...The Relationship Between Exchange Rate and Inflation in Pakistanby Shagufta KashifAbstractThere has been a long-standing interest in studying the factors that are responsible for uneven vacillation in the stable growth of the world economies. Lots and lots of theoretical literature and empirical evidences have addresses this issue in the past. Hike in prices of goods and services and foreign exchange are two important aspects which are deemed responsible for such potholed fluctuations in the economic growthThe volatility of the nature of prices is a major source of concern in all countries since 1970s. The issue is of a more serious nature in the developing countries where inflation in foreign countries known as “imported inflation” is seen to be driving “local/domestic inflation”; making domestic policies to control inflation ineffective. Similarly, in Pakistan, the domestic price level rose from the mid-1970s. The exchange rate started depreciating continuously from the early 1980s. Continuous devaluation of currency and inflation in the 1980s seems to suggest a correlation between the two variables.The studies by Rana and Dowling (1983) suggest that foreign inflation is the most influencing factor in explaining the change in local price level in nine less-developed countries of Asia during the period 1973-79. This study suggests that these countries cannot exercise much control over domestic inflation, however, the policies of their major trading partners (through exchange rate)...
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...What is the relationship between marketing and the fundamental theory of exchange? To understand the relationship between marketing and the fundamental theory of exchange, one must define the two separately to know the benefit of them together. The Merriam-Webster dictionary defines marketing “as the process or technique of promoting, selling, and distributing a product or service.” (1) With any business, one must have this skill to be able to promote the goods or service that they wish to sell to the public. In relation to the fundamental theory of exchange an article written by a grad student from Illinois State University wrote about the fundamental theorem of exchange, "One of the most important principles of economics is the Fundamental Theorem of Exchange: ... trade is mutually beneficial. Voluntary exchange increases [net benefits] for all parties involved." (2) For one to have a truly successful relationship between these two they need to have an understanding on what they are selling. The worst thing a consumer wants when they go to a store or shop is for the salesman helping them to not know anything about what they are talking about. With being in retail for the majority of my life I have come to know that just a small portion of consumers know what they want when they walk into a store. It is the job of the salesman to use his, “promoting, selling, and distributing” skills to be able to secure a successful transaction of exchange between the consumer and the...
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...The Exchange Relationship: From not an Easy Sell Product Rahul Parikh BUS620: Managerial Marketing (MAC1125A) Erich Randall June 17, 2011. The Exchange Relationship: From not an Easy Sell Product According to Mullins and Walker (2010, p.12, para 7), “Market consist of (a) individuals, and organizations, who (b) are interested, and willing, to buy a particular product to obtain benefits, that will specify a specific need or want, and who (c) have the resources [such as] (time, money) to engage in such a transaction.” “People have different needs, wants, and resources, [so] the entire population is seldom a viable market for a single product or service” (Mullins & Walker, 2010, p.13, para 1). Hence, “Market for a given product is fragmented into several distinct market segments, [and] each segment contains people, homogenous in their needs, want, and product benefit they seek” (Mullins & Walker, 2010, p.13, para 2). According to Tillinger (2008, May 8), “Not every product is an easy sell, [and] there are certain items, and products, which require a bit more effort, and creativity, [in] the process of selling [to customer, who does not want to be a customer]” (Tillinger, 2008, May 8). According to Tillinger (2008, May 8), the key is “Creativity, and understanding, the customer’s perspective are important, when trying to sell [such] products.” Companies marketing product that may not be an ‘easy sell’ face certain issues, and “strategic marketing management...
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...Culture has been used to signify the ‘’pattern of life within a community-the regularly recurring activities and material and social arrangements’’ of a specific group. A tribe consists of a unity of people by ties of descent from a common ancestor, community of customs and traditions or adherence to the same leaders. There are two types of labels that can be given to a tribe. One of them is the mosaic view, which consists of small-scale of tribes located mainly in the tropical world, and these make up a type of mosaic cultures. This means in essence that every culture is very unique and has to be studied differently, hence mosaic (every part is different not common). The second view is the ladder type. This is made up of a string of developmental stages or levels, which are defined by diverse subsistence economies and accompanying levels of socio-political integration. The tribal world was defined as a system by the confronting of indigenous people by explorers or colonialists, later described by anthropologists. On the other hand, peasants are a member of a class of persons who are small farmers or farm labourers of low social rank. This definition however is not that accurate as it varies in different communities and systems. Studies on peasants by Anthropologists took place since 1950 and have been increasing. The main difference between these social groups can be seen by quoting Geertz; ‘’Culture is the fabric of meaning in terms of which human...
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...Kevin Powell Warren Tillson Social Exchange Theory Social exchange theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. The theory has roots in economics, psychology and sociology. Social exchange theory features many of the main assumptions found in rational choice theory and structuralism. Social exchange theory was introduced in 1958 by the sociologist George Homans with the publication of his work "Social Behavior as Exchange". He defined social exchange as the exchange of activity, tangible or intangible, and more or less rewarding or costly, between at least two persons. After Homans founded the theory, other theorists continued to write about it, particularly Peter M. Blau and Richard M. Emerson, who in addition to Homans are generally thought of as the major developers of the exchange perspective within sociology. Homans' work emphasized the individual behavior of actors in interaction with one another. Although there are various modes of exchange, Homans centered his studies on dyadic exchange John Thibaut and Harold Kelly are recognized for focusing their studies within the theory on the psychological concepts, the dyad and small group. Lévi-Strauss is recognized for contributing to the emergence of this theoretical...
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...87 2004 by JOURNAL OF CONSUMER RESEARCH, Inc. ● Vol. 31 ● June 2004 All rights reserved. 0093-5301/2004/3101-0008$10.00 The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior PANKAJ AGGARWAL* The key premise underlying this work is that when consumers form relationships with brands they use norms of interpersonal relationships as a guide in their brand assessments. Two relationship types are examined: exchange relationships in which benefits are given to others to get something back and communal relationships in which benefits are given to show concern for other’s needs. The conceptual model proposes that an adherence to or a violation of these relationship norms influences the appraisal of the specific marketing action and also the overall brand evaluations. Results of three experiments provide converging evidence in support of the theory. Branding and brand-based differentiation are powerful means for creating and sustaining competitive advantage. Prior research has examined differences in how consumers perceive and evaluate brands, for example, through investigating brand equity (Keller 1993; McQueen, Foley, and Deighton 1993), brand personality (Aaker 1997; Plummer 1985) and brand extensions (Aaker and Keller 1990; Nakamoto, MacInnis, and Jung 1993). More recently, researchers have noted that consumers differ not only in how they perceive brands but also in how they relate to brands (Fournier 1998; Muniz and O’Guinn 2001). This...
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...Social Exchange Theory Social exchange theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. The theory has roots in economics, psychology and sociology. Social exchange theory features many of the main assumptions found in rational choice theory and structuralism. Social exchange theory was introduced in 1958 by the sociologist George Homans with the publication of his work "Social Behavior as Exchange". He defined social exchange as the exchange of activity, tangible or intangible, and more or less rewarding or costly, between at least two persons. After Homans founded the theory, other theorists continued to write about it, particularly Peter M. Blau and Richard M. Emerson, who in addition to Homans are generally thought of as the major developers of the exchange perspective within sociology. Homans' work emphasized the individual behavior of actors in interaction with one another. Although there are various modes of exchange, Homans centered his studies on dyadic exchange John Thibaut and Harold Kelly are recognized for focusing their studies within the theory on the psychological concepts, the dyad and small group. Lévi-Strauss is recognized for contributing to the emergence of this theoretical perspective from his work...
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...Relationship Exchange Rate Stock Price CHAPTER THREE 3.1) introduction This chapter is particularly focused on the various previous studies, which tries to explore the relationship between the exchange rate and stock price. Many studies had been conducted in context to the relation between the exchange rate and stock prices, some studies even have analyzed the relation by considering some of the other variables (like FDI, interest rate, inflation rate ect), to see if these variables have any influence on the fluctuating exchange rate and stock prices. The current literature provides year by year explanation about the Different opinions and arguments of various researches on the relationship between exchange rate and stock prices. For the easy understanding the chapter will be divided into two sections. The first section will cover all the research papers published prior to 1990's. one can observe that most of the studies in section one had established the relationship by measuring the exposure from fluctuating exchange rates to stock prices, so we will name this part as “literature review on measuring the exposure'. And in second section; we cover all the research papers which are published after 1990's and one can observe that some of the studies have established the relation by measuring the causal relation between the exchange rate and stock prices, so we would name the second part as” literature review on measuring the causality relation between the exchange rate and...
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...The relationship between stock prices and exchange rates in China Mengyuan Chen Illinois Wesleyan University Dec 10, 2012 Abstract This paper uses the data of RMB exchange rates and stock market prices in China from 1994 to 2011 to estimate the relationship between stock prices and exchange rates. There are two major theories concerning the relationship. According to the portfolio balance effect, these two variables should be negatively related; in addition, according to the international trading effect theory, these two variables should be positively related. The linear regression model is adopted to observe the various relationships between stock and foreign exchange markets. The results confirmed my hypothesis, which indicates that the international trading effect is more dominant, thus the net effect is a positive causal relationship from exchange rates to stock prices. I. Introduction Within the emerging Chinese market, China now has more open policies and advanced financial market instruments to promote globalization. For example, China started to allow the RMB to float within a larger daily range in 2005 and brought derivative options into the stock market. These significant steps all suggest that China is beginning to face a new economic condition. For instance, the challenging policy making of RMB exchange rate is one. Exchange rates and stock prices are both key indicators of the economy and financial markets. So the relationship between those two becomes an...
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...On the Relationship between stock return and exchange rate: evidence on China Yaqiong Li a b , Lihong Huang b a b The Business School, Loughborough University ,UK College of Mathematics and Econometrics, Hunan University, Changsha ,Hunan ,China Abstract The purpose of this paper is to investigate the relationship between RMB exchange rate and A-share stock returns in China, in particular in Shanghai stock market. We find that both stock returns and RMB nominal exchange rate are integrated of order 1. The Engle–Granger cointegration test is then performed, suggesting that there is not a long-run equilibrium relationship between stock returns and RMB exchange rates at 5% significance level. However, there is strong evidence suggesting that there is a short-run uni-directional causality relationship from the nominal exchange rate to the stock returns. Keywords: cointegration; Granger causality; RMB exchange rate; stock return; unit root test. 1. Introduction The China’s exchange rate policy has recently emerged as one of major issues in the trade between the PR of China and the United States of America. The controversy is fuelled by China’s pegging of RMB to USD. Since a major devaluation of the RMB in 1994, the Chinese currency’s exchange rate vis-a-vis USD remained more or less unchanged until 21 July 2005, and has fluctuated from RMB 8.22 to 8.11 per dollar since then. The Chinese Authority has recently announced that “RMB will be no longer pegged to the US dollar”...
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... INTRODUCTION Exchange relationship is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer- related data and enabled by information technology (Barnes, 2000). Exchange relationship as defined by Day and Van Den Bulte (2002) is a cross functional procedure for achieving a continuous conversation with customers, across all their contact and access points, with personalized treatment for the dearest customers, to increase customer retention and the effectiveness of marketing initiatives. On the other hand Ricardom, (2006) on exchange relationship takes a wider view on customer relationship and sees it as a attitude to customers and to the organization itself, which dynamically integrates sales, marketing and customer care services to create and add value for the company and its customers Quelch, John A and David Kenny (2002). Also exchange relationship is seen as ‘the set of business processes and overall policies designed to capture, retain and provide service to customers or a coherent and complete set of processes and technologies for managing relationship with current and potential customers and associates of the company, using the marketing, sales and services departments, regardless of the channel of communication’ (Fletcher and Taplin (2001) and Chen and Popovich (2003) respectively. Exchange relationship is a 'core business...
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...Theories Of Relationship Theories Of Relationship [Document Title] [Document Title] Elizabeth Wiwoloku Elizabeth Wiwoloku Introduction There are two main theories applied to relationships, Social Exchange Theory and Equity Theory underpin commonly used behavioural therapies such as Cognitive Behavioural Therapy, Enhanced Cognitive Behavioral Therapy and Integrative Cognitive Behavioural Therapy. More recent studies in neuroscience and behavior and the importance of language have led to the development of Relational Frame Theory and Acceptance and Commitment Therapy as an alternative approach. In this essay I will outline the relationship models comparing and contrasting them Social exchange theory Social exchange theory analyses interactions between two parties by examining the costs and benefits to each. The key point of the theory is that it assumes the two parties are both giving and receiving items of value from each other. Under this theory, interactions are only likely to continue if both parties feel they coming out of the exchange with more than they are giving up that is, if there is a positive amount of profit for both parties involved. The Social Exchange Theory by Thibaut and Kelly (1978) originates from economy sociology and psychology. It is also a well know theory in sociology that explains the variations and modifications of social relationships development between individuals. The social exchange theory assumes that all human relationships are a matter...
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...Facing Exchange Relationship with Customers Willard Williamson, Sr Managerial Marketing – BUS 620 Dr. Larry Flegle February 7, 2011 Abstract: In this paper I will be discussing the issues that force companies that market products that may not sell easily. Will discuss the impact exchange relationship will have on a customer who doesn’t want to be a customer. Will also discuss how companies effectively approach this relationship. Marketing is a social process involving the activities necessary to enable individuals and organizations to obtain what they need and want through exchange with others and to develop ongoing exchange relationships (Mullins & Walker, 2010). A company that is attempting to sell a product that is not an easy sell must research through surveys and other means to learn how their customers feel about the product, if the customer has any real interest to buy or have the product in their home or to use it. The company must have a good understanding of their customers by listening to their customers while they gather information, analyze, and understand the customer’s problems and tailor their offerings to the customer’s needs (Abed & Haghighi, 2009). A well established customer oriented relationship can help sales people satisfy buyers needs on a long term venture. The sellers must spend considerable time and be dedicated to understanding and then satisfying the customer through buyer – seller relationships. The success for most companies...
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...The Effects of Brand Relationship Norms on Consumer Attitudes and Behavior PANKAJ AGGARWAL* The key premise underlying this work is that when consumers form relationships with brands they use norms of interpersonal relationships as a guide in their brand assessments. Two relationship types are examined: exchange relationships in which benefits are given to others to get something back and communal relationships in which benefits are given to show concern for other’s needs. The conceptual model proposes that an adherence to or a violation of these relationship norms influences the appraisal of the specific marketing action and also the overall brand evaluations. Results of three experiments provide converging evidence in support of the theory. B randing and brand-based differentiation are powerful means for creating and sustaining competitive advantage. Prior research has examined differences in how consumers perceive and evaluate brands, for example, through investigating brand equity (Keller 1993; McQueen, Foley, and Deighton 1993), brand personality (Aaker 1997; Plummer 1985) and brand extensions (Aaker and Keller 1990; Nakamoto, MacInnis, and Jung 1993). More recently, researchers have noted that consumers differ not only in how they perceive brands but also in how they relate to brands (Fournier 1998; Muniz and O’Guinn 2001). This line of research has suggested that people sometimes form rela- *Pankaj Aggarwal is an assistant professor of marketing at the Division of...
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...linkages between the foreign exchange and stock markets for India, Samanta and Nath (2003) employed the Granger causality test on daily data during the period March 1993 to December 2002. The empirical findings of the study suggest that these two markets did not have any causal relationship. When the study extended its analysis to verily if liberalization in both the markets brought them together, it found no significant causal relationship between the exchange rate and stock price movements, except for the years l993, 2001 and 2002 during when a unidirectional causal influence from stock index return to return in forex market is detected and a very mild causal influence in the reverse direction is...
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