Seven papers make up this issue. The first one, titled Analysis of FDI Inflows into China from ASEAN-5 Countries: A Panel Cointegration Approach by Sallahuddin Hassan, Nor’Aznin Abu Bakar and Hussin Abdullah, analyses the foreign direct investment (FDI) inflows into China from ASEAN–5 countries using the panel cointegration approach. The FDI model has been utilized in determining factors that influence FDI inflows into China from ASEAN–5 countries, namely, Malaysia, Thailand, the Philippines, Indonesia and Singapore. Variables such as trade openness (OPENNESS), exchange rate of China relative to each of individual ASEAN–5 countries (RELEXC), fixed capital formation (FCF), and gross domestic product (GDP) are used for the period of 1990 – 2004. The empirical results indicate that for most countries OPENNESS and GDP are significant variables in explaining the flow of FDI to China. Meanwhile, FCF is only significant for Malaysia. Conversely, RELEXC is not statistically significant for all countries. It is hoped that this finding can be used by researchers and policy makers in making decision on multilateral relationship between China and ASEAN–5 countries.

The second paper, titled An Estimation of The Consumption Function Under The Permanent Income Hypothesis: The Case of D-8 Countries by Ömer Faruk Altunç and Celil Aydın, examines the consumption function formed on the permanent income hypothesis. It covers eight countries that are member to the Organization of Islamic Cooperation (D-8) based on the annual data from 1980 to 2010. The model employed in this study takes into consideration both the adaptive expectations model and a combination of the partial adjustment model and the adaptive expectations model. The techniques used in time series analysis have been utilized as econometric models. Empirical results include evidences supporting the consumption function formed in accordance with the permanent income hypothesis and the adaptive expectations model.

The third paper, titled Fiscal and Monetary Regime Identification for Price Stability in Case of Pakistan’s Economy by Umaima Arif and Attiya Y. Javid, investigates the relative importance of fiscal and monetary determinants of inflation for Pakistan during 1960-2011. By analyzing the impulse response functions, the relationship linking liabilities to GDP with surpluses to GDP, verify monetary regime. The study finds that the incident of wealth effects of adjustment in nominal public debt may pass through to prices by escalating inflation variability as predicted by the fiscal theory of price determination. The results do not support the perception that monetary authorities acted consistently with monetary dominant regime in Pakistani case to accommodate the fiscal shocks. A positive shock in inflation leads to the negative response of reserve money growth which is consistent with monetary dominant regime. However discount rate that responds negatively to inflation shock is in line with fiscal dominant regime. The different set of analysis leads to implication that nominal public liabilities, as revealing either in money growth or in nominal public debt, influence price stability in case of Pakistan. The authorities may be following different regimes for different time periods during the 1960-2011.

The fourth paper, titled Testing the Theoretical Proposition of Exchange Market Pressure: The Nigerian Experience by Jimoh Olajide Raji, Juzhar Jusoh and Mohd-Dan Jantan, inspects the monetary model of Exchange Market Pressure (EMP) that applied to Nigerian economy over the period 1970 to 2010. In support of the EMP propositions, dynamic ordinary least squares (DOLS) results reveal that domestic credit has stable significant negative relationship with exchange market pressure. The findings also provide evidence that Nigerian monetary authorities absorbed most of the exchange market pressure by adjusting the foreign reserves. The overall results indicate that the Nigeria’s experience provides another good example to test the theoretical propositions of the Girton-Roper monetary model of exchange market pressure.

The fifth paper, titled Poverty Alleviation and Identifying the Barriers to the Rural Poor Participation in MFIs: A Case Study in Bangladesh by Mohammad A. Ashraf and Yusnidah B. Ibrahim, identifies the barriers of participation of the rural poor in microfinance institutions (MFIs) in Bangladesh. To this aim, data were collected through face to face interview from six different districts of Bangladesh. From the microfinance literature, the study sets eight explanatory factors and six demographics which are explored through three separate models in examining the factors that influence the dependent variables such as nonparticipation and drop-out (Model 1), participation (Model 2) and nonparticipant but willing to participate (Model 3) in MFIs. Logistic regression techniques are employed in analyzing data. The results of Model 1 indicate that education, other assets and spousal dislike to female head of households are observed as the significant barriers of participation. The outcome of the Model 2 suggests that there have been six factors that inhibit the rural poor participation in MFIs which are gender, age, yearly income, land, religion and lack of knowledge. And in the Model 3, gender, education, land, insufficient resources and lack of knowledge appear to be the significant barriers to participation of the rural poor in MFIs in Bangladesh.

The sixth paper, titled The Efficiency of Zakat Collection and Distribution: Evidence from Two Stage Analysis by Ismail Hj Ahmad and Masturah Ma’in, analyzes the efficiency of zakat management of Lembaga Zakat Selangor. The Annual Report data for Lembaga Zakat Selangor between 2001 and 2011 were devised. This paper utilizes the two stage linked Data Envelopment Analysis model, as proposed by Berber et al (2011). The findings show that: first, both collection and distribution have lagging resources that is referred to technical efficiency. Second, the result shows a lower efficiency in distribution than in collection function. Third, from the overall efficiency, allocative and cost efficiency scores show maximum efficiency is achieved almost every year. It reveals that Lembaga Zakat Selangor is utilizing its input proportionately to ensure minimum cost incurred to produce a given output (amount collected and amount distributed) at a given input prices (cost collection and cost distribution)

The last and seventh paper titled The Causality between Financial Development and Economic Growth: The Case of Turkey by Ayşen Araç and Süleyman Kutalmış Özcan, investigates the causal relationship between financial development and economic growth in Turkey for the 1987:1-2012:4 period. Eight series are used to indicate financial development and Johansen’s (1991) Cointegration Approach, Pesaran’s (2001) Bounds Testing and Granger Causality Tests are employed. The test results suggest that long-run relationships exist between economic growth and all financial development indicators. Moreover, the findings support both supply leading and demand following hypotheses. The direction of the short-run and long-run causal relationship between economic growth and financial development depends on which financial development indicator is used. Particularly, improvements in financial development indicators related to the resource allocation function of the financial system lead to economic growth whereas economic growth causes financial development through increasing banks’ assets in the long run.

Abstract articles of the Journal of Economic Cooperation and Development, Vol.35 No.3 (2014)