Global Business and Economics Review (35 papers in press)
Antecedent of Risk Based Capital of Public Non-Life Insurance Companies in Indonesia
by Jenry Cardo Manurung, Sudaryanto , Dharma Tintri Ediraras
Abstract: The performance of the insurance service industry has an impact on the Indonesian economy, therefore insurance companies must be able to maintain their sustainability by maintaining a level of financial health, generally represented by Risk Based Capital (RBC). The purpose of this research is to test and analyze whether the macro indicators such as customer price index, gross domestic product, central bank interest rate; and micro indicators such as investment performance, loss ratio and total assets are antecedent of risk based capital. This quantitative research used 9 samples of public non-life insurance companies in Indonesia and the secondary data were collected from annual financial report from 2008-2019 and macroeconomic data were collected from Statistic Bureau Centre, then data panel regression analysis was conducted to test the research hypotheses. The results show that loss ratio, total assets and the movement of gross domestic product are antecedent of the RBC. Total assets has relative big impact (positive) on RBC and loss ratio has relative small impact (positive) on RBC, on the other hand GDP has a relative medium impact (negative) on RBC. In other words that two micro indicators and one macro indicator have impacts on RBC.
Keywords: macroeconomic indicators; microeconomic indicators; non-life insurance; risk based capital.
An alternative valuation of Public Private Partnerships by using the Black Scholes Model: The Portuguese highway case
by Victor Barros, David Pedra Costa, Joaquim Miranda Sarmento
Abstract: This study evaluates Portuguese highway PPPs initial valuation using real options methods to assess the potential mispricing of these projects that is model dependent. Our findings suggest that some of these PPPs could be completed without resorting to outside financing for the initial investment by selling a right to ownership of projects. This different approach to real investments using options could also enable hedging future operational risks without changing the project operationally. Overall, our study addresses a relevant policy implication whether governments should protect their interest by adopting PPP valuation as real options.
Keywords: Public Private Partnerships; Concessions; Valuation; Black and Scholes Model.
A new evidence for the Turkish wage curve
by Ozer Selcuk, Huseyin Kaya
Abstract: As an accepted empirical law of economics, the wage curve establishes a negative relationship between local unemployment rates and level of wages. By using microdata from the Household Labor Force Survey and especially focusing on the period 2014-2017, this paper analyses the existence of the Turkish wage curve for five-year periods from 2006 to 2017. We find strong evidence for the existence of the Turkish wage curve for all periods prior to 2014, but no evidence for the period 2014-2017. We believe that this is a consequence of the recent significant changes in the Turkish labor market.
Keywords: Wage Curve; Regional Labor Markets; Local Unemployment; Fixed Effects.
Comparing Parametric, Semi Parametric and Non-Parametric Early Warning Systems for Banking Crisis: Indian context
by Neha Gupta, Arya Kumar
Abstract: This study attempts to develop an Early Warning System (EWS) for the Indian banking sector for predicting a banking crisis. The Early Warning System is constructed using Signal Extraction approach, probit model and Artificial Neural Networks (ANNs). The study has considered and examined the relevance of 15 leading indicators as independent variables that are likely to influence occurrence of a banking crisis, selected based on a comprehensive literature review. Inflation, stock prices, call money rate and ratio of money supply (M3) to foreign exchange reserves are found to be significant variables in predicting the possibility of an approaching banking crisis using probit and Signal Extraction approach. The comparison of predictive power for the three approaches based on Quadratic Probability Score (QPS) and Global Squared Bias (GSB) indicate the superiority of ANNs compared to Signal Extraction approach and probit model in terms of both accuracy and calibration. The uniqueness of this study lies in considering diverse macroeconomic variables and the relevance and reliability of different techniques in anticipating and taking proactive measures to manage the occurrence of banking sector fragility for the Indian economy.
Keywords: Financial Crisis;Early Warning System;Banking Crisis;Artificial Neural Network.
White Swan-the Pandemic Crisis, Lockdown and Unlock effect on the Indian Stock Market
by Narinder Pal Singh, Himanshu Goel
Abstract: This White Swan event (as mentioned by Prof. Nassim N Taleb The pandemic crisis the white Swan event as mentioned by professor Nasim and Talib as per the world market) has pushed the world markets to crash till the levels that have not ever been witnessed since the 2008 Global Financial Crisis. Therefore, this study investigates the impact of pandemic COVID-19, nationwide lockdown and unlock on the Indian Stock Market. The findings reveal that lockdown has a significant positive impact on the volatility of BSE returns. Secondly, this study investigates the relationship between daily confirmed cases of COVID-19 and the closing price of BSE Sensex using Johansens cointegration test. Cointegration test indicates that there is a long run relationship between daily confirmed cases and closing price of Sensex. Therefore, the findings of this research are beneficial to investors of all categories and portfolio managers.
Keywords: COVID-19; lockdown; unlock; EGARCH; Indian stock market; Volatility.
An Analysis of Joint Effects of Free Cash Flows and Ownership Concentration on Corporate Debt Policy?
by Dea'a Al-Deen Al-Sraheen, Mohammad Hamdan
Abstract: Free cash flow and concentrated ownership affect the debt policy of companies, and an emerging economy like Jordan offers an exciting scenario to examine such a phenomenon. The current research emphasises the debt policy of Jordanian industrial listed companies with free cash flow and concentrated ownership. The term of the current study was the five-year period from 2015-2019, using 51 firms with 255 firm-year observations. The findings revealed that an increase in the free cash flow level caused a debt reduction and that concentrated ownership positively influenced debt policy. This study demonstrated that excessive debt would not be prioritised as a desirable financing policy in a company with a high free cash flow level. This led to a reduction in their financial leverage ratios and increased agency costs because debt policy is one mechanism that firms use to decrease agency problems. This study contributes to exploring the implications of the free cash flow hypothesis and concentration of ownership in corporate debt policy to reduce the agency conflict also.
Keywords: Free cash flow; ownership concentration; debt policy; agency cost; Jordan.
The impact of foreign bank presence on domestic banks profit: Evidence from Vietnam
by Phan Dinh Nguyen
Abstract: This paper examines the impact of foreign bank presence on Vietnamese domestic banks profit by employing data of 30 domestic banks and 30 foreign banks operating in Vietnam from 2011 to 2017. Pooled OLS, REM, FIX and GLS are used to estimate but GLS regressed results are employed to explain the impact. We propose two new measurements of foreign bank presence to expand the existing literature. Our findings show that the increased presence of foreign banks enhances profit, improves banking services and the effectiveness of equity, and also increases equity of domestic banks under the competitive pressure.
Keywords: Impact; Foreign Bank Presence; Domestic Bank Profit.
External auditors reliance on the internal audit function and audit fees
by Ibrahim Albawwat
International Standard on Auditing (ISA) 610 (Revised 2013) allows external auditors (EAs) to rely on the internal audit function (IAF) in obtaining audit evidence if the latter meet specific quality criteria. The revisions made to the standard intend to introduce a more robust framework for the quality evaluation of IAF. It also enables the use of IAF to provide direct assistance, in addition to the previously permitted use of work already performed by the IAF. According to the pre-revision ISA 610, previous studies reported low reliance on the IAF by EAs in Jordan with no direct impact on external audit fees. Accordingly, the purpose of this study is to examine the direct and indirect effect on external audit fees in light of the latest revisions made on ISA 610.
A conceptual model is developed based on the related literature and the revised ISA 610. Data are collected using a questionnaire directed to a sample of EAs in Jordan. Data are then analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) techniques. Also, follow-up interviews were conducted to allow more in-depth discussion and obtain more information and understanding of the questionnaires responses.
The paths representing the direct impact of EAs reliance upon the external audit fees were not significant. However, the significant indirect relationship revealed by the structural evaluation indicates a mediating role of external audit work hours. That is, the reliance of EAs on the IAF decreases the external audit work hours, which in turn reduces the external audit fees. The results also show that reliance on work already performed by the IAF contributes to more reduction in external audit fees than reliance by using IAF to provide direct assistance.
This study contributes to the literature on the outcomes of EAs reliance on IAF by providing empirical evidence on how an external audit fee is influenced by the mediating role of external audit work hours while considering the revisions made to the ISA 610. Moreover, this study adds to the literature by introducing a conceptual model to clarify the real sequence by which each type of reliance placed by EAs reduces the external audit fees.
Keywords: External Auditors; Internal Audit Function; Audit Fees; Audit Work Hours; Auditing Standards.
How volatility effect the behaviour of institutional investors in emerging markets
by Purwa Srivastava, Sakshi Varshney
Abstract: The investments done by domestic institutional investors (DII) have turned out to be a dynamic force for the development of Indian stock markets. This situation has motivated me to study the nexus between domestic institutional investors capital flows and stock market volatility. Most studies have taken mutual funds as the proxy for DII. This paper has considered the disintegrated data of DII, which includes mutual funds and insurance companies, banks, and development financial institutions. The study discloses that out of four DII insurance companies increase the market volatility. On the other hand, trading of banks, mutual funds, and development financial institutions are helping to decrease the volatility in stock markets. Thus, they contribute to correct the overreaction in stock markets resulting from noise trading. Moreover, all the DIIs act as informed traders because they take advantage of the volatile markets for investments.
Keywords: Keywords: - Mutual funds; Insurance companies; Development financial institution; Banks; stock market volatility; Vector autoregressive Model.
The policy of dividend variability of companies listed on the West African regional stock exchange: between predictability, retention and stability?
by Pourakin Djarius Dieudonné BAMA
Abstract: We will examine the dividend policy of companies listed on the West African regional stock exchange basing on a panel of 31 companies. Through a regression analysis, we find a mutual and significant influence of past dividends, prices, net earnings and returns on dividend variation. Furthermore, we show that dividend variation is stationary and predictable, as are the stock price, net income and stock return. This leads us to think that managers practice retention policy and dividend stability with an optimum distribution.
Keywords: dividends; predictability of dividends; dividend retention; dividend stability.
Effects of leadership styles and motivational factors on worker engagement: An empirical study on ready-made garments industry in Bangladesh
by Dalowar Hossan, Zuraina Binti Dato' Mansor, Mohammad Abdullah Al Mamun, Abu Naser Mohammad Saif, Amer Hamzah Bin Jantan
Abstract: This study inspects the effects of motivational factors (intrinsic and extrinsic) and leadership styles (transformational and transactional) on worker engagement in the ready-made garments industry of Bangladesh. The paper is based on Herzbergs Motivation-Hygiene theory. The study adopted a quantitative technique and used SPSS to analyze the data assembled from a valid sample of 387 workers in Bangladesh's ready-made garments industry. The findings show that extrinsic motivational factors positively correlate with worker engagement more than intrinsic motivational factors. Consequently, transformational leadership is positively associated with worker engagement more than transactional leadership among the workers in the ready-made garments industry of Bangladesh. In conclusion, it is suggested that the industry should focus more on the transformational leadership style compared to the transactional leadership style and workers have to be motivated to increase productivity in this specific industry.
Keywords: Worker engagement; intrinsic motivational factors; extrinsic motivational factors; transformational leadership; transactional leadership; ready-made garments (RMG); Bangladesh.
ESG Disclosure and The Role of CEO Narcissism on Firm Value: The Case of ASEAN-5
by Laila Jahidatul Falah, Aria Farah Mita
Abstract: This study discusses the current trend regarding company performance which is not only seen from the financial aspect but how the company will sustain by contributing to its stakeholder in terms of its environmental, social, and governance aspects (ESG). CEO Narcissism is a CEO character that encourages the improvement of the Environmental, Social, and Governance (ESG) performance. This study examines the effect of ESG disclosure on firm value and the role of CEO narcissism to moderate the relationship between ESG disclosure and firm value. The ESG score from Thomson Reuters measured ESG disclosure, and the unobtrusive indicators by Chatterjee and Hambrick (2007) measured CEO narcissism. Samples are from non-financial companies in ASEAN Five countries with period cover years from 2014 to 2017. The results show that the ESG disclosure and CEO narcissism increase the firm value. Further, CEO narcissism strengthens the positive influence of ESG disclosure on firm value.
Keywords: ESG disclosure; firm value; Tobin's q; CEO narcissism.
Economic evaluations of diagnostic process and neuropsychological assessment of Dementia: a systematic review.
by Fiorella Pia Salvatore, Michele Milone, Emanuela Resta, Cristina Di Dio, Giancarlo Logroscino
Abstract: Alzheimer disease will have a strong growth rate among the adult population. Today, for healthcare managers, it would be extremely important to consider: the prevalence of the disease, and the demands for healthcare services. Adequate models have not yet been developed for estimating the evaluations of diagnostic tests useful for the decision-making process of healthcare managers. A systematic literature review was performed following the PRISMA checklist. The search retrieved 1,831 references. The highest impact of neuropsychological assessment was in France and Sweden. The lowest was in Spain and Netherlands. As for the total indirect costs, values varied from 630 international dollars (IntD$) in the USA, to IntD$956.25 in France for mild ALD patients. As for the moderate ALD, the lower value was in the USA (IntD$825), the medium in the UK (IntD$972.86), and the higher in Spain (IntD$1,123.33). Future research to better manage healthcare resources is recommended.
Keywords: healthcare management; healthcare expenses; diagnostic cost; Alzheimer disease; ALD; review; PRISMA.
Modified Ratios and the Cyclically-Adjusted Price-Earnings Ratio
by Catherine Georgiou, Ioannis Neokosmidis, Vassilis Polimenis
Abstract: Due to the failure to detect stationarity in the simple dividend-price (dp) and earnings-price (ep) ratios for the US stock market, we propose the use of a modified dp and ep (mdp and mep respectively) which constitute stationary versions of the conventional dp and ep. We retrieve evidence that long-run equilibrium relations among d and p, and e and p exist and proceed on constructing their modified counterparts. The forecasting performance of mep and mdp are tested alongside the classical ep and dp but also the well-known and highly followed cyclically adjusted pe ratio (cape). In-sample forecasting suggests that the modified ratios have improved nominal return fit over the simple ones. When forecasting out-of-sample (oos), mep provides clear oos improvements over the classical ep. Cape does not generalize well oos. Over the 7- and 10-year return horizon, the oos performance gain through mdp is 60% and 69% respectively.
Keywords: price-to-earnings ratio; dividend-price ratio; non-stationary ratios; pe ratio; modified ratios.
Leverage and firm characteristics what matter? Data from the Indonesian stock exchange
by Puji Handayati, Cipto Wardoyo, Lioni Indrayani, Yohanes Indrayono
Abstract: The purpose of this study is to investigate the relations between firm characteristics and financial leverage for Indonesian publicly-held firms. Based on data obtained from 206 firms listed in the Indonesian stock exchange for the periods of 2007-2016, we hypothesize and find that financial leverage is negatively associated with a firm's profitability, and firm size. Furthermore, we predict and find that growth opportunity and median industry leverage is positively associated with financial leverage. Concerning asset tangibility, we did not find a significant relation with financial leverage. The findings of our study provide useful insights into understanding the factors should be used by firm manager to make their financing decisions especially in Indonesian publicly-held firms.
Keywords: leverage; assets-tangibility; profitability; firm-size; market-to-book-ratio; median industry leverage; Indonesian publicly-held firms.
HOW FAR PRODUCTIVITY IS RELEVANT IN EXPLAINING FINANCIAL INCLUSION ACROSS THE STATES OF INDIA AN EMPIRICAL INVESTIGATION
by Shantanu Ghosh, Tarak Nath Sahu
Abstract: The article exhibits inter-state evidence that an increase in productivity can promote financial inclusion, using data on 27 states and five union territories of India over the period 2002 to 2019. After controlling the effects of population, inflation and expenditure by governments on health and education; the study reports a contemporaneous association along with a unidirectional positive impact of productivity on per capita savings account. Applying the panel data econometrics aligned with some post-analytical checks for robustness the study finds a significant impact of per capita net state domestic product on holding of per capita savings accounts. Propositions by Robinson and Lucas across the Indian provinces might be correct.
Keywords: economic development; financial inclusion; productivity; India.
Effect of Consumers Perceived Risk and Relationship Marketing for M-Shopping in India: The moderated mediation role of Demonetisation
by Ishfaq Bhat, Shilpi Gupta
Abstract: The development of digital technologies has paved the way for digital revolution in India. The customers have shifted to various digital platforms for fulfilling their shopping requirements in this digital era. Mobile phones have become one of the most strategic channels for the retailers to attract, satisfy and retain customers to maximise their revenue. The all-time accessible mobile app services encourage the users to connect to different online shopping platforms to satisfy their shopping needs. With demonetisation the digital platforms for shopping have been encouraged thus paving the way for m-shoppers to shop at their place of convenience. Inspite of all the benefits offered to m-shoppers, they perceive certain risks while shopping through their mobile phones. Therefore, the present study examines the impact of various behavioural constructs like perceived risk, trust, commitment and purchase intention on m-shopping. The study also attempts to analyse the moderating impact of demonetisation on these behavioural constructs under study. An adapted online questionnaire was used to collect the data from 442 customers who use various mobile app services to shop online. Purposive sampling technique was used to choose a representative sample. The collected data was subject to various statistical tools. The findings of the study reveal that perceived risk has an inverse relationship with m-shopping behaviour whereas trust and commitment positively impact the purchase decision of m-shoppers. Also, perceived risk and commitment parallelly mediate the relationship between trust and purchase intention. The moderated mediation analysis also indicates a positive impact of demonetisation on overall m-shopping behaviour. The study contributes to the m-shopping literature and recommends the academicians, policy makers and retailers to gauge the quantum of various risks perceived by the customers in m-shopping. This would help in reducing these risks and increase the overall sales of the various m-shopping platforms.
Keywords: Perceived risk; Demonetisation; Trust; Commitment; Purchase intention.
Sectoral herding behavior in Indian financial market
by VEENA MADAAN, Monica Shrivastava
Abstract: This paper estimates the herding behaviour at the sector level in the Indian equity market. The CSSD and CSAD model was used to detect the herding for the period after global financial crisis in equity market. Further, the asymmetry of the same was examined during upturn downturn market, high and low trading volume, and conditional volatility phase of the market. The CSSD model indicated no herding but CSAD model revealed the existence of herding in some sectors in Indian stock market. Additionally, the Cement and Service sectors indicated herding irrespective of rising or falling market, trading volume, and conditional volatility. The outcome will be helpful for policymakers to design strict guidelines to provide a protected environment for investors. This study investigated the trading pattern at the sectoral level till the year 2019, while most of the studies have covered up to the year 2015.
Keywords: herding behaviour; CSSD model; CSAD model; conditional volatility; trading volume; behaviour finance.
Economical and psychosocial effects of COVID-19: Evidence from the GCC economies
by Talla Aldeehani, Moid Ahmad
Abstract: Pandemics like COVID-19 are expected to make a dent on the pockets and the psychological state of individuals. Not just the residents of a country, the industry is also under stress and expects some support from the government to negotiate and manage the effects of such pandemics. The primary objective of the research is to understand the relationship between economic impact, stress and the governments support during the COVID-19 crisis. Additionally, it was intended to study the expectation and impact of the economic relief and support as announced by the respective governments of the GCC countries. The study was conducted during October to December (2020) and is based on survey data as collected from GCC residents. It uses the moderation-mediation techniques and other analytical tools to draw conclusions. One of the significant findings of the research is that the stress levels of individuals during the times of pandemics can be reduced by increasing the governments support. Additionally, the economic impact of a pandemic on earnings is one of the significant reasons for increase in stress levels of individuals.
Keywords: COVID-19; economic impact; stress; Gulf Cooperation Council; GCC; government support.
A Study of the Tweets of Successful Investors in order to identify their Personality
by Ramprakash R, C. J.O.E. ARUN
Abstract: The thrust of the study is to determine the dominant personality traits of successful investors by studying their tweets in Twitter and subsequently demonstrate how these traits influence the behaviour and performance of such investors in investment related realms and in financial management. Given the importance of tweets in indicating personality traits of individuals, this study selected 25 successful investors and performed a linguistic analysis of their tweets using linguistic inquiry and word count (LIWC) software. The results of the study show that successful investors predominantly exhibit two personality traits, namely, emotional stability and openness. Nevertheless, the study found that conscientiousness has been the fundamental trait among all the investors, across the clusters. Interestingly, the study also found that successful investors have low agreeableness and do not exhibit extraversion.
Keywords: investor personality; tweets; linguistic inquiry and word count; LIWC; big five traits; behavioural finance; successful investors.
The trajectory of the SRI fund industry in Brazil
by Jessica Barroso, Elaine Araújo
Abstract: This article utilizes data collected from the platforms Quantum Axis, Morningstar, and Central System from Comissao de Valores Mobiliarios (CVM) to present a descriptive analysis of the Brazilian Socially Responsible Investment (SRI) funds. It was noted that, overall, the Brazilian SRI funds adopt in their policies the third generation SRI approach (positive screen), and no fund with negative screen was found. From 2001 to December 2017, the Brazilian SRI funds industry had a total of 64 funds with sustainable characteristics in its name, which represents a negligible percentage compared to the total of the Brazilian funds industry.
Keywords: Investment funds; SRI; Socially Responsible Investments.
Evaluating the effects of formal and informal institutional on MNE's working in Saudi Arabia.
by Nasser Alshareef
Abstract: Foreign direct investment is unique in that it offers the investor the opportunity to invest in a host country in multiple ways and welcome by the host country. Formal and informal institutions play significant roles in attracting foreign direct investment made by multinational enterprises. Current work aims to explore the influence of formal and informal institutional avoidance, adaption, and co-evolution factors for the inflow of FDI as perceived by the MNEs working in KSA as an evolutionary approach to international business. The data was collected from the British MNEs working in KSA and analysed with logistic regression. The study results suggest the formal institutional avoidance and adaptation factors significantly influence the inflow of FDI as perceived by the MNEs working in KSA. While the formal institutional co-evolution factors insignificantly influence the FDI in KSA. For the informal institutional factors, only informal avoidance significantly influences the FDI in KSA.
Keywords: foreign direct investment; FDI; institutions; multinationals; formal; informal; multinational enterprises; MNEs; capital.
Financial Analyst Coverage and Tax Avoidance: Evidence from the UK
by Mohammed Almaharmeh, Ali Shehadeh, Mohammad Aladwan
Abstract: This paper examines the impact of analyst coverage on corporate tax avoidance strategies. Previous literature suggests different views about the possible relationships linking these phenomena. After examining 3,475 firm-year observations collected from the UK market for the period 2011 to 2018 the findings suggest that high intensity in analyst coverage leads to increased tax avoidance activities. This result is in line with the pressure view which posits that managers may be more incentivised to reach or exceed earnings expectations to evade the unfavourable consequences of missing analysts earnings benchmarks. Our results are robust after applying pooled OLS and fixed-effects panel regressions.
Keywords: corporate tax avoidance; corporate tax aggressiveness; financial analyst coverage; earnings management; corporate governance; market pressure; analyst following; UK.
Household Saving Culture and Financial Literacy in case of Wolaita Zone, Ethiopia
by Mulat Goshu Gebeyehu
Abstract: This study investigates the impact of financial literacy on household saving outcomes in the Wolaita Zone of Ethiopia. A sample of 217 households has used to collect the data. The findings evident that the majority of respondents have overrepresented in informal saving mechanisms. Around 8.75% of households saved through formal means, including banks and microfinance institutions. Approximately 38.25% of respondents saved money through informal mechanisms such as saving association (Iqub and Iddir), at home, with relatives, lending, and purchasing fixed assets. Around 25.81% of respondents save in both formal and informal ways. The instrumental variable (IV) estimation method estimates the impact of financial literacy on household saving outcomes. Mean financial literacy at the district level and participation in financial training are used as financial literacy instruments. According to the findings, financial literacy has a positive and substantial impact on household saving outcomes. Furthermore, financial literacy increases formal savings but has little effect on informal savings. This result highlights the importance of financial literacy policy interventions in improving household saving outcomes and attracting people to formal saving modes.
Keywords: household saving; financial literacy; IV estimation; Wolaita Zone; Ethiopia.
Does financial deepening matter for economic growth in Asian economies: Fresh evidence from panel threshold analysis
by Suman Dahiya
Abstract: Considering the importance of a developed financial system in the development of a nation, the present study explores the link of economic growth with financial deepening in the context of Asian economies with annual data over the period 1999 to 2018. This study is using a new index of financial development proposed by the International Monetary Fund (IMF) in the year 2016. It also examines the nonlinearity of the relationship using panel threshold regression. Estimation results find a single threshold (0.1456) effect in the financial deepening-growth nexus. The results reveal that financial deepening enhances growth in those countries where it is above the threshold value, whereas the role of financial deepening in the growth vanishes in countries where this value is below the threshold. It shows that the financial system can contribute to the growth of an economy once it exceeds the threshold level of deepening. Therefore, policymakers in the below threshold region should design and implement policies that will deepen their financial system to boost economic growth.
Keywords: financial deepening; economic growth; Asian region; two-stage least square; 2SLS; panel threshold regression.
CHANGES OF WORKING CAPITAL MANAGEMENT AND FIRM VALUE IN THAILAND AND SINGAPORE
by M.A. Zariyawati, Mohammad Reyad Hossain
Abstract: Efficient working capital management ensures a firm can run the day-to-day operation smoothly to sustain in a longer period. Hence, the firm should be more careful on changes of working capital management. The study explores the impact of changes of working capital management on firm value using 200 listed non-financial firms from Thailand and Singapore from 2009 to 2018. By employing static panel data regressions, the study demonstrates that shareholders in Thailand perceive an extra working capital investment is significantly less worth than an extra Thai baht of cash investment. Conversely, shareholders in Singapore perceive that extra Singapore dollar of cash investment and extra working capital investment reduces firm value. These different results from both countries are expected due to the different levels of market development.
Keywords: changes of working capital management; firm value; Thailand; Singapore.
Impact of Corporate Governance on Working Capital Management: An Empirical Investigation from India
by Najib Hamood, Faozi Almaqtari, Mamdouh Abdulaziz Saleh Al-Faryan, Mosab Tabash
Abstract: The current study examined the effects of corporate governance on the effectiveness of working capital management among Indian pharmaceutical companies. The study extracted data for ten years from 2008 to 2017 and the empirical analysis conducted was based on a large sample of 82 companies. The results of the current study revealed the number of directors on a board of directors negatively and significantly affects payables deferral period and receivables collection period, while composition of the board does not have a significant impact on the efficiency of working capital management. The current research is believed to be among the first to investigate the influence of corporate governance on the effectiveness of working capital management in an emerging economy, India. The study data should be beneficial for policymakers, investors, finance managers, and others concerned with the efficiency of working capital management.
Keywords: working capital management; WCM; corporate governance; pharmaceutical industry; India; independent directors; dependent directors; board of directors size; emerging economy.
The Impact Of Expectations On The Co-integration Relationship Between The Stock and REIT Markets
by Umit Erol, Aydin Yuksel, Asli Yuksel, Hakki Ozturk
Abstract: This paper examines if expectations have a significant impact on the co-integration relationship between stock and real estate investment trust markets. We use two widely followed expectation indicators which are the US yield spread and the expected US stock market volatility (VIX) to test this hypothesis. The US yield spread is decomposed into two components which are the expected short-term interest rate (EF) and a variable term premium (TP) using Hamilton-Kim algorithm. A dataset covering ten developed markets is used. Using co-integration score analysis our findings indicate that expected US short-term interest rates and expected US stock market volatility have a statistically significant and positive impact on the global co-integrations of different countries. This effect is especially valid in the post-global financial crisis period. The expectation based indicators EF and VIX, however, do not seem to have a significant impact on co-integration at regional and local levels.
Keywords: global; regional co-integration; the US yield spread; expected US short-term interest rates; variable term premium; international diversification.
CROSS MARKET HERDING IN CHINESE, US AND CRUDE OIL MARKETS? QUANTILE REGRESSION ANALYSIS
by O.O.I. K.O.K. LOANG
Abstract: This study examines cross-market herding in Chinese and US markets from 2015 to 2020. It seeks to explore the impact of the crude oil market on Chinese and US. This study adopts cross-sectional absolute deviation to detect herding. This study employs quantile regression rather than OLS method to examine herding in different quantiles. The result shows that NYSE and NASDAQ are herded with each other. For Chinese markets, the bidirectional herding between Shanghai and Shenzhen tends to appear in median (Τ= 50%) and upper quantiles (Τ= 75% and 95%). The herding tendency of Shenzhen is higher than Shanghai and Nasdaq is higher than NYSE. The crude oil market can cause herding in US and Shanghai. The originality of this study contributes to academicians and practitioners in understanding the existence and tendency of cross-market herding. Investors shall aware that herding can be caused by the performance of other markets.
Keywords: herding; stock market; Chinese market; US market; globalisation.
Special Issue on: EMAB 2018 Efficiency and Performance Trends under the Impact of Climate Change, Technology, Ageing Population, Immigration and Religious Challenges
Financial statement misrepresentation: the role of internal and external audit
by Petros Lois, George Drogalas, Alkiviadis Karagiorgos, Adamantia Parcha
Abstract: This paper focuses on the importance of internal and external audits in reducing misrepresentation or falsification of financial statements and examines the key characteristics, reasons, and methods for committing as well as confronting fraud. Electronic questionnaires were sent to stock-exchange-listed companies with an internal audit department. Descriptive statistics, factor analysis, and multiple regressions show that internal audit contributes significantly to reducing fraud. Factor analysis shows a significant internal audit contribution against fraud. Linear regression highlights the significance of variables concerning the reasons for falsification, external auditors competence, and internal auditors and audit committees efficiency. Business fraud is organised and therefore difficult to detect, disclose, and prevent, especially when conducted by the board of directors; further, it is more common in businesses without control mechanisms. Audits role is key in preventing and detecting fraud; it should act as a strong, internal, independent control function. Despite the importance of audit, the phenomenon of fraud, there has not been much empirical research on this issue.
Keywords: Financial statement mispresentation; Fraud; internal audit; external audit; audit committee.
Football industry stakeholder salience and attributes - the case of Cyprus, EU
by George Yiapanas, Alkis Thrassou
Abstract: The purpose of this paper is to theoretically identify the various stakeholders of the football industry and to define and delineate their typology, prioritisation and interrelationships, along specific attributes; drawing in parallel explicit theoretical and practical conclusions towards scholarly advancement and managerial implementation. The research focuses on the case of Cyprus, a small European (EU) island-state, whose football-specific attributes, in all its business, sporting and social contexts make it a rather unique and valuable case study for football internationally. Methodologically, the research relies on an extensive theoretical study and the application of Mitchell, Agle and Wood (1997) typology of stakeholders attributes and salience.
Keywords: football industry; managers; attention; stakeholder theory; stakeholder salience; attributes; typology; stakeholder identification; prioritization.
The Effect of Religiosity and Demographic Variables on Arab Women Consumers Self-Expression through Luxury Brands: A Mixed Methods Study
by Baker Ahmad Abdullah Alserhan, Daphne Halkias, Aisha Wood Boulanouar, Marcos Komodromos, Tahar Lazhar Ayed, Othman Althawadi
Abstract: This mixed methods study focuses on one category of luxury female consumer products and investigates its relationship with Muslim consumer religiosity and other demographic variables to provide greater understanding of the consumer behaviour of this largely unknown consumer segment. Building on the recommendations of two related earlier studies, this paper tests the four key propositions of complexity theory. Symmetrical testing was done using correlation, cross-tabulation and contrarian case analysis to examine the association among the constructs of Religiosity, Demographics and Self-Expression. Then, Asymmetrical fsQCA data analyses were done to test major tenets of the theory of complexity. Findings provide further support that utilising a combination of complexity theory, fsQCA and pattern research in service dominant logic is a proper fit for advancing theory, method and practice in service research. The results show that relationships in the emotionsbrand domain are not as straightforward as previously thought.
Keywords: Complexity theory; nuanced theory; self-expression; religiosity; luxury brands; Arab women consumers.
THE IMPACT OF E-SERVICE ON HOTELS' BOOKING: Adjusted TAM Framework for Customers Intentions to Book Hotels Online
by Demetris Vrontis, Mazen Massoud, Hassan Dennaoui, Sam El Nemar
Abstract: Electronic services have modified the procedures of online communication, namely in terms of available information which facilitates comparisons and transparency of markets, information diversity, and website interactivity. Understanding the determinants of customers intentions for booking online through electronic services becomes important for the hospitality industry because, within this industry, hotels are witnessing a reorganization of the distribution channels and marketing strategies. The purpose of this study was to examine the relationship between the TAM model, dimensions of e-service quality, and clients hotel e-booking intentions, focusing on evidence drawn from consumers of five-star hotels in Beirut, Lebanon. Customers still seek assistance during their online booking procedure. Results revealed that perceived trust, followed by perceived ease of use and perceived risk are key factors of e-booking. In managerial terms, this research enables decision-makers to identify factors influencing consumer behavior when buying online, as well as the motivation factors that drive them to make online purchases. Finally, this study determined the degree of association of variables through linear regression analysis in an empirical study conducted on 154 hotel guests.
Keywords: E-Service Quality; TAM; Intention to Book Hotel Rooms Online.
GREEN CONTROLLING IN MEDIUM-SIZED COMPANIES IN BADEN-W
by Bernd Britzelmaier, Pascal Rommel, Jana Maria Schlosser, Carolin Weidler
Abstract: Sustainability has established itself as a term in everyday life. Regulations and laws have led to public reporting. Nevertheless, the planning and management of the three sustainability dimensions (economic, ecological and social dimension) still seems to be in its infancy in many companies, especially in small and medium-sized ones. Based on literature and study evaluations, a qualitative study was therefore conducted on the subject of "Green Controlling in SME in Baden-W
Keywords: Green Controlling; sustainability; SME; Baden-Württemberg; Germany; management control; triple bottom line.
FUNDS OF HEDGE FUNDS ROLE IN PORTFOLIO DIVERSIFICATION DURING CRISIS: THE CASE OF CYPRUS
by Simona Mihai-Yiannaki, Lucia Gibilaro, Gianluca Mattarocci
Abstract: Abstract :Despite the poor value delivered, institutional investors prefer to invest in FOHFs because of diversification opportunities they offer. During the last decade the exposure of institutional investors to FOHFs has increased strongly, inside the hedge funds industry because of diversification opportunities despite the poor value they deliver. Even though geography represents a core factor in diversification strategies, investment choices by managers are driven by the proximity to the hedge fund, therefore little isAmong the diversification choices at the heart of portfolio construction, there is the geographical focus: despite a high diversification by asset, FOHFs managers prefer to invest in nearby hedge funds because information availability. Nonetheless, little is known on geographical diversification without US focus and on the contribution of the single country. By looking at hedge funds from United Kingdom, Ireland and Cyprus, results show that geographical diversification matters for FOHFs. Independently from the RAP measure selected, In particular, funds based in Cyprus do not outperform with respect to other market independently with respect to the RAP measure selected, but they contribute to the reduction of systemic risk, tracking error or downside risk exposure. are useful for constructing FOHF especially if investors aim to reduce the systemic risk, tracking error or downside risk exposure.
Keywords: hedge funds; performance; FOHF; portfolio diversification; Sharpe ratio; Treynor index; Jensen’s alpha; Modigliani’s square; Information ratio; Sortino index.