Development Of Geography As An Academic Discipline

Development Of Geography As An Academic Discipline In this essay I will be looking at the development of geography as an academic discipline, and then I will be discussing the role that theory has had in the development of geography. I will research past events and influences, to see how they have affected geography as an idiographic subject and changed the subject into a spatial science and effectively into a core academic discipline. The discipline of geography is among the most ancient of sciences. Geography can be traced back to Eratosthenes, a Greek scholar who lived around 276-196 B.C and who is often called the father of geography. Alexander Von Humboldt was a German geographer from 1769-1859, commonly known as the father of modern geography. As well as Humboldt, Carl Ritter is also considered as one of the founders of modern geography. Both Humboldt and Ritter shared similar views. The naturalist Charles Darwin wrote a book called the Origin of the Species by Means of Natural Selection in 1859. It proved an inspiration to many geographers, who saw in Darwins idea of natural selection the possibility of a general theory of man-land relationshipsà ¢Ã¢â€š ¬Ã‚ ¦ so man needed to adopt modes of living which were consonant with the environment in which he livedà ¢Ã¢â€š ¬Ã‚ ¦ (Graves, 1975) Geography branched out as a new light and the thought process was now in place. Yet Darwin never claimed to be a geographer, with his main concentration being botany. Humboldt and Carl Ritter then co-founded a Geographical Society in Germany in 1874, bringing together Humboldts principle of a systematic approach and Ritters regional approach which were key methods of geography at this time. Regional geography is the study of world regions. It looks at key characteristics and how one place is specific and unique compared to another. Another German geography, Freidrich Ratzel was the first person to use the term Lebensraum, which was used by Adolf Hitler. One of Ratzels students Ellen Semple studied under Ratzel and was heavily influenced by his ideas, publishing Influences of Geographic Environment in 1911. Another one of Ratzels students, Ellsworth Huntington also applied Ratzels theory of regional geography to the reasoning behind the rise and fall of civilisation. Despite being one of the oldest disciplines, in todays society, geography struggles to define itself as an academic subject. Over the past few decades, geography has had to forge its way to stand as a fundamental scientific subject. In the early 19th century, many geography scholars believed that environment had a key role on the living marvels. The theory of Environmental Determinism the view that the physical environment sets limits on human environment was being questioned due to claims of its lack in the intellectual relevance and faults in its descriptions of certain locations. This led on to the theory of environmental possibilism. Possibilism states that the environment does have an effect on society, however it is not deterministic and humans can heavily influence the environment around them. By the 1950s environmental determinism was virtually history and environmental possibilism had now taken over as central theory. The first few steps forward for geography were the opening of the first geographical institutions, such as the establishment of the first institution by Humboldt and Ritter in Germany in 1874, The National Geographic Society in 1888 and also the Royal Geographical Society, founded in 1830 in Britain. The Royal Geographical Society is an institution to encourage the progression of geographical science. The Society also devoted much of its energy to education, and was responsible for both the incorporation of the study of geography in schools at the turn of the 20th century, and for the first university positions in the discipline. (Royal Geographical Society website.) The Society is the largest Geographical Society in Europe and one of the largest in the world. It supports and promotes geographical research, field training, education and teaching. These associations were the grounding for geography to start to grow and develop as the funded key and essential research. They also promot ed geography in schools and universities, leading to the first university lecturer appointed in 1888. In 1919, Geography was the established as a Bachelor of Arts degree, and Cambridge University appointed its first professor in 1933, which was a great step forward for geography being such an influential place of learning. This appointment acted as a catalyst, and after this, many other universities started to follow suit. By the 1930s Britain had 44 University geography departments. However, there was a slump in the early 1940s when geography hit crisis point. Geography departments started to deteriorate as geography as an academic topic struggled to stand as a basic University subject. à ¢Ã¢â€š ¬Ã‚ ¦geography as a subject is frequently misunderstood by the non-geographersà ¢Ã¢â€š ¬Ã‚ ¦ (Graves, 1975) This meant that other discipline professors and educators questioned the importance of geography. During the eighteenth century, geography began to be taught in certain institutions of higher learning, though the substance of what was being taught varied immensely in quality. (Graves, 1975) This was followed by Harvard University abolishing geography as a subject in 1948. Being such an important and significant place of learning, this eradication had an adverse impact on the way geography was viewed. It lost its place as a highly regarded subject, and was starting to be regarded as overly descriptive w ith no relevance to science, the Greeks named it as a description of the earth. It was at this point that questions were raised about the importance of geography and whether it answers the whys? and hows?. At this time, geography had no documented split between the human and physical side. Also, à ¢Ã¢â€š ¬Ã‚ ¦geography in academic institutions straddled the arts and the sciences. This made it hard for geography to have a true factual definition. Society started to wonder whether it sat as a science or a humanity subject. These questions and queries made it increasingly difficult for geography to have a good platform on which to grow. Essentially, the subject needed to be defined, and this would entail more detailed research. With more advanced research, geography started to branch out with the division of both physical and human geography into contemporary geographies. Henderson (1968) the adjectival geography: agriculture geography, urban geography, social geography, settlement geography and so on. These numerous modern geographies started to make it easier to for geography to be defined. At last there were specialised areas that focused on one particular area of geography. Parallel to this trend towards specialization, there developed a tendency to use quantitative techniques of analysis. (Graves, 1975) The importance for technology to develop in society had increased massively by the end of World War II, which meant there was a gap for geography to grow. This gap led to the quantitative revolution, which was one of the major turning points of modern geography. This revolution began in the 1950s, and marked a swift change in the method behind geographical research making geography into a spatial science and shifting from an idiographic subject to an empirical law making one. It made laws that applied to large groups of people and individuals, and established broad generalisations. It was a turning point, and geography started to grasp attention once again. It brought to light new determinism models and mathematical equations to answer hypotheses that could be used in teaching, and helped to define geography, making it able to answer the more logical questions and respond in more depth. Geography could again stand as a strong scientific discipline in schools and universities. The subject started gaining popularity again and Universities began to recognise the value of geographic study and training this provided more classes and degree opportunities. The use of fieldwork started to be used in schools in the 1950s, as a key method of teaching. Fieldwork is an effective teaching method in geography is an interactive fun way for people to learn and experience what they are learning at first hand. It is an important method of learning as fieldwork teaches things that cannot be taught or learned in class. However, disappointingly the focus on fieldwork started to weaken as it à ¢Ã¢â€š ¬Ã‚ ¦ is not promoted in educational institutions because of factors such as time to cover comprehensive curricula, financial constraints, legal issues and commitment by educators. Factors such as these had the effect that the inclusion of fieldwork declined in some schools; however, with the help of funding fieldwork is still a very important and prominent part of teaching geography whenever possible. Geography is unique in that it is not artificial. It is not something that textbook writers had composed for students to study. Geography is alive, and something that is relevant and we use in our daily lives. Fieldwork started to make a real impact in higher education in 1985. It gave people transferrable skills, including Project design, organisational skills, leadership skills, group skills and student participation.(Royal Geographical Society website) This is why fieldwork is vital, it helps pupils understand and picture the subject for them. Fieldwork also put research and findings into practise. In undertaking field work, students are effectively carrying out innovative research over and above what could be achieved in a classroom. The president of the American Geographical Society, Jerome E. Dobson, president of the American Geographical Society argues that geographic tools allow for scientific advancement and therefore geography deserves a place among the fundamental sciences, but more importantly more of a role in education. à ¢Ã¢â€š ¬Ã‚ ¦most academics in the United States considered geography a marginal disciplineà ¢Ã¢â€š ¬Ã‚ ¦ (Jill Freund Thomas) In May 1993, Roger Down worked towards making research in geography education to be an integral part of work. In his own words, The need for research in geography education: it would be nice to have some data. (Downs, 1994b:57). In the UK, The Geography Education Research Collective is à ¢Ã¢â€š ¬Ã‚ ¦dedicated to the promotion of geography education through research and publication. (http://www.geography.org.uk/gtip/gereco/) 13 teachers come together every four years with the resolution of creating research in geography education. It is a UK based association and was first set up in 1893. The field of geography education is sadly lacking in empirical data that might inform and underpin decisions about standard setting, curriculum design, materials development, teaching strategies, and assessment procedures. Large quantities of high-quality data are necessary if geography is to be successfully implemented in the education systemà ¢Ã¢â€š ¬Ã‚ ¦ We need a new attitude towards researchà ¢Ã¢â€š ¬Ã‚ ¦ In conclusion I believe that geography will continue to grow and develop with the discoveries of new modern geographies due to the enormous amount of scientific research that is now able to be undertaken. The development of new technologies has helped geography turn into an academic discipline as it supports research making research easier to carry out, and getting results which are far more precise. In the future technology will continue to advance and thus continue to be included and promoted in school curriculums. à ¢Ã¢â€š ¬Ã‚ ¦the most important change which has occurred is the realization that any progress in understanding phenomena studied by geographers involves the conscious use of scientific methods and the development of a body of theory to explain such phenomena. (Graves, 1975) With advanced technologies, wider geographical research will also be capable and new discoveries will be made. The role of theory in the development of geography in education is very significant as it is the basis of learning and has helped geography thrive over the last couple of centuries. For, if a theory is to be developed, then some understanding of the nature of theory and of the process of theory building was required. (Graves, 1975) Today geography continues to flourish and expand in education. Nowadays, increasing numbers of students chose to study this subject at university, so the trend is set for the popularity and importance of this discipline to continue to go from strength to strength in the future.

Radio Documentary

RET potash a series called Documentaries on 1, these touch on may subjects and might be suitable for the longer version of this programmer. However, I would like to think that other stations will be willing to look at the subject matter and consider it as a stand-alone piece. The independent radio stations, Nearer – or LOAM, regularly do these kind of projects. Radio Techniques Voice, passion, and the stark contrast will play the main element of my documentary. Music will be important, but not the main factor. I intend, at this time, to use a cut in as my intro.This will be a combination of low bass slow beat Music, overlapped by a girl crying, fading out to a door closing, heavy rain falling, and then introduction. Here I will come in and introduce my if rest guest†¦ Don't have any plans to intermittently use sound effects through the programmer, however, that may change when look at post production; I'm not ruling it out at this time. Troubleshooting refer to take the a pproach of trying to see of any problems before bring my project to paper, think this is why it takes me longer settle on my assignment, and I know this is something I need to address.I do worry a bit that the voices of the two people I know may not be as strong within the programmer itself, but I plan to walk them through it a few times on a ‘Dry run' before the actual show itself, and I hope this will make them more relaxed. REPORT Last year I was very lucky to meet a young Irish woman called Rosemary, she is homeless, she IS identity less, and she is clinically blind. Rosemary is one of fife's very hard luck stories, but she is always smiling and she makes the most of life.The statistics for the homeless of Dublin, say an average of 1 60 people without permanent home or shelter, sleep on the streets of the capital city every night. This figure could be off by as much as 50/60 people per night however, as a lot of homeless people walk around during the night and then sleep o n a park bench by day, so they aren't included in the list. Every system that should have been in place to protect Rosemary, has failed her. She comes from a traveler background. Her mother left her when she was very nouns, and she was used and abused by a succession of supposed relatives.The department of social protection classify her as non-existent; she has no passport, no identity card, and no UPS number. She lives in a shed, when she can, and when that is not available, she sleeps in doorways, or relies on the kindness of homeless shelters to help her out. I met Rosier, on a bitterly cold night in Dublin city during a drive to bring clothes and food to the homeless, she was wearing sandals and her feet were purple with cold. It shocked me to the core that a young blind woman, could be homeless, feel her story serves airtime.I wanted this to be part of a bigger documentary, something that looks at the diversity Of life, initially just about Women, but ultimately across a wide d ivide. Shawn, is the proprietor of Sex Soap, a health based, body safe, sex toy distributor for both men and women. She could not be more different than Rosier. That said, the fact that they are female, both very close in age, both live in Ireland, and neither of them thought they would be doing what they do now, is the thread of my programmer. My show plans to look at the diverse lives of these two women, who, but for fate, could be so efferent.My guest Shawn, came about simply from following her on twitter. Her tweets, which one might expect to be lewd and disingenuous, are in fact very amusing, her ability to speak freely, and also her accomplished style of writing intrigued me. Couple that with the fact that she has won the Realer awards, and been asked to speak about safe sex and body conscious products, was enough for me to know I wanted to include her in this project. Originally wanted my show to be three voices, however, I felt time constraints would limit what each would ge t a chance to say, and I wanted the entrant to be relatively stark.I found that my time could have been put to better use, by not dithering over the little things, like who to put first on the running order, or how much information to include from research rather than letting their voices be the show. Did struggle with wanting the show to be purely their voices, and realizing that if I'm to market a brand, then I have to be a part of that branding. Women in business do have a harder time Of it than men that is a proven fact. Young women in business harder again, the sex industry business is just rife for negative connotations.However, engaged to find a young woman, filled to the brim with positivist, who speaks regularly at events to not only promote her business, but also to promote safe sex, and healthy lifestyles. Homeless people are generally branded as junkies, or alcoholics, trouble makers, or down and outs, with little if anything to offer to the world. My experience has taug ht me that is not true, and no more so than now when families are being made homeless against their will. I hope that the choices I have made with regard to imagery through music, different voices, and with the content of the programmer, shows a well- leaned out process.

Overview Of The Sugar Industry Of Pakistan Finance Essay - Free Essay Example

Sample details Pages: 17 Words: 5223 Downloads: 3 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Pakistan is the 5th largest country in the world in terms of area under sugarcane cultivation, 11th by production and 60th in terms of yield. Sugarcane is the primary raw material for the production of sugar. Since independence, the area under cultivation has increased more rapidly than any other major crop at around one million hectares. Don’t waste time! Our writers will create an original "Overview Of The Sugar Industry Of Pakistan Finance Essay" essay for you Create order The sugar industry in Pakistan is the 2nd largest agro based industry comprising 81 sugar mills out of which 27 are listed on Karachi Stock Exchange. The annual crushing capacity of the industry is over 6.1 million tones. Sugarcane farming and sugar manufacturing contribute significantly to the national exchequer in the form of various taxes and levies. Sugar manufacturing and its by-products have contributed significantly towards the foreign exchange resources through import substitution. Sugar production is a seasonal activity. The mills, at an average operate for 150 days a year whereas the supplies are made throughout the year. As the industry now has large daily crushing capacity there are efforts to reduce the production even further. 1.2 About the subject The purpose of this research was to examine the significance of free cash flow in relation with firms capital expenditure. Many researchers have studied the relationship built around free cash flow and have argued that managers have to play a vital role in deciding where free cash flow eventually ends up. Something known as an agency problem is widely discussed and commented on by several researchers. This problem talks exactly about the conflict of interest between managers and shareholders. Shareholders are interested in earning as much dividends as possible which would increase their value. On the contrary, managers think for themselves. They tend to invest the available cash flow in projects that would not necessarily increase shareholders value but ensure that the tenure of the manager is as extended as possible. New investments would mean more responsibilities on managers thus their uninterrupted length of service is required in the long term interest of the firm. Going one s tep ahead of agency problem, this study is related to free cash flow which shows an association and a relationship with the capital expenditure. 1.2.1 Free cash flow. Free cash flow is aÂÂ  measure of financial performance and one of the sources of capital expenditure in firms. Managers can either disburse the available cash among shareholders in the form of dividends afterÂÂ  keeping aside the money required to expand or maintain its asset base or hold it back for developing new products, making acquisitions, and reducing debt. At this point in time, it is imperative to note that negative free cash flow in itself is not bad. If free cash flow is negative, itÂÂ  could show that a company is developing new products, reducing debts or even making large investments. If these cash out flows earn a high return eventually, the strategy has the potential to pay off in the long run. 1.2.2 Capital expenditure. Capital expenditure (CAPEX) are those cash outflows that c reate future benefits for the firm. A capital expenditure is incurred when a business outlay funds to acquire or upgrade physical assets such as property, industrial buildings or equipment. CAPEX is commonly found on the Cash Flow Statement as an investment in plant, property and equipment or something similar in the investing section. Companies listed on stock exchange will often list their capital expenditures for the year in annual reports, which allows shareholders to see how the company is using their funds and whether it is investing in its long term growth. The hypothesis tested in this study is accepted and thus a non existence of a relationship between free cash flow and capital expenditure is established. 1.3 Hypothesis Free Cash flow has no relationship with capital expenditure. 1.4 Theoretical framework and hypothesis formation The hypothesis aims to prove that there is no relationship between free cash flow and capital expenditure, concentrating on the Sugar Industry of Pakistan. In order to do that, linear regression seems to be the best test as it attempts to model the relationship between two variables by fitting a linear equation to observed data. One variable is considered to be an independent variable while the other is considered to be a dependent variable. The objective of multiple linear regression analysis is to use the independent variables whose values are known to forecast the single dependent value selected by the researcher. (Hair, 2006) CHAPTER 2: LITERATURE REVIEW Cash flow was determined by integrating the cash receipt and disbursement items from the income statement with the change in each balance sheet item; the sum of the cash inflows equals the sum of the ca sh outflows. Whereas capital expenditure is the amount a company spends buying or upgrading fixed assets, such as equipment, during the year and acquiring subsidiaries, minus government grants received. Jensen (1986) in his free cash flow (FCF) hypothesis suggests that surplus cash flow was exhausted on value-destroying expenditure because managers have personal motivation to raise the asset base of the business rather than dispense cash among shareholders in the form of dividends. Cash flow has always been somewhat of a puzzle in the literature on the determinants of investment. Gugler (2004) argues that in a strictly neoclassical world, cash flow does not belong in an investment equation. Even than pragmatic studies dating back over 4 decades invariably document that cash flow and investment are positively related. The effect of cash flow engendered from within on financing of capital investment expenditure is well studied. But what remains to be studied thoroughly is the reason behind this effect. The irrelevance proposition of Modigliani and Miller (1958) affirms that firms undertake positive net present value (NPV) ventures irrespective of the source of financing. Firms that pay low dividends rely more profoundly on cash flow as shown by Fazzari, Petersen and Hubbard (1988). The first two gentlemen also found that such firms use working capital adjustments and not external financing to maintain the needed capital expenditure in order to smooth fluctuations in cash flow. They further argued that in order to save cash flow, firms choose a stumpy dividend payout strategy. Calomiris and Hubbard (1995) proved that those firms have most reliance on cash flow to finance capital expenditure which pay the highest taxes allied with undistributed profits. Devereux and Schiantareelli (1990) found that as compared to smaller firms in the UK, the large firms depend more heavily on cash flow financing. The reason they pointed out for such a trend was t he manager/shareholder agency problems in these large firms mainly because of lower managerial ownership and higher costs allied with monitoring system. In this thesis, further evidence have been provided on the role of free cash flow and capital expenditure through observing the data provided by the Karachi Stock Exchange. To measure the market reaction to such expenditure plans, the over and above returns around capital announcements have been used. It was moreover, found that the impact capital expenditure has on firm value that is financed by cash flow depends upon the characteristics of the firm making the expenditures. Firms show a strong positive relation between the level of undistributed cash flow and the level of announced expenditure, although large firms depend less heavily on cash flow as compared to the small firms and those firms that have high managerial ownership. Jensen (1986) proposed that those firms which had a hefty level of free cash flow were likely to squander it on unprofitable ventures. As a result undistributed cash flow must play an important role in illumination of capital expenditure by these organizations. In addition, there are firms which are more prone to the free cash flow agency problems, especially the large firms which, as discussed by Devereux and Schiantarelli (1990), generally have a more assorted ownership formation. Jensen (1993) discussed such firms as the ones that have further expensive internal control system. About small firms, Jalilvand and Harris (1986) commented that they are more vulnerable to experience cash flow restraint mainly because they have limited way in to outer captial market due to high transaction cost of public security isssue and the information problems. Therefore, Vogt (1997) believes that small firms tend to have profitable and at the same time unexploited investment opportunities. The available cash flow should be the main source of capital expenditure by these firms. Moreover, if ca sh flow is used by these firms to fund the capital expenditure, such an announcement must show a positive reaction in terms of appreciated stock prices. Jensen (1986) argues that there are agency costs coupled with free cash flow. His study broadens that argument and speculates that shareholders form their valuation decisions on firms reputations regarding free cash flow exploitation. This notion was tested by examining the stock price responses to equity offers, which generally aggravate the cash flow quandary, for firms differentiated by their recent avaricious behavior. The results suggested that shareholders react more positively to equity issue announcements if firms have obtained only assets related to their key business than to other equity issue announcements. On another occasion, Jensen and Meckling (1976) explained the agency problem between managers and shareholders. They unarguably stated that managers are supposed to be the representatives of the shareholders. But they tend to make those decisions that will maximize their own benefits as opposed to the shareholders value. In order to restrict them from doing so, they must either be provided incentives or be monitored. They further argued that in firms where managers have low level of insider ownership, have greater enticement to invest in unbeneficial projects that elongate the firms beyond its most favorable size and the expected yield on new capital expenditure would be negative for such firms. Such actions would obviously be inconsistent with firms value maximization objective. Jensen (1986) suggests that stock prices are tendered downward to imply agency costs coupled with a firms free cash flow. In particular, managers have an enticement to use unfettered funds to benefit themselves instead of the shareholders. John and Nachman (1985) claim that agency costs can be alleviated through reputation building. Particularly, they demonstrate that the agency problem of underinvestment can be determined through reputation. The observed results recommend that managers build reputation through covetous activity whereas the shareholders state their response on pre-acquisition activity. In an ideal world, managers would disburse the entire free cash flow among the shareholders provided; the interests of shareholders and managers complement each other. This would maximize shareholders wealth and allow them to use the available cash for capitalization. Amihud and Lev (1981) however argued that managers have an enticement to minimize their employment risk. Employment risk aims to explain the insecurity inbuilt in a managers tenure or the term of employment. Managers have an option of increasing the certainty of their tenure by diversifying the real asset portfolio of the firm and they do it by purchasing those assets that are unrelated to the primary line of business of the firm. Managers have an option of financing diversification projects by using the free cash flow that has been held back and not been distributed to shareholders, thus they need not seek funds from the capital markets. Easterbrook (1984) believes that it is easy to watch the managerial behavior of the firms when they seek funds from the well-performing capital markets. Therefore, on one hand it becomes difficult to keep a check on the performance of managers if they use the hoarded cash flow for the purpose while on the other hand, investors are unable to measure free cash flow as they are incapable of scrutinizing the investment opportunity schedule of the firm. Shareholders are expected to take any unencumbered cash request negatively, coming from the management for the purpose of diversifying. Unless they are provided sufficient proof, they will assume the request to be the acquisition of free cash flow. As a result of this ambiguity, stock prices will fall and show the residual loss caused by the probable misuse of free cash flow by management. Further, managers may wish to expa nd firm size, irrespective of the fact that it increases shareholders wealth or not, based on the assumption that executive promotion and compensation are positively related to firm size (Donaldson 1984; Baker 1986; and Baker, Jensen, and Murphy 1988). Cash flow is related to the expected yield from new venture as shown by Myers and Majluf (1984). Those firms which have a shortage of liquid assets and cash flow might let go profitable investment expenditure instead of issuing mispriced securities to finance the investment. As a result, these firms might have unexploited investment opportunities which would increase organizations value if adequate cash flow is generated to finance them. Capital expenditure of high ownership businesses must show a reliance on cash flow and positive surplus profits must be there for these firms when they declare new capital expenditure. Morck, Shleifer, and Vishny (1988) described greater levels of insider ownership to be linked with greater leve ls of capital expenditure financed by cash flow due to managerial establishment issues. Firms with greater insider ownership might wish to finance expenditure with cash flow exclusively to avoid control loss associated with weakening their ownership status or limitations imposed by the creditors. Lehn and Poulsen (1989) and McLaughlin, Safieddine, and Vasudevan (1996) defined Free Cash Flow to be operating income before depreciation, less interest expense on debt, less income taxes, less preferred and common dividends. Vogt (1997) calculated both cash flow measures net of dividends and interest expense to control for decisions made at managerial level which affect the level of non dispensed cash flow. A prejudice would be created in the studied relation between cash flow, market returns and capital expenditure if the other decision variables are ignored. As an example he referred to a firm which although has greater levels of cash flow but does not maneuver the agency problem. Such a firm would lessen non dispensed cash flow by opting for high dividend and/or interest levels. It might practice profitable investment expenditure and is not likely to depend heavily on cash flow for the financing. This firm must be allied with optimistic market responses about expenditure announcements. Vogt (1997) used 421 firms to observe relationship between cash flow and capital expenditure. When these firms announced expenditure increases, the level of declared capital expenditure seemed to be positively and much strongly associated with the cash flow level. The vigor of this relation amplifies for businesses with profitable earlier investment opportunities, while firm size drops, and as the fraction of insider possession increases. His further analysis suggested that considerable diversity prevails in the capital markets retort to capital expenditure financed by cash flow. The statistically significant as well as positive excess profits found in the sample of bus inesses announcing increases is strenuous in the smallest of the sample businesses, in businesses with low cash flow compared with capital expenditure and, to a smaller extent, in businesses with high levels of the insider share ownership. There are tests that explain the cross-sectional deviation in returns expose that excess profits for small and medium businesses in the model are positively related with unexpected raise in planned expenditure. These tests are also suggesting that the funds market responds more positively to the announced expenditure by small businesses when the planned expenditure is more reliant on cash flow. On the other hand, excess profits for the largest businesses in the model are negative, however statistically insignificant. Vogt (1997) observed that due to the fact that small businesses and high ownership businesses are most likely to handle the liquidity crunch linked with the asymmetric information, they are most likely to let go lucrative investmen t opportunities in times of cash flow scarcity. As cash flow increases, the money-making capital investment ventures the firm can carry out also increases. As a result, capital expenditure announcements are met with optimistic shareholder response, particularly when expenditure is cash flow dependent. Vogt (1997) concluded by observing that the apparent diversity in the response of market to capital expenditure decisions propose different capital expenditure financing policies for businesses that seek to augment shareholder value. The market values of small businesses, businesses with significant insider ownership, and businesses that are generally cash flow confined appear to be improved by financing capital expenditure with cash flow. These businesses may consider policies of saving undistributed cash flow through leverage and low disbursement policies. Such an action therefore encourages new capital expenditure from internally generated funds. However, all other businesses see m to be less reliant on a cash flow retention policy to assist capital expenditure. In 1986 while explaining the free cash flow (FCF) hypothesis Jensen (1986), concentrates on the agency problem. He believes that managers can enhance their possessions at the cost of shareholders by not paying out the funds from a firms free cash flow in the form of debt financed stock repurchases or dividends, rather investing them in unprofitable investment prospects. Devereux and Schiantarelli (1990), Strong and Meyer (1990), Oliner and Rudebusch (1992) and Carpenter (1993) later studied the role that agency issues play in the relationship between cash flow and investment. Their results turned out to be conflicting vis-a-vis the significance of free cash flow. Strong and Meyer (1990) found that share prices of firms that undertake investment expenditure with unrestricted cash flow face negative performance while Oliner and Rudebusch (1992) found little evidence regarding ownership structure aff ecting the relationship between cash flow and investment. The firms decision regarding dividend has connotation for the FCF theory. According to Lang and Litzenberger (1989), dividends are one way of eradicating free cash flow. Vogt (1994) developed a model in this research paper where he showed that businesses with the chance to exploit free cash flow will go after low dividend payout policies and cash flow would have a strong control on investment expenditure. On the other hand, if firms are confined from obtaining external funds because of whatever reason, firms with profitable venture opportunities would sustain low dividend payout policies with the intention of preserving on cash flow. Therefore his model was found to be steady with Fazzari, Hubbard, and Petersen (1988); it envisages that low payout firms must be linked with a strong relationship between cash flow and investment. There has been considerable pragmatic evidence which indicate that internally created funds a re the focal way of financing firms investment expenditures. Gordon Donaldson (1961), in a detailed study of 25 large firms, concludes as follows: Management strongly favored internal generation as a source of new funds even to the exclusion of external funds except for occasional unavoidable bulges in the need for new funds. A later survey of 176 corporate managers by Pinegar and Wilbricht (1989) discovers that managers favor cash flow to finance new investment over external sources as 84.3% of model respondents showed their preference for funding investment with cash flow. Vogt (1994) explains the relationship of cash flow and capital expenditure by analyzing the free cash flow theory of Jensen (1986). As monitoring is assumed costly, and managers can benefit from overinvestment, he predicts that cash flow will significantly influence investment expenditure after controlling for the cost of capital. Investment expenditure of firms not paying dividend would be more influenced by cash flow than investment expenditure of firms that pay dividends. This follows because no-dividend firms are able to retain all cash flow and still not reach the retention constraint. Businesses that are liquidity-constrained, cash flow and adjustments in their stock of the liquid assets must have a considerable impact on investment expenditure. Businesses with large information asymmetries or several profitable investment opportunities would be having investment expenditure that is most responsive to changes in cash flow, and must preserve on cash flow by paying no or low dividends. Firms signifying a liquidity restraint by not paying out dividends would have the most noteworthy cash flow and investment relationship. In a study; Fazzari, Hubbard, and Petersen (1988) discovered that cash flow has a sturdy effect on investment expenditure in businesses that have low dividend payout policies. They argued that such a result is unswerving with the belief that because of asymmetr ic information costs associated with external financing, low payout firms are cash flow confined. One reason why these businesses keep dividends to the lowest is to preserve on cash flow from which they can fund profitable investment prospects. Later in the year 1993, Fazzari and Petersen (1993) found that the same group of businesses paying low dividends, even out fluctuations in cash flow with working capital to sustain preferred investment levels. This result is unswerving with the findings done by Myers and Majluf (1984) which states that the underinvestment crisis occurring due to asymmetric information can be alleviated by the liquid financial assets. Carpenter (1993) studied the relationships between debt structure, debt financing, and investment expenditure to test the theory of free cash flow, comparing the restructured firms with the non-restructured firms. He observed that firms had increased their investment expenditure that was restructured by substituting large amou nts of external equity with debt as compared to non-restructured firms. To him these results seemed to be inconsistent with free cash flow performance. He believed that cash flow which is committed to debt maintenance must be correlated with reductions in later investment expenditure. Devereux and Schiantarelli (1990) and Strong and Meyer (1990) conducted studies that support the free cash flow elucidation. Strong and Meyer (1990) studied separately the investment and cash flow of firms in the paper industry into sustaining investment and optional investment, and total cash flow and remaining cash flow. Optional investment and share price performance is strongly yet negatively correlated. Discretionary investment and residual cash flow are found to be strongly and positively related. This proof suggests that enduring cash flow is frequently used to finance unprofitable discretionary investment expenditure. Study conducted by Vogt (1994) related to cash flow and capital expendi ture predicts that businesses which do not pay dividends must show the strongest association, whereas those businesses that do pay high dividends must exhibit the weakest relationship between cash flow and investment expenditure. His result suggested that cash flow-financed capital expenditure is slightly inefficient and provides facts in support of the Free Cash Flow hypothesis. Regarding the small businesses paying low dividends over the sample period, Vogt (1994) commented that such businesses relied profoundly on cash flow and changes in cash to finance capital expenditure. Cash flow-financed growth by small, low-dividend firms is likely to be value- creating, whereas cash flow-financed growth is value destroying for large, low-dividend firms. He concluded by suggesting that managers of cash flow-rich companies can even decide to increase dividend payouts in order to increase the efficiency of their capital expenditure decisions. A persistent high-dividend-payout policy can also give a hint to shareholders that extra and expensive monitoring of capital expenditure decisions is not required. Furthermore, as capital expenditures just add to the amount of assets which is under managerial control and create more predictable future cash flows, these expenditures create the opportunity to utilize free cash flow in following periods. Alti (2003) found out that investment is sensitive to cash flow. The sensitivity is substantially higher for young, small firms with high growth rates and low dividend payout ratios. The uncertainty these firms face about their growth prospects amplifies the investment-cash flow sensitivity in two ways. First, the uncertainty is resolved in time as cash flow realizations provide new information about investment opportunities. This makes investment highly sensitive to cash flow surprises. Second, the uncertainty creates implicit growth options relate to long-term growth potential but not to investment in the near-term. Having a wea ker relationship with the value of long-term growth options, cash flow acts as a useful instrument in investment regressions. Gentry (1990) analyzed capital expenditure with total cash flow and found out that the percentage of cash flows going to capital investment ranged from an outflow of 60 percent or more. The giant companies invested a higher percentage of their total outflow in plant and equipment than companies in the other size categories. The small companies invested the lowest percentage of their total outflows in capital. There has been a research done previously that was applied to agricultural firms by Jensen (1993). The results were found to be consistent with previous studies for nonagricultural firms which showed that internal cash flow variables are important in explaining investment. It was found that the addition of internal cash flow variables can improve the explanatory power of agricultural investment models. In terms of elasticity, investment was more re sponsive to internal cash flow variables. Worthington (1995) has found that cash flow measures industry-level investment equations positively and significantly, even after investment opportunities are proxied by capacity utilization variables. The effect of cash flow is greater in durable goods industries than in non durable goods industries. Moyen (2004) explained the fact that the cash flow sensitivity of firms described by the constrained model is lower than the cash flow sensitivity of firms described by the unconstrained model can be easily explained. In both models, cash flow is highly correlated with investment opportunities. With more favorable opportunities, both constrained and unconstrained firms invest more. Raj Aggarwal (2005) conducted a study in which he concluded that investment levels are significantly positively influenced by levels of internal cash flows. Also, the strength of this relationship generally increases with the degree of financial constraints faced by firms. Overall, these findings seem strong to the nature of the financial system and indicate that most firms operate in financially incomplete and imperfect markets and find external finance to be less attractive than internal finance. CHAPTER 3: RESEARCH METHODS 3.1 Sampling design Sample companies that are taken for the purpose of research are 27 sugar mills of Pakistan that are listed on Karachi Stock Exchange. 3.2 Data Collection Annual financial statement data for 27 sugar mills of Pakistan listed on KSE is taken to calculate free cash flow and annual capital expenditure for the period 2000 through 2008. 3.3 Model Specifications 3.3.1 Variable. 1. Independent variable = Free Cash Flow (FCF) 2. Dependent variable = Net Capital Expenditure 3.3.1.1 Independent variable. The FCF is calculated the way Lehn and Poulsen (1989) and McLaughlin, Safieddine, and Vasudevan (1996) defined it. It is operating income before depreciation, less interest expense on debt, less income taxes, less preferred and common dividends. Free cash flow = Operating income before depreciation interest on debt income taxes preference common stock dividend. 3.3.1.2 Dependent variable. Net capital expenditures are those where funds are used to acquire or upgrade physical assets such as property, industrial buildings or equipment. Change in fixed assets over a year is taken as net capital expenditure by the firm. Net capital expenditure = Current year fixed assets last year fixed assets. Net capital expenditure = Ln (FA) Ln of fixed assets is taken to control the variability of the data. 3.4 Data analysis PP plot of Fixed Assets (FA) PP plot of the first difference of Fixed Assets (FA) PP plot of the Natural Log of Fixed Assets (Ln_FA) PP plot of Free Cash Flow (FCF) 3.5 Interpretation of data analysis The PP plot of Fixed Assets (FA) is not fulfilling the requirement of the data being normally distributed. The values are deviating too much from the benchmark line. In the second graph, the PP plot of the first difference of Fixed Asset is not normally distributed either. In the third graph, the PP plot of the Natural Log of Fixed Assets is normally distributed to a great extent as the values are very close to the benchmark line. Therefore, the data of Natural Log of Fixed Assets is used for further analysis. In the fourth graph, the data of FCF is also normally distributed. Thus, fulfills the prerequisite. Hypothesis Summary Hypothesis Result Free Cash flow has no relationship with capital expenditure. Accepted CHAPTER 4: RESULTS Table 4.1 Correlations Ln_FA FCF Pearson Correlation Ln_FA 1.000 0.011 FCF 0.011 1.000 Sig. (1-tailed) Ln_FA . 0.433 FCF 0.433 . N Ln_FA 243 243 FCF 243 243 The correlation between Ln FA and FCF is 0.011 which is very weak and insignificant as the p-value is 0.433 which is not less than 0.05 (the benchmark). This depicts that there is no interdependence between FCF and Ln FA. Table 4.2 Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 0.011a 0.000 -0.004 0.76453 Predictors: (Constant), FCF The researcher has used statistical software SPSS 17.0 to process the data and run regression analysis on the variables. The results are interpreted in light of statistical text book by Hair (2006). All FCF and (ln) FA figures are in Million Rupees. R squared value: the coefficient of determination, R2 is the amount of variance in the dependent variable that can be explained by the regression model. It is the goodness of fit and shows the explanatory power of a model. Here, it is almost 0 (zero) which depicts that changes in Free Cash Flow do not bring any change in Fixed Assets. In Pakistan, particularly in the Sugar Industry, expansions do not take place every year. Therefore, firms that have spare cash flow do not necessarily invest it in buying fixed assets. Table 4.3 Coefficients a Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 6.290 0.052 121.624 0.000 FCF 5.565E-5 0.000 0.011 0.169 0.866 a. Dependent Variable: Ln_FA The slope of the function is very small and highly insignificant as p-value (0.866) is not less than 0.05 (benchmark). It indicates that change in Free Cash Flows do not cause a change in Fixed Assets. CHAPTER 5: DISCUSSIONS, IMPLICATIONS, CONCLUSION 5.1 Implication As discussed through out, the importance of Free Cash Flow and Capital Expenditure is quite significant in various industries around the world. After conducting the same study in the Sugar Industry of Pakistan it became apparent that these two variables have no relation between them. Reiterating the earlier discussion, free cash flow can be put to several uses; capital expenditure could be one of them. However, the study proved that free cash flow is not used for capital expenditure in this industry, rather disbursed as dividends among sharehoders or held back as retained earning. The nature of the industry is as such that expansion does not take place every year, therefore the need to invest in fixed assets does not arise. Researchers in Pakistan will be able to use this study for their own analysis and to figure out the reasons why this industry is inconsistent with other industries of the world. Whereas the foreign researchers will be able to take help from this study whil e they study and compare their own economy with that of Pakistan. It will help them benchmark the 5th largest country in the world, in terms of area under sugarcane cultivation; to compare and contrast with the country they wish to study. 5.2 Conclusion The sugar industry in Pakistan is the 2nd largest agro based industry of the country. Pakistan earns heavy foreign exchange resources through import substitution of sugar. Despite of the importance of this industry, significant attention is not paid at the government level to develop it. Lack of support at educational institution level for research and development in this industry is sabotaging the prospects of its better future. Among several other reasons, this research has been done to mark a contribution towards sugar industry, cultivating a field for other researchers to come forward and take the study steps ahead. The relation that exists between free cash flow and capital expenditure is observed in this study. The conclusion verifies that this industry is not consistent with several other industries all over the world in terms of using free cash flow for capital expenditures. Instead of expanding the size of the firms and investing in the fixed assets, management rather d istributes the free cash flow among shareholders. On one hand it increases shareholders value but on the other hand it does not contribute towards improved GDP and a potential increase in output is lost by not making the capital expenditure.

Research Paper on Drug Use - 931 Words

Drug use in today’s society is something that has become too common. We have a large percentage of our population using drugs for numerous reasons. The stresses of our fast paced lives can be the reason we need drugs to keep up. We sometime take these drugs with out thinking of the future consequences and risk that might be attached to them. We have to teach society of the dangers of drugs and the treatment available to quit using. We have too many people using drugs in our society today. â€Å"In 1996, 50.8% of high school seniors had used some illegal drug at some time during their life, 40.2% during the previous year, and 24.6% during the previous month.† This shows that at least half of the senior class in high schools use or have use†¦show more content†¦Almost half of the drug abusers also suffered from alcohol abuse at some point during their lifetime.† People don’t only use drugs get high or deal with the stresses of life, but also to deal with the problems with in them. People use drugs to cope with their anxieties, depression and schizophrenia. With the drugs the people feel that the disorder they have does not exist. They believe that they are everyone else and there is nothing wrong with them. â€Å"Initial low-level involvement with drugs may result from peer pressure, drug availability or other risk factors in an individuals social or family environment.† Many i ndividuals use drugs to fit in with friends or to be excepted by a crowd of higher popularity than them. This happens a lot in high school with younger students being pressured by upper classmen. People sometime do things without thinking about the repercussions of their actions. â€Å"Some people think that prescription drugs are safer and less addictive than street drugs†¦. But prescription drugs are only safe for the individuals who actually have prescriptions for them. 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