Browsing by Author "Marobhe, M.I"

Now showing 1 - 13 of 13

Bearish Conditions and Volatility Persistence During COVID-19 can Microchip Stocks Weather the Storm?
(Review of Behavioral Finance, 2022) Marobhe, M.I; Dickson, P
Purpose The purpose of this article is to examine the impact of panic and hysteria news on the volatility of microchip stocks during Covid-19. Design/methodology/approach The authors use the P-GARCH (1,1) and random effects regression to model/examine the impact of Covid-19 panic and hysteria news on the overall microchip sector and individual firms. They further utilize the SVAR model to examine volatility spill-over from the microchip sector to the automobile and main technology sectors. Their time frame ranges from 6th January 2020 to 30th June 2021 to capture the effects of both waves of Covid-19. Findings The study results firstly reveal that Covid-19 panic and hysteria news have tremendous potential to model the volatility of microchip sector stock thus confirming the information discovery hypothesis. The authors secondly demonstrate the influence of Covid-19 cases, deaths and policy stringency on stock returns of individual microchip companies in different countries. Finally the authors confirm the presence of volatility spill-over from the microchip sector to other technology sectors. Research limitations/implications The authors provide evidence to support the profundity of bad news in predicting stock behavior. The study results depict how Covid-19 has affected microchip stocks so that policy initiatives can be taken to protect the industry. The presence of volatility spill-over signifies the importance of diversifying portfolios by mixing technology and non-technology stocks. Originality/value The research strand on Covid-19 and individual sectoral stocks has received limited scholarly attention despite unparalleled effects of the pandemic on different sectors.
Cryptocurrency as a Safe Haven for Investment Portfolios Amid COVID-19 Panic Cases of Bitcoin, Ethereum and Litecoin
(China Finance Review International, 2021) Marobhe, M.I
Purpose – This article examines the susceptibility of cryptocurrencies to coronavirus disease 2019 (COVID-19) induced panic in comparison with major stock indices. Design/methodology/approach – The author employs the Bayesian structural vector autoregression to examine the phenomenon in Bitcoin, Ethereum and Litecoin from 2nd January 2020 to 30th June 2021. A similar analysis is conducted for major stock indices, namely S&P 500, FTSE 100 and SSE Composite for comparison purposes. Findings – The results suggest that cryptocurrencies returns suffered immensely in the early days of the COVID-19 outbreak following declarations of the disease as a global health emergency and eventually a pandemic in March 2020. However, the returns for all three cryptocurrencies recovered by April 2020 and remained resistant to further COVID-19 panic shocks. The results are dissimilar to those of S&P 500, FTSE 100 and SSE Composite values which were vulnerable to COVID-19 panic throughout the timeframe to June 2021. The results further reveal the strong predictive power of Bitcoin on the prices of other cryptocurrencies. Research limitations/implications – The article provides evidence to support the cryptocurrency as a safe haven during the COVID-19 school of thought given their resistance to subsequent shocks during COVID-19. Thus, the author stresses the need for diversification of investment portfolios by including cryptocurrencies given their uniqueness and resistance to shocks during crises. Originality/value – The author makes use of the novel coronavirus panic index to examine the magnitude of shocks in prices of cryptocurrencies during COVID-19.
Determinants of Firms’ Working Capital Panel Evidence from Listed East African Manufacturing Companies
(International Journal of Business and Social Science, 2015) Marobhe, M.I
This study evaluates the determinants of working capital of manufacturing companies listed in East Africa Stock Exchanges. It uses Cash Conversion Cycle and Acid Test Ratios as the measures of working capital and Return on Assets (ROA), Firm Size, Firm Growth, Asset Utilization, Operating cash flows, Gearing and Real GDP Growth Rate as the determinants of working capital. This study employed the Fixed and Random Affect Multiple regression models using panel data in the period (2005-2014). The findings showed that ROA, Firm size and Firm Growth and Asset Utilization have a significant relationship with Cash Conversion Cycle using the Random Effect model. For Acid Test Ratio; Firm Size, Firm Growth, Gearing and Operating Cash Flows showed significant relationship with this ratio using the Fixed Effect model. So manufacturing companies are urged to maintain appropriate working capital levels by striking a balance between the factors that influence working capital as they have been established by this study
The Determinants of the Commercial Banks Profitability in Tanzania: Panel Evidence
(European Journal of Business and Management, 2015) Marobhe, M.I
This paper examines determinants of commercial banks' profitability in Tanzania with a particular focus on the internal and external factors. The study employs a set of panel secondary data from a sample of eighteen (18) commercial banks for the period (2000-2011) and uses the CAMEL model to investigate the financial performance level of the banking system. Furthermore, The study employs a multiple regression model to generate and specify the profitability function. The results confirm that capital adequacy, liquidity, asset quality and macro-economic factors are critical components in influencing profitability of the commercial banks.
Do Foreign Direct Investment Inflows Cause Economic Growth in Tanzania? The Granger Causality Test Approach
(Journal of Economics and Sustainable Development, 2015) Marobhe, M.I
This study assesses whether FDI inflows cause economic growth in Tanzania, it uses time series data covering a period (1970-2014). The study also tests for the co integration between FDI inflows and economic growth. Data pertaining FDI inflows and Gross Domestic Product (GDP) which is used as a measure of economic growth were obtained from International Monetary Fund (IMF) statistics. The Granger causality test was used to test for the causality between FDI inflows and GDP and co integration was tested using Johansen Co integration test. But the major prerequisite for conducting these two (2) tests is that the time series data must not have a unit root i.e. stationary, so the Augmented Dickey Fuller (ADF) test was carried out to check for the unit root. The results from ADF test showed that the time series data for both FDI inflows and GDP did not have a unit root hence making them appropriate for running the econometric tests needed. The results from Granger Causality Test concluded that FDI inflows do cause economic growth in Tanzania and not vice versa. Lastly, the Johansen Co integration Test results show that there is co integration or long term association between FDI inflows and economic growth measured by GDP. So it is recommended that Tanzania and other emerging economies should devise appropriate strategies such as efficient tax benefits to foreign investors, improve infrastructure and improve the skills of human capital to attract FDI.
An Empirical Analysis of the Relationship Between Working Capital Management and Profitability: Panel Evidence from Listed Manufacturing Companies in East Africa
(European Journal of Business and Management, 2014) Marobhe, M.I
This paper assesses the relationship between working capital management and profitability of manufacturing companies listed in East African stock exchange markets in the period (2005-2012). Profitability which was the dependent variable was represented by Return on Assets (ROA) and Operating Margin (OM) while the independent variable, working capital management was represented by Current Ratio, Quick Ratio, Cash Cover Ratio, Inventory Holding Period, Receivables’ Collection Period, Payables’ Deferral Period and Cash Conversion Cycle. The study also used Sales Growth, Debt Ratio and Company Size as the control variables. Data analysis was conducted using Pearson Correlation and Multiple Regression Analysis and it was observed that there exists a significant relationship between the components of working capital, especially cash conversion cycle and profitability. The cash conversion cycle was negatively related to operating margin (OM) hence it is recommended that companies should shorten the cash conversion cycle by keeping the receivables’ collection period, payables’ deferral period and inventory holding period o the optimum level.
External Debts and Economic Growth in Tanzania
(Review of Integrative Business and Economics Research, 2019) Marobhe, M.I
This study examines the relationship between external debts and economic growth in Tanzania using time series data from (1970-to 2015). The ordinary least squares multiple regression analysis was conducted and the results revealed a significant positive relationship between external debt and economic growth. The Granger causality test was also carried out and the results provided evidence of causality between external debts and economic growth in Tanzania. Furthermore, results from the Johansen Co-integration test also provide evidence of the existence of long-run association/co-integration between external debt and economic growth. So, this study provides evidence that may help to reach a conclusion that external debts have aided to stimulate economic growth in Tanzania. However, caution must be taken to keep external debts at an optimal level to avoid debt overhang which can have detrimental effects on the economy.
The Influence of Capital Structure on the Performance of Manufacturing Companies: Empirical Evidence from Listed Companies in East Africa
(Research Journal of Finance and Accounting, 2014) Marobhe, M.I
This paper evaluates the influence of capital structure on the performance of manufacturing companies listed in various stock exchanges in East Africa. This study used panel secondary data, where the financial statements of 12 manufacturing companies were selected from (2005-2012). Data analysis was done using multiple regression analysis which established the relationship between performance expressed by Return on Assets (ROA), Return on Equity (ROE) and Earnings per Share (EPS) and capital structure which was represented by Long Term Debts to Total Capitalization (LTDTC)/ (gearing), Short Term Debts to Total Assets (STD), Long Term Debts to Total Assets (LTDTA), Debt to Equity (TDE) and Interest cover (IC). The study confirmed statistically a significant negative relationship between profitability and capital structure using ROA however the remaining profitability measures ROE and EPS showed an insignificant relationship with capital structure. It is recommended that manufacturing companies in East Africa should strive to maintain low leverage so as to be profitable.
Institutional Quality and Resource based Economic Sustainability: the Mediation Efects of Resource Governance
(SN Business and Economic A Springer Nature Journal, 2022-01-20) Marobhe, M.I
The discovery of extractive resources is associated with multiple opportunities and unbridled optimism on achieving socio-economic development for many countries. However, the question how the host governments meet expectations of indigenous people by ensuring an ideal resource-based economic sustainability (RES) has been receiving less research attention. Using the global panel dataset of 80 resourceendowed economies from 2010 to 2017, we postulate and empirically examine the mediating efect of the resource governance (RESOGV) on the relationship between institutional quality (IQ) and RES. The ANOVA and post hoc ANOVA results revealed signifcant disparities in terms of IQ, RESOGV, and RES among countries with diferent levels of economic development, regions, and sector (mining or petroleum). Moreover, the fixed effects (FE) and ordinary least square (OLS) results confirmed that IQ marginally influenced RES. However, the influence was more pronounced when it was partially (but complementary) mediated by the RESOGV. The paper, therefore, stresses the importance of host governments in improving the quality of their institutions. This will ultimately help enhancing their RESOGV capabilities for attaining economic, social and environmental sustainability.
Institutional Quality and Resource-Based Economic Sustainability: The Mediation Effects of Resource Governance
(SN Business & Economics, 2022) Marobhe, M.I
The discovery of extractive resources is associated with multiple opportunities and unbridled optimism on achieving socio-economic development for many countries. However, the question of how the host governments meet the expectations of indigenous people by ensuring an ideal resource-based economic sustainability (RES) has been receiving less research attention. Using the global panel dataset of 80 resource endowed economies from 2010 to 2017, we postulate and empirically examine the mediating effect of resource governance (RESOGV) on the relationship between institutional quality (IQ) and RES. The ANOVA and post hoc ANOVA results revealed significant disparities in terms of IQ, RESOGV, and RES among countries with different levels of economic development, regions, and sector (mining or petroleum). Moreover, the fixed effects (FE) and ordinary least square (OLS) results confirmed that IQ marginally influenced RES. However, the influence was more pronounced when it was partially (but complementarily) mediated by the RESOGV. The paper, therefore, stresses the importance of host governments in improving the quality of their institutions. This will ultimately help enhance their RESOGV capabilities for attaining economic, social and environmental sustainability. The discovery of extractive resources is associated with multiple opportunities and unbridled optimism on achieving socio-economic development for many countries. However, the question of how the host governments meet the expectations of indigenous people by ensuring an ideal resource-based economic sustainability (RES) has been receiving less research attention. Using the global panel dataset of 80 resource endowed economies from 2010 to 2017, we postulate and empirically examine the mediating effect of the resource governance (RESOGV) on the relationship between institutional quality (IQ) and RES. The ANOVA and post hoc ANOVA results revealed significant disparities in terms of IQ, RESOGV, and RES among countries with different levels of economic development, regions, and sector (mining or petroleum). Moreover, the fixed effects (FE) and ordinary least square (OLS) results confirmed that IQ marginally influenced RES. However, the influence was more pronounced when it was partially (but complementarily) mediated by the RESOGV. The paper, therefore, stresses the importance of host governments in improving the quality of their institutions. This will ultimately help enhance their RESOGV capabilities for attaining economic, social and environmental sustainability.The discovery of extractive resources is associated with multiple opportunities and unbridled optimism on achieving socio-economic development for many countries. However, the question how the host governments meet expectations of indigenous people by ensuring an ideal resource-based economic sustainability (RES) has been receiving less research attention. Using the global panel dataset of 80 resourceendowed economies from 2010 to 2017, we postulate and empirically examine the mediating effect of the resource governance (RESOGV) on the relationship between institutional quality (IQ) and RES. The ANOVA and post hoc ANOVA results revealed significant disparities in terms of IQ, RESOGV, and RES among countries with different levels of economic development, regions, and sector (mining or petroleum). Moreover, the fixed effects (FE) and ordinary least square (OLS) results confirmed that IQ marginally influenced RES. However, the influence was more pronounced when it was partially (but complementarily) mediated by the RESOGV. The paper, therefore, stresses the importance of host governments in improving the quality of their institutions. This will ultimately help enhance their RESOGV capabilities for attaining economic, social and environmental sustainability.
Investors’ Reactions to COVID-19 Related Announcements: Evidence from the Cargo Shipping Industry
(Review of behavioral finance, 2021) Marobhe, M.I
Purpose – The purpose of this study is to examine the impact of the corona virus (COVID-19) pandemic on stock returns of listed cargo shipping companies. Design/methodology/approach – The author employs the events study methodology to examine this phenomenon. A sample of 49 listed cargo shipping companies in the container, dry bulk and tanker sub-sectors from Asia, North America, and Europe was selected and their daily closing stock prices from 1st January 2020to 31st December 2020 were utilized. Findings – The results reveal that there was an overall negative overreaction to the announcement by World Health Organization (WHO) that declared COVID-19 a pandemic. The approvals of USD 857 billion stimulus package by the European Union (EU) and Pfizer vaccine by Food and Drug Administration (FDA) in USA received slight positive reactions. The Greek, Singaporean and Taiwanese shipping stocks were the least affected stocks as their respective shipping industries remained resilient during 2020. Research limitations/implications – This study provides evidence to confirm the fact that COVID-19 has affected stock markets; however the impact is un parallel among cargo shipping stocks of different countries. Originality/value – The majority of studies have conducted country level analyses of the COVID-19 and stock market performance phenomenon. However, there have been sectoral disparities in terms of their susceptibility to economic shocks from COVID-19. This study’s focal point is on the cargo shipping sector which synonymous with other sectors has not been immune to the current pandemic. The study also extends the timeline of events to incorporate those from June to December 2020.
The Nexus between Dividend Policy and Financial Gearing of Listed Non Financial Companies in Tanzania
(International Journal of Business and Administrative Studies, 2019-10-26) Marobhe, M.I; Hembe, Luciana
Abstract: Abstract This paper intends to explore the relationship between dividend policy and financial gearing of listed non-financial companies in Tanzania. A case study of seven (7) non-financial companies listed at Dar es Salaam Stock Exchange (DSE) was used to assess this phenomenon. Unbalanced panel data from these companies’ annual reports were used, covering 2002 to 2018. Generalized linear regression analysis was used to examine the phenomenon mentioned above with Akaike Information Criterion (AIC) and Beysian Information Criterion (BIC) to select the most appropriate models. The results from generalized linear regression analysis indicated that companies with higher dividend payouts have lower gearing. Further results show that higher dividend payouts are associated with a lower cost of debts as debt providers deem these companies to be stable and less risky. So this study urges profitable firms to pay out dividends as a sign of financial strength which eventually reduces the cost of debt. But caution must be taken by financial managers to ensure that a sufficient amount of internal funds are retained after paying dividends for future endeavours.
The Relationship Between Capital Structure and Commercial Bank Performance: A Panel Data Analysis
(International Journal of Financial Economics, 2013) Dickson, P; Marobhe, M.I; Kaaya, I
The study was aimed at identifying the relationship between capital structure and bank performance. The bank performance was indicated by Return on Asset as the dependent variable and was regressed against the components of capital structure using multiple regression models. The results depict the negative relationship between capital structure and bank performance as they indicate negative coefficients. The value of R square and adjusted R square was low, and the study recommends being extended to more variables as it can help to improve the fitness of the model.