International Journal of Monetary Economics and Finance
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International Journal of Monetary Economics and Finance (7 papers in press)
Financial literacy of SMEs in Citarum Watershed Area, Indonesia. by Sam’un Jaja Raharja, Nenden Kostini Abstract: One aspect of the role of small and medium enterprises (SMEs) is encouraging economic growth and development, domestically, and internationally. This study aims to determine the level of financial literacy of SMEs. This research uses quantitative and descriptive methods. Data were collected from 100 SMEs in the Citarum Watershed, Indonesia. Multivariate analysis techniques and factor analysis are used to process data. Results show that two factors determine the level of financial literacy of SMEs. The first factor is financial products and services. The second factor is the basic financial concepts. Suggestions for future research include other factors that influence financial literacy. Keywords: financial literacy; financial products and services; financial concepts; crowd funding; inclusive financial program; Citarum Watershed. DOI: 10.1504/IJMEF.2020.10032245
Behavioural economics and the Phillips curve: new evidence from sectoral survey data by Tobias F. Rötheli Abstract: Behavioural economics has a long record of providing insights into the inflation process. This study continues this tradition by adding to the current debate on the Phillips curve. We study data from periodic surveys of producing firms for Germany and Switzerland. The New Keynesian Phillips curve (NKPC) holds that prices are set by forward-looking firms. In this perspective the expectations that drive prices relate to prospective prices within the industry. By contrast, an older tradition sees expectations of economy-wide inflation as a key driving variable. With sectoral survey data we can address this debate and find support for the modern view of the price setting process. The results of our econometric estimates suggest that price setting has essentially remained unchanged in the years after the great recession. In conclusion, both policy makers and researchers continue to benefit from tools carved out by behavioural economists. Keywords: inflation dynamics; expected inflation; Phillips curve; survey data; Germany and Switzerland. DOI: 10.1504/IJMEF.2020.10033516
Does non-linearity in exchange rate hold in Nigeria? evidence from smooth transition autoregressive model by James Temitope Dada, Philip Akanni Olomola, Adebayo Adedokun Abstract: This study employs smooth transition autoregressive (STAR) model to investigate the non-linearity in exchange rate process in Nigeria within the context of exchange rate parity theory (ERPT). Quarterly data from 1981Q1 to 2017Q4 is used. The outcome of the study confirms the presence of exchange rate parity in Nigeria using Augmented Dickey Fuller (ADF) and KwiatkowskiPhillips-Schmidt-Shin (KPSS) unit root tests. The study rejects the null hypothesis of linearity in nominal exchange rate in Nigeria. Furthermore, the estimation result of non-linear least squares (NLS) regression indicates that most of the parameter estimates are statistically significant. The study reveals that non-linear models best explain exchange rate dynamics in Nigeria.
Likewise, the study discovers that exchange rate process in Nigeria is best fit with smoothly asymmetric logistic smooth transition autoregressive (LSTAR). The study concludes that heterogeneous nature of participants and asymmetric information in the market cause exchange rate to adjust in non-linear version. Keywords: exchange rate; exchange rate parity; STAR; smooth transition autoregressive. DOI: 10.1504/IJMEF.2020.10034068
Actual participation: the effects of information sharing and familiarity team on budget decision quality by Apriwandi, R.A. Supriyono Abstract: This experiment examines the effect of information sharing and team member familiarity on decision quality. Forty students participated in the experiment playing the role of budget managers and teams. The task of the experiment is to translate symbol codes and propose the amount of code to be translated in an online meeting as a measure of actual information sharing and participation. Participants were randomly assigned to each condition (high/low sharing of information and familiarity). The results showed that information sharing and decision quality were better under conditions of information sharing and high familiarity than information sharing and low familiarity.
The results are consistent with increased familiarity of team members under information sharing among team members which increases polarisation in budget decision making. The results also suggest that differences in the quality of team decisions may be better explained by psychological factors and cognitive behaviour than by agency contracts. Keywords: budget decisions; team familiarity; information sharing. DOI: 10.1504/IJMEF.2020.10034179
The heterogeneity in adjustment speeds toward corporate target leverage: the case of Vietnam
by An Thai, Radu Burlacu Abstract: The paper explores the heterogeneity in the adjustment speed toward the optimal capital structure of Vietnamese listed firms on the period from 2005 to 2017. We test the existence of the target leverage and estimate the speed of adjustment by using a partial adjustment model. The study finds that under-leveraged firms move to the target leverage faster than those that are over-leveraged. The speed of off-target firms is higher than that of near-target firms, and firms with financial surplus move more quickly to the optimal level of debt than those with a deficit. Keywords: heterogeneity; adjustment speed; target leverage; capital structure; partial adjustment model; deficit; Vietnam. DOI: 10.1504/IJMEF.2020.10034193
Ownership structure segmentation of Indian listed firms: a governance perspective by Ruchi Kansil Abstract: The research paper studies the present ownership structure of S&P BSE 500 Indian listed firms in order to take heed of the expected level of shareholder engagement and the level of governance practices of such firms. The paper employs a cluster analysis approach to identify the distinct cluster or group of firms with probably similar level of shareholder engagement and governance practices. It is found that ownership of publicly listed companies is concentrated in the hands of Indian promoters and non-promoter institutional shareholders. Thus, the institutional investors have become important owners alongside the Indian promoters and can play dominant role in the control and management of the firms they invest in. They would help to enhance corporate governance practices via shareholder activism and engagement. The study is
relevant for board of directors (BOD), institutional investors and policy makers,
regulators, think tanks, corporates, investors and researchers. Keywords: corporate governance; ownership structure; cluster analysis; India; ownership segmentation; shareholder activism; shareholder engagement. DOI: 10.1504/IJMEF.2021.10035470
Explaining the endogeneity between the credit risk, liquidity risk, and off-balance sheet activities in commercial banks: a case of South Asian economies by Muhammad Farhan Basheer, Waeibrorheem Waemustafa, Mohamad Helmi Bin Hidthiir, Saira Ghulam Hassan Abstract: The main objective of the current study is explaining the endogeneity among liquidity risk (LIQDR), credit risk (CRDR) and off-balance sheet activities. The balanced panel of 81 banks over a period of five years from 20132017 is chosen to investigate achieve the research objectives. Fixed
effect and generalised method of momentum panel estimates, followed by a series of diagnostic tests have appeared most appropriate for the study. The findings of the Hausman test have confirmed the presence of endogeneity. Arellano-Bond test for zero autocorrelation are estimated in the generalised method of moments (GMM) analysis of the work in our case. The findings have provided the support that South Asian banks use OBSA for hedging purposes. The LIQDR, and CRDR are in significant positive relationship with each other. The findings of the study have provided more support to the market portfolio theory and finical intermediation theory Keywords: : off-balance sheet activities; liquidity risk; credit risk; Market portfolio theory; market power theory; endogeneity; South Asia. DOI: 10.1504/IJMEF.2021.10035832