Research Article
The Impact of Capital Expenditure on Ethiopian Economic Growth
Issue:
Volume 10, Issue 5, October 2024
Pages:
84-91
Received:
11 September 2023
Accepted:
10 October 2024
Published:
29 October 2024
Abstract: This study investigates the effect of disaggregated capital expenditure on economic growth in Ethiopia over the period from 1981 to 2021. An autoregressive distributed lag (ARDL) model, combined with a Granger causality test, is used for the econometric analysis. The empirical results reveal that capital expenditure on economic development (CAEE), recurrent expenditure (RCE), and the inflation rate (CPI) have significant positive impacts on economic growth in both the long run and short run. However, capital expenditure on administrative and general development (CEAG) has a significant negative effect on economic growth in the long run. The Granger causality test further indicates unidirectional causality from economic growth (GNI) to capital expenditure on economic development (CAEE). Based on these findings, the study recommends that the Ministry of Finance should increase its budget allocations for capital expenditures aimed at economic development in order to further stimulate economic growth. Additionally, the government should implement stricter follow-up and monitoring mechanisms to ensure the proper management of budget allocations, particularly regarding capital expenditures on social development and administrative and general development. These measures are crucial for sustaining long-term economic growth in Ethiopia.
Abstract: This study investigates the effect of disaggregated capital expenditure on economic growth in Ethiopia over the period from 1981 to 2021. An autoregressive distributed lag (ARDL) model, combined with a Granger causality test, is used for the econometric analysis. The empirical results reveal that capital expenditure on economic development (CAEE), ...
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Research Article
Non-Performing Assets (NPA’s) – Impact on Financial Stability of Indian Commercial Banks
Dia Reddy Ganjikunta
,
Neharika Shrivastava*
Issue:
Volume 10, Issue 5, October 2024
Pages:
92-103
Received:
28 September 2024
Accepted:
23 October 2024
Published:
13 November 2024
DOI:
10.11648/j.ijfbr.20241005.12
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Abstract: For any economy credit is required for faster growth, but any outstanding advances may turn macroeconomic shocks. There can be various reasons for Non-Performing Assets (NPA) like low scrutiny by banks, wilful defaulter, low earnings affecting ability of entities to pay back loans, economic slowdown, government policies etc. This study aims to bridge this gap by analysing the performance and impact of NPA’s on the State Bank Of India (SBI) top public commercial bank by market capitalisation and HDFC Bank, a top private bank according to market capitalisation. For the current study, HDFC and SBI bank was considered and data for the study was collected using secondary source, i.e. annual reports. The data was collected in a time series format for different financial variables. Keeping Net NPA to Net Advances as an independent variable and Net Profit/Income Ratio and ROA as dependent variable hypothesis was formed. As per the findings, NPA significantly impact profitability of Banks’ and Debt to Asset Ratio. The impact of NPA was found to be more profound in the SBI than HDFC, but it was observed that SBI’s NPA is better managed than that of HDFC, since it made more provisions for NPA, had better loan structures and profitability metrics. It is suggested that Private Commercial Banks can maintain more provisions for NPA and better utilization of assets to reduce their Debt to Asset Ratio to mitigate the negative affect of NPA.
Abstract: For any economy credit is required for faster growth, but any outstanding advances may turn macroeconomic shocks. There can be various reasons for Non-Performing Assets (NPA) like low scrutiny by banks, wilful defaulter, low earnings affecting ability of entities to pay back loans, economic slowdown, government policies etc. This study aims to brid...
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