Leaders Make a Real Difference in an Organisation’s Performance Essay

Within these qualities over history great leaders have developed detailed theories that are constantly being utilized within successful corporations today. Amongst these are Trait theory, Behavioural theories and also the Situational contingency theories that were used to represent successful leadership qualities. Great leaders become highlighted in times of oppression, utilizing their talents to move forward and have solid control of their organisations, in turn developing positive organisational performance. Through past generations leadership had developed to the ultimate success it is today. Through multiple theories, leadership has moved to the point where it now has a factual impact on organisations performance. The contemporary management theories are used in numerous ways of motivating, creating opportunity providing inspiration and resulting in a definite increase in organisational performance. This is evident in today’s society, through a minimal view of coaching sporting teams to the operations of large corporate groups such as Wesfarmers. Creating opportunity, Throughout history, it has been clearly evident that a great leader’s input shall reflect with a great performance output, thus developing opportunities for individuals to accomplish their maximum potential. â€Å"Leaders create opportunity for individuals within their sphere of influence† (urbanfoot. ca, 2009), opportunity being a set of circumstances that makes it potentially possible to achieve anything from extrinsic to intrinsic rewards. This creation of opportunity manifests itself across the globe in large and small organisations. In contemporary society it is shown by leaders within sporting clubs, the success of the best AFL clubs are built on a hierarchy of leaders, club captains, coaches, and trainers. They are all striving to create opportunity for young potential players. Essendon football club’s great success over the past numerous decades have been because of the major influential leadership role James Hird has played within the club. James Hird leading his club by being captain through two premierships and is now today still leading the club by coaching. His career of captain assisted with the creation the opportunity for the club leaders today and now he is continuing his leadership role by coaching the team, it is evident with his club involvement there is a definite outcome of organisational performance. As well as leading through creating opportunity, great leaders strive to inspire others within their environment. Inspiration, Leaders aim to inspire individuals within their vicinity to pursue the outcome of organisational performance. This constant attempt to provide inspiration is strongly shown by our world’s best leaders that are driving the powerhouse of our world’s economy. Steve Jobs, co-founder of Apple, Phil Knight, founder of Nike and Richard Branson founder of Virgin Group, these individuals are amongst many others that are part of the world’s most inspirational leaders. These people have founded some of the world’s biggest corporations by their profound ability inspire. Richard Branson went from developing a school newspaper called Student to operating one of the world’s most complex conglomerates know as Virgin Group. Branson’s life motto is to ‘have fun’ this is reason to his positive eccentric personality that reflects to inspire others around him. Lead by example† this phrase is used throughout human life to portray inspiration on others, through creating an inspiration on others leaders are assisting to motivate. Motivation, Motivation is a key part of a great leader’s success in achieving organisational performance. Motivation is referred to as â€Å"the forces within an individual that account for the level, direction and persistence of effort expended at work† (Wood, J. et al, 2010). Motivation on individuals is reflected by successful leaders, through multiple different theories. Abraham Maslow’s hierarchy of needs theory identifies high order needs and low order needs† (Wood, J. et al, 2010) this details a pyramid that highlights the work motivational needs of individuals, including psychological, safety, social, esteem and self-actualisation. This research has contributed to the success of leaders in motivating and achieving ultimate organisational performance across large contemporary organisations. In many of today’s organisations leaders commonly motivate employees through the use of offering extrinsic rewards, â€Å"positively valued work outcomes† (Wood, J. t al, 2010), this may range from Christmas bonuses to simply allowing the use of a company car. Through the use of extrinsic rewards individuals are motivated to produc e their maximum performance. It is evident in KPMG, one of the world’s largest consulting firms; the use of leaders providing employees with extrinsic rewards motivates employees to achieve their full potential. KPMG provides employees with an annual bonus fluctuating on the employees yearly work effort. In doing so employees are determined to work to achieve a high constant overall organisational performance. Individuals that utilize the use of their leadership talents; creating opportunity, inspiring and motivating individuals will evidently result in reaching an optimum level of organisational performance productivity. Throughout history within these abilities leaders have developed several theories to manage the way it is put into practice. Through the past centuries leaders have always played a pivotal role in the triumph of groups, from the times of Genghis Khan, Napoleon and even Hitler, their efforts have exemplified how great leaders can make a major difference to organisations. All leaders tend to have different styles when it comes to commanding their subordinates and as time has progressed they have been categorized into different approaches and theories. The first theory to be thought up was known as the trait theory, and as the years moved on different studies and research was conducted to the point where different types of leadership are studied. Trait Theory, The trait theory which identifies different traits between leaders and followers, and assumes that leaders are born not developed. The trait theory takes into account physical and mental attributes of people that appeared to be more successful leaders. This theory took into account things such as height, weight and personality, and rather than study each of those in detail, these characteristics were recognised in effective and ineffective leaders. Therefore people could be able to predict if a person was a worthy or unworthy leader, although due to the studies being conducted as early as 1900 there was never any real recording s of evidence. Also there were never any real set of traits that defined a good leader, in other words there was no benchmark, which made it difficult for people to understand the theory as there were great leaders that had different characteristics. For example Hitler had different traits and characteristics to Nelson Mandela, Hitler was considered hard and persistent whereas Mandela was a visionary. Although it is certain that the trait theory set the trend for years to come. Behavioural Theories, The trait theory laid the foundations for what was later known as the behavioural theories; this included the Michigan and Ohio State studies. The behavioural theories compliments the flaws of the trait theory as it is more action based rather than only taking natural aspects into consideration. The Michigan studies showed that there are two types of leaders, employee-centred supervisors and production-centred supervisors. Employee-centred supervisors are leaders who look out for their workers and try to keep them emotionally happy by showing genuine interest in the wellbeing. Whereas production-centred employees are mostly concerned about getting the work done and meeting figures, rather than looking out for the welfare of their workers. Research has shown that employee-centred managers were found to have more efficient and effective groups than production-centred supervisors. The Ohio State studies which are very similar to the Michigan studies showed that leaders had two main dimensions, consideration and initiating structure, which can be related to employee-centres supervisors and production-centred supervisors respectively. Although the results from this study showed different results as the supervisors who received the best output from their employees showed a high amount of consideration and initiating structure. Situational contingency theories, The next sets of theories to be developed were the situational contingency theories, which came about in the 1960’s. These theories involve leaders that can adapt to the situation they are place in, for example Fiedler’s theory predicts work group effectiveness and how it depends on a match between the leader’s technique and the difficulties of the situation. Fiedler also considered the amount of situational control a leader has, which is how well a leader can determine the result of a groups actions and the course the will take on the way. Of course Fiedler was not the only person to come up with situational theories, there was also; Robert House, Paul Hersey, Kenneth Blanchard, Steve Kerr and Jonathon Jermier, but for the purpose of not repeating similar information they will not be discussed. It is fair to say that over the years leadership theories have changed with the times. The trait theory was effective for organisational performance as it helped identify leaders before they even took on a leading role, and although today that might seem politically incorrect, it’s what was suitable for the times. The behavioural theories in the late 1940’s had a great effect on organisational performance because people started to take into account the actions of their leaders and the different effect that certain actions would obtain. The Situational theories took another step into understanding the effect that good leaders can have on organisational behaviour by interpreting the how leaders manage the situation and whether or not they can mould to new and different challenges. As leadership theories have evolved, only the strong have survived, and the recent global financial crisis has provided great challenges for leaders to portray their successful qualities. Leadership is a quality that has grown in human culture over thousands of years and within the past century economies have taken significant falls highlighting the choices great leaders have made to sustain organisational performance through this time. Two significant downturns in history shook the world economy, the great depression of the 1930’s, Franklin D Roosevelt’s leadership qualities particularly exceled through this period and the global financial crisis saw absurd leadership talents ChemChina. These flairs in leadership talent depicted the difference it can asset on organisational performance. Global Financial Crisis – ChemChina In 2007 the world economy fell into the deepest trough in decades, this is known as the global financial crisis, it was considered the worst financial crisis since the great depression in the 1930’s. The global financial crisis saw the collapse of multiple investment banks across the United States of America and developed a ripple effect that was felt by economies across the globe. Great leaders stood out through this period powering their companies without feeling the effect of the economic down turn. One company in particular that continued a sustainable growth in organisational performance is ChemChina. While millions of companies were collapsing and on the verge of insolvency ChemChina’s prime operating income multiplied seven times, total assets increased by 133. 4 billion Yuan and total profits escalated an increased 12 times over, Ren Jianxin the president of ChemChina’s outstanding leadership qualities were the main motive behind the relentless accomplishment. The massive operational increases in production were due to major â€Å"innovations in organisation, institutions and technologies involving changes in their way of thinking, philosophies and producti on technologies and processes†. (Ren Jianxin, 2009) All this required an overall development in their way of leadership, in turn a successful corporate transformation thus organisational performance. 930’s Great Depression – Franklin D Roosevelt The great depression which hit the world through the 1930’s affected the world on a scale that had never been seen before. The depression started in America when stock prices started to fall, and on October 29, 1929 the stock market crashed and the effect spread globally. The effect this had on the world was far worse than anyone could have ever imagined causing people to commit suicide, die of starvation and start their lives over in a new world. Out of this came one of the world’s greatest ever leaders, Franklin D. Roosevelt, who dragged America and the rest of the world out of the depression. Roosevelt took over as president in March of 1933 and re instilled hope back into the American people by promising action and in his first address to the people he said one of today most famous quotes, â€Å"The only thing we have to fear is fear itself†. Roosevelt decided that to get the country out of the position they were in he had to adopt policies that were frowned upon, such as creating deficit budgets, which for the times were unheard of. When Roosevelt pulled the American economy back to its feet he was rewarded by being elected for four successive terms. Roosevelt proved how one great leader can have a major effect on a group of people and that it is not impossible to come back from the dead. Financial crisis’s at any time cause a great amount of angst in the around the world, and it takes very special people to lead corporations, governments or even countries out of these fatal situations. ChemChina and Roosevelt were both innovative in their styles and led their respective organisations either to new great heights or just simply out of a great depression. Throughout the times Leaders have always come under scrutiny from their critics, although one does not attain criticism without achieving. Without Leaders providing their qualities to inspire, create opportunity and motivate, organisations would have a lack of soul and would be forever falling in a negative style.

Relation between jew of malta and merchant of venice Essay

The two novels, Christopher Marlowe’s ‘The Jew of Malta’ and William Shakespeare’s ‘The Merchant of Venice’, the main characters are Jews, a characteristic that makes the comparison of the books easier. However, the way the characters are presented has made the two stories have deep and active anti-Semitic notions and messages. Right from the beginning of the play, we can see some clear negative stereotypes towards Jews. Barabbas is undoubtedly portrayed as a man who loves money to an extent that he seems addicted to them. In the opening, we see a merchant, counting his money with passion, and later on complaining about not having made enough by his recent business activities. Marlowe straightly defines his whole character and attitude by this portrayal, showing us that Barabbas is nothing more than a greedy Jew. As the story progresses and the plot unfolds, the character of Barabbas also unfolds, showing us how he doesn’t even hesitate doing unethical and heartless things just so that he can protect himself from losing money. When his wealth is taken away, after he refuses to give half of it like the other Jews did, he unleashes his ruthless effort to regain his wealth. He doesn’t hesitate using his daughter to retrieve the gold and jewels he has hidden in his house, and it is meaningful to see how he reacts after Abigail throws him the bags of gold out of the window and he embraces them while ignoring his own daughter. Although this is not the only example of how he puts money over more important things, the fact that he seems to place money above Abigail, his own daughter, shows his general attitude. But of course it doesn’t stop there, as apart from his avaricious self, he has to quench his thirst for revenge and execute his plan for retaliation. His plan consists mainly of taking revenge from the man who took away the most precious thing he has, his wealth. That man of course is Ferneze, the governor of Malta. So, Barabbas decides to kill Ferneze’s son, Lodowick, that way taking the revenge he so passionately seeks. Once again he uses his own daughter as decoy, to execute his plan, showing that she has mainly a functional purpose for him. After he completes his plan and kills not only Lodowick but also Mathias, the man that his daughter loves, he feels betrayed by his daughter, as she converts to Christianity. I believe that this is where the insanity and sickness of Barabbas reaches a peak. He is determined to kill his own daughter, because he feels that she disrespects her family’s name. The epilogue to this madness comes when finally Barabbas gets killed by his own evil plots. In the end of the story we can easily identify the negative characteristics that Barabbas has, which are also strongly connected to the fact that he is Jewish. His elitist nature, his illogical actions that are all driven by his avarice, and his lack of sentiments towards other people, make him fit ideally the stereotypes of Jews that existed at the time. So, every single part of his hateful and insane being, is justified by the fact that he is Jewish, and thus it is natural that he is unstable and inferior to Christians. The next example of anti-Semitic portrayals comes from ‘The Merchant of Venice’. The main character, Shylock is portrayed as a greedy Jewish moneylender that is just like Barabbas, when it comes to hate towards Christians and other people in general. He is also a heartless man, not feeling pity for anyone, showing a rather sadistic nature. The hate he feels for Antonio is so immense that makes us question to what extent he is actually rational at all. Throughout the development of the plot he seems to hold so many negative values that it is impossible not to make a connection between his character and the fact that he is a Jew. Just like Marlowe, Shakespeare makes the fact that he is Jewish the root of all evil, as from that very fact all the other negative traits arise. As Bloom mentions in his essay, Shylock is a walking nightmare, and that should be the only way that anyone portrays him. As we can see from his speeches, he clearly has a great love for his wealth and he is not jeopardizing his financial position for any reason. It is not a coincidence that when Jessica runs away with his money, he mostly worries about his wealth and not so much about his daughter. Also, the fact that Jessica had to run away shows that Shylock is far from an ideal father. His speeches also show that he has an extremely negative attitude towards Christians that he justifies as the retaliation for all the anti-Semitism he has faced. He seems very resentful towards the people that have acted in a bad way towards him and as I mentioned earlier, especially Antonio. So, his actions are mainly driven by his rage and what he thinks as retribution. By the portrayal of Barabbas and Shylock, a logical question approaches. Are the two writers inspired and influenced by racism and the anti-Semitic ideas of their time? In ‘The Jew of Malta’ it is hard not to recognize all the negative Jewish stereotypes presented in the form of a very unappealing character, Barabbas. Barabbas is not just an unethical and evil man, he is the typical money-loving Jew, with all the disgusting characteristics that the racist society of the two writers has attributed to Jews. Such a racist society had created all these negative stereotyping for Jews, making them seem like greedy monsters. So I find it impossible that Marlowe as an author hasn’t been affected and influenced by the stereotypes of his time. That is mainly because in societies that racism towards a specific religion is so acceptable, there is very high tolerance for reproduction of such ideas and thus such a portrayal would not arise any questions or hate. Such situation reminds me of what happens with many fictional evil characters like the devil. I doubt that even a single reader would object if a writer attributed evil characteristics to the devil! Although it may seem like an oversimplified example, I believe it captures the very essence of the attitude of people at the time. That is, because the society had condemned Jews of being the cause of everything bad. Such portrayals are very similar to what Carl Marx has written hundreds of years later, describing Jews as mere worshipers of money. Although in our days the Jew of Malta can be viewed as a cynical work, I seriously doubt that Marlowe has such an intention, as he characterized it atragedy. Â  It is clear to me that no matter how anti-Semitism is viewed today after many important events like the Holocaust, the play was influenced by a lot of religious racism and prejudice, and Barabbas’ characteristics were nothing but the actual portrayal of ‘evil Jews’ as the English at the time viewed them. Consequently, Barabbas seems like the epitome of a real ‘Jew’, the epitome of evil, greed and lack of conscience. The case is similar in ‘The Merchant of Venice’, as Shylock is also portrayed like a perfect example of a Jew, as stereotyped in the Elizabethan times. I personally feel that Shakespeare was also influenced by the general anti-Semitic environment he lived in. Although a verdict of whether he was actually racist in his story is hard to be reached, I find it impossible that a play meant for Christians would not follow the trends of the time. The examples in the story are numerous and clear, straightforwardly proving the position of the Jews. From the fact that the Jews are presented the way they are, up to the point that they are forced to convert to Christianity or give up a part of their wealth, it is evident how negative the Jewish religion was as a characteristic. The fact that it was the same thing for the government to gain wealth and convert a Jew, show the deep-rooted hatred against this religious group, and the fact that Christians simply wanted to get rid of them as they viewed them like parasites. Such sort of treatment reminds us, newer generations, of the Nazis and their monstrous acts but at the time of the original play, as aforementioned, racism was perfectly fine! Nevertheless, Shakespeare does act in a racist way, if we assume that a writer is judged by what he actually writes. I would strongly doubt that Shakespeare intended to make his play anything similar to a parody or a criticism of stereotypes, and I believe that he expresses what he purely thinks. As we have seen from the two plays, the Jewish protagonists, Barabbas and Shylock have a very negative and unethical personality. Their vile and evil acts, paired with their appalling characters, seem to be the actual description of a negative stereotype towards the Jews. Although it may seem ambiguous whether these portrayals are actual and literal or simply ironic, it is clear to me that the answer is simple. The two authors have no intention at all of criticizing racism and simply portray Jews just as a normal Elizabethan would. So, the two stories, although politically incorrect and really prejudiced, are the result of truthful portrayals and honest approaches of the description of characters with a Jewish religion. No matter how wrong and inaccurate, these descriptions were made with complete seriousness by writers living in an environment were such sort of prejudice was rooted from many years ago and continued to bloom.

The Impact of Globalization on the Economy

The impact of globalization on the economy Globalization is one of the main features of modern society. Today it covers almost all spheres of human activity, and its influence becomes more and more obvious. To talk about the effects of globalization, it is necessary to understand its nature and the factors, sources, which led to its emergence. Today majority of scientists agree that economic globalization â€Å"is the increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology, and capital†.There are several sources of globalization. The first factor is technological advances. E-mail, the Internet, and the World Wide Web have significantly lowered the costs of transportation and communication in international trade and in doing business by and large. Next reason of globalization is trade liberalization that has led to more liberal world trading system. And finally source of globaliza tion is creating globalized media, the arts, and popular culture with the widespread use of the English language for global communication.Of course there is not a complete list of the factors of globalization, but in my opinion, those mentioned sources are the most important. Globalization has significant impacts on all economies of the world, with various effects. There are heated debates around positive and negative effects of globalization. Leading pro-globalization arguments make a strong case that globalization is simply the industrial revolution that rationalizes economic activity everywhere. For instance, it affects countries’ production of goods and services.It also affects investment, both in physical capital and in human capital. It also has major effects on efficiency, productivity and competitiveness. On the other hand, scientists consider about so-called paradox of globalization: in many cases, the gap between the rich and the poor is increasingly widening. An ar rival of foreign companies and foreign capital creates a reduction of unemployment and poverty; however it can also increase the wage gap between well-educated, skilled workers and those who are not. In the short term, some of the poor will become poorer.The arrival of foreign companies into developing countries increases employment in many sectors. But those foreign companies arrive with the new technology, which extends across the country. Automation, especially in the manufacturing and agricultural sectors reduces the need for unskilled laborers. As a result, employment rate in these sectors falls. To sum up, globalization is a complex process that works in various ways and has different effects. In my opinion, some solutions are needed to reduce negative impacts of globalization and to find happy medium between developed and developing countries.

Management research project Paper Example | Topics and Well Written Essays - 3500 words

Management project - Research Paper Example The paper will critically evaluate how human resource in the bank incorporates strategies and policies to better handle and nurture diversity within its workforce. Research Objectives The broad objective of the study is to find out how OCBC handle the issue of its diverse workforce. The three specific objectives of the study are: To establish how diverse the workforce in OCBC is. To find out the existing strategies and policies employed by the human resource management regarding diverse workforce To examine the challenges brought about by a diverse workforce Research Question How diverse is the OCBC workforce in Singapore? What are the existing strategies and policies used by the human resource management in handling diversity in its employees? What are the challenges brought about by a diverse workforce Research Methodology Both qualitative and quantitative research design will be utilized as they will cover the broad aspects of the study and enable a concrete conclusion and recomme ndation to be drawn. The tool used to collect data includes both primary and secondary sources. Questionnaires as well as interview guides will be distributed to OCBC employees and the human resource department respectively as they are the target population. Data will be analyzed using SPSS and presented descriptively using tables, charts and graphs. Random and careful biased sampling will be used to arrive at the desired sample Literature Review It has been argued that human or workforce is the most important asset that dictates the future of any organization, OCBC Bank in Singapore not being an exception. According to Boxall & Purcell, 2008 workplace diversity has been defined severally but one definition adopted is; variety of differences and uniqueness among and between individuals within an organization. The concept entails issues relating to of age, sex, religion, ability, disability, race, ethnic groups, color, nationality and even sex orientation, educational background, job title to mention but a few. If the HR have in place best strategies and policies to nurture diversity, the results are better as it helps in increasing adaptability, widening service range, more effective way of executing duties as well as bring a diverse ideas that can yield the desired satisfaction to customers hence propelling the organization to greater heights (Katharine, et al 1995). On the other hand, there are challenges brought about by a diverse workforce and this include resistance to change, hindrance on implementation of diversity in place of work polices, difficulties in sharing information Company background OCBC is the longest operating bank in Singapore having been established in 1912. Today, OCBC has been ranked by world analysts as the second largest financial services group in Southeast Asia, most highly-rated bank and one of the world’s strongest bank ( OCBC Annual Report 2010). OCBC provides financial services

EU Economy Issues and Policies Essay Example | Topics and Well Written Essays - 2000 words

EU Economy Issues and Policies - Essay Example ship and they include: Macedonia, Iceland, Serbia, Turkey and Montenegro and have also started negotiations for membership except Macedonia (Archick, 2005 p.255). Other countries that have signed Stabilizations and Association Agreements (SAA) with the European Union include; Western Balkans, Bosnia, Albania and Herzegovina. This agreement is a prerequisite for lodging membership applications thus are considered potential candidates. Many analysts have argued that the South-eastern enlargement of the European Union is not only a test for the European Union, but also for the member states and candidates as well. According to Nuroglu & Kurtagić (2012 p.42), this kind of enlargement with candidates as well as potential candidates is estimated to increase the number of population by 19%, the European Union area by 25%, and the absolute gross Domestic Product by 5% (Nuroglu & Kurtagić, 2012 p.42). Even though the accession time is not known yet, the European commission is contemplating starting with the first three applicants: Montenegro, Croatia and Iceland (Nuroglu & Kurtagić, 2012 p.43). It is however important to note that the GDP income for the countries are 3 times below 27 member EU average (Nuroglu & Kurtagić, 2012 p.43). This forms the basis of sceptics argument and question that â€Å"why expand the EU at all? (Nuroglu & Kurtagić, 2012 p.43). The following discussion looks into these is sues into details and outlines the compelling economic arguments in support of European Union enlargement. Proponents of European Union enlargement argue that such successful accession would accumulate a lot of benefits not only to the members of the union but also to the individual citizens. However, some economic analysts have differed with this point of argument stating that such enlargement would not benefit the European Union but the new members due to their small size economy and population. The main economic arguments for further enlargement of the European Union are

Database and Terrorism Essay Example | Topics and Well Written Essays - 500 words

Database and Terrorism - Essay Example On the other hand, there are information, especially those related to terrorism as well as in national security itself that are permitted to be shared with the public. This is what this paper will explore. The right to know or access information from the government, including those that concern national security, is guaranteed by the US Constitution. Judicial jurisprudence in this regard has consistently upheld that the right to acquire information is an essential component of the First Amendment. In this regard, there are indeed information that the public has the right to know and must know. For instance, in the event of terrorism, the public must know how to respond and, hence, must acquire information in regard to the nature of attacks and ways how to mitigate it. According to Wessely and Krasnov (2005), authorities should seek partnership with the public, provide measure facts for them to make independent choices rather than providing information that is believed what they should hear. (p. 218) Another area wherein access to information is vital concerns the scientific community. There is a growing belief among policymakers that suppressing the transfer of knowledge and technology is vital to the security of the United States. Such belief is not unfounded. Between 1998 and 2000, the US faced three national security crises involving the potential loss of scientific and technical information when China stole advanced military technology from the Department of Energy’s premier national security laboratories. (Esano and Uhir 2003, p. 107) Restricting access to scientific data and technology, on the other hand, could prove detrimental to the growth of the research and development in the United States because such restrictions could diminish the amount of scientific and technical data available in public domain and obstruct scientific inquiry. What must be done is a close collaboration between the security agencies and the scientific

Organizational Behaviour - Leadership in Organizations Case Study

Organizational Behaviour - Leadership in Organizations - Case Study Example These theories discussed different styles of leadership also which include leadership styles such as situational, transformational, servant-leadership etc. The topic of this essay is to discuss the contingency model of leadership and the subsequent changes which took place over the period of time in the concept and theoretical foundations of the concept. However, before discussing the concept, it is important that a comprehensive look at what the leadership is and how it emerges must be taken into account. As discussed above that there were different attempts being made in defining the process of leadership and how it emerges. Leadership has typically been defined as the process of influencing others in order to accomplish some objectives through others. Leaders often achieve this through their personal attributes such as values, knowledge, ethical considerations as well as character. However, on an organizational level, leadership is more concerned with organizational functioning as well as the coordination of various activities in order to achieve the intended objectives. Recent advances in the literature, however, clearly indicate that leadership is not just limited to the concept of accomplishing tasks through personal attributes rather it is more of a collaborative effort which does not rely on the leader but on followers also. This leadership is, therefore, a two-way concept involving both the leaders and followers to accomplish any given task. A historical look at the development of leadership theories would suggest that it started with the emergence of Great Man theories which emphasized the in-born capabilities of the leaders. Such theories highlighted that great leaders are born leaders and leadership is something which cannot be acquired or developed over a period of time. (Horner,1997). The next generation of change in leadership theories focused on the contextual relationship of the leadership with the organization. The situational leadership theories, therefore, concentrated on studying the influences of the external environment on the behaviour of the leaders and attempted to define the external environment as an influential factor on the overall shaping of the leader. Situational theories are based on the assumption that leaders emerge either due to the economic condition of the country, group dynamics, threats which are external to the organization as well as the different organizational culture prevailing in organizations. The situational leadership is therefore considered as the result of a leader's reaction towards the different external settings and influences faced by the organization. (Hollander, 1971). Fiedler's contingency model is part of this school of thought about leadership.  

SYNTHESIS MATRIX about the dangers of smoking Assignment

SYNTHESIS MATRIX about the dangers of smoking - Assignment Example Preventive Medicine, 52 (6), 428-433. Shahid, K. & Elahi, R. (October 19, 2011). Effect of Smoking on Total Serum Cholesterol Level: An investigation of the association between Smoking and Total Serum Cholesterol level from District Peshawar, Pakistan Paperback. United Kingdom: LAP LAMBERT Academic Publishing. The researcher find that some company do not associate with smoker due to the issue of insurance and the nature of the insurance they provide to their worker has a certain limit of money to be provided, higher than for that person suffering from smoking problems The researchers figured out that those children whose mothers used to smoke at the time of pregnancy experienced the issue of shorter height as well as smaller circumference of the head and other abnormalities for as long as 4 years since the time they were born. The researchers figured that a pregnant woman uses a lot of energy during pregnant period and hence smoking dehydrates the body, leading to abnormal functioning of the body tissue and hence affecting pregnancy at

Follow the materials Essay Example | Topics and Well Written Essays - 1000 words

Follow the materials - Essay Example The two targeted audiences are the board of the school and the students. These audiences are different in several aspects (Longaker, 2011). The board is an official body that deals with the school management. This board is in charge of making decisions on matters concerning the school and student welfare. This board has the power to change laws within the school and should be approached with care, using all the writing ethics that are applied in official communication. The second audience consists of students. They are the ones affected by the school policies and laws. As mentioned in the letter to the board, the change in the fee structure will have a huge impact on the way the students function. This audience has no direct effect on the setting of school laws and policies. The final decisions do not lie in their hands, and they have to depend on the board to make important school decisions for them. The two audiences affect the way in which the communication decisions were made. The board implies the need of being official in the communication, bringing up the need to write an official letter. The message is effective because the board can be addressed as a single entity. This means that a single letter can be sent to the entire board instead of writing individual letters to Board members. It is also difficult to get the board to an interactive meeting as most of its members are difficult to reach. Hence, it is easier to write them a letter, which can be read to the entire board whenever they meet. The students, on the other hand, are available during school days and getting them into one sitting is easy. It is easier to communicate to them through mass presentations such as PowerPoint and website presentations. Thus, the decision to use a site presentation was driven by the fact that the students could be addressed quickly and informally. Using letters with them would require that multiple letters be written, one for each student. The letters are also

Ethics Awareness Inventory Analysis Essay Example | Topics and Well Written Essays - 250 words

Ethics Awareness Inventory Analysis - Essay Example Therefore, acting according to ones instincts is necessary and ethical (Lennick, D., & Kiel, F. 2005). I also believe inspiring individuals to improve their lives and grow is important compared to increasing business profits; through inhumane business practices like reshaping or traditional downsizing. Generally, I work with business ideas and policies which ensure equal opportunities and equal respect for all the employees in the family business. The knowledge I acquired during my study guide my thinking that business decisions are ethical only if they support the free choice of people, respect employee rights and supports creativity. In reference to obligation assessment, all businesses should comply with internationally proclaimed human rights. Besides, a sustainable business should not be complicit in the abuse of employee rights. In addition, the business is expected to maintain a good forward and backward linkages in the supply chain. These enhances the productivity of workers and result to profits (Lennick, D., & Kiel, F. 2005). However, my ethical viewpoint is not without any challenges especially when addressing ethical dilemmas in both personal settings and business. In most instances what I think is the appropriate approach is not applicable in the short-term choice. Hence, sustainability and conflict resolution at work place require a holistic approach to management of employee and employer relationships. Good business ethical practices embedded in business policies increase business

Term Paper for Philosophy of Man Essay Example for Free

Term Paper for Philosophy of Man Essay There is no such thing as Christianity here on earth until an emperor named Constantine, a pagan, had a vision of a cross before his battle. Who knows if what he saw is true or what he saw is just a sword? (Sword has a resemblance with cross remember he’s up for a battle right? ) After his victory he was converted to Christian and planned to unite the Roman Empire by developing a religion under his control. He met all the religion leaders for a purpose: to unify everything. They have chosen only 4 out of 50 gospels that would only fit for the state religion. They should have given it authors- Constantine and friends, since they are the one who put it together. 300 yrs. after death of Jesus the Bible was put together by less faith more to politics. Many of these Gospels that are not included in the Bible apparently disappeared later because they have unknown origins. This uncertainty about their origins was one reason many of them were excluded from the Bible. But some of them were also excluded because they expressed unorthodox views. Somehow the copies of some of them still survive at unknown locations. Luckily several have been found again. The Gospel of Peter, Mary, Judas and St.  Thomas were discovered in modern times named after peter, Mary Magdalene, Judas Escariot, and St. Thomas but those weren’t their real authors, the real authors are unknown and will probably never be identified. The gospel of Peter, the first lost gospel found (1886), contains the description of Jesus leaving the tomb after his resurrection seen by the two guards while in the New Testament the effect of the resurrection was only written. The Gospel of Mary emphasizes her prominence by presenting her as a strong leader, and by suggesting that she was the most favored disciple of Jesus and received a special revelation from him. The gospel contains Gnostic ideas, particularly in the section which describes the revelations she received from Jesus. This connection with Gnosticism, together with the prominent role that the book gives to a female, may have led to its suppression by orthodox Christians. The Gospel of St. Thomas may preserve some authentic teachings of Jesus that are not found in the Bible. The Gospel of Judas said that Judas was the most loyal disciple of Jesus where in our bible contradicts, which says that Judas is the one who gave up Jesus in exchange of gold. Did the church intentionally destroyed some books in order to cover up embarrasses facts about the origins of Christianity? The knowledge about the bible they are holding until know is not probably the truth, it is more on their beliefs. No one has ever proven that all written in the bible is true from Old Testament to New Testament even the genesis is questionable. It is that, we are on it for over a thousand years and will have a difficulty to adjust or understand if any will be changed because of the found lost gospels.

Plastic Recycling Essay Example for Free

Plastic Recycling Essay Due to increased the high residence time in the environment, old and used plastics require recycling to not only ensure clean and healthy environment, but also maximize the resource utility. Sorting/ separation is one of the most important stage in the recycling process as it differentiates the plastics from other materials and categorize it into various forms. Depending on the origin of the plastic materials, the sorting process is made easier especially if there was initial separation at the source where plastics are put in different containers from the others types of wastes. Physical sorting method According to Plunket (2005), this separation method involves use of the visible and physical characteristics of the plastics to remove them from other waste materials or separate different types of plastics. This method is labor intensive as it requires manual inspection through product recognition, color and shape of the materials for the plastic being sorted. Many of the American companies make their products in specific plastic shapes and color therefore making it easy to sort and recycle their plastics from the waste stream. Floating mechanism is increasingly being employed by different recycling plants to separate high and low density plastics depending on weight characteristics (Harper, (2006). Besides, the separating centrifuge is also employed to separate the plastics on the basis of their weight on the high speed rotating drums. According to Nigel (2004), physical sorting process is cost effective in that there is minimal capital investment as the method uses staff and low cost investment machines to sort out the plastics. Unlike in the automated method, there is no need of highly skilled manpower and technology in the process thereby reducing the cost of operation with a great margin. The method is highly suitable for small scale recycling process where the quantity of the plastic to be separated is generally low. However, this method can lead to inaccurate identification and separation due to human error. Types and the speed of separation in the process are highly limited since human beings employ only one visual mode in the identification process. Besides, complications arise when different companies use similar shapes for packaging their products thereby creating confusion and making the companys objective to recycle its plastics be highly compromised. To add to that, the process is highly manual requiring a lot of staff for effective completion which greatly reduces the ability and therefore ineficiency to sort the plastics (Tietenberg Henk, 2006). Plunket (2005) argues that, physical method of sorting plastics is highly uneconomical especially for separating large scale quantities of plastics due to the requirements of large staff numbers at any moment. The quantity of plastics that can be sorted at any moment using the physical method is very limited compared to the automated method. Due to the above inefficiencies, the amount of plastics sorted and recycled is low and therefore not cost effective for recycling companies or the municipal authorities who have large quantities of plastics to be separated. Besides, the method do not guarantee the efficiency required for different plastics to effectively be sorted out. This inefficiency may compromise the products made from the recycled materials at the end of the process (Harper, 2006). Automated sorting method This method employs various auto-separation systems which use sensors in establishing the chemical as well as the physical properties of the plastics to be separated (Tietenberg Henk, 2006). Use of x-rays method of automated separation involves employing the radiation which detects the chlorine elements that are found in the Polyvinyl Chlorides (PVC). This method is highly effective for the plastics that contain PVC but limited in application since it cannot be applied on other plastics. Then, the modern infrared method analysis is being applied on a large scale basis to detect as well as separate plastics of multiple characteristics in their composition. Infrared rays are quantified and categorized on the basis of the characteristics of the specific plastic element type that is needed from the waste stream (Myer, 2007). To add to that, optical scanning is also being used by different industries all over the world where the plastics are separated on the basis of their pigment coloration. It ensures uniformity in the separation process and increases efficiency in the specific separation processes. Automated separation methods have also been effectively applied to separate general plastics from the waste mainstream depending on their main or individual characteristics like High Density Polythrene, Pollythylene Telephthalate and Polypropane. The main advantage of this method is that it is highly effective and the quantities of the plastics that can be sorted at any one moment is very high. Myer (2007) notes that, different types of plastics are also easily recycled as the machine error is highly reduced compared to the high human error in the mechanical system. Also, the method is less labor intensive as it employs the modern technology in enhancing efficiency of the work done. However, the method requires high capital investment to install and operationalize the whole system. Protective equipments for the radiations add to the external costs for the people who work and operate the machines. Infrared and x-ray generating machines require specialized experts to operate thus increasing the overhead cost to a very large extent. Besides, there are high hazard risk levels for the people operating with these machines due to exposure on the dangerous radiations of x-rays and high infrared levels (Nigel, 2004). Though the initial cost of machines installation is relatively high, this method is highly cost-effective in the 21st century due to the increasing need for faster plastic sorting and recycling. It is a great tool for conserving the environment and maximizing the resources utility. The quantity of the plastics that can be sorted out at any moment being very high, then the method ensures that the remaining process and eventual processing into finished products receives enough and correct materials. Conclusion. Sorting as indicated earlier, is one of the most important steps in the recycling process as it makes the remaining processes easier and more effective in their application. It captures the plastic materials either from an integrated mixture in the waste stream or from assorted plastic mixtures therefore making it possible to use the material for further other products development. Automated method is thus more cost effective in sorting the plastics due to its high efficiency in dealing with bulk wastes at any particular moment. As the world consumption patters continue changing year after year, the levels of the plastic wastes are bound to increase in the environment and the most cost effective method of sorting this waste should be adopted (Plunket, 2005). Automated method should be adopted by all the municipal authorities, recycling commercial industries and individual industries which recycle their own wastes as it ensures long term cost effectiveness.

Stock Market Performance and the Real Economic Activity

Stock Market Performance and the Real Economic Activity Whether national economy is affecting the stock market or other way round? A lot of studies have done on the past what are relationship of these variables. In my work I have used cointegration and Granger Causality method to find out the relationship between the stock index price and Economic growth indicator GDP. Introduction The debate of whether stock market is associated with economic growth or the stock market can be served as the economic indicator to predict future. According to many economists stock market can be a reason for the future recession if there is a huge decrease in the stock price or vice versa. However, there are evidence of controversial issue about the ability of prediction from the stock market is not reliable if there is a situation like 1987 stock market crashed followed by the economic recession and 1997 financial crises. (Stock market and economic growth in Malaysia: causality test). The aim of the study is to find the relation between the stock market performance and the real economic activity in case of four countries The UK, The USA, Malaysia and Japan. With my limited knowledge I have tried to find out the role of financial development in stimulating economic growth. A lot of economists have different view about stock market development and the economic growth. If we focus on some related literature published on this topic one question arises: Is economic development is affected by stock market development? Even though there are lots of debate on some are saying that stock market can help the economy but the effect of stock market in the economy especially in the economy is very little. Ross Levine suggested in his paper published in 1998 that recent evidence suggested stock market can really give a boom to economic growth. (REFERENCE) It is not really possible to measure the growth by simply looking at the ups and down in the stock market indicator and by looking at the rates of growth in GDP. A lot of things can cause in the growth of stock market like changes in the banking system, foreign participation in the in the financial market may participate strongly. Apparently it seems that these developments can cause development of stock market followed by the good economic growth. But to check the accuracy one required to follow an appropriate method which would meaningfully measure whether stock price is really effecting the economic growth or not? In my work I have tried to find out the co integrating relationship between Stock price and GDP and tried to check if there is a long run and short run relationship between the stock price and GDP. The method used for the studies is Engle Granger co integration method. To do this I have used ADF (Augmented Dickey Fuller Test) to check for the stationary behaviour of the variables and then I have performed the Engle Granger Engle Granger co integration method followed by residual based error correction model. To check for the short run relationship I have used 2nd stage Engle Granger co integration method. To check the causal effect of the four countries stock market and economic growth I used Granger Causality Method. In this paper I have reviewed some studies of scholars which I have discussed on the literature review part. This paper contains five parts Part two is about the literature based on the past wok of scholars. Part Three discussed about the Data. Part four is about the methodology, Results are discussed on part five and part six is all about the summary and conclusion of the whole study. In my work I have founded there is no long run relationship between stock market and economic growth in all four countries. In addition there is no causal relation between stock index yield and the national economy growth rate. The empirical results of the thesis concludes that the possibility of seemingly abnormal relationship between the stock index and national economy of these for countries. Literature Review: Stock market contributes to economic growth in different ways either directly or indirectly. The functions of stock market are savings mobilization, Liquidity creation, and Risk diversification, keep control on disintermediation, information gaining and enhanced incentive for corporate control. The relationship between stock market and economic growth has become an issue of extensive analysis. There is always a question whether the stock market directly influence economic growth. A lot of research and results shows that there is a strong relationship between stock market and economic growth. Evidence on whether financial development causes growth help to reconcile these views. If we go back to the study of Schumpeter (1912) his studies emphasizes the positive influence on the development of a countrys financial sector on the level and the potential risk of losses caused by the adverse selection and moral hazard or transaction costs are argued by him how necessary the rate of growth argues that financial sectors provides of reallocating capital to minimize the potential losses. Empirical evidence from king and Levine (1983) show that the level of financial intermediation is good predictor of long run rates of growth, capital accumulation and productivity. Enhanced liquidity of financial market leads to financial development and investors can easily diversify their risk by creating their portfolio in different investments with higher investment. Another study from Levine and Zervos (1996) using the data of 24 countries found that a strong positive correlation between stock market development and economic growth. Their expanded study on 49 countries from 1976-1993, they used Stock Market liquidity, Economic growth rate, Capital Accumulating rate and output Growth Rate. They found that all the variables are positively correlated with each other. Demiurgic and Maksimovic (1996) have found positive causal effects of financial development on economic growth in line with the ‘supply leading hypothesis. According to his studies countries with better financial system has a smooth functioning stock market tend to grow much faster as they have access to much needed funds for financially constrained economic enterprises by the large efficient banks. Related research was done for the past three decades focusing on the role of financial development in stimulating economic growth they never considered about the stock market. An empirical study by Ming Men and Rui on Stock market index and economic growth in China suggest that possible reason of apparent abnormal relationship between the stock Index and national economy in china. Apparent abnormal relationship may be because of the following reason inconsistency of Chinese GDP with the structure of its stock market, role played by private sector in growth of GDP and disequilibrium of finance structure etc. The study was done using the cointegration method and Granger causality test, the overall finding of the study is Chinese finance market is not playing an important role in economic development. (Men M 2006 China paper). An article by Indrani Chakraborti based on the case of India presented in a seminar in kolkata in October, 2006 provides some information about the existence of long run stable relationship between stosk market capitalization, bank credit and growth rate of real GDP. She used the concept of the granger causality after using both the Engle-Granger and Johansen technique. In her study she found GDP is co-integrated with financial depth, Volatility in the stock market and GDP growth is co integrated with all the findings the paper explain that the in an overall sense, economic growth is the reson for financial development in India.(Chakraboty Indrani). Few writers from Malaysia found that stock market does help to predict future economy. Stock market is associated with economic growth play as a source for new private capital. Causal relationship between the stock market and economic growth which was done by using the formal test for causality by C.J. Granger and yearly Malaysia data for the period 1977-2006. The result from the study explain that future prediction is possible by stock market. A study focused on the relationship between stock market performance and real economic activity in Turkey. The study shows existence of a long run relationship between real economic activity and stock prices†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Result from the study pointed out that economic activity increases after a shock in stock prices and then declines in Turkish market from the second quarter and a unitary (Turkish paper) An international time series analysis from 1980-1990 by By RAGHURAM G. RAJAN AND LUIGI ZINGALES shows some evidence of the relation between stock market and economic growth. This paper describes whether economic growth is facilitated by financial development. He found that financial development has strong effect on economic growth. (Rajan and Zingales, 1998) The study of Ross LEVINE AND SARA ZERVOS on finding out the long run relationship between stock market and bank suggest a positive effect both the variables has positive effect on economic growth. International integration and volatility is not properly effected by capital stock market. And private save saving rates are not at all affected by these financial indicators. The study was done on 47 countries data using cross sectional analysis. In theory the conventional literature on growth was not sufficient enough to look for the connection between financial development and economic growth and the reason is they were focused on the steady state level of capital stock per workerof productivity. And they were not really concentrated on the rate of growth. Actually the main concern was legitimated to exogenous technical progress. (Levine and Zervos 1998) Belgium Stock market study with economic development shows the positive long run relationship between both the variables. In case of Belgium the evidences are quiet strong that Economic growth is caused by the development of the stock market. It is more focused between the period 1873 and 1935; basically this period is considered as the period of rapid industrialization in Belgium. The importance of the stock market in Belgium is more pronounced after liberalization of the stock market in 1867-1873. The time varying nature of the link between stock market development and economic growth is explained by the institutional change in the stock exchange. They also tried to find out the relationship to the universal banking system. Before 1873 the economic growth was based on the banking system and after 1873 stock market took the place. (Stock Market Development and economic growth in Belgium, Stijin Van Nieuwerburg, Ludo Cuyvers, Frans Buelens July 5, 2005) Senior economist of the World Banks Policy research department Ross Levine has discussed about Stock market in his paper Stock Markets: A Spur to economic growth on the impact of development. Less risky investments are possible in liquid equity market and it attracts the savers to acquire an asset, equity. As, they can sell it quickly when they need access to their savings, and if they want to alter their portfolio. Though many long term investment is required for the profitable investment. But reluctance of the investors towards long term investment as they dont have the access to their savings easily. Permanent access to capital is raised by the companies through equity issues as they are facilitating longer term, more profitable investments and prospect of long term economic growth is enhanced as liquid market improves the allocation of capital. The empirical evidence from the study strongly suggests that greater stock markets create more liquidity or at least continue economic gr owth. (Levine. R A spur to economic Growth) A lot of research has established that future economic growth is influenced by countrys financial growth, stock market index returns are another factor of economic growth. The researcher focused to extend their study; they tie together these two strings and started analyzing the relationship between banking industry, stock returns and future economic growth. Research was done on 18 developed and 18 emerging markets and the results are positive and noteworthy relationship between future GDP and stock returns. Few important features can also be predicted such as bank-accounting-disclosure standards, banking crises, insider trading law enforcement and government ownership of banks. (Bank stock returns and economic growth q Rebel A. Cole a, Fariborz Moshirian b,*, Qiongbing Wu c a Department of Finance, DePaul University, Chicago, IL 60604, USA b School of Banking and Finance, The University of New South Wales, Sydney, NSW 2052, Australia c Newcastle raduate School of Business, The University of Newcastle, Newcastle, NSW 2300, Australia Received 29 September 2006; accepted 26 July 2007Available online 21 September 2007) Another paper was focused on the linkages between financial development and economic growth using TYDL model for the empirical exercises by Purna Chandra Padhan suggests that both stock price and economic activity are integrated of order one and Johansen-Juselias Coin-integration tests for this study found one co integrating vector exists. It is proved by the spurious relation rule in this study the existence of at least one direction of causality. He described that bi-directional causality between stock price and economic growth meaning that economic activity can be enhanced by well developed stock exchange and vice-versa. ( Title:  The nexus between stock market and economic activity: an empirical analysis for India Author(s): Purna Chandra Padhan Journal: International Journal of Social Economics Year: 2007 Volume: 34 Issue: 10  Page: 741 – 753 DOI: 10.1108/03068290710816874 Publisher: Emerald Group Publishing Limited) Chee Keong Choong (Universiti Tunku Abdul Rahman Malaysia) Zulkornain Yusop (Universiti Putra Malaysia) Siong Hook Law (Universiti Putra Malaysia) Venus Liew Khim Sen (Universiti Putra Malaysia) Date of creation: 23 Jul 2003 Tried to find out the importance of the causal relationship of Financial development and economic growth. The findings of their study usin autoregressive Distributed lag (ARDL) describes about the positive long run impact on economic growth Granger causality also suggest same results. A study by Randall Filler(2000) using 70 countries data over the period 1985-1997 proves that there is a very little relationship between economic growth and stock market especially in developing countries and currency appreciation has occurred. From the result of the study we can see that an important role may be played by the stock market in an economy, and these are not essential for economic growth. However, another study on Iran by N. Shahnoushi, A.G Daneshvar, E Shori and M. Motalebi 2008 Financial development is not considered as an effective factor to the economic growth. The study was focused on the causal relationship between the financial development and economic growth. Time series data used for the study from the period 1961-2004. Granger causality shows there is no co integrating relationship between financial development and economic growth in Iran only the economical growth leads to financial development. Establishing link between savings and investment is very much important and financial market provides that. Transient or lasting growth is the ultimate affect of the financial market. Economic growth can be influenced by financial market by improving the productivity of the capital, Investment to firms can be channelled and greater capital accumulation by increasing savings. To ensure the stability of the financial market potential regulation is important due to asymmetric information, especially at the time of financial liberalization. (Economic Development and Financial Market Tosson Nabil Deabes Moderm Academy for technology aand computer sciences; MAM November 2004 Economic Development Financial Market Working Paper No. 2 ) Data: The empirical analysis was carried out using the quarterly data for The UK, The USA, Japan and Malaysia. The data were collected from the DataStream for the period 1993I to 2008III. Economic growth is measured as the growth rate of gross domestic product (GDP) of each country with the help of stock prices SP. For the software processing I used Eviews 6.0 for the planned regression in order to get the results. The empirical analysis is done from the quarterly data from the stock market indices and the and the GDP between the first quarter of 1993 and the fourth quarter of 2008. All the data has been extracted from the data stream and expressed in US$. The data for Japan share price is from Tokyo Stock Exchange. Malaysias Share price is form Kuala Lumpur Composite Index, UKs is from UK FT all share price index and USA share price is taken from the DOW Jones industrial share price index. The nature of the Data is series used for the time series regression. List of Variables: UGDP UK GDP USP UK Share price LUGDP Log of UK GDP LUSP Log of UK Share price USGDP USA GDP USSP USA (DOW Jones) Share price LUSGDP Log of USA GDP LUSSP Log of USA Share price MGDP Malaysia GDP MSP Malaysia Share price LMGDP Log of Malaysia GDP LMSP Log of Malaysia Share price JGDP Japan GDP JSP Japan Share Price LJGDP Log of Japan GDP LJSP Log of Japan Share price Methodology: Cointegration long term common stochastic trend between non stationary time series. If non-stationary series x and yare both integrated of same order and there is a linear combination of them that is stationary, they are called co integrated series. A common stochastic trend is shared in Cointegration. It follows that these two series will not drift apart too much, meaning that even they may deviate from each other in the short-term, they will revert to the long-run equilibrium. This fact makes cointegration a very powerful approach for the long-term analyses. Meanwhile, cointegration does not imply high correlation; two series can be co integrated and yet have very low correlations. Cointegration tests allow us to determine whether financial variables of different national markets move together over the long run, while providing for the possibility of short-run divergence. The first step in the analysis is to test each index series for the presence of unit roots, which shows whether the series are nonstationary. All the series must be nonstationarity and integrated of the same order. To do this, we apply both the Augmented Dickey-Fuller (ADF) test. Once the stationarity requirements are met, we proceed Granger bivariate cointegration (1987) procedure. 30 International Research Journal of Finance and Economics Issue 24 (2009) Series Stationary Test: In this study I have used Augmented Dickey Fuller Test (ADF) to test the stationary of variables. The unit root test is usually used to confirm stationary of a series. The ADF is test for unit root where I have checked the Unit root and strong negative numbers of unit root is being rejected by the null hypothesis (level of significance). In this study I have used Augmented Dickey Fuller Test (ADF) to check whether the series is stationary or not. ADF test is based on the estimate of the following regression: is in this case variable of interest = , is the differencing operator, t is the time trend and is the random component of zero mean and constant variance. The parameters to be estimated are { } Null and alternative hypothesis of unit root test are: , () () Here with the test we can find the estimates of are equal to zero or not. Y is said to be stationary if the cumulative distribution of the ADF statistics by showing that if the calculated ratio of the coefficient is less than the critical value according to Fuller (1976). If we accept the Ho the sequence is predicted to be having unit root and if Ho is rejected then we can say that the series doesnt have unit root. This proves that the series is stationary. The co–integration test can only be performed if both the sequences are all integrated of order I (1). Cointegration Test: Engle and Granger (1987) first established the cointegration method. It is a method of measuring long term diversification based on data. Linear combination of two non stationary series shows that they are integrated in order one I(1) that is stationary. And this is a co integrated series. Cointegration Long term common random trend between non stationary time series. The linear combination of both the non stationary series can be stationary if both the variables are integrated in same order. Cointegration is a very powerful approach in the long term analysis because a common stochastic trend is shared in cointegration that mean two series will not drift separately too much. They might deviate from each other but in the long run but eventually the will revert back in the long run. If there is very low correlation between the series still the series can be co-integrated as high correlation is not implied in cointegration. The reason for choosing the method as it will allow us to check the move between the variable in the long run even there might be a divergence in the short run. The first step in the analysis is check each index series whether the series for the presence of unit root which shows whether the series is non stationary. The method that I followed to do this is Augmented Dickey Fuller Test (ADF). I proceed the Granger cointegration technique 1987 when the stationary requirements are met. According to Engle and Granger (1987) to check for cointegration if both the variables and are integrated with order one the proposed method for cointegration residual-based test for cointegration (Engle-Granger method). So from the above method we can find the equation By regressing with And after that and is denoted as the estimated regression coefficient vectors. After that I saved the residual from the above equation. Then, = – is representing the estimated residual vector. If the residual is integrated with order zero that means the series for the residual is stationary, and and are then co integrated and vice versa. I have checked it by performing Augmented Dickey fuller test on the residual series on level value with intercept only of each country. An in this situation (1, -) is called co-integrating vector if the series is stationary. Therefore is a co integrating equation, so, from it we can say that there is long run relationship between and. Granger causality test: Granger causality test is applied if the relationship is lagged between the two variables to determine the direction of relation in statistical term. It gives information about the short term relationship between the variables. In terms of conceptual definition causality is consist of different ideas, this concept produce a relation between caused and results were agreed upon. Aristo defines that there exist a link between causes and results and without causes these results are impossible. And this is strong relationship. Some economists believe that the idea of causality is the mix of both theoretical and explanation and statistical concept. The frontline operational definition of causality is given by some economist, but Granger is the one who provided the information to understand it correctly and completely. Granger causality approach (1969), lets think the variable y is Economic Growth (GDP) and x is Stock price index, if it is possible to predict the past values of y and x than from the lagged values of y alone. X is said to be granger caused by and y is helping in predicting it. in case of a simple bivariate model, causality can be tested between stock market growth and economic growth. Granger causality run on the basis of the following bivariate regressions of the form: (1) (2) Where GDP denotes economic growth and SP denotes the stock price index and they explain the changes in growth. Variables are expressed in logarithm form. The distribution of and are uncorrelated by assumption. From the equation one it can be said that current GDP is related to lagged values of itself and as well as that of SP. And equation 2 postulates same kind of behaviour for SP. Both the equations can be obtained by ordinary least squares (OLS). The f statistics are the Wald statistics for the joint hypothesis: and F test is carried out for the null hypothesis of no Granger causality. The formula of f statistic is Lagged term is defined here by m; number of parameter is defined as k. Test result for Unit Root: Augmented Dickey Fuller Model (ADF) is used to test the stationary of each variable. Null and alternative hypothesis describes about the investigation of unit root. If the null is accepted and alternative is rejected then the variable non stationary behaviour and vice versa is stationary. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test Japan t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -2.653258 -3.522887     -2.901779 -2.588280   -2.693600   -4.088713   -3.472558 1st Difference -9.053185 -3.524233   -2.902358 -2.588587 -9.003482   -4.090602   -3.473447 Share Price Level   -2.116137 -3.522887     -2.901779 -2.588280   -2.203273   -4.088713   -3.472558 1st Difference   -6.899295 -3.524233   -2.902358 -2.588587   -6.844396   -4.090602   -3.473447 Table 01: Unit root test for stationary Japan If we have a look on the unit root test for the variables GDP and Share price to find out the stationary behaviour the Augmented Dickey Fuller Test with intercept and with intercept and trend in level and first difference. The t statistic value with trend is -2.653258 which is higher than the critical values in 1%, 5% and 10% critical value. The same applies with intercept and trend as the t statistic value -2.693600 is higher than the critical value in all the level of critical value. So from the nature of stationary behaviour we can say in level GDP shows nonstationary behaviour. And the first difference LnGDP is integrated with order one. In case of LnSP the results with intercept and with intercept trend in level are -2.116137 and -2.203273 which is higher than the critical values shows non stationary behaviour as they are higher than the critical value. The unit root test for the variables at first difference shows stationary as the t statistic value is than the critical value i n all level and they are integrated in order one. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test Malaysia t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -1.195020 -3.522887     -2.901779 -2.588280 -1.933335   -4.088713   -3.472558 1st Difference -5.951843 -3.524233   -2.902358 -2.588587 -5.923595   -4.090602   -3.473447 Share Price Level   -1.900406 -3.522887     -2.901779 -2.588280   -1.891183   -4.088713   -3.472558 1st Difference   -7.842122 -3.524233   -2.902358 -2.588587   -7.779757   -4.090602   -3.473447 The unit root test result for LMGDP and LMSP values presented in natural logarithm. And the level values with intercept and with intercept and trend for LMGDP is -1.195020 and -1.93335 respectively. The values are higher than the critical value means the series has non stationary behaviour. On the other hand the 1st difference values with intercept and with intercept and trend are -5.951843 and -5.923595 respectively. The 1st difference values are integrated with order one. And in the same way I did the ADF test to check for Stationary behaviour of LMSP in level and first difference with intercept and trend. The values in level are -1.900406 and -1.891183 with intercept and trend us higher than the critical value and the series is not integrated with order one. The first difference t statistic values are -7.842122 and -7.779757 with intercept and with intercept and trend respectively are less than the critical value in both the case implies that the series is integrated with order on e. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test UK t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -0.690866 -3.522887     -2.901779 -2.588280 -2.377333   -4.088713   -3.472558 1st Difference -7.474388 -3.524233   -2.902358 -2.588587 -7.439027   -4.090602   -3.473447 Share Price Level -1.711599 -3.522887     -2.901779 -2.588280 -1.261546   -4.088713   -3.472558 1st Difference -7.254574 -3.524233   -2.902358 -2.588587 -7.391821   -4.090602   -3.473447 The results from Augmented Dickey Fuller test (ADF) for UK GDP in level with intercept and with intercept and trend is –0.690866 and -2.377333 respectively. Both the values in level are higher than the critical value and are integrated in order 0 shows non stationary behaviour. The t statistic values in 1st difference with intercept and with intercept and trend are -7.474388 and -7.439207 respectively. Which suggest that the critical values are less than the critical values in 1%, 5% and 10% level. So from the above hypothesis it can be said that it series is integrated with order one. When I performed the unit root test using the same method the series in level with intercept and with intercept and trend the values in are -1.711599 and -1.261546 respectively. The values are higher than the critical values implies that they are not integrated in order one shows non stationary behaviour. However, the 1st difference value of log natural share price is -7.254573 and -7.391821 wit h intercept and with intercept and trend respectively. So from the result we can say that the series is integrated in order one in both the cases with intercept and with intercept and trend. So the series in first difference is stationary. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test USA t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% Stock Market Performance and the Real Economic Activity Stock Market Performance and the Real Economic Activity Whether national economy is affecting the stock market or other way round? A lot of studies have done on the past what are relationship of these variables. In my work I have used cointegration and Granger Causality method to find out the relationship between the stock index price and Economic growth indicator GDP. Introduction The debate of whether stock market is associated with economic growth or the stock market can be served as the economic indicator to predict future. According to many economists stock market can be a reason for the future recession if there is a huge decrease in the stock price or vice versa. However, there are evidence of controversial issue about the ability of prediction from the stock market is not reliable if there is a situation like 1987 stock market crashed followed by the economic recession and 1997 financial crises. (Stock market and economic growth in Malaysia: causality test). The aim of the study is to find the relation between the stock market performance and the real economic activity in case of four countries The UK, The USA, Malaysia and Japan. With my limited knowledge I have tried to find out the role of financial development in stimulating economic growth. A lot of economists have different view about stock market development and the economic growth. If we focus on some related literature published on this topic one question arises: Is economic development is affected by stock market development? Even though there are lots of debate on some are saying that stock market can help the economy but the effect of stock market in the economy especially in the economy is very little. Ross Levine suggested in his paper published in 1998 that recent evidence suggested stock market can really give a boom to economic growth. (REFERENCE) It is not really possible to measure the growth by simply looking at the ups and down in the stock market indicator and by looking at the rates of growth in GDP. A lot of things can cause in the growth of stock market like changes in the banking system, foreign participation in the in the financial market may participate strongly. Apparently it seems that these developments can cause development of stock market followed by the good economic growth. But to check the accuracy one required to follow an appropriate method which would meaningfully measure whether stock price is really effecting the economic growth or not? In my work I have tried to find out the co integrating relationship between Stock price and GDP and tried to check if there is a long run and short run relationship between the stock price and GDP. The method used for the studies is Engle Granger co integration method. To do this I have used ADF (Augmented Dickey Fuller Test) to check for the stationary behaviour of the variables and then I have performed the Engle Granger Engle Granger co integration method followed by residual based error correction model. To check for the short run relationship I have used 2nd stage Engle Granger co integration method. To check the causal effect of the four countries stock market and economic growth I used Granger Causality Method. In this paper I have reviewed some studies of scholars which I have discussed on the literature review part. This paper contains five parts Part two is about the literature based on the past wok of scholars. Part Three discussed about the Data. Part four is about the methodology, Results are discussed on part five and part six is all about the summary and conclusion of the whole study. In my work I have founded there is no long run relationship between stock market and economic growth in all four countries. In addition there is no causal relation between stock index yield and the national economy growth rate. The empirical results of the thesis concludes that the possibility of seemingly abnormal relationship between the stock index and national economy of these for countries. Literature Review: Stock market contributes to economic growth in different ways either directly or indirectly. The functions of stock market are savings mobilization, Liquidity creation, and Risk diversification, keep control on disintermediation, information gaining and enhanced incentive for corporate control. The relationship between stock market and economic growth has become an issue of extensive analysis. There is always a question whether the stock market directly influence economic growth. A lot of research and results shows that there is a strong relationship between stock market and economic growth. Evidence on whether financial development causes growth help to reconcile these views. If we go back to the study of Schumpeter (1912) his studies emphasizes the positive influence on the development of a countrys financial sector on the level and the potential risk of losses caused by the adverse selection and moral hazard or transaction costs are argued by him how necessary the rate of growth argues that financial sectors provides of reallocating capital to minimize the potential losses. Empirical evidence from king and Levine (1983) show that the level of financial intermediation is good predictor of long run rates of growth, capital accumulation and productivity. Enhanced liquidity of financial market leads to financial development and investors can easily diversify their risk by creating their portfolio in different investments with higher investment. Another study from Levine and Zervos (1996) using the data of 24 countries found that a strong positive correlation between stock market development and economic growth. Their expanded study on 49 countries from 1976-1993, they used Stock Market liquidity, Economic growth rate, Capital Accumulating rate and output Growth Rate. They found that all the variables are positively correlated with each other. Demiurgic and Maksimovic (1996) have found positive causal effects of financial development on economic growth in line with the ‘supply leading hypothesis. According to his studies countries with better financial system has a smooth functioning stock market tend to grow much faster as they have access to much needed funds for financially constrained economic enterprises by the large efficient banks. Related research was done for the past three decades focusing on the role of financial development in stimulating economic growth they never considered about the stock market. An empirical study by Ming Men and Rui on Stock market index and economic growth in China suggest that possible reason of apparent abnormal relationship between the stock Index and national economy in china. Apparent abnormal relationship may be because of the following reason inconsistency of Chinese GDP with the structure of its stock market, role played by private sector in growth of GDP and disequilibrium of finance structure etc. The study was done using the cointegration method and Granger causality test, the overall finding of the study is Chinese finance market is not playing an important role in economic development. (Men M 2006 China paper). An article by Indrani Chakraborti based on the case of India presented in a seminar in kolkata in October, 2006 provides some information about the existence of long run stable relationship between stosk market capitalization, bank credit and growth rate of real GDP. She used the concept of the granger causality after using both the Engle-Granger and Johansen technique. In her study she found GDP is co-integrated with financial depth, Volatility in the stock market and GDP growth is co integrated with all the findings the paper explain that the in an overall sense, economic growth is the reson for financial development in India.(Chakraboty Indrani). Few writers from Malaysia found that stock market does help to predict future economy. Stock market is associated with economic growth play as a source for new private capital. Causal relationship between the stock market and economic growth which was done by using the formal test for causality by C.J. Granger and yearly Malaysia data for the period 1977-2006. The result from the study explain that future prediction is possible by stock market. A study focused on the relationship between stock market performance and real economic activity in Turkey. The study shows existence of a long run relationship between real economic activity and stock prices†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Result from the study pointed out that economic activity increases after a shock in stock prices and then declines in Turkish market from the second quarter and a unitary (Turkish paper) An international time series analysis from 1980-1990 by By RAGHURAM G. RAJAN AND LUIGI ZINGALES shows some evidence of the relation between stock market and economic growth. This paper describes whether economic growth is facilitated by financial development. He found that financial development has strong effect on economic growth. (Rajan and Zingales, 1998) The study of Ross LEVINE AND SARA ZERVOS on finding out the long run relationship between stock market and bank suggest a positive effect both the variables has positive effect on economic growth. International integration and volatility is not properly effected by capital stock market. And private save saving rates are not at all affected by these financial indicators. The study was done on 47 countries data using cross sectional analysis. In theory the conventional literature on growth was not sufficient enough to look for the connection between financial development and economic growth and the reason is they were focused on the steady state level of capital stock per workerof productivity. And they were not really concentrated on the rate of growth. Actually the main concern was legitimated to exogenous technical progress. (Levine and Zervos 1998) Belgium Stock market study with economic development shows the positive long run relationship between both the variables. In case of Belgium the evidences are quiet strong that Economic growth is caused by the development of the stock market. It is more focused between the period 1873 and 1935; basically this period is considered as the period of rapid industrialization in Belgium. The importance of the stock market in Belgium is more pronounced after liberalization of the stock market in 1867-1873. The time varying nature of the link between stock market development and economic growth is explained by the institutional change in the stock exchange. They also tried to find out the relationship to the universal banking system. Before 1873 the economic growth was based on the banking system and after 1873 stock market took the place. (Stock Market Development and economic growth in Belgium, Stijin Van Nieuwerburg, Ludo Cuyvers, Frans Buelens July 5, 2005) Senior economist of the World Banks Policy research department Ross Levine has discussed about Stock market in his paper Stock Markets: A Spur to economic growth on the impact of development. Less risky investments are possible in liquid equity market and it attracts the savers to acquire an asset, equity. As, they can sell it quickly when they need access to their savings, and if they want to alter their portfolio. Though many long term investment is required for the profitable investment. But reluctance of the investors towards long term investment as they dont have the access to their savings easily. Permanent access to capital is raised by the companies through equity issues as they are facilitating longer term, more profitable investments and prospect of long term economic growth is enhanced as liquid market improves the allocation of capital. The empirical evidence from the study strongly suggests that greater stock markets create more liquidity or at least continue economic gr owth. (Levine. R A spur to economic Growth) A lot of research has established that future economic growth is influenced by countrys financial growth, stock market index returns are another factor of economic growth. The researcher focused to extend their study; they tie together these two strings and started analyzing the relationship between banking industry, stock returns and future economic growth. Research was done on 18 developed and 18 emerging markets and the results are positive and noteworthy relationship between future GDP and stock returns. Few important features can also be predicted such as bank-accounting-disclosure standards, banking crises, insider trading law enforcement and government ownership of banks. (Bank stock returns and economic growth q Rebel A. Cole a, Fariborz Moshirian b,*, Qiongbing Wu c a Department of Finance, DePaul University, Chicago, IL 60604, USA b School of Banking and Finance, The University of New South Wales, Sydney, NSW 2052, Australia c Newcastle raduate School of Business, The University of Newcastle, Newcastle, NSW 2300, Australia Received 29 September 2006; accepted 26 July 2007Available online 21 September 2007) Another paper was focused on the linkages between financial development and economic growth using TYDL model for the empirical exercises by Purna Chandra Padhan suggests that both stock price and economic activity are integrated of order one and Johansen-Juselias Coin-integration tests for this study found one co integrating vector exists. It is proved by the spurious relation rule in this study the existence of at least one direction of causality. He described that bi-directional causality between stock price and economic growth meaning that economic activity can be enhanced by well developed stock exchange and vice-versa. ( Title:  The nexus between stock market and economic activity: an empirical analysis for India Author(s): Purna Chandra Padhan Journal: International Journal of Social Economics Year: 2007 Volume: 34 Issue: 10  Page: 741 – 753 DOI: 10.1108/03068290710816874 Publisher: Emerald Group Publishing Limited) Chee Keong Choong (Universiti Tunku Abdul Rahman Malaysia) Zulkornain Yusop (Universiti Putra Malaysia) Siong Hook Law (Universiti Putra Malaysia) Venus Liew Khim Sen (Universiti Putra Malaysia) Date of creation: 23 Jul 2003 Tried to find out the importance of the causal relationship of Financial development and economic growth. The findings of their study usin autoregressive Distributed lag (ARDL) describes about the positive long run impact on economic growth Granger causality also suggest same results. A study by Randall Filler(2000) using 70 countries data over the period 1985-1997 proves that there is a very little relationship between economic growth and stock market especially in developing countries and currency appreciation has occurred. From the result of the study we can see that an important role may be played by the stock market in an economy, and these are not essential for economic growth. However, another study on Iran by N. Shahnoushi, A.G Daneshvar, E Shori and M. Motalebi 2008 Financial development is not considered as an effective factor to the economic growth. The study was focused on the causal relationship between the financial development and economic growth. Time series data used for the study from the period 1961-2004. Granger causality shows there is no co integrating relationship between financial development and economic growth in Iran only the economical growth leads to financial development. Establishing link between savings and investment is very much important and financial market provides that. Transient or lasting growth is the ultimate affect of the financial market. Economic growth can be influenced by financial market by improving the productivity of the capital, Investment to firms can be channelled and greater capital accumulation by increasing savings. To ensure the stability of the financial market potential regulation is important due to asymmetric information, especially at the time of financial liberalization. (Economic Development and Financial Market Tosson Nabil Deabes Moderm Academy for technology aand computer sciences; MAM November 2004 Economic Development Financial Market Working Paper No. 2 ) Data: The empirical analysis was carried out using the quarterly data for The UK, The USA, Japan and Malaysia. The data were collected from the DataStream for the period 1993I to 2008III. Economic growth is measured as the growth rate of gross domestic product (GDP) of each country with the help of stock prices SP. For the software processing I used Eviews 6.0 for the planned regression in order to get the results. The empirical analysis is done from the quarterly data from the stock market indices and the and the GDP between the first quarter of 1993 and the fourth quarter of 2008. All the data has been extracted from the data stream and expressed in US$. The data for Japan share price is from Tokyo Stock Exchange. Malaysias Share price is form Kuala Lumpur Composite Index, UKs is from UK FT all share price index and USA share price is taken from the DOW Jones industrial share price index. The nature of the Data is series used for the time series regression. List of Variables: UGDP UK GDP USP UK Share price LUGDP Log of UK GDP LUSP Log of UK Share price USGDP USA GDP USSP USA (DOW Jones) Share price LUSGDP Log of USA GDP LUSSP Log of USA Share price MGDP Malaysia GDP MSP Malaysia Share price LMGDP Log of Malaysia GDP LMSP Log of Malaysia Share price JGDP Japan GDP JSP Japan Share Price LJGDP Log of Japan GDP LJSP Log of Japan Share price Methodology: Cointegration long term common stochastic trend between non stationary time series. If non-stationary series x and yare both integrated of same order and there is a linear combination of them that is stationary, they are called co integrated series. A common stochastic trend is shared in Cointegration. It follows that these two series will not drift apart too much, meaning that even they may deviate from each other in the short-term, they will revert to the long-run equilibrium. This fact makes cointegration a very powerful approach for the long-term analyses. Meanwhile, cointegration does not imply high correlation; two series can be co integrated and yet have very low correlations. Cointegration tests allow us to determine whether financial variables of different national markets move together over the long run, while providing for the possibility of short-run divergence. The first step in the analysis is to test each index series for the presence of unit roots, which shows whether the series are nonstationary. All the series must be nonstationarity and integrated of the same order. To do this, we apply both the Augmented Dickey-Fuller (ADF) test. Once the stationarity requirements are met, we proceed Granger bivariate cointegration (1987) procedure. 30 International Research Journal of Finance and Economics Issue 24 (2009) Series Stationary Test: In this study I have used Augmented Dickey Fuller Test (ADF) to test the stationary of variables. The unit root test is usually used to confirm stationary of a series. The ADF is test for unit root where I have checked the Unit root and strong negative numbers of unit root is being rejected by the null hypothesis (level of significance). In this study I have used Augmented Dickey Fuller Test (ADF) to check whether the series is stationary or not. ADF test is based on the estimate of the following regression: is in this case variable of interest = , is the differencing operator, t is the time trend and is the random component of zero mean and constant variance. The parameters to be estimated are { } Null and alternative hypothesis of unit root test are: , () () Here with the test we can find the estimates of are equal to zero or not. Y is said to be stationary if the cumulative distribution of the ADF statistics by showing that if the calculated ratio of the coefficient is less than the critical value according to Fuller (1976). If we accept the Ho the sequence is predicted to be having unit root and if Ho is rejected then we can say that the series doesnt have unit root. This proves that the series is stationary. The co–integration test can only be performed if both the sequences are all integrated of order I (1). Cointegration Test: Engle and Granger (1987) first established the cointegration method. It is a method of measuring long term diversification based on data. Linear combination of two non stationary series shows that they are integrated in order one I(1) that is stationary. And this is a co integrated series. Cointegration Long term common random trend between non stationary time series. The linear combination of both the non stationary series can be stationary if both the variables are integrated in same order. Cointegration is a very powerful approach in the long term analysis because a common stochastic trend is shared in cointegration that mean two series will not drift separately too much. They might deviate from each other but in the long run but eventually the will revert back in the long run. If there is very low correlation between the series still the series can be co-integrated as high correlation is not implied in cointegration. The reason for choosing the method as it will allow us to check the move between the variable in the long run even there might be a divergence in the short run. The first step in the analysis is check each index series whether the series for the presence of unit root which shows whether the series is non stationary. The method that I followed to do this is Augmented Dickey Fuller Test (ADF). I proceed the Granger cointegration technique 1987 when the stationary requirements are met. According to Engle and Granger (1987) to check for cointegration if both the variables and are integrated with order one the proposed method for cointegration residual-based test for cointegration (Engle-Granger method). So from the above method we can find the equation By regressing with And after that and is denoted as the estimated regression coefficient vectors. After that I saved the residual from the above equation. Then, = – is representing the estimated residual vector. If the residual is integrated with order zero that means the series for the residual is stationary, and and are then co integrated and vice versa. I have checked it by performing Augmented Dickey fuller test on the residual series on level value with intercept only of each country. An in this situation (1, -) is called co-integrating vector if the series is stationary. Therefore is a co integrating equation, so, from it we can say that there is long run relationship between and. Granger causality test: Granger causality test is applied if the relationship is lagged between the two variables to determine the direction of relation in statistical term. It gives information about the short term relationship between the variables. In terms of conceptual definition causality is consist of different ideas, this concept produce a relation between caused and results were agreed upon. Aristo defines that there exist a link between causes and results and without causes these results are impossible. And this is strong relationship. Some economists believe that the idea of causality is the mix of both theoretical and explanation and statistical concept. The frontline operational definition of causality is given by some economist, but Granger is the one who provided the information to understand it correctly and completely. Granger causality approach (1969), lets think the variable y is Economic Growth (GDP) and x is Stock price index, if it is possible to predict the past values of y and x than from the lagged values of y alone. X is said to be granger caused by and y is helping in predicting it. in case of a simple bivariate model, causality can be tested between stock market growth and economic growth. Granger causality run on the basis of the following bivariate regressions of the form: (1) (2) Where GDP denotes economic growth and SP denotes the stock price index and they explain the changes in growth. Variables are expressed in logarithm form. The distribution of and are uncorrelated by assumption. From the equation one it can be said that current GDP is related to lagged values of itself and as well as that of SP. And equation 2 postulates same kind of behaviour for SP. Both the equations can be obtained by ordinary least squares (OLS). The f statistics are the Wald statistics for the joint hypothesis: and F test is carried out for the null hypothesis of no Granger causality. The formula of f statistic is Lagged term is defined here by m; number of parameter is defined as k. Test result for Unit Root: Augmented Dickey Fuller Model (ADF) is used to test the stationary of each variable. Null and alternative hypothesis describes about the investigation of unit root. If the null is accepted and alternative is rejected then the variable non stationary behaviour and vice versa is stationary. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test Japan t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -2.653258 -3.522887     -2.901779 -2.588280   -2.693600   -4.088713   -3.472558 1st Difference -9.053185 -3.524233   -2.902358 -2.588587 -9.003482   -4.090602   -3.473447 Share Price Level   -2.116137 -3.522887     -2.901779 -2.588280   -2.203273   -4.088713   -3.472558 1st Difference   -6.899295 -3.524233   -2.902358 -2.588587   -6.844396   -4.090602   -3.473447 Table 01: Unit root test for stationary Japan If we have a look on the unit root test for the variables GDP and Share price to find out the stationary behaviour the Augmented Dickey Fuller Test with intercept and with intercept and trend in level and first difference. The t statistic value with trend is -2.653258 which is higher than the critical values in 1%, 5% and 10% critical value. The same applies with intercept and trend as the t statistic value -2.693600 is higher than the critical value in all the level of critical value. So from the nature of stationary behaviour we can say in level GDP shows nonstationary behaviour. And the first difference LnGDP is integrated with order one. In case of LnSP the results with intercept and with intercept trend in level are -2.116137 and -2.203273 which is higher than the critical values shows non stationary behaviour as they are higher than the critical value. The unit root test for the variables at first difference shows stationary as the t statistic value is than the critical value i n all level and they are integrated in order one. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test Malaysia t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -1.195020 -3.522887     -2.901779 -2.588280 -1.933335   -4.088713   -3.472558 1st Difference -5.951843 -3.524233   -2.902358 -2.588587 -5.923595   -4.090602   -3.473447 Share Price Level   -1.900406 -3.522887     -2.901779 -2.588280   -1.891183   -4.088713   -3.472558 1st Difference   -7.842122 -3.524233   -2.902358 -2.588587   -7.779757   -4.090602   -3.473447 The unit root test result for LMGDP and LMSP values presented in natural logarithm. And the level values with intercept and with intercept and trend for LMGDP is -1.195020 and -1.93335 respectively. The values are higher than the critical value means the series has non stationary behaviour. On the other hand the 1st difference values with intercept and with intercept and trend are -5.951843 and -5.923595 respectively. The 1st difference values are integrated with order one. And in the same way I did the ADF test to check for Stationary behaviour of LMSP in level and first difference with intercept and trend. The values in level are -1.900406 and -1.891183 with intercept and trend us higher than the critical value and the series is not integrated with order one. The first difference t statistic values are -7.842122 and -7.779757 with intercept and with intercept and trend respectively are less than the critical value in both the case implies that the series is integrated with order on e. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test UK t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1% 5% GDP Level -0.690866 -3.522887     -2.901779 -2.588280 -2.377333   -4.088713   -3.472558 1st Difference -7.474388 -3.524233   -2.902358 -2.588587 -7.439027   -4.090602   -3.473447 Share Price Level -1.711599 -3.522887     -2.901779 -2.588280 -1.261546   -4.088713   -3.472558 1st Difference -7.254574 -3.524233   -2.902358 -2.588587 -7.391821   -4.090602   -3.473447 The results from Augmented Dickey Fuller test (ADF) for UK GDP in level with intercept and with intercept and trend is –0.690866 and -2.377333 respectively. Both the values in level are higher than the critical value and are integrated in order 0 shows non stationary behaviour. The t statistic values in 1st difference with intercept and with intercept and trend are -7.474388 and -7.439207 respectively. Which suggest that the critical values are less than the critical values in 1%, 5% and 10% level. So from the above hypothesis it can be said that it series is integrated with order one. When I performed the unit root test using the same method the series in level with intercept and with intercept and trend the values in are -1.711599 and -1.261546 respectively. The values are higher than the critical values implies that they are not integrated in order one shows non stationary behaviour. However, the 1st difference value of log natural share price is -7.254573 and -7.391821 wit h intercept and with intercept and trend respectively. So from the result we can say that the series is integrated in order one in both the cases with intercept and with intercept and trend. So the series in first difference is stationary. Variables level/1st Difference Augmented Dickey Fuller Statistic(ADF) test USA t statistic value With Trend t statistic value With trend and Intercept 1% 5% 10% 1%