Forthcoming articles


International Journal of Monetary Economics and Finance


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International Journal of Monetary Economics and Finance (28 papers in press)


Regular Issues


  • The Effect of Greenhouse Gas Emissions on Financial Performance of Listed Manufacturing Firms in Indonesia
    by Andewi Rokhmawati, Milind Sathye 

    by Rindu Rika Gamayuni  
    Abstract: Internal audit function is important at the central and local government, but is still weak, and it needs to be improved. Therefore, this research aims to examine the effect of the internal auditor competence and objectivity, management support, and organization culture on the effectiveness of the internal audit function. This research uses survey method with description verification approach, and it is conducted on local government in Lampung Province, Indonesia. Primary data are statistically tested by using SEM partial least square (PLS). This research has shown that the internal auditor competence and objectivity, and organization culture have significant influence to the effectiveness of internal audit function, but management support does not.
    Keywords: internal auditor competence; objectivity; management support; organization culture; internal audit function effectivity.
    DOI: 10.1504/IJMEF.2018.10006601
  • Econometric Analysis of Real Exchange Rate Shocks and Real Growth of the Tourism Sector in South Africa   Order a copy of this article
    by Paul-Francois Muzindutsi 
    Abstract: The aim of this study was to analyse the interactions between real exchange rate and real income from the tourism sector in South Africa. The Vector Autoregressive Model (VAR) with Johansen multivariate cointegration approach was used to analyse monthly time series from January 2007 to December 2015. This study found a negative long-run relationship between the real exchange rate and real tourism revenue in South Africa, where the depreciation of the local currency is associated with an increase in the real tourism revenue. Short-run results revealed that real tourism revenue is affected by short-run fluctuations in the real exchange rate; while Granger-causality test showed that the real exchange rate Granger-causes real tourism revenue. This study concluded that the weakening of the local currency, against major foreign currencies, seems to be good news for the South African tourism sector.
    Keywords: Cointegration; Real exchange rate; Tourism income; South Africa; VAR model.
    DOI: 10.1504/IJMEF.2018.10006616
  • Re-examine Performance of Foreign Banks in Indonesia   Order a copy of this article
    by Irwan Trinugroho 
    Abstract: We re-examine the performance of multiple definitions of foreign banks in Indonesia over the period of September 2005
    Keywords: Foreign ownership; joint venture; acquired banks; bank performance; multiple identifications; Indonesia.
    DOI: 10.1504/IJMEF.2018.10006617
  • Financial development and the lending channel of monetary policy transmission: evidence from Thailand   Order a copy of this article
    by Attasuda Lerskullawat 
    Abstract: This paper examines the bank lending channel of monetary policy transmission and the effect of financial market development on the bank lending channel in Thailand using bank-level panel data from the quarterly period of 1992Q1-2011Q4. The empirical results show a significant effect of monetary policy via the bank lending channel of monetary policy in Thailand. This effect of monetary policy is higher especially in bank with larger size as well as bank with lower capitalisation. Financial market development, including the banking sector development and the capital market development, mainly weakens the effect of monetary policy through the bank lending channel in Thailand.
    Keywords: monetary policy; bank lending channel; financial market development; Thailand.
    DOI: 10.1504/IJMEF.2018.10006620
  • The Impact of Financial and Trade Integration on Business Cycles in Emerging Markets   Order a copy of this article
    by Lathaporn Ratanavararak 
    Abstract: This article investigates the combined effect of financial and trade integration on macroeconomic volatility and business cycle synchronisation in emerging markets. The study adopts a two-country real business cycle model with the adjustment cost of foreign asset holding, domestic leverage constraint, and asymmetric financial accessibility. The results reveal that the impacts of financial and trade integration are intertwined. Increasing foreign asset holding generally has a weaker impact at high trade intensity. People with restricted financial access face large consumption volatility from increased financial integration under low trade. The findings suggest that trade could help mitigate the negative effect of financial integration on consumption smoothing, and financial integration could help lower output fluctuation and dependence on foreign economies, while trade increases them.
    Keywords: financial integration; trade integration; business cycles; emerging market economies; macroeconomic volatility; business cycle synchronisation; financial access.
    DOI: 10.1504/IJMEF.2018.10006621
  • Creating Economic Value Through Multi-Stakeholder Partnership (Case Study on the Black Soybean Farmers Development Program of Unilever Indonesia)   Order a copy of this article
    by Kartika D.S. Susilowati 
    Abstract: This study examines the black soybean farmers development program created by Unilever Indonesia. This programs was developed in collaboration with several stakeholders made up of scientists/ university staff, NGOs, financial institution, farmers, wives of farmers and cooperative. The program basically aims to set up local black soybean production centers to assure a continuous supply of the main ingredients of Bango soy sauce, a flagship product of Unilever Indonesia with a quantity, quality and price in accordance to the company
    Keywords: partnership; multi-stakeholder; black soybean program; Unilever Indonesia.
    DOI: 10.1504/IJMEF.2018.10006622
  • Asset Allocation Strategy to Create Superior Portfolio from Equity Mutual Funds   Order a copy of this article
    by Sylviana Maya Damayanti 
    Abstract: There are many factors that cause an investor
    Keywords: Asset Allocation; Portfolio; Equity Mutual Fund.
    DOI: 10.1504/IJMEF.2018.10006623
    by Normala Zulkifli 
    Abstract: This study examines the determinants of an individual worker
    Keywords: pay determination; manufacturing sector; Malaysian economy; quantile regression analysis.
    DOI: 10.1504/IJMEF.2018.10006624
  • Analysis of Transformational Leadership Effect towards Organizational Citizenship Behavior Mediated by Organizational Commitment in The Heritage Hotel   Order a copy of this article
    by Misbahuddin Azzuhri 
    Abstract: Many organizations are shifting the pattern of their leadership style from transactional into transformational leadership as a way of achieving the strategy and goals. This study aimed to analyze transformational leadership influence on OCB and organizational commitment role in mediating its effects. The type of research is explanatory research with a quantitative approach. The populations in this study are 82 employees from the heritage hotel in Malang, East Java, Indonesia. Census method is used and involves the entire population as respondents. Data are processed by SEM analysis that conducted by the Partial Least Square (PLS) method. The results indicated that transformational leadership has a significant positive effect on OCB and against organizational commitment, where organizational commitment does not much affect OCB. Evidently, organizational commitment does not mediate the effect of transformational leadership on OCB.
    Keywords: transformational leadership; organizational commitment; OCB; heritage hotel.
    DOI: 10.1504/IJMEF.2018.10006625
  • Does market capitalization matters? Tests of weak-form efficient market hypothesis for Thai stock market   Order a copy of this article
    by Karoon Suksonghong 
    Abstract: This study contributes to the literature of stock market efficiency by examining the weak-form efficient hypothesis for Thai stock market, especially after the subprime mortgage crisis in which the restricted financial policies issued by Thai government has been implemented. Thus, the full sample and sub-sample windows covering pre- and post-subprime financial crisis periods are investigated. The newly developed multiple variance ratio test based on the wild bootstrap together with the Lo-MacKinlay and the Chow-Denning variance ratio tests are employed for testing the hypothesis. In addition, sub-indices based upon market capitalization are categorized for further investigation on the impact of firm-sized on efficiency. The results reveal that, for the market level, the Stock Exchange of Thailand exhibits the market efficiency during the period of pre- and post-subprime mortgage crisis. For the sub-indices point of view, however, the small-capitalization index provides some evidences against a weak-form efficiency.
    Keywords: Market efficiency; Random walk; Multiple variance ratio test; Market capitalization; Stock Exchange of Thailand.
    DOI: 10.1504/IJMEF.2018.10006626
  • The Impact of Board Ethnic Diversity on Firm Performance: Evidence from Public Listed Firms in Malaysia   Order a copy of this article
    by Shu Fen Chuah 
    Abstract: This paper examines the impact of board ethnic diversity on firm performance as well as the interacting effects of board independence and board meeting attendance. Unlike prior local research which mainly studied Bumiputera and non-Bumiputera (Malays and non-Malays) directors, this paper views the board from the perspective of diversity. We hand-collected the directors
    Keywords: board ethnic diversity; firm performance; board independence; board meeting attendance; Herfindahl Index.
    DOI: 10.1504/IJMEF.2018.10006627
  • Generic Drug in Indonesia: Why Physicians and Pharmacists Matters   Order a copy of this article
    by Amelia Amelia 
    Abstract: Since 2014, Indonesia began imposing the National Health Insurance program. One of the goals of implementing the program is to increase the use of generic drugs. This action was done to respond the low use of generic drugs, which is around 11 percent, in 2011 (World Bank, 2008). Therefore, this study tried to examine the factors that influence the purchase intention of generic drugs based on the information from physicians and pharmacists. Also the overall information risk with experience was used as moderating variable. The research sample for this research includes 400 respondents. The questionnaires were distributed from September 2014 until December 2015. The questionnaire distribution takes a relatively long time due to the very small number of generic drug users were available. The result shows that physician information has the biggest effect on the purchase intention of generic drugs, and that experience has a significant effect as moderating variable.
    Keywords: generic drugs; physician information; pharmacist information; experience; Indonesia.
    DOI: 10.1504/IJMEF.2018.10006628
    Abstract: Drinking Water Regional Company (Perusahaan Daerah Air Minum or PDAM) is owned and controlled by local governments. PDAM faces a number of problems in Indonesia, including the West Java Province. Two major problems exist, which are internal technical and external strategic concerns. These are challenges faced by PDAM in the improvement of service coverage and its business development. Results showed that the management of PDAM still faces many strategic internal and external challenges associated with environmental aspects inside and outside the organization
    Keywords: Keywords: regional company; environmental; strategic challenge.
    DOI: 10.1504/IJMEF.2018.10006630
  • Capital Structure Active Adjustment of Indonesian State Owned Enterprises (SOEs)   Order a copy of this article
    by Subiakto Soekarno 
    Abstract: Indonesia
    Keywords: capital structure; dynamic capital structure; state owned enterprises; active adjustment; partial adjustment.
    DOI: 10.1504/IJMEF.2018.10006631
    by Dumrongdej Pramitithanakan 
    Abstract: This study aimed to investigate users
    Keywords: usersÂ’ behavior; attitudes towards new technology; characteristics of innovation; rice direct-seeding device.
    DOI: 10.1504/IJMEF.2018.10006632
  • Systemically Important Financial Institutions (SIFI) in Indonesian Banking System   Order a copy of this article
    by Zaafri Ananto Husodo, Daniel Wojtyla 
    Abstract: We study the Indonesian Banking System, as one of the emerging economy with significant numbers of bank employing Component Expected Shortfall (CES) as a market based systemic risk measurement. The measure is a hybrid one that combines Too Big To Fail and Too Interconnected Too Fail paradigms. Our result shows that systemic risk in Indonesian Banking System is highly concentrated, dominated by five big banks which contributes to more than 80% (eighty percent) of total risk of the banking system. Moreover, the concentration increased as the financial turmoil waived the whole banking system in September 2008. As robustness test, this research use various weighting scheme using total assets, total equities, and total loans as weights of the firm. The result show relatively consistent SIFI cluster compared to market capitalisation weight.
    Keywords: Systemic Risk; Systemically Important Banks; Component Expected Shortfall; Indonesian Banking industry; Emerging Market Systemic Risk.
    DOI: 10.1504/IJMEF.2018.10012020
  • Central Bank Communication and Transparency: The ECB and the European Parliament   Order a copy of this article
    by Ansgar Belke 
    Abstract: This paper considers a range of important issues concerning the transparency and accountability of central banks with particular emphasis on the so-called monetary Dialogue, i.e. the regular appearances of the President of the European Central Bank (ECB) before the European Parliament (EP). In order to highlight the key issues of central bank communication and the management of expectations referring to a practical institutional example, we comment on the role the Monetary Dialogue in the context of an evolving monetary policy. Communication is finally described as a policy option in terms of minimising risk in the context of exit from unconventional monetary policies and of the signalling channel which refers to what the public learns from announcements of unconventional monetary policy operations such as Quantitative Easing.
    Keywords: central bank communication; European Central Bank; forward guidance; monetary dialogue; transparency.
    DOI: 10.1504/IJMEF.2018.10007539
  • Culture and Corruption in Bank Lending Revisited   Order a copy of this article
    by Siwapong Dheera-aumpon 
    Abstract: This paper aims to reassess the effects of culture on corruption in bank lending. These effects were first studied by prior studies which use Hofstede's cultural dimension data. The Hofstede's cultural data are constructed from survey data collected between 1967 and 1973. The data on corruption in bank lending taken from the World Business Environment Survey, however, were collected between 1999 and 2000. This paper uses cultural data from the GLOBE project which are constructed from survey data collected in 1990s instead. The data from the GLOBE project are not only more recent but also provide more cultural dimensions than those of Hofstede. The results indicate that In-Group Collectivism still increases corruption in bank lending. The results suggest that Assertiveness and Uncertainty Avoidance no longer have significant effect on corruption in bank lending.
    Keywords: bank lending; corruption; culture; collectivism.
    DOI: 10.1504/IJMEF.2018.10007542
  • Unconventional monetary policies and the credit market   Order a copy of this article
    by Jose Olmo 
    Abstract: We propose a theoretical model based on the bank lending channel to assess the ability of lending facilities and swap programmes to a
    Keywords: Bank profi?t maximization; credit interest rate; optimal credit supply; unconventional monetary policy.
    DOI: 10.1504/IJMEF.2018.10008378
    by Eleni Dalla 
    Abstract: Following the industrial organization approach to banking, we investigate the effects of banking conduct on the investment cycle. To achieve this, we extend the second order accelerator (SOA) model in discrete time, introducing the interest rate on loans. To the extent that the banking sector is concerned, we consider two different types of banking conduct: a Cournot game where the banks make their decision on the quantities of loans and deposits simultaneously, and a Stackelberg game in which they decide over these amounts sequentially. In addition, we follow a simulation process to confirm the dynamic properties of our theoretical findings and examine the effects of monetary policy on capital over time.
    Keywords: Cournot game; Stackelberg game; investment cycle; second order accelerator; monetary policy.
    DOI: 10.1504/IJMEF.2018.10009142
  • U.S. Monetary Policy Surprises Transmission to European Stock Markets   Order a copy of this article
    by Tarek Chebbi 
    Abstract: This paper empirically investigates the impact of US monetary policy surprises on the volatility of stock market returns for euro area countries. More specifically, to extract the unanticipated component of the US monetary policy, we follow the Kuttner
    Keywords: Monetary policy surprises; conditional volatility; federal funds futures; European stock markets; DDC-GARCH.
    DOI: 10.1504/IJMEF.2018.10011150
  • Price Efficiency on Islamic Banks vs. Conventional Banks in Bahrain, UAE, Kuwait, Oman, Qatar & Saudi Arabia: Impact of Country Governance   Order a copy of this article
    by Fakarudin Kamarudin 
    Abstract: This research investigate the impact of six dimensions of country governance to the price efficiency of Islamic and conventional banks. The empirical analysis is focused on the Islamic and conventional banks operating in the Bahrain, UAE, Kuwait, Oman, Qatar and Saudi Arabia countries. The data envelopment analysis (DEA) method applied to compute the revenue efficiency of Islamic and conventional banks. Then used the Multivariate Panel Regression Analysis with the Ordinary Least Square as an estimation method to investigate the potential determinants and the effect of country governance on the revenue efficiency. The empirical findings indicate that greater voice and accountability, political stability, regulatory quality, rule of law and control of corruption enhance the revenue efficiency of both Islamic and conventional banks. The dimension of government effectiveness exerts positive sign relationship with the banks revenue efficiency only on conventional banks.
    Keywords: Revenue Efficiency; Data Envelopment Analysis; Ordinary Least Square; Country Governance.
    DOI: 10.1504/IJMEF.2018.10012025
  • Can Countries Lobby for Foreign Direct Investment? Evidence from the US   Order a copy of this article
    by Gabriel Montes-Rojas 
    Abstract: This paper empirically studies a mechanism where FDI recipient countries lobby the US government for the allocation of outward US FDI. In this case, lobbying has the goal of informing US policymakers about their countries' market capabilities and of influencing their attitudes toward recipient countries. In turn, policymakers influence firms' decisions about the location of their potential investments abroad. We empirically estimate the direct influence of the recipient country's lobbying agents in obtaining FDI. The econometric results show that increasing foreign lobbying in the US raises the amount of US FDI received. This amount is potentially large for FDI receiving countries.
    Keywords: Foreign Direct Investment; Lobbying.
    DOI: 10.1504/IJMEF.2018.10012034
  • The Effect of Sustainability Assurance Demand on Information Asymmetry: Evidence from French Companies   Order a copy of this article
    by Yosra MNIF SELLAMI 
    Abstract: The purpose of this paper is to examine whether voluntary demand for sustainability reporting assurance by French companies is associated with lower information asymmetry. The use of the generalised least squares method (GLS) for a sample of 768 firm-year observations of French companies belonging to the SBF 250 and CAC All-Tradable indices during the period 2010
    Keywords: Sustainability assurance; Information asymmetry; Bid -ask spreads; France.
    DOI: 10.1504/IJMEF.2018.10012038
  • Macroeconomic Determinants of credit risk : A P-VAR Evidence from European countries   Order a copy of this article
    by Ahlem Messai 
    Abstract: The aim of this study is to develop a macroprudential approach in order to determine the most relevant factors able to explain the emergence of non-performing loans (NPL). For this purpose, we estimate an econometric model for analysing interrelationship among non-performing loans and the determinants of the credit risk in 18 European countries by using a panel vector autoregressive (PVAR) approach during the period 2000
    Keywords: credit risk; non performing loans; macroprudential approach; PVAR approach.
    DOI: 10.1504/IJMEF.2018.10012039
  • The Magnitude of the macroeconomic impact of oil price: the case of BRICS   Order a copy of this article
    by Salma Ben Lalouna, Joe Pearlman 
    Abstract: This paper aims to investigate the importance of the macroeconomic impact of oil prices variations on Brazil, Russia, India, China and South Africa (BRICS). The topic was selected due to the significance of those leading emerging economies in global markets and to the determining role of oil in the current economy of the BRICS. The research was built upon on the Granger causality test, the impulse response function and the Cholesky variance decomposition by fitting both linear and non-linear multivariate vector autoregression (VAR) models. The model includes oil price inflation and consumer price inflation, interest rates, unemployment rates, exchange rates, imports and exports, and total industrial production. The results showed a significant impact of oil prices on the BRICS economies mainly in terms of total industrial production, exports and imports, and evidence of asymmetry was found. The remaining outcomes showed different results depending on whether the country is oil-exporting or oil-importing.
    Keywords: BRICS Oil prices inflation interest rates unemployment exchange rates imports exports total industrial production Macroeconomics variables VAR.

  • Random Walk and Structural Break in Exchange Rates   Order a copy of this article
    by Kenneth A. Tah  
    Abstract: In this paper, our goal is to examine whether foreign exchange rate between the US and her largest trading partners (China, Canada, Mexico, Japan, Europe, South Korea, UK, India and Taiwan) follow random-walk or mean-reversion processes in the presence of sudden and gradual structural break. Our tests endogenously determined the structural swing and are more powerful than the traditional unit root tests. In all foreign exchange rates, we find strong evidence for structural breaks. Moreover, the results are consistent with the random-walk hypothesis for all trading partners except China. After due allowance is made for structural break, the Chinese yuan against the US dollar violate the random walk hypothesis.
    Keywords: exchange rates; random-walk; structural break; additive outlier; innovational outlier.
    DOI: 10.1504/IJMEF.2018.10014335