Liquidity and Profitability: A Co-Integration Study
This paper examines the relationship between liquidity and profitability of the non-financial firms listed in Dhaka Stock Exchange (DSE) for the period of 1998–2013. Pedroni and Johansen co-integration results show that liquidity, profitability, firm size and long-term debt (LTD) have significant co...
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| Veröffentlicht in: | Review of Pacific basin financial markets and policies 2018-06, Vol.21 (2), p.1850011 |
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| creator | Alom, Khairul |
| description | This paper examines the relationship between liquidity and profitability of the non-financial firms listed in Dhaka Stock Exchange (DSE) for the period of 1998–2013. Pedroni and Johansen co-integration results show that liquidity, profitability, firm size and long-term debt (LTD) have significant co-integration relationship in the long run. The causality test results expose that a strong bidirectional casual relationship exist among the variables of liquidity and profitability, LTD and liquidity profitability and firm size in the short run. Also, there exists unidirectional causality among the variables of firm size and liquidity, profitability and LTD in the short run. Furthermore, Pooled Mean Group results show that profitability, firm size and LTD have long-run co-integration relationship with liquidity. However, in the short run, profitability and LTD significantly contribute to the liquidity and the error correction mechanism shows that speed of adjustment to equilibrium is significant within the year. Impulse response analysis indicates shocks in the firm size, LTD and profitability have positive and significant impact on liquidity. |
| doi_str_mv | 10.1142/S021909151850011X |
| format | Article |
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Pedroni and Johansen co-integration results show that liquidity, profitability, firm size and long-term debt (LTD) have significant co-integration relationship in the long run. The causality test results expose that a strong bidirectional casual relationship exist among the variables of liquidity and profitability, LTD and liquidity profitability and firm size in the short run. Also, there exists unidirectional causality among the variables of firm size and liquidity, profitability and LTD in the short run. Furthermore, Pooled Mean Group results show that profitability, firm size and LTD have long-run co-integration relationship with liquidity. However, in the short run, profitability and LTD significantly contribute to the liquidity and the error correction mechanism shows that speed of adjustment to equilibrium is significant within the year. Impulse response analysis indicates shocks in the firm size, LTD and profitability have positive and significant impact on liquidity.</description><identifier>ISSN: 0219-0915</identifier><identifier>EISSN: 1793-6705</identifier><identifier>DOI: 10.1142/S021909151850011X</identifier><language>eng</language><publisher>Singapore: World Scientific Publishing Co. Pte., Ltd</publisher><subject>Bidirectionality ; Causality ; Economic models ; Liquidity ; Long term debt ; Profitability ; Size of enterprise</subject><ispartof>Review of Pacific basin financial markets and policies, 2018-06, Vol.21 (2), p.1850011</ispartof><rights>2018. 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Pedroni and Johansen co-integration results show that liquidity, profitability, firm size and long-term debt (LTD) have significant co-integration relationship in the long run. The causality test results expose that a strong bidirectional casual relationship exist among the variables of liquidity and profitability, LTD and liquidity profitability and firm size in the short run. Also, there exists unidirectional causality among the variables of firm size and liquidity, profitability and LTD in the short run. Furthermore, Pooled Mean Group results show that profitability, firm size and LTD have long-run co-integration relationship with liquidity. However, in the short run, profitability and LTD significantly contribute to the liquidity and the error correction mechanism shows that speed of adjustment to equilibrium is significant within the year. Impulse response analysis indicates shocks in the firm size, LTD and profitability have positive and significant impact on liquidity.</description><subject>Bidirectionality</subject><subject>Causality</subject><subject>Economic models</subject><subject>Liquidity</subject><subject>Long term debt</subject><subject>Profitability</subject><subject>Size of enterprise</subject><issn>0219-0915</issn><issn>1793-6705</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2018</creationdate><recordtype>article</recordtype><recordid>eNplkE9LxDAQxYMoWFc_gLeC52gm0zSNt6X4Z6GgsAreStokkmVtd9P00G9vy3rzNMO8H-8Nj5BbYPcAGX_YMg6KKRBQCMYAvs5IAlIhzSUT5yRZZLrol-RqGHYzUhQSEoKVP47e-DilujPpe-idj7rx-_nymK7TsqebLtrvoKPvu3QbRzNdkwun94O9-Zsr8vn89FG-0urtZVOuK9pyiZFKDpJb1AB5zmw7b_MvjWA5gkLFBTbCOJHlTWFanjHG2xaBC9cY41ABxxW5O_keQn8c7RDrXT-Gbo6sOUCBXDGJMwUnqg39MATr6kPwPzpMNbB66ab-1w3-AhHsVCM</recordid><startdate>201806</startdate><enddate>201806</enddate><creator>Alom, Khairul</creator><general>World Scientific Publishing Co. Pte., Ltd</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>201806</creationdate><title>Liquidity and Profitability: A Co-Integration Study</title><author>Alom, Khairul</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c273t-72172e3a11660ece3a670b50631939253b5df546b8dc24002cc3125fbddf39123</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2018</creationdate><topic>Bidirectionality</topic><topic>Causality</topic><topic>Economic models</topic><topic>Liquidity</topic><topic>Long term debt</topic><topic>Profitability</topic><topic>Size of enterprise</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Alom, Khairul</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Review of Pacific basin financial markets and policies</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Alom, Khairul</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Liquidity and Profitability: A Co-Integration Study</atitle><jtitle>Review of Pacific basin financial markets and policies</jtitle><date>2018-06</date><risdate>2018</risdate><volume>21</volume><issue>2</issue><spage>1850011</spage><pages>1850011-</pages><issn>0219-0915</issn><eissn>1793-6705</eissn><abstract>This paper examines the relationship between liquidity and profitability of the non-financial firms listed in Dhaka Stock Exchange (DSE) for the period of 1998–2013. Pedroni and Johansen co-integration results show that liquidity, profitability, firm size and long-term debt (LTD) have significant co-integration relationship in the long run. The causality test results expose that a strong bidirectional casual relationship exist among the variables of liquidity and profitability, LTD and liquidity profitability and firm size in the short run. Also, there exists unidirectional causality among the variables of firm size and liquidity, profitability and LTD in the short run. Furthermore, Pooled Mean Group results show that profitability, firm size and LTD have long-run co-integration relationship with liquidity. However, in the short run, profitability and LTD significantly contribute to the liquidity and the error correction mechanism shows that speed of adjustment to equilibrium is significant within the year. Impulse response analysis indicates shocks in the firm size, LTD and profitability have positive and significant impact on liquidity.</abstract><cop>Singapore</cop><pub>World Scientific Publishing Co. Pte., Ltd</pub><doi>10.1142/S021909151850011X</doi></addata></record> |
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| ispartof | Review of Pacific basin financial markets and policies, 2018-06, Vol.21 (2), p.1850011 |
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| language | eng |
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| source | Business Source Complete |
| subjects | Bidirectionality Causality Economic models Liquidity Long term debt Profitability Size of enterprise |
| title | Liquidity and Profitability: A Co-Integration Study |
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