International Journal of Business and Emerging Markets (17 papers in press)
The effect of managerial choices around liquidity, leverage, and company size on corporate bond yield: A case study from Indonesia
by Hari Gursida, Yohanes Indrayono
Abstract: This study uses structural equation modelling (SEM) to chart the effects of managerial choices concerning capital structure on bond yield, captured by company size, leverage, and liquidity. The results are based on 22 Indonesian companies, over the period 2012 to 2016. Only company size had a statistically significant direct effect on bond yield. When company size was held as a moderator variable, both leverage and liquidity displayed positive, indirect effects. However, different accounting definitions of leverage and liquidity may alter the direction of the estimated effect, thereby highlighting the alerts of basing financing strategies solely on accounting metrics. Taken together, the results of this study contribute to our understanding of the effects that managerial choices in terms of financing strategies on bond yield.
Keywords: liquidity; leverage; company size; bond yield; Indonesia.
Mapping research on competitive strategy in international business journals: a co-citation analysis
by LERAN GUAN, Jongwook Kwon
Abstract: The competitive strategy (CS) literature in international business (IB) journals has constituted a considerable database. But few studies have adopted bibliometric methods to map a comprehensive overview of these publications. Thus, a quantitative bibliometric review summarizing and integrating what we know to identify and suggest future directions for researchers is necessary. Information on 1,099 articles was obtained from the Web of Science. By document co-citation analysis, three main emerging research trends, which are the expansion of emerging market multinational enterprises, a mediator linking resources and the international performance, and the political dimension of intra-firm competition, were identified. We also detected the core authors, institutions, countries/regions, and cited journals to present the quantitative overview of the active researchers and their affiliations for promoting academic collaboration of future research. It can support researchers by offering a quantitative overview of the evolution and current status of CS research in IB environments and be helpful for researchers to efficiently identify the research network and to promote a deeper understanding of the CS research status in IB environments.
Keywords: competitive strategy; international business; co-citation analysis; CiteSpace.
Business across borders: perceptions of political risk in internationalized Brazilian companies
by Ronaldo De Oliveira Santos Jhunior, Gustavo Abib, Fabricio Stocker
Abstract: Brazil is an emerging country in terms of political, economic, and social development. Its companies are usually in a scenario of instability, especially since mid-2010. In this context, the paper provides unpublished evidence on political risk perception in companies of diverse branches. The purpose of this study is to analyse the perception of political risk in business abroad by managers of internationalised Brazilian companies. Qualitative and descriptive research was conducted in a multiple case study through document collection and semi-structured interviews. The internationalisation processes of six small and medium-sized Brazilian companies and their managers political risk perception were investigated. The findings reveal the political risk factors inherent to different environments for internationalised companies in a context of political and economic uncertainties, namely, the internal environment, the external environment and the environment related to the organisation itself.
Keywords: risk perception; political risk; international business; internationalisation process.
Accountability Through Budget Performance: A Study on Budget Adequacy and Participation of Malaysian Local Government
by Tuan Zainun Tuan Mat, Nor Azlina Mohd Saad, Roshayani Arshad, Saiyidi Mat Roni, Sharina Tajul Urus
Abstract: Budget mirrors local authorities effective and efficient resource allocation practices. In many cases, however, a tendency toward budget slack raises genuine concern among stakeholders who participate in and are affected by the budget. The budget slack potentially exerts bias in the budgeting process which is detrimental to the accountability of local authorities. On this premise, this study aims to examine the influence of budget participation and budget adequacy on the budget performance of local governments in Malaysia and how accountability could be promoted through high budget performance. A survey-based instrument was used to collect the data for this study from various local authorities in Klang Valley. A total of 110 responses were obtained representing a 73% response rate. Partial least square (PLS) structural equation modelling results showed that the effect of budgetary participation on budget performance is direct and also mediated by budget adequacy. This implies, among others, that while participation in the budgeting process can enhance budget performance, the effect is also contingent on the adequacy of resources the participants are presented with.
Keywords: accountability; budget adequacy; budget participation; budget performance; local government.
The impact of e-filing usage on the job performance of tax agents in Malaysia
by Nurul Hannani Hashim, Nadiah Abdul Hamid, Soliha Sanusi, Nor Farizal Mohammed
Abstract: E-filing has brought many positive impacts to all users including the tax agents since its introduction in 2004. Despite its benefits to the tax agents, there are also setbacks in the system in terms of functionality, information quality, tax agents knowledge, and infrastructure issues that impede the accuracy of data in the tax preparation process. Hence, by using a questionnaire survey, this study intends to identify the factors influencing the job performance of tax agents in the tax preparation process via the e-filing system. The findings revealed that the most significant factor influencing the job performance of tax agents is functionality and followed by information quality. In essence, this study serves as a medium for tax agents to voice out their insights regarding the system. This also benefits both IRBM and the government since they can further increase the efficiency and effectiveness of the tax administration system.
Keywords: e-filing; tax agents; job performance; information quality; functionality; Malaysia.
Firm nominal value and the role of some accounting information: an investigation of Indonesian listed firms
by Yohanes Indrayono
Abstract: This study introduces the firms nominal value rather than using market value only in the stock market which should be considered by investors and firm management when they make decisions. This research work examines the accounting informations effect, which comprises the earnings, sales, book value per share, and operating profit of firms nominal value of the stock. This study uses regression analysis with 184 non-financial Indonesian listed sample firms from thirteen industries for the period 20072016. The result is that the firms accounting information, namely the earnings, sales, book value per share and operating profit has a significant influence on the firms nominal worth. In order to make a better decision in stock markets, it is suggested that investors and firm management should use the firms nominal value and certain accounting parameter, which include the earnings worth per share, book value, sales and operating profit to predict the stock market price.
Keywords: firm nominal value; earnings per share; book value; sales; operating profit.
ADVANTAGES OF INDIGENOUSNESS AND FIRMS FROM EMERGING ECONOMIES
by Lance Brouthers, George Nakos, Ted Randall
Abstract: This paper develops and tests a new concept called the advantages of indigenousness (AOI). The AOI concept suggests that: 1) local emerging economy firms can create defendable product markets based on specific advantages that stem from being an indigenous firm; 2) firms using these advantages have superior performance when compared to local firms that do not. Based on this new concept we generate and test three hypotheses on a sample of 382 Romanian domestic firms. Our findings show that companies emphasising their local connection by promoting the local manufacturing of their products, as well as the ones that utilise an umbrella branding strategy tend to have stronger performance. No support was found for a positive impact on performance by the employment of tight delivery schedules.
Keywords: advantages of indigenousness; Romanian firms; emerging market firms; umbrella branding.
Exchange Rate Regime and Economic Growth in Nigeria: Evidence from Sectoral Level
by JAMES T. DADA
Abstract: The purpose of this study is to examine the effect of exchange rate regime on sectoral output in Nigeria from 1970 to 2017. The study centres on six sectors namely: mining and quarrying, telecommunication, agricultural, manufacturing, building and construction and retail and business trade. Dummy variable is used to capture the effect of exchange rate regime, while generalise method of moments (GMM) is used as the estimation technique. The findings from the study reveal that both fixed and flexible exchange rates have positive and significant effects on sectoral output in Nigeria. In magnitude, the result shows that fixed exchange rate stimulates output than flexible exchange rate in Nigeria. The study concludes that exchange rate regime matters for growth in developing countries.
Keywords: exchange rate; exchange rate regime; economic growth; sectoral output; generalise method of moments; GMM.
The Relationship Between Social Performance and Operational Sustainability of Vietnams Formal Microfinance Institutions
by Van Duong Ha
Abstract: The operational sustainability and social performance are factors affecting the operations and goals of the microfinance institutions (MFIs). The major intendment of this study was to discover the interactive between social performance and operational sustainability and to examine factors that affect the social performance and operational sustainability of formal MFIs. The study analysed in panel data with three models from 2010 to 2018 of (36) all formal MFIs in Vietnam. The results found bidirectional interactions between the social performance and operational sustainability. In particular, there was the interactive relationship between breadth of outreach and operational sustainability in a positive trend, there was a trade-off between depth of outreach and operational sustainability. This study offers policy implication and new insights for developing a more sustainable formal MFIs going forward.
Keywords: breath of outreach; depth of outreach; microfinance institution; operational sustainability; social performance.
Efficiency classification among MENA region stock markets indexes: Insights from multifractal spectrum and MSM forecasts
by Monia Antar
Abstract: This paper proposes an efficiency ranking of the stock-market indexes in the MENA region based on the scale-invariant characteristics of stock returns. The methodology involves the computation of the multifractal spectrum width. We also estimate a Markov switching multifractal (MSM) model and use it to forecast stock-return volatility. The value of the loss function associated with the volatility forecasts provides an alternative metric to gauge the efficiency of the stock market. We find that the ranking based on the MSM model forecasts shows some inconsistencies with that based on the spectrum width, suggesting that the MSM model does not perform as well in predicting stock-market volatility in emerging markets as it does in developed countries.
Keywords: multifractal spectrum width; efficiency; volatility prediction; Markov switching multifractal; MSM simulation; MENA emerging markets.
Financial Pressure and Related Party Transactions on Financial Statements Fraud: Fraud Triangle Perspective
by Ataina Hudayati, Titis Khairun Nisa, Zuraidah Mohd-Sanusi
Abstract: This study aims to analyse the effect of financial pressure (financial stability, personal financial need and financial targets) and related party transactions (RPTs) on financial statement fraud. Respondents of the study are manufacturing companies listed on the Indonesia Stock Exchange for the years 2011 to 2015. By using fixed effect panel regressions, the survey results show that financial stability as measured by sales divided by total asset and RPTs negatively affect financial statement fraud. In addition, financial targets have a significant positive effect on financial statement fraud. However, this study shows that personal financial need does not affect the financial statement fraud. This study provides several important conclusions. First, companies are in a stable financial condition, enabling them to reduce their financial report fraud. Second, the findings suggest the possibility of a negative impact on the quality of financial statements due to the use of financial performance targets such as ROA. Third, the result of the study which states that RPTs negatively affect fraudulent financial statements implies that in Indonesia with reference to manufacturing companies, RPTs do not reflect negative behaviour or even vice versa.
Keywords: pressure; related party transactions; RPTs; financial statement fraud; FSF.
Influence of institutional investor heterogeneity on stock liquidity and its underlying liquidity channels
by J.I.A. J.I.A. HING, Y.E.E. PENG CHOW
Abstract: This paper investigates the influence of institutional investor heterogeneity (i.e., active and passive institutional investors) and the underlying liquidity channels (i.e., information asymmetry and trading activity channels) through which these institutional investor groups affect stock liquidity. Drawing on a sample of listed firms in Malaysia from 2012 to 2018, this paper employs the pooled ordinary least squares method to conduct the empirical tests. Initially, the empirical results based on the linear model show that the association between institutional investor shareholdings and stock liquidity is solely attributed to the active institutional investors. Further tests using the quadratic model reveal that a non-monotonic relationship arises between shareholdings by both active and passive institutional investors and stock liquidity due to competing liquidity channels. In particular, passive institutional investors improve stock liquidity due to lower level of information asymmetry, while active institutional investors improve stock liquidity by enhancing the level of trading activity.
Keywords: institutional investor heterogeneity; active institutional investors; passive institutional investors; liquidity channels; information asymmetry; trading activity; stock liquidity.
Forward-looking disclosures using a new library: evidence from GCC banks
by Gehan A. Mousa, Elsayed A.H. Elamir
Abstract: The study provides an in-depth analysis of a certain type of disclosure, which is a forward-looking disclosure (FOLD) for annual reports of a sample of listed conventional banks in the GCC countries. It investigates whether some firm characteristics namely: firm size, firm performance, financial leverage and firm age are determinants of the level of FOLD. A library of FOLD has been developed to measure the level of FOLD in the banks' annual reports. Multiple linear regression analysis and multivariate multiple regression have been run for FOLD model. The results of multivariate multiple regression report that firm size, firm performance and firm age have a significant effect on the level of FOLD. Another interesting finding, from running multivariate multiple regression with interaction analysis, is firm leverage has a significant effect on the level of FOLD if it joins with other independent variables such as firm size and firm performance.
Keywords: forward-looking disclosures; FOLD; firm characteristics; opportunities and expectations; risks and uncertainty; related financial information.
Conceptualising quality factors affecting the intention to use and purchase an AI speaker
by Nicole Agnieszka Rydz, Youness El Mezzi, Kyung Jin Cha
Abstract: AIS is becoming a central device, which accesses many types of smart services through a voice interface. Although AIS technologies are an advanced novelty, the market size is not extended as expected. This study focuses on various aspects affecting the 'perceived value' and 'intention to use or purchase' AIS. Furthermore, this study examines the importance of various quality factors related to the users' intention to adopt AIS. For the prospect of this study, we have conducted a field survey on customer's attitude towards the AIS, in order to analyse and utilise our model. The results from this study will be able to help R&D, marketing, as well as technology-human interaction scholars, to have an insight into users' attitude toward such a novel technology, like AIS.
Keywords: AIS adoption; AI speakers; AISs; smart devices; AI quality; technology acceptance model; TAM; privacy concern; perceived value.
Corporate governance and managerial expertise influence on financial distress: the mediating role of financial performance
by Wuryan Andayani, Imam Subekti, Rifdah Riyan Dara, Eley Suzana Kasim
Abstract: Financial distress (FD) has been found to cause bankruptcies among publicly traded companies. Extant literature suggests that corporate governance (CG) and managerial expertise may influence FD. However, to date, limited studies have been conducted to examine the influence of CG and managerial expertise on FD based on the Indonesian experience. Thus, by taking into account the Indonesian series of corporate delistings, this study aims to examine the effect of CG and managerial expertise on FD, as well as the effect of financial performance in mediating the relationship between CG and managerial expertise on FD. Based on CG circular number 32/SEOJK.04/2015, data from 31 companies in 2016 and 53 companies in 2017 was analysed using logistics and multiple linear regression analysis. The results indicated that financial performance does not mediate the influence of managerial expertise, but mediate the effect of CG on FD. Moreover, CG does not affect financial performance. This implies that FD is caused by declining financial performance and by recruiting a competent manager, financial performance will be improved.
Keywords: financial distress; corporate governance; managerial expertise; financial performance.
Corporate board, ownership structure and banking performance in the emergent market
by Wissem Daadaa
Abstract: Corporate governance plays a crucial role in creating corporate culture, transparency, enhancing economic and financial performance. In this context, this paper provides a brief view of the background of internal corporate governance mechanisms in Tunisia. Furthermore, it analyses the impact of the corporate board and ownership structure on the financial performance of Tunisian banking. The study uses a sample that consists of 11 listed banks for the period 2005-2018. Results revealed the importance of board control within the bank, but they also state that other mechanisms such as the ownership structure must also be taken into account. Research shows that the ownership concentration, board size, independent and institutional administrators affect bank performance. Likewise, duality is positively associated with bank profitability. The current study is considered as a battery for further research and studies particularly in Tunisia in the context of corporate governance and financial performance. The results can have an important implication on bank regulation and corporate governance in the Tunisian market.
Keywords: bank governance; ownership structure; board characteristics; banking performance.
The maturation of the internationalisation of Portuguese and Brazilian multinational companies
by Shalimar Gallon, Marcos Ferasso, Jorge Filipe Da Silva Gomes, Carlos Costa
Abstract: An analysis of the maturation of the internationalisation of Portuguese and Brazilian multinational corporations (MNCs) was undertaken which draws on the data of two case studies based on 30 semi-guided interviews. A content analysis technique supported by MAXQDA software found a more significant maturation of Portuguese MNCs than of Brazilian ones. Portuguese MNCs were shown to have a different organisational structure than that of their host-country head offices, thereby achieving a more fluid business process in their subsidiary. The internationalisation strategy of Plastic - a metanational, - is a distant reality in terms of Brazilian MNCs, in that it still aims to become consolidated in the market as an MNC. This research sheds light on the maturation of the internationalisation of MNCs in the context of developed and emergent countries.
Keywords: multinational enterprises; internationalisation strategy; maturation of internationalisation; Portuguese; multinational companies; MNCs; Brazilian.