International Journal of Economics and Business Research (56 papers in press)
Convergence, Context, Crossvergence: Contending Perspectives on Strategic Management in Asia vs. the West
by Maria Nathan
Abstract: In what ways are the strategic management practices within Asia and. the West similar and different? In search of an answer to this question, researchers have given shape to three perspectives: (1) universal convergence suggests that for varied reasons there is general practice among Asian and Western firms; (2) contextualism focuses upon cross-national firm difference, and (3) crossvergence studies the synergistic effects of convergence and divergence upon Asian and Western firms. Research findings to date depict complex, countervailing forces operating both within and outside firms, nations, and across the globe. It is argued that rejection of any one perspective is not appropriate for various reasons and could deter progress toward a clearer understanding of difference, similarity, and hybridization between Asian and Western firms. Recommendations for future research are offered, including alternative frameworks for reconciling the three perspectives.
Keywords: universal convergence; Asian strategic management; strategic crossvergence; contextualism; cross-national strategic management; global strategic management.
Easing the Burden of Non-Tariff Barriers: A Regional and Firm-Level Data Analysis
by Farnaz Farnia, Nathalie De Marcellis-Warin, Thierry Warin
Abstract: This article aims at providing a firm-level analysis of Non-Tariff Barriers (NTBs) categories based on the importance of exports for domestic firms across diverse regions in the world. It exploits cross-sectional data from the World Bank Enterprise Surveys of 10,266 firms across 81 countries covering the period from 2006 to 2014. The study focuses on four NTBs: customs and trade regulations, tax rate, tax administration, and business licensing and permits. Firms were analysed according to levels of exports and locations. The results show that tax rate and business licensing and permits are more likely to be rated as a severe barrier. The tax administration and customs and trade regulations are more probable to be ranked as minor or no obstacle to trade. The business licensing and permits and tax rate are more likely to be ranked as a severe barrier for the firms within the 51-75% level of exports. In addition, the majority of the firms with 26-50% of exports are more likely to rank tax administration and customs and trade regulation as severe barriers.
Keywords: non-tariff barriers to trade; exporting firms; upper-middle income countries; lower-middle income countries; low-income countries; enterprise survey.
The Rationality of Irrational Decisions: A New Perspective of Behavioral Economics
by Mahmoud Askari, Ghaleb El Refae
Abstract: This paper is an attempt to contribute to the field of behavioral economics by proposing a new perspective of utility and rational decision making. We use the method of Thought Experiment, as well as, hypothetical examples of decision making to explain the rationality of decisions that might be seen by economics as irrational. We hypothesize that all decisions are rational at the individual level, and that all decisions are justified by decision makers and maximize the decision makers perceived utility. To do this, we redefine rationality at the decision makers level, and we explain how individuals customize rationales for their own actions to make decisions that maximize their perceived utility. We also redefine utility to include both tangible and intangible dimensions, and we discuss how the customization of rationales and the perception of utility at the individual level make all decisions rational. We also propose a model to hypothetically calculate full utility attainment (maximum utility) by the individual.
Keywords: Rationality; Irrational Decisions; Perceived Intangible Utility; Behavior Economics.
Macroeconomic Determinants of Non-Performing Loans in GCC Economies: Does the Global Financial Crisis Matter?
by Hisham Abdelbaki
Abstract: This paper uses the OLS, fixed effects, Arellano and Bond GMM and VAR model to empirically examine the macroeconomic determinants of non-performing loans in GCC through the period from 1998 to 2016. The main findings conclude that non-oil GDP growth, domestic credit to private sector to GDP ratio and inflation rate have negative effects on non-performing loans. Whereas, interest rate and financial crisis have positive effects on non-performing loans. The findings also suggest that the domestic credit to private sector to GDP ratio is the main factor affecting non-performing loans in the short run. While, interest rate is the main factor which influences non-performing loans size in the long run is a faster during the period before the financial crisis.
Keywords: non-performing loans; fixed effects; panel OLS; Arellano and Bond GMM; VAR; GCC economies.
Dupont de Nemours and the Origin of the Maxim Laissez Faire, Laissez Passer
by Robert Prasch, Thierry Warin
Abstract: Dupont de Nemours begins his Lettre
Keywords: laissez-faire; capitalism; economic thought; political economy.
Do TQM Practices Improve Organisational Success? A Case Study of Electronics Industry in the UAE
by Haitham Alzoubi, Gouher Ahmed
Abstract: Total quality management (TQM) is an inescapable strategic and business development tool, and there is a widespread consensus that implementation of total quality management plays a vital role in achieving the success of the organisations. This study investigates the relationship between the practices of total quality management and the organisational success with reference to the electronic industry in the United Arab Emirates with a sample of 50 firms in 2016-17. The literature on the TQM widely supports the success of TQM practices in making their organization successful. The results of this exercises arrived through regression, co-relation, etc. the methods are also in consonance with the studies in the field, proving TQM to be a pure business /organization success tool more so in the electronics in the UAE, open to global competition, calling for a culture of quality and commitment to TQM by the management.
Keywords: Quality; Total Quality Management; Organisational Success; Electronics Industry.
An exploration into the household pipe-borne water consumption: Empirical evidence from Sri Lankan household surveys
by Asankha Pallegedara
Abstract: This paper analyses determinants of households' pipe-borne water consumption in Sri Lanka using data covering the period 1990 to 2013. Employing a two-part estimation model, the study finds that household income, household size, level of education of the household head and age of the household head are positively associated with the likelihood of consuming pipe-borne water and monthly consumption expenditures on pipe-borne water. Moreover, households' demand for pipe-borne water has significantly increased over the years. Therefore, expansion of the pipe-borne water supply network along with demand management strategies would be beneficial to cater the growing demand for pipe-borne water.
Keywords: pipe-borne water; household surveys; two-part model; water consumption expenditures; Sri Lanka; econometric estimation; descriptive statistics; developing countries; water supply schemes; urban areas; income level.
The Relationship between Organizational trust and Organizational Identification and its effect on Organizational Loyalty
by Feras Al Shalabi
Abstract: Most of management literature in general and organizational behavior in particular agree on the importance of organizational trust and organizational identification in the success and sustainability of organizations, these variables significantly affect important indicators of success in the organization such as organizational citizenship, organizational loyalty, employee satisfaction, etc. The purpose of this study is to examine the relationship between organizational trust, organizational identification and organizational loyalty in the private Jordanian hospitals, providing a framework of four scenarios for the relationship between these variables and working on determining the optimal relationship between the three variables. The study framework included the direct relationships of organizational trust and organizational identification and its impact on organizational loyalty, the indirect effect of organizational trust on organizational loyalty with the existence of organizational identification as a mediator variable, and organizational identification on organizational loyalty with the existence of organizational trust in organizational loyalty as a mediator variable. The study showed that all relationships in the study framework had a significant effect on organizational loyalty. However, the optimal relationship was the effect of organizational identification in organizational loyalty with the existence of organizational trust as an mediator variable.rnrnrn
Keywords: organizational trust; Organizational identification; Organizational Loyaltyrnrn.
INVESTOR SEGMENTATION: HOW TO IMPROVE CURRENT TECHNIQUES BY INCORPORATING BEHAVIOURAL FINANCE CONCEPTS?
by Ronaldo Andrade Deccax, Carlos Heitor D'Avila Pereira Campani
Abstract: This article proposes an improved model of individual investor segmentation. The approach employed consisted of a broad review of studies published in renowned journals in recent decades on the segmentation of individual customers of financial services and on factors that influence financial decision making. The new segmentation model proposed adopts a hybrid approach which combines demographic and psychographic variables that previous research revealed to be the most important. After being tested and improved through future quantitative research, this new model may contribute to the improvement of financial institutions customer acquisition methods and the services they provide, of investors selection of investments and of the regulations that currently govern the financial sector in particular, those which regulate prior suitability verification of investors. The new segmentation model proposed here innovates by incorporating psychographic variables ("rationality", "risk aversion", "overconfidence" and "optimism") from Psychology and the increasingly recognized Behavioural Finance area.
Keywords: Behavioural Sciences; Investor Suitability; Financial Markets; Market Segmentation; Consumer Behaviour.
The Influence of Star Marketing and the Design Characteristics of Idol Goods on Consumer Responses and Purchase Intentions: Focus on Fandom Culture
by Eunjung Park, Wang-Jin Yoo, Inha Oh
Abstract: The purpose of this study was to investigate the effects of star marketing and the design characteristics of idol goods on the responses of fandom-culture consumers and their purchase intentions. In order to proceed with this study, a literature review and questionnaire survey were conducted. The survey was conducted on 229 idol fans interested in idol goods. Results of the analysis are as follows. First, the design characteristics exerted a stronger influence on emotional responses to the idol goods than the star marketing. In addition, we found that instead of star marketing, both the content characteristics and the originality of the design characteristics directly affected cognitive responses. Second, an analysis of the effects of consumer reaction on the intention to purchase idol goods demonstrated that consumers with stronger emotional and cognitive responses had a higher intention to reuse idol goods. In addition, higher perceptions of emotional response led to an increased intention to speak about idol goods. Therefore, this study verified that the emotional reaction stimulating the emotion of consumers plays the most important role in creating the intent to purchase idol goods.
Keywords: idol goods; star marketing; design characteristics; consumer response; purchase intention; fandom culture.
Asymmetric impacts of foreign exchange reserves on the exchange rate in Korea
by Chee-Hong Law
Abstract: This paper investigates the impact of foreign exchange reserves on the value of the Korean Won relative to the US Dollar using a comparison of linear and non-linear autoregressive distributed lag estimation. This paper, to the best of the authors knowledge, is the first paper examining the non-linear dynamics between the Korean foreign exchange reserves and the exchange rate. In the linear model, the foreign exchange reserves do not have a significant impact. In contrast, the non-linear models reveal that only the reduction in the reserves will cause the Korean Won to appreciate in the long run. In the short run, increases and decreases in the foreign exchange reserves are significant. There is also evidence supporting the hypothesis of sign bias in long-run and short-run relationships. Additionally, the asymmetric patterns are found for long-run and short-run effects, indicating the importance of measuring the non-linear effects.
Keywords: Korea; exchange rate; foreign exchange reserves; non-linear autoregressive distributed lag.
ECONOMIC GROWTH INFLATION NEXUS & ITS IMPACT ON THE DEVELOPMENT OF THE AUTOMOTIVE INDUSTRY: THE CASE OF TURKEY
by Dilek Temiz Dinç, Aytaç Gökmen, Kaan Ustundag
Abstract: Economic growth is essential for development and welfare of the citizens of a country. Economic development is an intact process involving potentially entire industries in a state. Also, economic growth is associated with macroeconomic indicators such as GDP, exports, imports, budget surplus or deficits, current account balance, interest and inflation rates. Nonetheless, inflation is an important macroeconomic indicator which can influence industrial development positively or negatively. Moreover, the aim of this study is to analyze the impact of inflation on the total automotive industry production in the Republic of Turkey resting on various econometric applications as JJ cointegration test, VECM, Wald test, Gtranger test and LSM.
Keywords: Turkey; economics; growth; inflation; impact; automotive; industry; development; economics; welfare.
THE IMPACT OF IFRS 16 ON AIRLINE COMPANIES: AN EXPLORATORY STUDY IN THE MIDDLE EAST
by Enas Alabood, Murad Abuaddous, Hanady Bataineh
Abstract: The announcement of the IFRS 16 came with a fundamental reformation of lease contracts. The scope of operating lease was narrowed by the IFRS 16 to a degree that could significantly influence a large number of firms worldwide. Accordingly, this study focuses on three airline companies which are operating in the Middle East to investigate the impact of the IFRS 16s adoption. The study explores the expected outcome from capitalizing the operating lease in terms of its impact on financial position and key financial ratios. Each of the three studied companies adopted different operating lease strategies which showed high 77%, moderate 21% and low 0% reliance on operating lease. This generates three different scenarios that have been explored in this study. The compatibility between Imhoff et al. (1991)s model and the IFRS 16s requirements for lease capitalization allowed for an adoption of this model for the current study. Finding suggests that the IFRS 16s adoption will bring many challenges for airline companies. The results can provide an insight about the expected markets reaction to some radical changes in numbers caused by the adoption of the IFRS 16, as well as, the managements reaction for such adoption.
Keywords: IFRS 16; Airline companies; Operating lease; Finance lease; Unrecognized leased liabilities; Middle East; Statement of financial position; Key financial ratios; Constructive Lease Capitalization; Imhoff Model.
Modelling the underlying factors for flexible power plant valuation
by Aristeidis Samitas, Aggelos Armenatzoglou, Ioannis Kinias, Stathis Polyzos
Abstract: In this article the value of a gas fired power plant is estimated through the decision of the power plant's operator to produce electricity. Spark spread options are used as a tool for cash flow evaluation, based on simulated electricity and natural gas prices. We choose to model electricity spot prices through the Schwartz-Smith two factor model and natural gas prices through a mean reverting model. Special characteristics of the plant are those of a typical CCGT power plant, which incorporates flexible and efficient technology. Decisions concerning at starting and running the power plant are made daily and for this reason, plant evaluation is crucial for power plant owners and potential investors. Moreover investments in installing capacity are extremely costly, making the proper evaluation of the investment vital. We calculate annual profits under different cost scenarios and finding a more than 50% profit decrease when incorporating capacity factors.
Keywords: Energy markets;Electricity prices;Natural gas prices;Power plant valuation;CCGT.
The Relative Influence of Generic Essential Drugs and Nursing Staff Supply Shortages on Primary Healthcare Access in Burkina Faso
by Ibrahim Niankara
Abstract: The provision of quality primary health care relies upon the presence of skilled nurse attendants working in an environment where medical supplies including generic essential drugs are available when needed and in an adequate quantity and of assured quality. This retrospective cross-sectional study aims to describe the experience of health care consumers in 36 primary health care facilities located in three of the thirteen administrative regions of Burkina Faso. The data is extracted from the pilot project Community Monitoring for Better Health and Education Services Delivery Project in Burkina Faso. The standard univariate probit specification of the primary care access equation suggests that reported barriers to primary care are statistically endogenous. When this endogeneity is accounted for, the resulting trivariate probit model shows that patients-reported shortages in nursing staff (NS) reduce by 85.5% the likelihood of primary care access, while reported generic essential drugs (GEDs) shortages paradoxically increase this likelihood by 60.3%. In addition, there are significant regional heterogeneities in the effects of these two primary care access constraints. Therefore suggesting that respondents primary care needs in the studied regions are more preventive (health counselling and family planning from nurses), than curative (GEDs consumption). Hence, national policy efforts to increase primary care access and thereby social welfare should consider these findings in setting up resource allocation priorities.
Keywords: Access to Care; Burkina Faso; Generic Essential Drugs; Nursing staff; Trivariate Probit.
Acquisition Profitability and Firm Disclosure
by Brett Kawada, Ryan Peterson
Abstract: This study examines the association between acquisition profitability and firm disclosure. Using a large sample of acquisitions over the period 1998 - 2008, this study provides evidence of a positive association between the profitability of acquisitions and firm disclosure prior to the acquisition. Specifically, firms issuing voluntary management earnings forecasts more frequently prior to the acquisition announcement are associated with more profitable acquisitions. These findings suggest that disclosure can serve as a monitoring function towards encouraging managers to make corporate investment decisions that increase shareholder value.
Keywords: Acquisitions; Voluntary Disclosure; Management Earnings Forecasts; Corporate Investment; Corporate Governance.
Does the Legal System Affect the Cost of External Financing? Evidence from IPO Underpricing of Foreign Firms Listed in U.S. Stock Markets
by Shaokang Wang, Jing Jiang
Abstract: To study the effect of the legal system on the cost of external financing, we examine the degree of underpricing of the IPOs by foreign companies listed in U.S. We find that firms from highly corrupted countries have larger IPO underpricing. The quality of the home-country public law enforcement reduces the degree of IPO underpricing. In particular, the criminal sanction for violations of securities laws is the most significant factor in reducing underpricing. The evidence shows that even when a non-U.S. firm meets sophisticated U.S. regulations and goes public in a U.S. exchange, the degree of underpricing is still influenced by the legal and judicial system in the home country. Following La Porta et al. (2000a), we provide evidence against the functional convergence hypothesis (Coffee, 1999 and 2002).
Keywords: IPO; Underpricing; Functional Convergence Hypothesis; Law and Finance.
Law to Counter Tobacco Companies in the Arab Region: A Look at Jordan and the United Arab Emirates
by Mohammad Nsour, Mutasim Alqudah
Abstract: Many countries have endeavored to limit the consumption of tobacco by enacting laws that impose restraints on its use. The Framework Convention on Tobacco Control 2003 (FCTC) is the first international treaty that addresses tobacco supply and demand measures and establishes essential measures capable of reducing the prevalence of tobacco use and exposure to tobacco smoke. Jordan and the UAE ratified the FCTC respectively in 2004 and 2005 and they enacted legislation that aims to reduce tobacco consumption in both countries. However, the issue of tobacco control in Jordan and the United Arab Emirates has been both controversial and challenging as tobacco use in Jordan and the UAE remains very high. This paper examines whether both countries have adopted legislation that is compatible with their international obligations, particularly, the FCTC and whether it is possible to sue tobacco companies in the aforementioned countries to seek injunction and damages. We conclude that tobacco litigation against tobacco companies is possible, by either individual litigants or governments or other legal persons who suffered injury from tobacco producers.
Keywords: Tobacco Control; FCTC; Litigation; Liability; Jordan; United Arab Emirates.
Threshold of Gibrats Law and Firms Growth Strategy
by Taewon Kang, Chulwoo Baek, Jeong-Dong Lee
Abstract: Early research on the relationship between firm size and growth has generally drawn dichotomous conclusions either supporting or rejecting Gibrats law. Recently, empirical evidences indicate that Gibrats law tends to be rejected for small firms and accepted for large ones. However, this does not provide an accurate threshold for where Gibrats law works differently and does not consider how the growth strategy should change across threshold size. This paper aims (i) to estimate the accurate threshold size if the relationship between firm size and growth is non-linear, and (ii) to analyze the change of firms growth strategies across the threshold size. We estimate threshold regression using panel data of Korean manufacturing firms. The results indicate that the threshold is located around sales of 23 million dollars. Moreover, R&D collaborations become important to the growth above the threshold, while diversification and being affiliated to a large corporate group contributes to the growth below the threshold.
Keywords: Gibrat’s law; Firm growth; Threshold size; Growth strategy; Threshold regression.
The status quo of employee engagement in Jordanian secondary schools: principals and teachers' perspective
by Nadia Kharbat, Rateb Alsoud
Abstract: This study aimed at identifying the status quo of employee engagement in Jordanian secondary schools from their principals and teachers' perspective. To achieve the research objectives, the descriptive survey approach was adopted. The randomly selected study sample consisted of (205) male/female principals and (377) male/female teachers, from public and private schools in Amman, Jordan. A 19-item questionnaire was developed on employee engagement divided into four dimensions: communication, growth, recognition, and trust. The results of the study indicated that the total degree of the status quo of employee engagement in secondary schools in Jordan from the perspective of their principals and teachers was moderate, as well as all four dimensions of the scale. Furthermore, the findings of the study showed significant differences at (α ≤ 0.05) in the total degree of the study sample's perceptions, attributed to teaching sector and job title, in favor of the private sector and principals respectively. Thus, the researchers recommended setting standards for hiring and assessing school leaders who are responsible for engaging their staff at work, in addition to raising awareness about the significance of the employee engagement factor as a prerequisite for educational development.
Keywords: Employee Engagement; Educational Leadership; Secondary Schools; Principals; Jordan.
Can Bitcoin diversify significantly a portfolio?
by Stavros Stavroyiannis
Abstract: The overall performance of a portfolio is the utmost measure of success for the skills of the portfolio manager. The Sharpe ratio and the modified Sharpe ratio have been some of the most referenced standards used in finance, to evaluate the efficiency of funds and hedge fund managers, however; such an ordering should be accompanied by proper statistical inference. In this work we examine whether Bitcoin can diversify significantly a reference portfolio composed from the five best performers of the Dow Jones Industrial Average in 2017 that is, Apple, Boeing, Caterpillar, Visa, and Walmart. The portfolios are constructed via analytical solutions in the mean-variance framework, constrained optimization for the cases of long-only and risk-parity portfolios, and an equal weight strategy. The statistical significance of the Sharpe and modified Sharpe ratio differences is examined via a variety of tests. The results indicate that Bitcoin can significantly improve only the Sharpe and modified Sharpe ratios of the minimum variance and risk-parity portfolios. On the efficient frontier, the tangent portfolios are dominated by the traditional stocks.
Keywords: Bitcoin; portfolio optimization; Sharpe ratio; modified Sharpe ratio; statistical significance.
Do Institutions Matter for Informal Employment in Jordan, Egypt and Tunisia?
by Asmaa Ezzat, Hanan Nazier, Racha Ramadan
Abstract: The paper shed light on the role of institutions, in addition to values and individual characteristics on the likelihood of being in informal employment in Jordan, Egypt and Tunisia. Using the Labour Market Panel Surveys of the three countries, in addition to the World Value Survey and the World Governance Indicators, we examine determinants of informal employment. Our results show education and values play an important role in the decision of being in informal employment. Moreover, institutions matter in the informality decision.
Keywords: informal employment; informal institutions; formal institutions; Egypt; Jordan; Tunisia.
The Impact of Export Instability on Economic Growth: Sample of MENA Countries
by Samer Abdelhadi, Ala’ Bashayreh, Mohammad Alomari
Abstract: This study aims mainly at investigating the relationship between export instability and economic growth in a sample of MENA countries. For this purpose, the study tested the stationarity of variables using Augmented Dickey-Fuller Test, applied the Johansen cointegration method, and estimated the Error Correction Model using annual data over the period (1990-2016).
Results show that there is a stable long run relationship between export instability and economic growth in Jordan and Egypt. On the other hand, results show a positive effect of export instability on economic growth for both KSA and Algeria on the long run but the effect is not significant.
The study suggests further work and investigation to find innovative ways, to overcome the natural barriers of monopoly placed by developed countries as well as to diversify exports as a procedurethat could mitigate the bad effect of export instability. It is recommended also to enhance investment which stimulates economic growth and hence overcomes the instability problems.
Keywords: Economic Growth; Export Instability; MENA countries.
The Effect of Culture and Organizational Culture on Administrative Corruption
by Salem Al-Jundi, Ahmed Shuhaiber, Shaban Al-Emara
Abstract: There is extensive literature on corruption, such as political and corporate corruption, some of which examines factors influencing administrative corruption. However, to the best of our knowledge, the multivariate influences of culture and organizational culture on administrative corruption have not been tested using an integrative approach. This paper attempts to fill the gap by building and testing a comprehensive model. We test a sample of 677 responses that reflect the prospective view of the public in Basra, Iraq, using the partial least squares structural equation modelling (PLS-SEM) approach. Our study finds that corrupt culture and weak organizational culture have direct effects on administrative corruption, while corrupt culture leads to weak organizational culture. The latter mediates the impact of corrupt culture on administrative corruption. The higher level of social class, the lower the impact of corrupt culture on administrative corruption.
Keywords: administrative corruption; culture; organizational culture; public sector; social class; structural equation modelling; partial least squares; Iraq.
Assessing the effectiveness of Monetary and Macro-prudential Policies in GCC Economies
by Hisham Abdelbaki
Abstract: This paper aims to evaluate the effectiveness of the monetary and macro-prudential policies in GCC economies during the period 2000-2013. The main results are that the macro-prudential policies are more powerful compared to monetary policy where the macro-prudential policy shocks explain 14.2% and 10.3% of credit and output fluctuations respectively, while monetary policy shocks explain only 5.5% and 6.4% of credit and output fluctuations, respectively. The main recommendations of the paper are that the GCC countries must move forward and faster in diversifying their economies and should improve the data availability which may require establishing a financial stability coordination committee.
Keywords: monetary policy; macro-prudential policy; GMM estimator; VAR model,GCC countries.
Short and long-run linear and nonlinear causality between FDI and GDP for the US
by Iias A. Makris, Stavros Stavroyiannis
Abstract: Recent severe recessions demonstrated an urgent need for identifying and forecasting on the impact of specific macroeconomic indicators. Investment spending is considered to be a crucial factor of growth, with many researchers to focus on the crucial contribution of foreign investment in recipient economies. However, findings are not clear, on whether the relation is bi-directional or not. That issue is crucial for macroeconomic policy spurring a vivid economic debate in regard to whether FDI affects growth, or it is growth that attracts FDI. The purpose of this work is to examine the direction of short and long-run causality of quarterly data of the US gross domestic product (GDP), and the rest of the world, foreign direct investments (FDI) in the US. A well-specified vector error correction model (VECM) identifies a unidirectional short and long-run causality from FDI to GDP. Taking into account that a VECM model is linear, the nonparametric Diks and Panchenko (2006) causality test have been used to examine the direction of any remaining, strictly nonlinear in nature, causality. The results show a unidirectional long-run nonlinear causality from FDI to GDP, and application of the test on the VECM residuals for a variety of embedded dimensions, the same remaining short-run nonlinear unidirectional relationship holds.
Keywords: Foreign direct investments; Gross domestic product; linear and nonlinear Granger causality; Vector error correction model.
The Effect of Organizational Silence on Work Alienation in Service Enterprises
by Ali Sukru Cetinkaya, Selcuk Karayel
Abstract: Human source is one of the most important resources for organizations in the present competitive work environment. But this resource may, consciously or not, be treated in a way that may drive them into silence, and in result alienation, in the organizations. This quantitative research aimed to find out the relationship between organizational silence and employee alienation in organizations. In this context, human-intensive service sectors, mainly health and tourism and hospitality sectors, were surveyed, and 425 valid responses obtained from randomly selected employees working in such service providing organizations. Data was analyzed by employing Explanatory Factor Analysis and linear regression modeling. Results of the research revealed that there was a significant relationship between organizational silence and alienation. Organizations
Keywords: organizational silence; work alienation; service enterprises; health services; tourism and hospitality services.
Corporate social responsibility and accounting conservatism
by Soonwook Hong
Abstract: This study aims to clarify the relationship between sustainability management and accounting conservatism. Perspectives on sustainability management are diverse, including positive, negative, and neutral perspectives. It is worth studying sustainability management given that it has not reached a consensus. This study analyzes sustainability management using ESG rating provided by KCGS as a proxy variable of sustainability management for the listed companies in Korea Exchange from 2010 to 2016. The result demonstrates that the higher the ESG rating, the lower the conservatism. The contribution of this paper is to verify the relationship between sustainability management and conservatism of Korean companies which have not been done recently. In addition, there is an implication in that it provided a starting point for the utilization of the ESG ratings announced by KCGS.
Keywords: Korea Corporate Governance Service (KCGS); corporate social responsibility (CSR); accounting conservatism; accounting transparency.
Evidence for using the CCC (Cash Convertion Cycle) to test the relationship with the corporate profitability: an empirical analysis on a sample of textile Italian SMEs
by Paola Saracino, Roberta Provasi, Patrizia Riva
Abstract: The Cash Conversion Cycle (CCC) is a financial index with increasing importance in recent years since analysts and investors consider it effective for financial analyses. The index provides a correct and truthful situation of the companys ability to cope with its liabilities and allows the company to monitor the cash cycle with reference to purchase operations, production, and sales of products. The CCC is an index expressed by days, so it is necessary to know the Days Inventory Outstanding, the Days Sales Outstanding, and the Days Payable Outstanding to calculate it. The purpose of this research is to analyze characteristics of the CCC and differences with respect to the other liquidity ratios and its relationship with the most relevant financial ratios through empirical applications to verify if it is a reliable index for making decisions regarding a companys cash flow strategy.
Keywords: CCC Cash Conversion Cycle; Crisis early warning; Insolvency KPI; Financial Index; Cash Flow; WCM Working Capital Management; DIO Days Inventory Outstanding; DPO Days Payable Outstanding; DSO Days Sales Outstanding.
Implementation of accounting standards as a company marketing strategy to attract shareholders
by Mohammed Nuseir
Abstract: The present review paper has examined the possibilities of implementing accounting standards and principles as a strategy of the companies to motivate shareholders for investment decisions. This in-depth search of the literature was to find specific financial records and information that could be worthy for marketing to prospective shareholders. There are many views and opinions about the components of financial information that can be mesmerizing shareholders for buying an investment portfolio. Therefore, the ability of organizational accountants is crucial for such stimulation. The accurate, relevant, and appropriate knowledge of the financial activities of an organization can be a useful instrument for marketing. The significant parameters Suggested are Profit and Earnings Information, Expansion of the company, Past Trends in Earnings per share and Dividends of the company, Information relating to the debt and debt levels, Information on companies assets and prospects of additions to the assets. These variables may be crucial, but not conclusive because still closer parameters of an attractive financial information have been suggested as Income Statement, Cash Flow Statement, Balance Sheet, information on number of units and cost of goods sold, annual revenues, gross profit, expenses, Net cash from financing activities, and Cash balance at the end of year.
Keywords: Accounting standards; Financial information; Shareholders; Marketing strategy; Parameters of financial information.
The Role of Business Intelligence in a Knowledge-Based Economy: The Case of Saudi Arabia
by Jamal Aburashed, Ibrahim Almafdali
Abstract: This paper examines the role of business intelligence in creating a more knowledge-based economy in Saudi Arabia. It identifies major enablers that could be utilized to close the existing gaps between business and competitive intelligence. We assess the fundamentals of Saudi Arabias economy to make recommendations for that economy for the long term. Our recommendations are based on our experiences with Saudi culture as well as the current state of the economy. Saudi Arabia has embarked on an ambitious plan to reduce or end its dependency on crude oil as a revenue generator. We have identified seven major issues that may enable movement toward a more knowledge-based and innovative economy. These issues, if addressed, may help decision-makers transform Saudi Arabias markets to a more knowledge-driven economy that is less dependent on oil.
Keywords: business intelligence; knowledge economy; normative economics; Saudi Arabia; Saudi National Transformation Programme; Vision 2030; private-public sector partnership; educational institutions; higher education; skilled labour force; open economy; political will; infrastructure.
The Unfair Competition Lawsuit for Protecting the Unregistered Trademark which is Accompanying a Sound under the UAE Legislation
by Ramzi Madi, Mohammad Almistarehi
Abstract: Sound mark as a type of unconventional trademark is becoming more accepted and registered around the world. The UAE Trademark Law No. (37) of 1992 and its amendments requires registration of any type of trademarks to be protected. However, due to the lack of guidelines for protecting and registering trademark which is accompanying a sound, this raises the question regarding the infringements taking place on such unregistered trademarks. Should they be left without any protection as their holders failed to register them? The aim of this paper is to find out the position of the UAE Trademark Law regarding the unregistered trademark which is accompanying a sound.
Authors focus on case law as it was found, when referring to UAE judicial rulings, that they approved protection for unregistered trademarks. Many judgments were based on the general principles of civil liability stipulated in the Civil Transactions Law or unfair competition. However, this article will tackle only the unfair competition lawsuit.
Keywords: Unfair Competition Lawsuit; Unregistered Trademark; Sound Mark; UAE Legislation.
The Impact of Public Relations on Judicial Institutions Performance
by Muhammad Noor Al Adwan, Majed Ahmad Al-Adwan
Abstract: This study tackles the problem of whether or not public relations practice within different judicial institutions follows a refined style by discussing the concept of public relations and its importance in the development of the judicial system. Besides that, the study identifies procedures for compliance with the rules and standards of this relationship upon considering lawsuits by the judge and dealing with the accused. The study also examines whether or not the procedures of notification and response from all parties of the lawsuit follows a refined style to maintain the performance of the judicial institution in its work to the fullest, and in exchange, preserve the dignity of the accused. The evidence from this study suggests that an internal communication system in the litigation scope should be applied for all litigation proceedings from beginning to end. These procedures must be regulated legislatively in a manner consistent with the general rules and principles governing litigation while taking into consideration the special nature of the judicial system.
Keywords: accused; court; judge; judicial institutions; public relations.
Firms profitability: Evidence from Bahrain and Qatar
by Yomna Abdulla
Abstract: In this paper, we investigate the profitability of Bahraini and Qatari firms during the period 2007-2016. The study focuses on two aspects of profitability, first, its determinants, and second, the impact of the recent decline in oil prices on firms profitability. Using two measures of profitability and applying various panel regression techniques, we find that the main significant determinants of profitability are fixed asset turnover, size, leverage, liquidity and age. The results also document the significant impact of the decline in oil prices on firms profitability. This impact is similar and evident in both countries. Finally, the findings suggest the need for further government aid to be provided to firms during periods of declining oil prices.
Keywords: Profitability; Performance; GCC; Oil Prices; Macroeconomic Variables.
Hainan Province the Chinas New Free Trade Zone and Hainan Medical Tourism
by Khalid Usman
Abstract: The Government of China has promoting the free trade zones of the country to captivate the largest overseas investment. The association between development of tourism and foreign trade is widely recognized. This study discussed the impact of Hainan free trade zone on medical tourism in Hainan province. The Hainan free trade zone plan not only promotes growth in South China, but it also donates to the growth of economy in the Pacific Asia region and the World. Under the free visa entry policy the government can attract tourists from all over the world, and can increase the industry of tourism and to fulfill the requirements of international tourists.
Keywords: Free Trade Zones; Hainan Province; Visa Free Access; Medical Tourism,.
A method for the evaluation of bushmeat as a livelihood for rural subsistence communities in Ecuador
by Elvira Rodriguez Ríos, Benjamín García Páez
Abstract: In this paper, a holistic method is proposed to account for the indices of the relative abundance of game species and their relational value to human communities. The method allows for the consideration of economic, ecological, and cultural factors. Based on econometrics, three regression models are specified: (i) the total cost model, which is used to analyze the costs involved in hunting; (ii) the private economic value model, which is used to assess hunting as an economic activity in terms of the hunter's private profit; and (iii) the social value model, which is used to estimate the net benefits accrued by society from the entire process of bushmeat consumption. This method provides not only empirical findings to show how bushmeat consumption contributes to enhance social welfare but also relevant information for public policy makers concerning the sustainable management of game species.
Keywords: method; valuing methods; bushmeat; livelihood; rural subsistence communities; Ecuador; economic value; social value; relational value; public policy; sustainable use.
Developing a conceptual model for examining social media marketing effects on brand awareness and brand image
by Man Lai Cheung, Guilherme D. Pires, Philip J. Rosenberger III
Abstract: Social-media marketing has attracted increasing attention from marketers, being regarded as one of the most important channels to communicate information about brands to consumers. Despite its growing importance, limited research has examined the influence of social-media marketing communications on consumers' brand knowledge. This paper addresses this gap in the literature, proposing a conceptual model for examining the impact of social-media-marketing dimensions on brand awareness and image across products with different involvement levels. The model seeks to enhance understanding of the influence of social-media-marketing communications on brands, across products with different involvement levels. Suggestions for the empirical investigation of the model are made.
Keywords: social media marketing; SMM; brand management; brand knowledge; brand awareness; brand image; product involvement; Hong Kong.
The historical emergence of small business conducts as an effective instrument for governing economic reform in Jordan; governmentality perspective
by Mohammad Orsan Al-Zoubi
Abstract: For the last three decades, the term 'reform' has been used widely by various scholars to explain the recent economic and social transformations which were undertaken by the modern democratic states. This paper aims to describe how the small business conducts emerged in Jordanian political discourses as an effective instrument for governing the national economic reform; where the old form of governance based on the large business scale failed to achieve socio-economic developments. This article utilises the framework of govern-mentality to analyse and understand the recent changes in mentality of governing the economic reform policy. This framework is comprised of three interrelated elements of governing: the conditions under which particular form of political rationalities direct economic reform; programmes which are designed to make rationalities amenable to interventions; and the technologies of governing which make the authority operable in normalising the behaviours of governed groups.
Keywords: governmentality; Foucault; economic reform; small business conducts; Jordan; political rationality; programmes; technologies of governing.
Effect of Graham's share selection criteria on portfolio return in emerging markets: case of Malaysian share market
by Nadisah Zakaria, Fariza Hashim
Abstract: Graham's model has been broadly investigated in diverse advanced share markets primarily in the USA and Europe as the companies are larger and established in sound economies. However, the selection criteria model is not prevalently examined in emerging countries, regardless of their fast economic growth and diversified sectors in stocks trading. For this reason, this study seeks to analyse the effect of Graham's stock selection criteria on the portfolio returns of the Malaysian stock market. Malaysia's has been recognised as one of the most rapidly growing markets in the Far East region; therefore, testing the market is essential and valid. The study found that notwithstanding its inception in the stock market, the Malaysian stock market was capable of proffering abnormal returns to investors, thus indicating that Graham's model of stock selection is certainly beneficial to investors.
Keywords: net current asset value; NCAV; Benjamin Graham; value investing; abnormal return; emerging countries.
The possibility of solving a potential crisis in a company by applying the measures of structurally multifunctional character
by Josef Kašík, Petr Šnapka
Abstract: This article presents the possibility of solving potential crises in a company, based on the formation and application of business arrangements of multifunctional process character. The solution of the problem in question is systematically connected with a potential transformation analysis within the scope of partial process blocks of a business value-creating chain, and these transformations are intended to enable the fulfilment of the objectives of effective corporate behaviour. In addition to the basic system considerations aimed at solving the problem in question, this article also presents analytical information specifying the emergence of a potential crisis, as well as a system approach to its analysis, followed by information based on a multifunctional process approach to the solution of this situation. The whole issue is specified using an example of particular problem solution in a real business.
Keywords: potential crisis; crisis management; crisis prevention; crisis solution; business potentials; value chain; business transformation process; tolerance limits; potential boundedness; business failures; business efficiency; business system; business problem; business research; multifunctional process approach.
The effect of institutional ownership on listed companies' performance in Vietnam
by Nguyen Minh Ha, Phan Hiep
Abstract: This research aims to study the impact of the institutional ownership on the listed companies' performance in Vietnam. With the data from the annual financial statements of 121 companies listed on the Ho Chi Minh City Stock Exchange, Vietnam from 2008 to 2013, the research results showed that institutional ownership had a significant impact on company's performance through Tobin's Q, ROA and ROE. However, when dividing the institutional ownership into domestic institutional ownership and foreign institutional ownership, there were different effects. And there were differences among changes in levels of domestic and foreign institutional ownership and the companies' performance. In addition, the study also considered the effects of other factors of the institutional ownership including numbers of institutions in the board of management and the representative for the institutional ownership in the board of directors.
Keywords: institutional ownership; ownership; listed companies; performance; Vietnam.
The impact of the 2008 financial crisis on the Greek banking system
by Iraklis Apergis, Sofia Eleftheriou
Abstract: The goal of this paper is to explore the roles of both the 2008 financial crisis and the Greek sovereign crisis in the Greek banking system and more specifically, the effect on its operating expenses and non-performing loans (NPLs). Through the methodology of panel data across all Greek banks, spanning the period 1984-2015, the results document the actual determinants that drive the banking system that were responsible for driving the Greek economy into the austerity programs.
Keywords: Greek banking system; 2008 financial crisis.
Price adjustment lags and their asymmetries in Vietnam
by The Anh Pham, Hoang Huy Nguyen, Hung Duc Nguyen
Abstract: The paper aims to investigate factors that influence the speed of price adjustments in response to shocks by firms in Vietnam, using a multivariate ordered probit model with survey data. The results indicate that the speed of price adjustment is more likely to depend on the size of shocks and economic conditions than on whether firms are state or time-dependent price reviewers. We document that firms use the rule-of-thumb in price setting tend to adjust prices more slowly in response to shocks than their counterparts who set prices based on the market conditions and that firms whose prices are influenced by competitors tend to be more flexible in reaction to shocks. In addition, we find that menu costs and contracts are the two most important theories in explaining price stickiness; however, they seem to induce firms to respond more slowly only to shocks that drive prices downwards, rather than to shocks that move prices upwards. Finally, the degree of competition, the market share, the size of firms, the practice of quantity discounts, the share of state ownership, and the sector where firms operate all matter with regards to how quickly and asymmetrically firms react to shocks.
Keywords: price adjustment; survey data; multivariate ordered probit; Vietnam.
Special Issue on: ICONMASTER 2018 Business and Economy in the Changing World
Social Media and Financial Institutions in the Indian context
by SNEHAL BAWRE, SUJATA KAR
Abstract: This paper aims to identify the extent to which social media is used by Indian financial institutions (FIs) for various purposes including generating financial awareness. We consider a total 32 FIs which are listed with Bombay Stock Exchange (BSE)/ National Stock Exchange (NSE), India; 22 of them being banks and ten non-banking financial companies (NBFCs). Managers of all the FIs were interviewed using self-administered questionnaire. The result shows that Facebook, Twitter and LinkedIn are the most widely used social media platforms for exploring new markets, developing new ideas, selling financial products, connecting with the customers and customer relationship management (CRM). Further, banks and NBFCs are found to adopt these media pages to post important financial announcements, which increases customers interest in investment options. The study provides a view on social media usage in terms of cost reduction and customer satisfaction. However, there are some risks associated with social media such as reputational risks, operational risks, data and information risks etc. Furthermore, managerial discussions highlighted their contribution to the use of social media to increase financial literacy.
Keywords: Social Media Platforms; Financial Institutions; Banks; NBFCs; Financial literacy.
The Influence of Intellectual Capital on Earnings Management through Real Activities Manipulation in Indonesian Manufacturing Companies
by Nuryaman Nuryaman, Eriana Kartadjumena, Sendi Gusnandar Arnan
Abstract: This study examines the influence of intellectual capital (IC) on earnings management through real activities (EMTRA) manipulation in Indonesian manufacturing companies. This study measured IC elements by employing the value added intellectual capital (VAIC) model developed by Pulic (1998) that consists of human capital, structural capital, and capital employed efficiencies. Meanwhile, earnings management was measured by employing the Roychowdhury model (2006), which is known as EMTRA manipulation. EMTRA manipulation is conducted on activities of sales operation, reduction of cost discretion, and over-production. This study analysed data from 69 financial statements of Indonesian manufacturing companies that are listed on the Indonesia Stock Exchange in 2016. The result shows that the integration of intellectual capital elements can reduce earnings management behaviour through sales operation activity manipulation. Moreover, partially, the intellectual capital of capital employed and structural capital efficiencies can lower the practice of EMTRA of cost discretion.
Keywords: intellectual capital; earnings management through real activities manipulation.
Attitudinal ambivalence towards green products: an empirical study in an emerging market
by Angelina Nhat-Hanh Le, Megha Jain, Duong Tam Truong, Thanh Tam Le
Abstract: Attitudinal ambivalence is an emerging concept in marketing and only limited articles have attempted to explore the concept of attitudinal ambivalence in the context of green consumption. This study is one of the pioneer works that examines four negative antecedents (i.e., greenwashing, consumer skepticism, green confusion, and green risk) of attitudinal ambivalence. The largely-ignored concept of resistance to change from non-green to green products is also investigated as the outcome variable of attitudinal ambivalence. Based on a sample of 310 Vietnamese consumers, the results indicate that green confusion is the strongest negative predictor of consumers attitudinal ambivalence towards green products followed by consumer skepticism, greenwashing, and green risk, respectively. Furthermore, attitudinal ambivalence is found to significantly increase consumers resistance to change. This study provides implications for marketing practitioners regarding attitudinal ambivalence and resistance to change, from which appropriate strategies can be formulated and applied to target green consumers.
Keywords: Attitudinal ambivalence; Greenwashing; Consumer skepticism; Green confusion; Green risk; Resistance to change.
TVET Teachers's Perceptions on Competencies: An Application of Malaysian Human Resource Development Practitioners Competency Model
by Chee Sern Lai
Abstract: Competency of TVET teacher is one of the major factors that influences the quality of TVET graduates and TVET system. This paper attempted to investigate the TVET teachers perceptions on the competency needs in Nigerian Higher Learning Institutions based on the Competency Model of Malaysian Human Resource Development Practitioners (MHRDP) which focused on Thinking Competency, Organisational Competency, and Application Competency. This study employed a survey design in which a set of questionnaire was used for data collection. A total of 205 TVET teachers from Universities, Polytechnics, and Colleges of education were involved in this research. Descriptive statistics which involved mean and standard deviation was ultilised to analyse the data. The findings revealed that the Nigerian TVET teachers perceived that all elements related to Thinking Competency, Organisational Competency, and Application Competency are important for TVET teachers for Higher Learning Institutions in Nigeria. Therefore, this research suggests that the Nigerian policy makers and the TVET Higher Learning Institutions should provide training to the TVET teachers in order to equip those teachers with the competency elements that are important and relevant to TVET.
Keywords: TVET; Competency Model; Teacher; Competency; Perception.
The Roles of Employee Work Well-being on Innovative Work Behavior Mediated by Organizational Commitment
by Rizal Nangoy, Mohammad Hamsal, Nogroho Juli Setiadi, Yosef Dedy Pradipto
Abstract: In the era of industry 4.0, innovation has become more important for companies for maintaining their competitive advantage. Nevertheless, research has shown that implementing innovation in corporate strategy is challenging. One of the foundations for successful innovation is the employee innovative work behavior. In the digital business industry, this behavior has been considered as a key performance indicator. Individual performance becomes the basis of the company performance which will further increase the value of the company. This study employs the paradigm of positive psychology, focusing on how performance improvement can be achieved by increasing employee work well-being. Previous studies show that there is an inconsistency in the relationship between work well-being and performance. So, it needs to be understood further through the role of mediation variables that can explain when an employee work well-being can improve performance. This study aims to examine the role of employee organizational commitment as a mediator of the relationship between employee work well-being and innovative work behavior. Taking the digital business industry in Indonesia as a research context, this research reveals that employee organizational commitment fully mediated the relationship between employee work well-being and innovative work behavior. This study contributes to the development of theory in human capital management which explains how a positive psychology-based paradigm strategy can improve employee performance
Keywords: Industry 4.0; Innovative Work Behavior; Organizational Commitment; Positive Organizational Behavior; Work Well-being.
Creating Innovative Work Behavior: The Roles of Self Efficacy, Leader Competency, and Friendly Workplace
by Henny Santoso, Connie Heng
Abstract: Continuous innovation is integral for an organization to get sustainability and growth. Adopting new technological advancements will bring benefits but might have a negative impact on current business modes. Adopting new technology leads to the question mark that is it always true that innovation alone will result in organizational sustainability. The focus of the study is to highlight that sustainability is a linkage between the importance of employees work behavior, their adaptability coupled with technological advancements. Furthermore, other factors such as employee self-efficacy, perceived leader's proficiency, and perceived employee-friendly workplace plays a significant role to innovate work behavior. This conclusion for other factors impacting innovate work behavior was made based on the survey conducted at various telecommunication companies across Indonesia comprising of 208 participants. Based on the above results, further theoretical and managerial research topics are recommended that will allow predicting organizations growth and sustainability better.
Keywords: Business Management; Human Factors; Innovative Work Behavior; Strategic Management; Sustainability.
Exploration of the Need Analysis for Technopreneurship Scientific Learning Models in Higher Vocational Education
by Hendra Hidayat, Zadrian Ardi, Yuliana Yuliana, Susi Herawati
Abstract: The unemployment rate for high education graduates has been increasingly worrying, especiallyin Indonesia. One of the reasons is the graduates ability to survive, character and competence of entrepreneurship, which are still low. This paper aims to explore and explain the needs analysis of entrepreneurial learning in Higher Vocational Education. The need analysis is a very important early stage of learning, in order to to design the technopreneurship model. The research method used was descriptive. The respondents of this research were 30 students from universities that have an entrepreneurial vision in West Sumatra. The measurement of validity, reliability and statistical data analysis were using the Rasch model approach, which use the Winstep software. Data analysis was done by descriptive statistic analysis and Differential Item Functioning (DIF) by Rasch model analysis. The results obtained were; (1) there is generally no entrepreneurial learning model specifically used in learning in higher education, (2) there is very little entrepreneurial learning taught oriented towards products and commercial potential, (3) entrepreneurial learning taught has not adopted technological elements, (4) In general. It strongly agrees if there is a model of entrepreneurial learning, in particular, such as the technopreneurship scientific learning model used in entrepreneurial learning in higher education. So it can be concluded that learning model for entrepreneurship learning that adopts the elements of technology, product-oriented learning and has the commercial potential is needed. One of them is technopreneurship scientific learning model.
Keywords: Technopreneurship; Scientific; Learning Model; Entrepreneurship.
Digital Transformation: A Transformational Performance-based Conceptual Model through Co-creation Strategy and Business Model Innovation in the Industry 4.0 in Indonesia
by Leonardus Wahyu Wasono Mihardjo, Sasmoko Sasmoko, Firdaus Alamsjah, Elidjen Elidjen
Abstract: Industry 4.0 is driven by the significant influence of digital technology in the industry. Corporations are required to transform their operations, products, and services to show distinctive organization capability, and to have the ability to respond to market changes and to provide customers experience services to sustain competitive advantage. The main drivers of Industry 4.0 are long-term innovations, especially for business model innovations integrating with vertical and horizontal capabilities and co-creation strategies, which is a collaborative strategy to grow together with customers and partners. Information Communication and Telecommunication (hereinafter abbreviated ICT) plays an important part in enabling the digital transformation. At this stage, research on business model innovations to transform organization capabilities within the ICT Industry is still very limited. This paper seeks to portray the conceptual model of ICT companies in transforming their business and organization capabilities to face Industry 4.0 through co-creation strategies and business model innovations in Indonesia markets. The Indonesian market is unique in terms of its ICT infrastructure, but still left behind compared to other countries. However, the market has tremendous opportunities in terms of digital capability innovations. The strategic management outline used as a framework for this paper. Mediating variables were co-creation strategies and business innovations with distinctive organizational capability as an internal factor and consumer orientation as the external independent factor. The construct of co-creation strategy and transformational performance were discussed. This model of digital transformation was a suitable model for senior leaders to transform digital business capability and academics. Moreover, the model and construct of variable can be used to further develop the theory of digital transformation.
Keywords: Industry 4.0; Digital Transformation; Business model innovation; Co-creation Strategy; Transformational Performance.
ROLE OF FREIGHT & FORWARDING COMPANY IN FACILITATING THE EXPORT IMPORT PROCESS IN KELANTAN MALAYSIA
by Mohd Azian Husin Che Hamat, Muhd Fadhlullah Rashid
Abstract: This case study discusses the role of freight & forwarding companies in facilitating the export import process related to the Malaysian Quarantine and Inspection Service (Maqis) agency under the Ministry of Agriculture and Agrobased Industry in Kelantan, Malaysia. This case study used qualitative interview method to collect descriptive data on freight and forwarding companies and also from Maqis role, problems faced and suggestions for improvement on the smoothness of the import and export process. The findings of this case study showed that the Maqis needs to issue a specific standard to facilitate the process of aligning the work by informing the Standard Operating Procedures (SOPs) to freight & forwarding companies located in Kelantan, particularly those dealing with import export of products from Thailand. In addition, the Maqis shall also disclose in details the incremental costs or fees incurred in the process of inspection and sampling of the product. To implement quarantine process, the customer should be referred to the appointed Maqis officer to provide registration, sharing information and payment rate to facilitate freight and forwarding companies. This case study can contribute in terms of ideas and suggestions towards continuous improvement either for the Maqis or the freight & forwarding companies. Suggestions for future researchers need to see the effectiveness of the export import process among customers who use Maqis services from aspects of customer satisfaction and service quality.
Keywords: freight; forwarding; export-import; quarantine.
Special Issue on: 6th TSFS Conference of Finance Risk Management and Performance
Banking Credit Strategy andSectoral Credit Risk: Evidence From Tunisia Resident Banks
by Hamdi Khalfaoui, Hassen GUENICHI
Abstract: This paper explores the relationship between bankingcredit strategy and sectoral credit risk while taking into account the added value of business sectors. To identify the relationship between banking credit strategy,sectoral credit risk and added value of busuness sectors, we have proceeded with two parts: A descriptive part witch highlights the Tunisian banking system and an empirical one in which we estimate two models:a general model that covers total economy andspecific models for each activity sector.Our empirical time-series analysis conducted on tunisian resident banks over the period 2000-2016 shows that for the general model, credit risk, added value of activity sectors, information index relative to credit and quality of law index are the main determinants of the credit granting banking strategy. While for specific models, these determinants vary from one sector of activity to another.
Keywords: Banking Credit; Tunisian ResidentBanks; Sectoral Credit Risk; Value-Added of Business Sectors; Time series.
Damascus Securities Exchange Weighted Index volatilities and Terrorist attacks in Syria
by Abdelkader Derbali, Lamia Jamel
Abstract: This paper examines the interaction between terrorism events and finance, focusing for the first time on the Damascus Securities Exchange Weighted Index return volatility of Syria besieged by terrorist attacks. To do so, we employ three multivariate GARCH models (GARCH (1,1), EGARCH (1,1) and TGARCH (1,1)) to examine the presence of daily anomalies created by terrorist attacks over the period from March 01, 2011 to October 29, 2015. We find terrorism risk is a significant factor in explaining the volatility of stock returns in the case of DSE Weighted Index, which should be taken into account when modeling volatility. From the empirical results of GARCH (1,1), EGARCH (1,1) and TGARCH (1,1) models, we can show the existence of a significance and positive effect for the return at (t-1) on the return volatility of DSE Weighted Index in a threshold of 1%. Additionally, we found that terrorist attacks have a negative impact on the DSE returns. This impact is significant with a significance level of 1% in the mean and variance equations. Also, we can show the persistence of volatility in the case of Damascus Securities Exchange Weighted Index.
Keywords: DSE; volatilities; terrorist attacks; GARCH; EGARCH; TGARCH.
Illiquidity and Tunisian Stock returns: Time-series Analysis
by Hela Ben Soltane, Kamel Naoui
Abstract: we study the responses of emerging Tunisian stock market returns to increased market illiquidity. We consider simultaneously illiquidity as a systematic risk, market characteristic and stock characteristic. We weekly measure illiquidity using the Amihud (2002) ratio. We find that market illiquidity shocks are negatively related to market performance as a whole. Estimation results show that investor on Tunisian stock market does not require more return when he expects an increase of market illiquidity. We show also that stock returns are negatively affected by contemporaneous illiquidity shocks. These illiquidity effects are only significant on small illiquid stocks returns. Large-caps returns are affected neither by expected market illiquidity nor by market illiquidity shocks. These results are confirmed using an alternative illiquidity measure. Other robustness tests validate these findings.
Keywords: Emerging market; illiquidity risk; expected market illiquidity; stock return.
Investor sentiment and the risk return tradeoff
by Mohamed Marouen Amiri, Kamel Naoui, Abdelkader Derbali, Mounir Ben Sassi
Abstract: The purpose of this paper is to investigate the risk-return tradeoff allowing for the presence of noise traders i.e. a subset of investors who either base their trading strategies on sentiment or hold unjustified optimistic/pessimistic views regarding market prospects. We measure noise traders sentiment relying on two sets of indices namely the Baker and Wurgler sentiment index and Michigan Consumer Confidence Index in the U.S. stock market. Under the assumption of the presence of noise traders sentiment, the risk-return tradeoff is tested through two sets of models: Mertons Intertemporal CAPM and the GARCH-in-mean model. First, we find that the relationship between risk and return allowing for the presence of noise traders risk as measured by the Baker and Wurgler sentiment index is positive and statistically significant when tested through Mertons Intertemporal CAPM. Second, the risk-return tradeoff tested through GARCH-in-mean models augmented by noise traders risk as measured through survey-based measures of sentiment establishes no clear evidence for a significant mean-variance relationship. Overall, we confirm Mertons (1973) hypothesis that the more risk an investor bears the greater his expected returns. This paper contributes to the asset pricing literature by trying to shed some light on the risk-return tradeoff from the standpoint of behavioral finance.
Keywords: Noise trading; risk-return tradeoff; investor sentiment.