International Journal of Business Performance Management (26 papers in press)
Airports as platforms: towards a new business model
by Nuno M. Brilha, Helena Nobre
Abstract: Traditionally, airports were seen as air transport infrastructures for airline operations, passenger, and cargo processing. This traditional view has evolved beyond the aeronautical function, to offering non-aeronautical equipment and services. As air transport becomes a pillar for globalization, and airports intermodal platforms for transport and business, the airport city concept emerges from a strategic vision in which airport development is now integrated with urban planning and regional land use. Yet, the airport city concept does not address one of the main stakeholders the consumer especially when the consumer is at the epicentre of the current technological revolution. Therefore, this paper proposes the Airport 3.0 concept as the new business model for the airport as a two-sided platform. The concept is founded on three strategic business vectors that must be managed as concentric, complementary, and synergic for superior business performance. The paper addresses some managerial remarks, limitations, and future directions for study.
Keywords: airport operator; airport business model; Airport 3.0; two-sided platforms; entrepreneurial management; brand value co-creation; business performance.
INNOVATIVE BUSINESS MODELS FOR FULL CYCLE OPERATING AIRLINES
by Iryna Heiets, Sergiy Spivakovskyy, Tetiana Spivakovska
Abstract: This study provides insights into the innovative business model for airlines. We theoretically discussed the main aspects and features of the functioning of innovative business model for a full cycle operating airlines. Focusing on the aviation industry, we enhanced the understanding of network structure, elements, factors and transformation process of business model innovation. An in-depth study of the full services network carriers was conducted for two competitors in the Middle East Region Emirates Airlines and Etihad Airways. The Business Model Canvas was built for the both airlines based on such elements as: key partners, value propositions, key activities, customer relationships and segments, key resource, channels, cost structure, and revenue streams. In addition, the correlation analysis was conducted to identify country innovation factors that significantly impact on revenue of the Middle East airlines, in particular, the UAE based full cycle operating airlines.
Keywords: full cycle operating airlines; aviation industry; innovative business model; business model canvas; Emirates Airlines; Etihad Airways.
Role of Logistics and SCM Management Practises in Improving Operational Efficiency in the Retail Industry in the UAE
by Adnan Jawabri
Abstract: The purpose of this paper is to examine how modern inventory management practices affect the operational efficiency of retail industry and the challenges are faced by them in implementing these practices in United Arab Emirates (UAE). The researcher used quantitative research method and a survey strategy to collect responses from 45 employees working in various departments of the inventory management. Significant driving factors like maintaining accurate inventory and co-ordination between the departments of inventory management were identified through linear regression model. The study findings also revealed that insufficient cash flow necessary for business scale expansion significantly challenges the operational efficiency of retail sector companies in UAE with respect to the inventory management practices imposed and followed by these retail companies. The two main limitations of this study are small sample size and derivation of results based on quantitative analysis only. Identification of significant driving and challenging factors of inventory management will help managers to enhance their operational efficiency.
Keywords: Innovative inventory management practises; operational efficiency; retail industry.
The Impact of the United Arab Emirates Macroeconomic Variables on Emirati Stock Market Indexes
by Juan Dempere
Abstract: The goal of this study is to determine whether some of the United Arab Emirates (UAEs) macroeconomic variables have explanatory power on the Emirati stock market by applying cointegration and Granger causality tests from vector autoregressive (VAR) and vector error correction (VEC) models. Identifying variables with a statistical power of predicting cycles of business expansion and contraction in the UAE may be extremely beneficial for business planning purposes. Time series that can anticipate, concur, or lag fluctuations of the Emirati economic cycles reliably may also prove to be extremely valuable for Emirati government officers and policy-makers. The studied macroeconomic variables include the Dubai crude oil price, the Emirates Interbank Offered Rate, the UAEs money supply, the effective exchange rate, and the Emirati consumer price index. Monthly data were obtained for each variable from December 2011 to October 2018. Our results provide evidence of unidirectional and bidirectional short-term Granger causality between two Emirati stock markets indexes and the UAEs money supply. Similarly, we find evidence of unidirectional short-term Granger causality between the Emirati stock market indexes and oil prices. Also, our results suggest a cointegration or long-run equilibrium relationship between five relevant UAEs macroeconomic variables and two Emirati stock market indexes
Keywords: United Arab Emirates; UAE; macroeconomic; stock indexes; vector autoregressive models; VAR models; vector error correction models; VEC models; Granger causality; cointegration.
Cooperation between Middle East countries and Ukraine in aerospace industry
by Sergiy Spivakovskyy, Tetiana Spivakovska, Al-Ghozou Ali Ahmad
Abstract: The article examines the expediency of international cooperation in the aerospace industry between two regions, Ukraine and Middle East countries. With the help of Porter's diamond model of national competitive advantages, the international competitiveness of aerospace industries of Ukraine and Middle East countries have been analysed, and competitive advantages of countries in this industry have been determined. The article provides a detailed analysis of the feasibility of international cooperation between companies from Middle East and Ukraine in the aerospace industry. Strengths of Ukrainian and Middle East companies in the aerospace industry were analysed, and opportunities for international partnership were highlighted. The benefits of all participants were detected. Taking into account the specifics of analysed countries and regions, the participants of cooperation, and their roles were defined.
Keywords: international cooperation; aerospace industry; heavy cargo aircrafts; competitive advantage; Porter’s diamond; related and supporting industries.
Industry sector contribution to the GDP. A future scenario analysis for the establishment of an electric vehicle industry in the UAE by 2040
by Hasan Mustafa, Haya Al Shawwa
Abstract: This paper attempts to build three possible scenarios for the establishment of an electric vehicle industry in the United Arab Emirates in the next two decades through the investment of approximately sixty billion dollars aimed at producing two million electric vehicles by 2040. The proposed scenarios are built to compensate the expected fall in oil revenue in the long-run as main source of export. Key factors that lead to successful establishment include the technological shift that already taking place in the transportation sector worldwide; increasing usage and spread of electric vehicles; significant improvements in alternative energies, mainly solar energy; and improved battery storage capacities.
The three scenarios explored, the preferred scenario, optimistic scenario and pessimistic scenario estimate investments over the next twenty years, suggesting areas for the establishment of this industry between Al Mirfa and Ruwais zones with seaport in the Emirate of Abu Dhabi. The suggested road map for its realization includes four stages, from present and until 2040. The preferred scenario particularly illustrates a realistic future setting in fostering the diversification of the countrys economic base.
Keywords: GDP; industry sector; electric vehicle industry; non-oil GDP; economic diversification; UAE.
Industry 4.0 and Big Data: Role of Government in the advancement of enterprises in Italy and UAE
by Lucio Poma, Haya Al Shawwa, Elisabetta Maini
Abstract: Industry 4.0 and Big Data act as a lever for increasing new competition between companies as it becomes too large and complex to be faced or internalized by these companies alone, even large ones. This article examines industry 4.0 and Big Data in Italy and the UAE. Very structurally different countries but similar in apprehending this is the age of data and already realized significant technological leaps on their own territories. Active intervention of government becomes crucial and central in the elaboration of industrial and technological policies towards the enhancement of a dynamic ecosystem and interactive environment where data can flow more smoothly along the production chain. In order to attain such systemic and organizational environment, governments create its solid foundation initially by fully utilizing the architecture of Big Data internally.
This paper addresses the current role of government and further actions needed as a stimulus, creator and originator of a cognitive and interactive environment for Big Data.
Keywords: Big Data; Industry 4.0; internet of things; cyber physical system; mass customization; open data; human resources; flow of knowledge; innovation; government; Emilia-Romagna; Italy; UAE.
Bank Ownership concentration, board of directors and loan portfolios quality: evidence from the Tunisian banking sector
by Nadia Ben Sedrine Goucha
Abstract: This paper examines the impact of banks corporate governance mechanisms in terms of ownership structure, board size and composition on the loan quality in the Tunisian banking sector. To do so we use a panel data method and a sample that contains the ten largest banks in Tunisia over the period 2001-2012. Our main findings show that ownership concentration worsens loan quality in the Tunisian banking sector. However, the presence of independent members on the board of directors improves loan quality through better monitoring actions. Our findings also suggest that Tunisian banks with CEO duality manage better their loans.
Keywords: Bank ownership concentration; bank board; loan quality.
Analysis of cost efficiency in GCC and Jordans insurance sectors: DEA approach
by Abderrazak Bakhouche, Welcome Sibanda, Randa Al Chaar, Mohamed Boulkeroua
Abstract: This paper provides a comprehensive analysis of cost efficiency of insurance firms operating in GCC countries and Jordan during 2009-17. The DEA approach was applied to estimate cost efficiency and its components-- allocative, pure technical and scale efficiency, inputs and outputs variables are defined according to the value-added approach, and in the second-stage regression analysis, we test a set of hypotheses on the relationship between efficiency and selected variables capturing firms heterogeneities and other environmental variables controlling for market structure, economic conditions and governance. The results point to the substantial efficiency improvement potential in all markets under study with large discrepancies in efficiency scores across the GCC countries suggesting divergence and difference stage of sector development and heterogeneity of regulation. The findings reveal that firm-specific variables such as size, profitability, solvency and investment concentration, have impact on efficiency, while no significant difference in efficiency was found between conventional and Takaful insurance firms.
Keywords: cost efficiency; technical efficiency; allocative efficiency; scale efficiency; pure technical efficiency; DEA; GCC; Jordan; MENA; financial institutions; insurance firms.
MEDIATING EFFECT OF BUSINESS PROCESS PERFORMANCE ON INNOVATION STRATEGY-COST PERFORMANCE RELATIONSHIP: CASE STUDY OF MANUFACTURING INDUSTRY IN EAST JAVA PROVINCE, INDONESIA
by Nanik Kustiningsih, Bambang Tjahjadi
Abstract: This study investigates the mediating effect of business process performance on innovation strategy-cost performance relationship of manufacturing companies in the East Java Province, Indonesia. As many as 170 managers from 170 companies participated in this study. Purposive sampling technique was employed and questionnaires were used to collect data. The data were analyzed using the PLS-SEM (partial least square-structural equation modeling) approach. This study provides the new insight on how business process performance mediates the relationship between innovation strategy and cost performance. The findings of the study suggest that managers need to improve their innovation strategy and business process performance to optimize the companies cost performance.
Keywords: innovation strategy; business process performance; cost performance; manufacturing industry.
Application of System Dynamics Methodology in Performance Management System: A Case Study of Indian Automotive Firm
by Neetu Yadav
Abstract: The study aims at showcasing the application of system dynamic (SD) methodology for developing system dynamics based performance management model where one of the Indian automobile manufacturing firms have been chosen as the context. Flexible strategy game-card has been used as a theoretical basis for developing the performance management system (PMS). The model emphasizes looking beyond the dynamics of leading and lagging performance indicators and capturing dynamics of strategic interventions and firms performance. The study adopts SD methodology and its tools as causal loop diagrams and feedback loops to capture dynamics of strategic interventions and lagging performance indicators. isee systems STELLA 10.0.2 software package has been used to develop the stock-and-flow diagram. The results of SD model simulation portray that introduction of new products in light commercial vehicles segment and value-addition by training and development of staff lead to increase in the sales volume, thus supporting formulated hypotheses. This study goes beyond dynamics of leading-lagging performance indicators and highlights interaction of strategic interventions/actions with firms performance that enables managers to visualize systems perspective and feedback on actions taken.
Keywords: Flexible Strategy Game-card; Firm’s Performance; System Dynamics Modelling; Strategic Interventions; System Dynamics based Performance Management Model.
Economic Effects of Growth Strategies on the Performance of Quoted Manufacturing Firms in Nigeria
by Samson Abolarinwa, Cosmas Asogwa
Abstract: Growth strategies, which can create value, have become part of innovative firms. However, they can bring about value destruction when they are not coherent. While research has explored the effect of growth strategies on firms financial performance, there is little evidence of how internal and external growth strategies, management efficiency, and solvency ratio interact to explain manufacturing firms economic performance in Nigeria. Thus, we use a sample of 144 firm-years of quoted manufacturing Nigerian firms to examine the economic effect of growth strategies for the period between 2014 and 2017. After controlling for firm size, management efficiency, leverage, and liquidity efficiency, we found that internal growth strategies such as aggressive profit retention and new product development improved manufacturing firms economic performance. Internal growth strategies yielded positive economic effects on returns on assets and equity. Firms that pursue growth through market deepening yielded high market shares that created economic values for investors, as reflected in returns on assets and equity. However, external growth strategies, such as acquisitions and conglomeration, negatively affected firms returns on assets, though conglomeration strategies enhanced equity investors stakes. The positive effect associated with internal growth strategies is dependent on good management efficiency in terms of asset utilisation and good liquidity management. Large manufacturing firms experienced relatively low returns on equity. This moderating effect suggests that growth strategies should be pursued when firms experience an increasing return to scale. Otherwise, inefficiency in assets utilisation and negative return to scale cancel out any potential positive economic effects of a growth strategy.
Keywords: Growth Strategies; Economic Effect; Performance; manufacturing firms; internal growth; external growth; performance management; International journal; Nigeria.
Special Issue on: TBM 2019 Transformative Business Models – Disruptive Innovation in Finance, Logistics and Tourism
Knowledge of Islamic Banking and Bank Customer Satisfaction in Afghanistan: An Exploratory Analysis
by Lina Safi, Boris Abbey, Nadia Ben Sedrine Goucha, Omar Al Serhan, Kimberley Gleason
Abstract: Through the lens of the Theory of Reasoned Action, we focus on Afghanistan banks customers knowledge of Islamic banking and their attitudes towards Islamic banking products and factors that motivate their selection of Islamic banking versus conventional banking products in Kabul, Afghanistan. We examine the products used by bank customers as well as the motivations for using Islamic banking products as an alternative to the available conventional banking products. Of those who use Islamic banking products, most do so because of their religious beliefs, as well as greater perceived efficiency of Islamic banking services. Using a path regression, we find that higher levels of customer satisfaction of Kabul banks customers are achieved when the use of Islamic banking products occurs by customers with greater knowledge of Islamic banking products. These results are consistent with the TRA explanation of rational choice as applied to banking products operationalized through the obtainment of knowledge related to Islamic banking.
Keywords: Afghanistan; Kabul; Islamic banking; Theory of reasoned action; Customer satisfaction.
Do Corporate Characteristics Improve Sustainability Disclosure? Evidences from UAE
by Kennedy Prince Modugu
Abstract: The study examines the relationship between corporate attributes and ESG disclosure among selected companies in United Arab Emirates. The corporate attributes are company size, profitability, liquidity, industry sensitivity and leverage. The study adopts a cross-sectional approach to data collection. The population consists of 67 companies whose equities are publicly listed in Dubai Financial Market as at 31st December, 2017. We use the purposive sampling technique to select 32 companies. The descriptive statistics reveals a maximum disclosure score of 78 and a minimum score of 32 out of a total score of 100. The study employs the multiple regression analysis technique in data analysis. The results of the regression analysis show that only company size, industry sensitivity and liquidity are significant determinants of ESG disclosure in UAE. Our findings show that firms with larger asset base and good degree of liquidity disclose more ESG information. However, contrary to prior studies, firms in the service sector are more inclined to ESG disclosure than manufacturing firms. We recommend that the board of directors should make sustainability reporting a front burner in its corporate strategy. In addition, the regulatory authorities should legalize ESG disclosure among UAE firms. Finally, lenders of corporate funds should make certified ESG report as a major condition precedent to obtaining funds.
Keywords: corporate characteristics; sustainability; disclosure; determinants; ESG; UAE.
Can Crypto Currencies Overtake the Fiat Money?
by Avaneesh Jumde, Boo Yun Cho
Abstract: Since the awakening of Bitcoin, the terms Block chain, Crypto currencies have become the buzz words. Crypto currencies were thought to be very promising and boomed feverously in the hope that it might be capable of replacing the traditional currency. On this background, the paper has following objectives 1. To compare the fiat money with crypto currency. 2. To study the potential of crypto currency of being capable of replacing the Fiat moneyrn3. To propose the framework to evaluate the sustainability of the possible candidates to be the dominating currency The researchers have applied the Analytic Hierarchy Process (AHP) method to derive ratio scales from paired comparisons and rated the expected performances for two alternatives. 9 factors were selected with the hierarchical structure to measure the relative performance of proposed candidates. The results found that fiat money is still preferred to crypto currency due to many reasons.
Keywords: Crypto- currency; Fiat Money; Digital currency; Block chain; traditional money; medium of exchange; store of value; unit of accounting; functions of money; Analytic Hierarchy process (AHP).
ROBOTICS AND GENERATION Z- APPREHENSION OR ATTACHMENT?
by Roberta Fenech, Priya Baguant, Ihab Abdelwahed
Abstract: Developments in technology have resulted in rapid change over the past decades. Greater change is forecasted in the world of work as artificial intelligence and robotics become an integral part of the work place. The purpose of this exploratory research is to discover the positive emotional response of attachment and apprehension towards robotics of Generation Z, those who will soon be entering the workforce or who have already entered the workforce. This exploratory study contributes to existing knowledge as it is based in the UAE and also studies gender differences within Generation Z. The assessment of attachment and apprehension are important in a change process and may serve to speed up or halt a change process. The theoretical framework in this study is the change theory by Lewin (1951). A quantitative methodology was adopted in this research using two measures to measure apprehension towards robots and one measure to measure attachment towards robots. In total 116 participants filled in a questionnaire consisting of the Negative Attitudes towards Robots Scale (NARS), Robot Anxiety Scale, (Nomura, Suzuki, Kando and Kato, 2006) and an 8-item scale of product emotional attachment by Schifferstein and Zwartkruis-Pelgrim (2008). The main finding is that overall Generation Z participants are in a process of change as they find themselves in a state of ambiguity and are undecided about their emotions towards robots in the workplace however lean more towards feeling apprehensive, fearful and detached. This finding applies to both the male and female participants in this study. Recommendations are given for educational institutions guiding Generation Z through this change process as well as for further research.
Keywords: Generation Z; Robotics; Emotions; Attachment and Fear.
Financial Traits of Bankruptcy, Empirical Evidence from Bosnia and Herzegovina
by Nedim Memic, Deni Memic
Abstract: Bankruptcy prediction has been in the focus of research for many years. The benefits of bankruptcy predictive ability are several and possibly beneficial for all business entity stakeholders. This paper has an ultimate goal of revealing most significant financial traits of bankrupt companies as opposed to non-bankrupt companies. The research includes 50 bankrupt companies based in Federation of Bosnia and Herzegovina. They were matched with a random sample of 100 non-bankrupt company-years. Financial ratios of companies used in the sample were derived from their financial statements. Using logistic regression analysis and ANOVA, we were able to construct a several bankruptcy prediction models. The comprehensive model exhibited predictive ability of more than 95%, with high predictive ability of both bankrupt and non-bankrupt companies. The research has shown that bankrupt companies do leave significant financial traits that can be detected prior to official bankruptcy proceeding filing, which can be beneficial for all stakeholders.
Keywords: Bankruptcy; insolvency; prediction; financial ratios.
Methodology of Costs Assessment for Customer Transportation Service of Small Perishable Cargoes
by Natalya Shramenko, Dmitriy Muzylyov, Vladyslav Shramenko
Abstract: Application of the offered methodology of the costs assessment of customer service for transportation of small perishable cargoes in urban areas makes it possible to choose the rational brand and cargo capacity of the truck, depending on the number of delivery locations in conditions with constantly changing demands for transportation services. The developed mathematical and imitation models allow simulating the process of small perishable cargoes delivery in urban areas at rendering transportation service to small cargo customers, including the service of retail chain shops, hotel and restaurant businesses. These models allow rapid estimating the specific expenses for perishable cargoes delivery depending on price values and technological parameters. The methodology is of interest for practical use for PL-forwarders at the assessment of possible transport costs in conditions of the constantly changing demand for transport services, as well as for customers (malls, restaurants, hotels, mini-markets) of small perishable cargoes.
Keywords: cargo capacity of the automobile; distributive routes; delivery; small consignment; perishable cargoes; technological parameters; transport servicing (transportation); model; costs.
Young Adults Financial Literacy and Overconfidence Bias in Debt Markets
by Andrzej Cwynar, Wiktor Cwynar, Wiktor Patena, Welcome Sibanda
Abstract: The aim of this paper is to investigate the relationship between overconfidence in financial literacy, participation in debt markets and the likelihood of making wrong borrowing decisions. The premise of the paper is that some economic agents, young adults in particular, are overconfident and, as a result of their misconceived and misdirected confidence, are more likely to enter debt markets, take on too much debt and end up in default. The paper investigates the possible impact of financial literacy overconfidence on borrowing and the quality of decisions made by overconfident borrowers.
The paper exploits logit and linear regression models using data from a purposive sample of 600 adult Poles aged between 18 and 35 who were surveyed via computer-assisted web interviewing, administered by a professional market and opinion survey agency, DRB Polonia, in partnership with the authors.
The results indicate that the overconfident participants were more likely to borrow. They had almost 37% less odds of being classified as non-borrowers than other respondents. We obtained mixed results regarding the link between overconfidence and debt behaviour. Simple binary measure of overconfidence turned out insignificant in predicting debt behaviour, however the quantitative measure of overconfidence were found significantly and positively related to unhealthy debt behaviour.
We cannot fully generalise our results, as we cannot rule out model- and sample-specific effects in our study. Even though we used a large sample of young adults, we are not certain that the observed patterns and relationships would hold in other national samples. To some extent, our results may be affected by our variable choice and sample frame. The respondents may have been unwilling to report the true picture of their debt behaviour versus their levels of confidence.
The findings offer policy makers an insight into the behaviour of economic agents in debt markets. The participation of overconfident economic agents in debt markets may lead to imperfect markets with sticky interest rates, with the markets not clearing at equilibrium. This has negative consequences for the financial sector and the overall economy. Overconfidence generates incompetent borrowers, resulting in sub-optimal debt markets. Policy makers may need to run educational programmes that address the behavioural aspects of overconfidence, in order to empower society and improve borrowing behaviour and overall economic performance.
Keywords: Young adults; financial literacy; debt markets; overconfidence.
A conceptual framework for reverse logistics challenges in e-commerce
by Danie Nel, Amanda Badenhorst
Abstract: Due to increased levels of customisation, supply chains have become more complex as customers demand more in terms of products and service offerings. E-commerce, or online buying, is but one initiative implemented by firms to respond to these demands. However, online buying has resulted in a significant increase in online returns. Online returns are costly and have posed several challenges to retailers and other upstream supply chain members. These challenges impact firms profitability and, thus, need to be addressed. Unfortunately, many firms find it difficult to track or document reverse logistics, while some blatantly neglect reverse logistics costs. This article proposes a conceptual framework for reverse logistics challenges in e-commerce to address and manage some of the main challenges for online returns. There are several reasons for online returns and firms need to identify these reasons. In doing so, potential solutions are provided to address online returns challenges which in turn may enhance business performance. The conceptual framework provides the blueprint for this.
Keywords: reverse logistics; online returns; e-commerce reverse logistics; e-commerce returns; supply chain management; returns process.
Introducing a process for radical supply chain risk management
by Danie Nel, Horst Simon
Abstract: Todays competitive environment is becoming more hostile than ever and amidst more stringent customer demands, supply chains are competing against each other in ever-increasing volatile environments. As levels of customisation increase, the need for supply chain agility and flexibility across the entire supply chain also increases while pressures to be more efficient are never relaxed. Firms have become more dependent on external supply chain partners as each supply chain member focuses on its own core competencies. These increasing supply chain risks can thus be linked to the internal supply chain and most certainly also to the external market and macro environments of the supply chain. Therefore, supply chain risks need to be managed across the entire supply chain. Many traditional risk management models exist. However, very few of these models focus on the importance of a risk management culture within the firm. This article highlights the importance for firms of having a risk management culture embedded into their risk management strategy by introducing a radical supply chain risk management process to manage risks across the supply chain.
Keywords: supply chain risk management; risk management; risk management culture; radical supply chain risk management.
Digital Technology Disruption on Bank Business Models
by Welcome Sibanda, Esinath Ndiweni, Mohamed Boulkeroua, Abdelghani Echchabi, Tabani Ndlovu
Abstract: The aim of this paper is to investigate the impact of digital technology, manifesting itself in Fin-Techs, on banks business models. The premise of the paper is that the paradigm shift to digital technology is exerting pervasively disruptive influence on their business models. Despite the evident digitization benefits, unambiguous bank-Fin-Techs -business model collaborative nexus analysis from a high-income transition economy perspective remains unexplored. The paper explores this sub-space by exploiting a drop/pick-up survey questionnaire administered on a sample of 68 banks operating in the UAE. The banks quantify their attitude to disruptive business model adoption using a 20-question questionnaire on a 5-point Likert scale. The results are aggregated and analysed to obtain thematic models emanating from the adoption of disruptive models, which are then interpreted as either in-house or independent Fin-Tech competitive or collaborative models.
The results indicate that the digital technology is transforming the banking ecosystem from classical bank-to-bank competitive models to either bank-to-Fin-Tech models or bank-to-Fin-Tech collaborative open business models. Classical banking is being disintermediated into multi-modal, multi-directional, fragmented modular, smaller, faster, nimbler and customizable models, with digital technology generating collaborative opportunities never seen before. While this is a sample-wide phenomenon, it is more so for international banks from high-income developed economies, driven by domicile-country innovation platforms, followed by UAE-domiciled banks, relying on the governments digitization efforts.
The sample period is short when the frenetic pace of technological developments is considered, which may hinder the generalisability of the findings. Lengthening the sample-period may give a clearer picture on business model evolution and yield meaningful insights on the impact of disruptive technology on bank business strategies. The results give banks, tech-vendors and policy makers a better insight of the impact of disruptive dig-techs on bank business models from a high-income transition economy perspective. The paper contributes to research on banking models by providing insights on how the traditional banking ecosystem is disrupted by technology from bank-to-bank competition to either bank-to-Fin-Tech competition or bank-Fin-Tech collaboration, creating an open banking system of collaborative business models
Keywords: collaborative business models; disruptive technologies; digital banking; fin-tech; banking ecosystem; fragmented modular models; digital multi-channels.
An Empirical Study of the Behaviour of Real Exchange Rates in the UAE
by Shibeshi Ghebre Kahsay, Wiktor Patena
Abstract: During the last thirty to forty years the world has witnessed dramatic changes in trade and investment flows. The value of world merchandize trade has increased by over 130 percent. Trade to GDP ratio has grown from 43 percent to 56 percent. International financial flows have also grown by lips and bounds. For example, the average growth rate of FDI flows in 2007 reached 22 percent. These development in trade and investment is mainly driven by advances in technology that reduce transport and communication costs, the removal of trade and investment barriers and political and social reforms. As a result of the shrinkage in economic space the world has become more and more interdependent.rnThe real exchange rate is an important macroeconomic variable that links the domestic economy to the rest of the world. Its importance has grown substantially with the rise in global interdependence among countries. The real exchange plays two important roles in the economy: as a relative price of home and foreign goods, it serves as a measure of competitiveness of the domestic economy. The real exchange rate also moves to maintain internal balance where the output gap is kept at zero and external balance where the current account is financed by sustainable capital flows.rnThis paper reviews the different concepts of the real exchange rate and its fundamentals. Using data from the United Arab Emirates we estimate the relationship between the real exchange rate and its fundamental determinants such as oil prices, terms of trade, productivity differentials, the government spending as percent of GDP. We employ time series models to determine the extent to which the real exchange rate of the UAE responds to the fundamentals. We report results and the statistical procedure for estimation and inference using the country variables and data from 1980 to 2016. The paper further, considers factors specific to the UAE that might help explain the observed behaviour of their real exchange rates.rn
Keywords: Keywords: UAE; Real Effective Exchange Rates; oil prices; productivity; competitiveness; public policy.
Special Issue on: TBM 2019 Transformative Business Models – Disruptive Innovation in Finance and Logistics
Integrated Business-Criterion to Choose a Rational Supply Chain for Perishable Agricultural Goods at Automobile Transportations
by Dmitriy Muzylyov, Natalya Shramenko, Vladyslav Shramenko
Abstract: The purpose of this research is to design a methodology for the rational supply chain choice of perishable cargoes. The proposed method simultaneously takes into account the interests of cargo-owner and transport company considering the technological features of transportation. The integrated business-criterion for a choice of the rational supply chain of perishable agricultural cargoes must be based on the simultaneous achievement by the maximal level of delivery quality and the maximal profit. The methodology is of interest to practical use for the assessment of the possible logistic costs for a carrier. This approach also considers criteria of the quality transportation which are interesting for the customer. The received dependencies allow choosing a rational supply chain on cargoes delivery on small distances and for main transportation. The approach has potential interest for the logistic companies which are carrying out planning during delivery of mass cargo and one-time orders.
Keywords: cargo; trucks; goods; supply chain; business; criterion; route; costs; quality; transport servicing; transportation; model.
Special Issue on: TBM 2019 Transformative Business Models – Disruptive Innovation in Finance and Logistics
Determinants of shareholder value creation- platform versus traditional business models
by RACHNA BANERJEE, Sudipa
Abstract: The digital era has given an opportunity to other business to disrupt the traditional markets and migrate to platform models to make themselves more relevant in todays digitalised economy. The value created in platform model is multi-way where a consumer and a producer continually switch roles, which is unlike the linear value creation model of a Traditional company. This study contributes to the literature on shareholder value creation by analysing the effect of traditional accounting based and economic based measures on value for platform and traditional business model companies, aimed at identifying and presenting the financial performance (profitability) measures relevant to these two contrasting business models. This study includes a sample of 16 heterogeneous companies selected from the top 100 largest public companies in the world by market value, from 2008-2017. Using random and fixed model, we find that accounting based measures performed better than economic based indicators of value as measured by stock returns. EPS growth is the best value driver for both platform model and traditional firms. DPS and ROE were also found to be significant indicators of value creation for traditional model companies, whereas for platform model, the effect of DPS is insignificant.
Keywords: shareholder value; platform business model; traditional business model; stock returns.
Special Issue on: TBM 2019 Transformative Business Models ?? Disruptive Innovation in Finance, Logistics and Tourism
Value Creation Efficiency of Polish Construction Companies listed on Warsaw Stock Exchange during 2010-2012
by Andrzej Jaki, Wojciech Cwiek
Abstract: Measuring the efficiency of enterprise value creation is the basis for assessing the profitability of capital investment by its shareholders. The conceptualization and application of the value creation measures were related to the creation and development of the value-based management concept that would orientate the entire enterprise management system to the permanent pursuit for multiplying its market value. These measures also enriched the financial analysis, becoming tools for the analysis of the enterprise value. In connection with the business valuation methods, they created the possibilities of measuring, analysing, and evaluating the synthetic and partial effects of enterprise value creation. The purpose of this article is to analyze the value creation efficiency of Polish construction companies listed on the Warsaw Stock Exchange along with showing the usability and possibility of using the mentioned measures to measure and assess the value creation efficiency of selected construction companies in Poland during the years of 2010-2012 (that is, during the period of preparing for UEFA Euro 2012 [organized in Poland] regarding the relative accumulation of building investments related to the sports, road, and tourist and recreational infrastructure). This will enable us to answer the following research questions:
How did the accumulation of construction investments financed from the EU funds, national public funds, and private funds influence the efficiency of the value creation of the analysed construction companies?
Did the accumulation of these investments contribute to an increase in the efficiency and development of the construction companies?
What was the impact of these investments on the business continuity risk of construction companies in Poland?
The article is based on an analysis of the literature and the use of financial analysis tools in the form of value creation measures, constituting a scientific reflection presented from the perspective of the few years that have passed since the analysed period.
Keywords: value-based management; measures and efficiency of value creation; business continuity risk; construction sector.