Vol. 5 No. 1 (2022)

The stock exchange of Bhutan is considered one of the smallest stock markets in the world with market capitalization of BTN 49 billion1. Since the inception of the stock exchange in 1993 to facilitate trading of both equity and debt securities, the performance of stock market with respect to the macroeconomic variables have not been studied by academicians and researchers in Bhutan. Similar to the asset-inflation relationship studies conducted in different countries, the objective of this research is in providing insights on the hedging features of the common stock returns against inflation as per the classical Fisher hypothesis postulated by Irving Fisher in 1930s. For this study, we selected nine different companies listed on the stock exchange and grouped them into banks, insurance and industry sectors. The data on the monthly consumer price index inflation rates is retrieved from the website of the National Statistics Bureau of Bhutan, and daily market closing price from website of the Royal Securities Exchange of Bhutan. To test the hypothesis, we used bivariate regression analysis for different groups of sectors. Other relevant information on the descriptive statistics of the nominal common stock returns and its variability with respect to the inflation is also discussed. Our result shows that the nominal common stock return does not act as a hedge against inflation. In addition, our study indicates a weak inverse relationship between the nominal common stock return and inflation, though the result is not statistically significant to support the negative relationship between the two.

This paper explores managing financial products and services by Bhutanese in some of the identified blocks (Gewogs) in Bhutan. It investigates various skills of managing financial products and services primarily on four financial management dimensions namely, Perception of General Financial Knowledge (PGFK), Perception of Savings and Borrowings (PSB), Perception of Insurance Planning (PIP) and Perception of Making Investment (PMI). The research is based on the baseline data collected from the respondents. Data were collected with the help of structured schedule. A total of 537 respondents were included from two blocks of Chukha district (rural) Thimphu, the capital city of Bhutan (urban). The data were analysed and interpreted based on qualifications of the respondents. Mean and standard deviation were used to describe the characteristics of the data. In addition, ANOVA was used to test the research hypotheses. The inferences of the study reveal current scenario of managing financial products and services among the Bhutanese. It portrays cases that people with higher education level obtained higher financial skills in almost all the dimensions (except that of PMI). The post-hoc tests, however, do not support research hypotheses in the study. The study is purely based on primary data and is expected to have some positive bearing on the key stakeholders of the country including that of policy framing agencies. Besides, the study may be taken as a case teaching material and may act as significant supplementary reference in the classroom teaching.

Over the years, the public spending, along with the GDP has been rising in Bhutan. For instance, the public expenditure in Bhutan rose to Nu. 56331.357 million in the Fiscal Year 2018/19 from Nu. 49,966.611 million in the previous year (AFS 2017-18). This paper attempts to validate Wagner’s law against the Keynesian hypothesis in the context of the Bhutanese economy from 1991 to 2019. Wagner’s law of government expenditure and real income is opposite to the Keynesian hypothesis. In Wagner’s postulation, the causal relationship runs from real income to real government expenditure and it is reversed in the case of the Keynesian hypothesis. The two-way granger causality test result indicated that Wagner’s law does not hold and the evidence supports the Keynesian proposition. This is because Bhutan is more of a public-led welfare state and with its sluggish private sector growth, the economy requires the substantial support of the government. To assess the association of government expenditure with other macroeconomic variables such as inflation and unemployment, correlation and regression tests was conducted. The result showed that both consumption and capital expenditure positively influence inflation. The rising consumption expenditure has a positive relationship with unemployment; however, the capital expenditure can reduce unemployment.

Microfinance Institutions (MFIs) provide financial services to those who have no access to finance and are hence considered a tool for poverty alleviation. However, the clear relationship between the depth of the MFIs and their sustainability is still lacking as there is an ongoing debate on whether the two components complement each other or whether there exists a tradeoff. This study applied the panel regression analysis to the data from 44 MFIs of Nepal from 1999 to 2019 and explored the inter-relationship between depth and sustainability of MFI in the Nepalese context. In addition to the two variables of interest, this study further analyses the interaction effect of operational efficiency. The findings show a significant tradeoff relationship between outreach and sustainability at a 99% confidence interval, further moderated by operational efficiency. As a result of increased operational efficiency, MFIs can have better outreach and sustainability. These findings can thus provide a better policy prescription that promotes operational efficiency and ultimately improve both the outreach and sustainability of MFIs.

The objective of the study is to bring out the linkages between HRM practices and organizational performance that continue to enthuse the researchers and practitioners as there are mediating and interacting variables in this relationship of distal nature. The black- box model approach was adopted to keep the options open for the researchers to unpack the box with intervening variables. In evaluating the extant literature, the methodology of the study, and intervening variables that link the relationship are derived from the organizational behavioural processes of individual, group, managerial and organizational structures and functions. The structural and functional integration suggested bridging the gap between HRM practices and performance.