensive in order to capture all possible signals, outputs and effects from the features of a firm. Secondly, the specialised nature of banking operations and the associated risk necessitates risk measures that suit the peculiarities of the sector and in this study we have proposed banking sector specific ERM model. In this regard, we propose a comprehensive methodology and multifaceted approach to determining ERM measures for the banking sector, taking cognisance of the various components of ERM and the specific needs of the sector. In our proposed comprehensive methodology for determining ERM measures for the banking sector, we combined two important models: the ERM model for the banking sector and the CAMELS model for assessing the performance of banks. The integration of these two models provides a comprehensive and all-encompassing approach for determining ERM measures for the banking sector. Our model is novel and offers a significant contribution to the literature of bank risk management. Our model provides a comprehensive risk management framework for bank executives, bank risk managers, the board members of banks, central banks and the authorities responsible for financial sector stability.
Journal of Central Banking Theory and Practice, 2017
This study has analysed the implications of institutional design of macroeconomic policy making i... more This study has analysed the implications of institutional design of macroeconomic policy making institutions for the macroeconomic policy interaction and financial sector in the United Kingdom. Employing a Vector Error Correction (VEC) model and using monthly data from January 1985 to August 2008 we found that the changes in institutional arrangement and design of policy making authorities appeared to be a major contributing factor in dynamics of association between policy coordination/combination and financial sector. It was also found that the independence of the Bank of England (BoE) and withdrawal from the Exchange Rate Mechanism led to the increase in macroeconomic policy maker’s ability to coordinate and restore financial stability. The results imply that although institutional autonomy in the form of instrument independence (monetary policy decisions) could bring financial stability, there is a strong necessity for coordination, even in Post-MPC (Monetary Policy Committee) an...
Cogent Business & Management, 2016
The Leeds Beckett repository holds a wide range of publications, each of which has been checked f... more The Leeds Beckett repository holds a wide range of publications, each of which has been checked for copyright and the relevant embargo period has been applied by the Research Services team. We operate on a standard take-down policy. If you are the author or publisher of an output and you would like it removed from the repository, please contact us and we will investigate on a case-by-case basis.
Cogent Economics & Finance, 2016
The Leeds Beckett repository holds a wide range of publications, each of which has been checked f... more The Leeds Beckett repository holds a wide range of publications, each of which has been checked for copyright and the relevant embargo period has been applied by the Research Services team. We operate on a standard take-down policy. If you are the author or publisher of an output and you would like it removed from the repository, please contact us and we will investigate on a case-by-case basis.
Journal of Central Banking Theory and Practice, 2016
This concise study analyses the symmetry of financial markets’ responses to macroeconomic policy ... more This concise study analyses the symmetry of financial markets’ responses to macroeconomic policy interaction in the United Kingdom. Employing the Vector Auto-regression (VAR) model on monthly data of the British financial sector and macroeconomic policies from January 1985 to August 2008, this study found that the equity and sovereign debt markets showed identical symmetry in response to macroeconomic policy interaction.
Economic Issues Journal Articles, 2014
This paper analyses the implications of macroeconomic policy interactions for financial stability... more This paper analyses the implications of macroeconomic policy interactions for financial stability, proxied by financial assets prices (equity and bonds). The empirical analysis applies a Vector Autoregressive (VAR) model and our findings suggest that an accommodating monetary, and disciplined fiscal, stance has been optimal for both stock and bond markets. There is also ample evidence of interdependence between policies, as an expansionary fiscal policy could persuade the monetary authorities to adopt an accommodating stance, whereas a contractionary monetary policy leads fiscal policy towards consolidation. The interrelation between monetary and fiscal policy necessitates coordination between them for the sake of financial stability.
Journal of Accounting and Public Policy, 2009
In recent years, a paradigm shift has occurred regarding the way organizations view risk manageme... more In recent years, a paradigm shift has occurred regarding the way organizations view risk management. Instead of looking at risk management from a silo-based perspective, the trend is to take a holistic view of risk management. This holistic approach toward managing an organization's risk is commonly referred to as enterprise risk management (ERM). Indeed, there is growing support for the general argument that organizations will improve their performance by employing the ERM concept. The basic argument presented in this paper is that the relation between ERM and firm performance is contingent upon the appropriate match between ERM and the following five factors affecting a firm: environmental uncertainty, industry competition, firm size, firm complexity, and board of directors' monitoring. Based on a sample of 112 US firms that disclose the implementation of their ERM activities within their 10Ks and 10Qs filed with the US Securities and Exchange Commission, empirical evidence confirms the above basic argument. The implication of these findings is that firms should consider the implementation of an ERM system in conjunction with contextual variables surrounding the firm.
Review of Development Economics, 2005
This paper reexamines the relationship between stock market development and economic growth. It p... more This paper reexamines the relationship between stock market development and economic growth. It provides a theoretical basis for establishing the channel through which stock markets affect economic growth in the long run. It examines the hypothesis of endogenous growth models that financial development causes higher growth through its influence on the level of investment and its productivity. The empirical part of this study exploits techniques recently developed to test for causality in VARs. The evidence obtained from a sample of four countries suggests that investment productivity is the channel through which stock market development enhances the growth rate in the long run.
Annals of Operations Research
This study analyses the implications of Jeffery–Lindley’s paradox and Global Financial Crisis (GF... more This study analyses the implications of Jeffery–Lindley’s paradox and Global Financial Crisis (GFC) for the operational aspect of macroeconomic policy coordination for financial stability. Using a Bayesian Vector Auto-regressive model and data from Jan 1985 to June 2016, our key findings suggest that the claim of macroeconomic policy interaction, interdependence and significance of coordinated policy operations for the financial stability holds its ground. The argument in the support for policy coordination for financial stability was found to be robust against the Jeffreys–Lindley’s paradox and in the Post-GFC era. A profound practical, operational and philosophical implication of this study is the positive aspects of Jeffreys–Lindley’s paradox and the possibility of employing the Frequentist and Bayesian estimation techniques as complementing rather competing frameworks.
Banks and Bank Systems
This study investigates the relationship between Enterprise Risk Management adoption and implemen... more This study investigates the relationship between Enterprise Risk Management adoption and implementation, and the performance of banks using a sample of four out of the seven Strategically Important Banks (SIB) listed on the Nigerian Stock Exchange covering the period from 2005 q1 to 2015 q2. In this study, we determined a measure for Enterprise Risk Management (ERM) adoption or implementation (ERM index) using an integrated Enterprise Risk Management measurement model for the banking sector suggested by Soliman and Mukhtar (2017). A time series Johansen’s cointegration test was used to obtain evidence of the long-term association between ERM and performance, while Vector Error Correction Model (VECM) analysis was performed to gather evidence of causality relationship between ERM and performance. Finally, Generalized Impulse Response Function was used to obtain evidence of how performance responds to the introduction of a shock on Enterprise Risk Management. This study makes signific...
Global Business Review
The purpose of this research article is to analyse the value-based management commitment of autom... more The purpose of this research article is to analyse the value-based management commitment of automotive enterprises and to examine the factors that explain the control parameters in automotive industry. There have been a few empirical studies published in the German’s automotive sector, but most of the existing studies failed to provide evidence of utilization of value-based management in the strategic management in the automotive sector. The German automotive industry’s development is closely related to global economic developments. Previous research work has considered control parameters of enterprises, but there is little evidence on the factors that explain which control parameters are used in automotive industry. A survey based on annual reports from 2008 to 2011 is used. In total, 20 annual reports of automotive companies were analysed. The results show that automotive companies, especially original equipment manufacturers and listed suppliers, have committed to value-oriented ...
Technological Forecasting and Social Change
Theoretical Economics Letters, 2017
The purpose of this research paper is to examine the proposition that capacity utilisation is an ... more The purpose of this research paper is to examine the proposition that capacity utilisation is an important factor in the determination of unemployment and wages. Underlying this proposition is the notion that capacity utilisation helps to determine the future path of the economy and is a significant factor in the response of the economy to different supply and demand shocks. We derived capacity utilisation and unemployment relationships, which were estimated and tested using data covering from 1997 to 2016 for three West Africa countries. The results suggest that long-term unemployment and capacity utilisation have a significant impact on unemployment. The policy implications of our findings are that in view of the strong effect of capacity utilisation on unemployment, programmes that enhance efficiency in production and investment enhancing policies may allow unemployed to regain access to the labour market.
Journal of economic development, Jun 1, 2004
Stock market is an indicator of an economy financial health. It indicates the mood of investors i... more Stock market is an indicator of an economy financial health. It indicates the mood of investors in a country. As such, stock market development is an important ingredient for growth. The stock exchange of West African monetary union is fairly new compared to many countries. This paper examines the impact of stock market development on growth in West African monetary union. A time series econometric investigation is conducted over the period 1995-2006. We analyze both the short run and long run relationship by constructing an ECM. Two measures of stock market development namely size and liquidity are used. We define size as the share of market capitalization over GDP and liquidity as volume of share traded over GDP. We found that stock market development positively affect economic growth in West African monetary union both in the short run and long run.
1 Abstract: This study derives an optimal macroeconomic policy combination for financial sector s... more 1 Abstract: This study derives an optimal macroeconomic policy combination for financial sector stability in the United Kingdom by employing a New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) framework. The empirical results obtained show that disciplined fiscal and accommodative monetary policies stance is optimal for financial sector stability. Furthermore, fiscal indiscipline countered by contractionary monetary stance adversely affects financial sector stability. Financial markets, e.g. stocks and Gilts show a short-term asymmetric response to macroeco- nomic policy interaction and to each other. The asymmetry is a reflection of portfo- lio adjustment. However in the long-run, the responses to suggested optimal policy combination had homogenous effects and there was evidence of co-movement in the stock and Gilt markets.
Political Economy: Government Expenditures & Related Policies eJournal, 2017
This study offers new insights into fiscal policy management by providing an alternative to the t... more This study offers new insights into fiscal policy management by providing an alternative to the traditional way of estimating guarantee It therefore takes away the need for guesswork amongst policy makers in estimating contingent liability. The findings confirm the long held belief that fundamental risk consideration should influence the choice of method in calculating value at risk which will be guaranteed by government. The study confirms that political consideration influences the governance risk indicator which is used to calculate the governance risk factor and that a default by government on guarantees for public private partnership transactions will have a negative impact on the debt while also providing a valuable path in the choice of “fundamental risk” indices in determining the value at risk.
Economic Issues Journal Articles, 2016
This study, using quarterly data from Egypt and Iran, extends the literature on demand for money ... more This study, using quarterly data from Egypt and Iran, extends the literature on demand for money by examining the stability of money demand functions in two different monetary policy regimes, an Islamic banking system and a conventional banking system. A stable demand for money enables central banks accurately to predict the demand for money and hence attain a price stability objective through the adjustment of the money supply. This paper adopts a restructured form of Friedman's (1956) model, which considers real demand for money as an extension to the theory of demand for durable goods. The study estimates the long-run demand for money functions in Iran, which represents an Islamic banking system, and Egypt, which represents a conventional banking system. The study then examines empirically the stability of the demand for money function under two different financial systems. The study finds that the demand for money function is stable under the Islamic banking system and unsta...
Theoretical Economics Letters, 2017
This paper provides both theoretical and empirical evidence for assessing the relationship betwee... more This paper provides both theoretical and empirical evidence for assessing the relationship between bank capitalisation and stock market liquidity. It estimates a bivariate VAR-GARCH (1.1) model to examine the linkage between bank capitalisation and stock market liquidity in Nigeria using annual data covering the period from 1986 to 2014. The findings of this paper show that bank capitalisation enables banks to give out more loans to the public and this increase in lending has a positive impact on stock market liquidity growth. The findings support the view that capitalised banks are well equipped to absorb and diversify risk, give out more loans, improve liquidity in the economy and improve stock market performance.
The Quarterly Review of Economics and Finance, 2021
Abstract This paper contends that the use of alternative constructs as Enterprise Risk Management... more Abstract This paper contends that the use of alternative constructs as Enterprise Risk Management (ERM) measures has made a partial contribution to the different and contradictory results provided by various empirical studies. It further argues that the comprehensive nature of Enterprise Risk Management implies that its adoption and implementation affect different aspects of firms and, therefore, the most appropriate construct to measure it should be equally comprehensive in order to capture all possible signals, outputs and effects from the features of a firm. Secondly, the specialised nature of banking operations and the associated risk necessitates risk measures that suit the peculiarities of the sector and in this study we have proposed banking sector specific ERM model. In this regard, we propose a comprehensive methodology and multifaceted approach to determining ERM measures for the banking sector, taking cognisance of the various components of ERM and the specific needs of the sector. In our proposed comprehensive methodology for determining ERM measures for the banking sector, we combined two important models: the ERM model for the banking sector and the CAMELS model for assessing the performance of banks. The integration of these two models provides a comprehensive and all-encompassing approach for determining ERM measures for the banking sector. Our model is novel and offers a significant contribution to the literature of bank risk management. Our model provides a comprehensive risk management framework for bank executives, bank risk managers, the board members of banks, central banks and the authorities responsible for financial sector stability.
Journal of Central Banking Theory and Practice, 2017
This study has analysed the implications of institutional design of macroeconomic policy making i... more This study has analysed the implications of institutional design of macroeconomic policy making institutions for the macroeconomic policy interaction and financial sector in the United Kingdom. Employing a Vector Error Correction (VEC) model and using monthly data from January 1985 to August 2008 we found that the changes in institutional arrangement and design of policy making authorities appeared to be a major contributing factor in dynamics of association between policy coordination/combination and financial sector. It was also found that the independence of the Bank of England (BoE) and withdrawal from the Exchange Rate Mechanism led to the increase in macroeconomic policy maker’s ability to coordinate and restore financial stability. The results imply that although institutional autonomy in the form of instrument independence (monetary policy decisions) could bring financial stability, there is a strong necessity for coordination, even in Post-MPC (Monetary Policy Committee) an...
Cogent Business & Management, 2016
The Leeds Beckett repository holds a wide range of publications, each of which has been checked f... more The Leeds Beckett repository holds a wide range of publications, each of which has been checked for copyright and the relevant embargo period has been applied by the Research Services team. We operate on a standard take-down policy. If you are the author or publisher of an output and you would like it removed from the repository, please contact us and we will investigate on a case-by-case basis.
Cogent Economics & Finance, 2016
The Leeds Beckett repository holds a wide range of publications, each of which has been checked f... more The Leeds Beckett repository holds a wide range of publications, each of which has been checked for copyright and the relevant embargo period has been applied by the Research Services team. We operate on a standard take-down policy. If you are the author or publisher of an output and you would like it removed from the repository, please contact us and we will investigate on a case-by-case basis.
Journal of Central Banking Theory and Practice, 2016
This concise study analyses the symmetry of financial markets’ responses to macroeconomic policy ... more This concise study analyses the symmetry of financial markets’ responses to macroeconomic policy interaction in the United Kingdom. Employing the Vector Auto-regression (VAR) model on monthly data of the British financial sector and macroeconomic policies from January 1985 to August 2008, this study found that the equity and sovereign debt markets showed identical symmetry in response to macroeconomic policy interaction.
Economic Issues Journal Articles, 2014
This paper analyses the implications of macroeconomic policy interactions for financial stability... more This paper analyses the implications of macroeconomic policy interactions for financial stability, proxied by financial assets prices (equity and bonds). The empirical analysis applies a Vector Autoregressive (VAR) model and our findings suggest that an accommodating monetary, and disciplined fiscal, stance has been optimal for both stock and bond markets. There is also ample evidence of interdependence between policies, as an expansionary fiscal policy could persuade the monetary authorities to adopt an accommodating stance, whereas a contractionary monetary policy leads fiscal policy towards consolidation. The interrelation between monetary and fiscal policy necessitates coordination between them for the sake of financial stability.
Journal of Accounting and Public Policy, 2009
In recent years, a paradigm shift has occurred regarding the way organizations view risk manageme... more In recent years, a paradigm shift has occurred regarding the way organizations view risk management. Instead of looking at risk management from a silo-based perspective, the trend is to take a holistic view of risk management. This holistic approach toward managing an organization's risk is commonly referred to as enterprise risk management (ERM). Indeed, there is growing support for the general argument that organizations will improve their performance by employing the ERM concept. The basic argument presented in this paper is that the relation between ERM and firm performance is contingent upon the appropriate match between ERM and the following five factors affecting a firm: environmental uncertainty, industry competition, firm size, firm complexity, and board of directors' monitoring. Based on a sample of 112 US firms that disclose the implementation of their ERM activities within their 10Ks and 10Qs filed with the US Securities and Exchange Commission, empirical evidence confirms the above basic argument. The implication of these findings is that firms should consider the implementation of an ERM system in conjunction with contextual variables surrounding the firm.
Review of Development Economics, 2005
This paper reexamines the relationship between stock market development and economic growth. It p... more This paper reexamines the relationship between stock market development and economic growth. It provides a theoretical basis for establishing the channel through which stock markets affect economic growth in the long run. It examines the hypothesis of endogenous growth models that financial development causes higher growth through its influence on the level of investment and its productivity. The empirical part of this study exploits techniques recently developed to test for causality in VARs. The evidence obtained from a sample of four countries suggests that investment productivity is the channel through which stock market development enhances the growth rate in the long run.
Annals of Operations Research
This study analyses the implications of Jeffery–Lindley’s paradox and Global Financial Crisis (GF... more This study analyses the implications of Jeffery–Lindley’s paradox and Global Financial Crisis (GFC) for the operational aspect of macroeconomic policy coordination for financial stability. Using a Bayesian Vector Auto-regressive model and data from Jan 1985 to June 2016, our key findings suggest that the claim of macroeconomic policy interaction, interdependence and significance of coordinated policy operations for the financial stability holds its ground. The argument in the support for policy coordination for financial stability was found to be robust against the Jeffreys–Lindley’s paradox and in the Post-GFC era. A profound practical, operational and philosophical implication of this study is the positive aspects of Jeffreys–Lindley’s paradox and the possibility of employing the Frequentist and Bayesian estimation techniques as complementing rather competing frameworks.
Banks and Bank Systems
This study investigates the relationship between Enterprise Risk Management adoption and implemen... more This study investigates the relationship between Enterprise Risk Management adoption and implementation, and the performance of banks using a sample of four out of the seven Strategically Important Banks (SIB) listed on the Nigerian Stock Exchange covering the period from 2005 q1 to 2015 q2. In this study, we determined a measure for Enterprise Risk Management (ERM) adoption or implementation (ERM index) using an integrated Enterprise Risk Management measurement model for the banking sector suggested by Soliman and Mukhtar (2017). A time series Johansen’s cointegration test was used to obtain evidence of the long-term association between ERM and performance, while Vector Error Correction Model (VECM) analysis was performed to gather evidence of causality relationship between ERM and performance. Finally, Generalized Impulse Response Function was used to obtain evidence of how performance responds to the introduction of a shock on Enterprise Risk Management. This study makes signific...
Global Business Review
The purpose of this research article is to analyse the value-based management commitment of autom... more The purpose of this research article is to analyse the value-based management commitment of automotive enterprises and to examine the factors that explain the control parameters in automotive industry. There have been a few empirical studies published in the German’s automotive sector, but most of the existing studies failed to provide evidence of utilization of value-based management in the strategic management in the automotive sector. The German automotive industry’s development is closely related to global economic developments. Previous research work has considered control parameters of enterprises, but there is little evidence on the factors that explain which control parameters are used in automotive industry. A survey based on annual reports from 2008 to 2011 is used. In total, 20 annual reports of automotive companies were analysed. The results show that automotive companies, especially original equipment manufacturers and listed suppliers, have committed to value-oriented ...