Showing papers in "Journal of Applied Business Research in 2013"
TL;DR: In this article, the authors provide a detailed review of different corporate governance mechanisms, reviewing the latest findings on classification shifting, and summarizing earnings management measures, including a new diagnostic system.
Abstract: Corporate governance can reduce or even eliminate the extent of earnings management. Normally, an institutional environment that provides better legal protection can control managers’ self-interest to a certain extent. Takeover force can exert market pressure on managers to do the best for shareholders. Prior studies have investigated different corporate governance mechanisms that can have negative relationships with earnings management. Board independence can enhance certain monitoring behaviors in managers, including the misappropriation of assets. Female directors can develop trust leadership, which requires managers to share information, and are more likely to be risk-averse to frauds and opportunistic earnings management. An audit committee can oversee the internal control for financial reporting and the quality of financial information. Directors with financial expertise can provide incremental control effects on earnings management, especially in firms with weak corporate governance. This paper contributes to corporate governance by providing detailed reviews of different corporate governance mechanisms, reviewing the latest findings on classification shifting, and summarizing earnings management measures, including a new diagnostic system. In the future, this new diagnostic system may be investigated in different contexts.
89 citations
TL;DR: In this paper, the authors investigate the effect of corporate governance practices on the extent of voluntary disclosure in France using a panel of 206 non-financial French listed firms during the period 2006-2009 and find evidence that voluntary disclosure increases with managerial ownership, board and audit committee independence, board meeting frequency, and external audit quality.
Abstract: This paper investigates the effect of corporate governance practices on the extent of voluntary disclosure in France. Using a panel of 206 non-financial French listed firms during the period 2006–2009, we find evidence that voluntary disclosure in annual reports increases with managerial ownership, board and audit committee independence, board meeting frequency, and external audit quality. We also find that frequency of audit committee meetings and diligence of board and auditing are associated with decreased disclosure. Additional findings show that larger, more profitable, and less indebted firms have greater voluntary disclosure.
88 citations
TL;DR: Li et al. as mentioned in this paper employed the content analysis approach to identify the determinants of corporate social responsibility disclosure in China using the annual reports of over 800 A-share listed firms on the Shanghai Stock Exchange.
Abstract: Employing the content analysis approach, this paper aims to identify the determinants of corporate social responsibility disclosure (CSRD) in China using the annual reports of over 800 A-share listed firms on the Shanghai Stock Exchange. We find that CSRD is positively associated with firm size, media exposure, share ownership concentration and institutional shareholding. Moreover, firms in High-Profile environmentally sensitive industries tend to disclose more corporate social responsibility (CSR) information than those in Low-Profile environmentally sensitive industries, supporting the view that political cost is the primary constraint for Chinese listed firms. Our results provide important insights for academics interested in the CSR issue in emerging economies, for enterprise managers interested in exploiting the annual reports as a strategy to legitimize their corporate social conduct, and for government regulators committed to improving CSR activities and information disclosure.
86 citations
TL;DR: In this paper, the authors conceptualized three dimensions of supply chain responsiveness and developed a reliable and valid instrument for measuring this construct, and further tested the relationships between supply chain management practices, supply-chain responsiveness, and competitive advantage using structural equation modeling based on 294 responses from industry professionals.
Abstract: Today’s supply chains are expected to respond rapidly, effectively, and efficiently to changes in the marketplace to sustain, succeed and create competitive advantage in this increasingly global marketplace by focusing on time, flexibility, and speed of response. The focus of this study is the supply chain responsiveness construct and a firm’s practices to respond to customer’s demands and constantly changing market conditions to create competitive advantage. This research conceptualizes three dimensions of supply chain responsiveness and develops a reliable and valid instrument for measuring this construct. The study further tests the relationships between supply chain management (SCM) practices, supply chain responsiveness, and competitive advantage using structural equation modeling based on 294 responses from industry professionals in the manufacturing and supply chain area. Research findings point out that higher level of SCM practices can lead to improved supply chain responsiveness and enhanced competitive advantage of a firm. Also supply chain responsiveness can have a direct positive impact on competitive advantage of a firm.
76 citations
TL;DR: In this paper, the authors examined the relationship between the level of corporate social responsibility (CSR) activities and earnings quality and found that firms with more corporate donations have lower discretionary accruals and greater accounting conservatism.
Abstract: This paper examines the association between the level of corporate social responsibility (CSR) activities and earnings quality with the level of donation expenses and the voluntary issuance of CSR reports filed with the Global Reporting Initiative (GRI) as proxies for CSR activities. Donation expenditures could be the most direct measure of managers’ willingness to conduct CSR activities, while the voluntary issuance of CSR reports filed with GRI captures a direct signal of managers’ willingness to conduct CSR activities. The results of this study provide evidence that firms active in CSR are likely to report earnings of a higher quality. More specifically, after controlling for firm-specific factors, we find that firms with more corporate donations have lower discretionary accruals and greater accounting conservatism. Furthermore, this negative relationship between donation and discretionary accruals is more pronounced when firms voluntarily issue CSR reports. Prior studies have focused on the association between financial performance and CSR activities of firms. However, managerial choices and signals on financial performance with voluntary CSR activities have not been specifically considered. This study adds to the existing literature on CSR by providing evidence of the role of CSR on earnings quality and helps academics and practitioners to understand the role of corporate donations and voluntary CSR disclosures in earnings quality.
75 citations
TL;DR: The psychometric properties of the measure of transformational leadership as measured by 20 items in Bass and Avolios Multifactor Leadership Questionnaire (MLQ) (Form 5x) were examined as mentioned in this paper.
Abstract: The psychometric properties of the measure of transformational leadership as measured by 20 items in Bass and Avolios Multifactor Leadership Questionnaire (MLQ) (Form 5x) were examined. The examination was based on a sample of 372 chief executives in the United States government.
61 citations
TL;DR: In this paper, the authors investigate the processes through which relationship quality influences attributional, emotional, and behavioral responses to service failures and find that relationship quality reduces the likelihood of adverse behaviors by making blame and anger less intense.
Abstract: This article investigates the processes through which relationship quality influences attributional, emotional, and behavioral responses to service failures. Results indicate that relationship quality reduces the likelihood of adverse behaviors by making blame and anger less intense. Results confirm the importance of relationship building behaviors and suggest strategies for reducing vulnerability to customer defection and adverse communications. To reduce negative word-of-mouth, managers should use relationship-building efforts to augment service recovery programs. To make customer exit less likely, service managers should invest in relationship building efforts that help to differentiate their service offers and increase barriers to exit.
58 citations
TL;DR: In this paper, the authors investigate how image perceptions, service quality and customer satisfaction contribute to customer loyalty and investigate the role of switching costs in the development of customer loyalty, finding that perceived switching costs, assessed in terms of price sensitivity, have by far the strongest, positive and direct impact on customer loyalty in comparison to the other antecedents included in the model.
Abstract: Customer loyalty plays a crucial role in firm’s performance. Over the last three decades the antecedents of customer loyalty in the service sector have attracted great interest by academics and practitioners alike. This study has two key objectives. First, we investigate how image perceptions, service quality and customer satisfaction contribute to customer loyalty. The results show that the organizational image customers hold of the service provider and perceived service quality have a similarly strong relationship with customer loyalty. Moreover, both, service quality and organizational image are significantly and positively correlated with customer satisfaction. The findings highlight that it is in particular through the formation of customer satisfaction that service quality and organizational impact customer loyalty. Thus, we can demonstrate that customer satisfaction has a mediating effect between external and interactive marketing initiatives and the development of customer loyalty. Second, we investigate the role of switching costs in the development of customer loyalty. The findings indicate that perceived switching costs, here assessed in terms of price sensitivity, have by far the strongest, positive and direct impact on customer loyalty in comparison to the other antecedents included in the model. The importance of switching costs is further corroborated with the finding that switching costs moderate the link between customer satisfaction and customer loyalty.
55 citations
TL;DR: In this article, the authors examined the direct effects of small business owner expertise on small business performance and the mediating influence of employee skills training in this relationship and found that small business owners expertise positively influenced employees skills training and small business performances in a significant way.
Abstract: While researches on small businesses have grown substantially, there seem to be a paucity of researches that specifically investigate the effects of small business owners expertise on employees skills training and small business performance. In order to fill this void the current study examined the direct effects of small business owner expertise on small business performance and the mediating influence of employee skills training in this relationship. To empirically test the three (3) posited hypotheses, a sample data of 221 was collected from small business employees in Zimbabwe. The results indicate that small business owners expertise positively influence employees skills training and small business performance in a significant way. Managerial implications of the findings are discussed and limitations and future research directions are indicated.
52 citations
TL;DR: In this paper, the authors explored whether and how the offshore outsourcing of the manufacturing SMEs creates competitive advantages for these firms and showed that not only the largemultinationals but also the SMEs can achieve competitive advantages from offshoring part of their activities to foreign firms where those tasks can be performed more competitively.
Abstract: This paper explores whether and how theoffshore outsourcing of the manufacturing SMEs creates competitive advantagesfor these firms. The offshore outsourcing strategy is widely criticized in thedeveloped countries for allegedly reducing job opportunities, missing scaleeconomy, diminishing innovation potentialities and creating various socialproblems. The present article with empirical data from thirteen Canadianoffshoring manufacturing SMEs attempted to address that the world-widedistributed co-production network could instead increase profit and marketshare, boost investment in R&D, raise focus on core competency and enhancecompetitivity of offshoring SMEs. This strategy enables companies to enhancetheir competitiveness by allowing them to have access to the competitiveproduction factors and new markets for their products. This paper contributesto the existing body of knowledge by showing that not only the largemultinationals but also the SMEs can achieve competitive advantages fromoffshoring part of their activities to foreign firms where those tasks can beperformed more competitively.
45 citations
TL;DR: In this paper, the authors provide evidence of return and volatility spillovers for the four major agricultural commodities including sugar, wheat, corn, and cotton over the recent period 2003-2010.
Abstract: We provide comprehensive evidence of return and volatility spillovers for the four major agricultural commodities including sugar, wheat, corn and cotton over the recent period 2003-2010. Our results from the recent VAR-GARCH model of Ling and McAleer (2003) that allows for simultaneous shock transmissions of conditional volatilities of returns across commodities show the existence of substantial volatility spillover linkages between agricultural commodity returns and volatilities. Our findings are also particularly insightful for optimal portfolio designs and risk management through the computation of optimal weights and hedge ratios.
TL;DR: In this paper, the authors outline the differences and similarities between private and public sector innovation in terms of definition, driving factors, barriers and measurement, and examine the importance of cross-sector collaboration for private-public sector innovation, and demonstrate that collaboration can improve innovation.
Abstract: Innovation plays a very important role in the private sector in terms of competitiveness, and is the key to success for private businesses, helping to cut costs, improve products and open new markets. Nowadays, innovation is gaining in importance in the public sector as well, as it can improve the quality of service delivery as well as reduce costs. Innovation is an important driver of economic progress and competitiveness in all economies. Collaboration between public and private entities creates better and more effective public and private services and products. Collaboration enables the participants to exchange and share knowledge, experiences, know-how and expertise. Collaboration helps to bring a broader set of skills and talents and a more responsive work culture into public sector organisations, along with innovative thinking and creativity; it also helps private companies to innovate more effectively and to achieve their concrete goals in a more efficient way. The objective of this paper is to outline the differences and similarities between private and public sector innovation in terms of definition, driving factors, barriers and measurement; the paper also aims to examine the importance of cross-sector collaboration for private and public sector innovation, and demonstrate that collaboration can improve innovation.
TL;DR: In this article, the development and regulations of new Islamic banking products with focus given more on Islamic house financing are discussed. The focus will be mainly on IFIs operating and regulated in Malaysia with specific enforcement by the country's regulators.
Abstract: The Islamic world is in its evolutionary phase. Islamic finance which comprises the banking system, takaful (Islamic insurance) and capital market products and services offer an alternative to society. The development is said to be phenomenal with a double-digit annual growth rate since its inception. McKinsey & Company (2007) in his study stated that the value of Islamic banking assets and assets under Islamic management is expected to reach USD1 trillion by 2010, with Islamic banks growing more rapidly than the average banking sector in most countries. As of 2009, worldwide assets under shari’ah compliance grew four times from 0.5% to 2% of the world economy and reached MYR3.5 trillion (PEMANDU, 2010). With the increasing trends of Islamic finance, Islamic financial institutions (IFIs) around the world are encouraged to develop and innovate new products in order to meet the ever-changing demand from its customers and potential customers. The introduction of new Islamic products does impose some challenges, not only to the practitioners and Shari’ah council members, but also to society at large, as they are the ultimate users of the product. This paper aims to look at the development and regulations of new Islamic banking products with focus given more on Islamic house financing. Such developments bring about variation in the products introduced to the public as different contracts are adopted. The focus will be mainly on IFIs operating and regulated in Malaysia with specific enforcement by the country’s regulators.
TL;DR: In this article, the efficiency of the Islamic bank in GCC countries around the subprime crisis of 2008 was investigated by using the Data envelopment approach (DEA) and two different approaches are evaluated; the constant return scale (CRS) and variable return scales (VRS).
Abstract: This paper investigates the efficiency of the Islamic bank in GCC countries around the subprime crisis of 2008. The score of efficiency is evaluated by using the Data envelopment approach (DEA). Two different approaches are evaluated; the constant return scale (CRS) and Variable return scale (VRS). Then, a regression panel analysis is employed to examine the relationship between efficiency scores derived from the DEA to a set of explanatory variables combined between macroeconomic variables and microeconomic variables. The main finding of this paper is to show that the Islamic bank remains efficient under subprime crisis.
TL;DR: A neural network model is applied to identify potential acquisition targets and the model exhibits a highly successful prediction rate and a portfolio of predicted target stocks identified by the network substantially outperformed the market.
Abstract: Artificial neural networks are a robust, effective complement to traditional statistical methods in financial applications. They can incorporate qualitative and quantitative information, and recognize underlying patterns and trends in large, complex data sets. This paper applies a neural network model to identify potential acquisition targets. The model incorporates various factors based on acquisition theories suggested in the literature. The resulting neural network model exhibits a highly successful prediction rate and a portfolio of predicted target stocks identified by the network substantially outperformed the market.
TL;DR: Wang et al. as discussed by the authors theoretically and empirically investigated the effects of different emotional labor strategies on frontline employee creativity in the context of service industry, and they also studied the mediating role of frontline employees creativity.
Abstract: This paper theoretically and empirically investigates the effects of different emotional labor strategies on frontline employee creativity in the context of service industry, and it also studies the mediating role of frontline employee creativity in the relationships between frontline employee’s emotional labor strategies and the two aspects of customer service performance. Based on the data of 424 employee–supervisor dyads in China, the empirical results indicate that surface acting decreases employee creativity and extra role performance, while deep acting increases employee creativity, role-prescribed performance and extra role performance; employee creativity mediates both the negative influence of surface acting on extra role performance and the positive influences of deep acting on role-prescribed and extra role performances. The results have some theoretical and practical implications on service creativity and emotion management in service industry.
TL;DR: A new dimension of E-Service quality is created that is based on system quality, system reliability, system availability, information quality, consistency of service quality, and online customer feedback to build a new theoretical framework for Live Customer Support Chat.
Abstract: This study investigates Live Customer Support Chat as a new type of customer service implemented for E-commerce websites. This study addresses an important research gap in regards to the effectiveness of new live customer support technology compared to the traditional non real-time support types such as online forms and e-mail. The study used two well-known theoretical frameworks (The Technology Acceptance Model and the Service Quality Model) and created a new dimension of E-Service quality that is based on system quality, system reliability, system availability, information quality, consistency of service quality, and online customer feedback to build a new theoretical framework for Live Customer Support Chat. The study further introduces the dimensions of e-service quality and incorporates them in this new framework.
TL;DR: In this article, the authors compared the performance of Islamic versus conventional banks in the Gulf Cooperation Council (GCC) region and found that Islamic banks are more profitable, more liquid, more solvent, and enjoyed higher internal growth rates than conventional banks during 2003-2011.
Abstract: This study is a commentary on the financial performance and quality capital of Islamic versus conventional banks currently operating in the Gulf Cooperation Council (GCC) region. In addition to assessing the financial performance of the full set of banks across various GCC countries, the study is the first to consider the extent to which Islamic vs. conventional GCC banks comply with the new Basel III requirements of raising better quality capital. The study uses bank-level data for 75 (55 conventional and 20 Islamic) banks in Kuwait, United Arab Emirates, Kingdom of Saudi Arabia, Oman, Qatar, and Bahrain. Financial ratios are used to measure and compare Islamic vs. conventional banks’ performances, and we employ a comprehensive and the most recent sample of data available in the region, consisting of cross-sections from 2003 to 2011. The results reveal that Islamic banks are, on average, less efficient but more profitable, more liquid, more solvent (less risky), and enjoyed higher internal growth rates than conventional banks during 2003-2011. The results indicate that there are statistically significant differences between the two types of banks, as far as profitability, solvency, and internal growth rate ratios are concerned; however, there are no statistically significant differences in liquidity and efficiency. The results also indicate that banks, as a whole, appear to be largely sufficiently capitalized for Basel III. Gulf Cooperation Council banks are well positioned to absorb higher provisions and impairment charges given the higher capital adequacy ratios reported by most. The Common Equity Ratio, Tier 1 Capital Ratio, and Capital Adequacy Ratios (CARs), for the majority of banks in 2011, comfortably satisfy the enhanced capital requirements of Basel III. The results show that Islamic banks have, on average, noticeably higher (and significantly different) capital ratios compared to conventional institutions. With regard to the impact of the global financial crisis on both types of the banks, the results indicate that Islamic banks performed better than conventional banks during the period 2006-2009, as the former enjoys higher capitalization, higher liquidity reserves, and also maintained stronger growth compared to conventional banks in almost countries. Findings of this study may be useful for capital-market participants, as the full set of banks across various Gulf Cooperation Council countries needs to be examined before any substantive conclusions can be reached about the relative performance of Islamic versus conventional banks. Further, as the full implementation of Basel III requirements will not take place until 2019, the results of this study will convey information that should encourage banks to consider the earlier implementation of Basel III capital requirements in order to provide themselves with a reputational boost, as well as a competitive advantage.
TL;DR: In this article, the authors investigated the influence of strategic leadership on business strategies and performance of family hotel businesses in Ghana and found that cost leadership, differentiation and strategic leadership enhance the performance of hotel businesses.
Abstract: Although family businesses contribute largely to the world output, little is known in literature about their mode of operations in the family hotels. The study aims to address the knowledge deficit on this critical component of the economy by investigating the experiences of family hotels in Ghana to gain a better understanding of the factors that facilitate the competitive positioning of family businesses. This paper investigates the moderating influence of strategic leadership on business strategies and performance of family hotel businesses in Ghana. The findings indicate that cost leadership, differentiation and strategic leadership enhance the performance of family hotel businesses in Ghana. It further showed that strategic leadership moderate the influence of both cost leadership and differentiation strategies on the performance of family hotel businesses
TL;DR: In this paper, the authors examined the relationship between participation in an accounting internship and increased job opportunities and found that the effect of internship experience on jobopportunities depends upon the circumstances.
Abstract: This paper reports the results of anempirical study examining the relationship between participation in anaccounting internship and increased job opportunities. Most prior studies haveexamined the benefits of internship programs while in school or the benefits ofinternships on professional learning, socialization, and personalcharacteristics in preparing students for entry into the profession. There hasbeen a paucity of empirical studies examining the relationship betweeninternships and job opportunities, which is a primary reason why students enterinternship programs, schools establish them, and employers hire interns. We surveyedprofessional employees below the manager level among three Big 4 firms and a largeregional CPA firm, and found that the effect of internship experience on jobopportunities depends upon the circumstances. The results indicate thatemploying firms highly value internship experience and that internshipexperience is useful for students in getting job opportunities whether or not theystay with the internship firm.
TL;DR: In this paper, the effect of the multiple directorships held by audit committee directors on the level of earnings management of listed French companies was investigated. But the results showed that audit committee can not provide effective monitoring of earnings when its members held many additional outside directorships, as measured by the magnitude of discretionary accruals.
Abstract: The aim of this paper is to examine the relationship between Audit Committee MultipleDirectorships and earnings management. Precisely, we empirically investigate the effect of the multiple directorships held by audit committee directors on the level of earnings management of listed French companies. Our investigation has been achieved on a sample of 88 non financial French listed firms that belong to the SBF 120 index, for the financial year 2008. The results suggest that the accumulation of several outside directorships by audit committee members may lead to a higher degree of earnings management, as measured by the magnitude of discretionary accruals. Therefore, our findings show that audit committee can’t provide effective monitoring of earnings management when its members held many additional outside directorships.
TL;DR: In this article, the authors provided a conceptual framework on the adoption of the drivers of green practices for fast-food restaurants, with institutional theory as its underlying base, and found that perceived internal and external drivers (i.e., normative pressure and mimetic pressure) are considered to be the drivers.
Abstract: With respect to the rapidly increasing importance of environmental issues, there is a need for businesses from various industries, including the food service industry, to implement initiatives to go green. In Malaysia, green fast-food restaurants are a growing niche. Being green is a strategy to differentiate a business from other competitors in the industry. Being green also indicates a positive response to consumers’ demand for environmentally friendly organizations. The food service industry, however, appears to be less inclined to adopt green practices than other industries. Most of the literature on green practices investigates the subject matter from consumers’ perspective, rather than from organizations’ perspective. This paper provides a conceptual framework on the adoption of the drivers of green practices for fast-food restaurants, with institutional theory as its underlying base. In this paper, perceived internal (i.e., normative pressure) and external drivers (i.e., coercive pressure and mimetic pressure) are considered to be the drivers. Normative pressure is represented by pressure from employees and manager’s attributes; coercive pressure is represented by regulatory pressure and customer pressure; and mimetic pressure is pressure from competitors. The results of the findings are expected to indicate whether internal and external factors drive the adoption of green practices for fast-food restaurants in Malaysia.
TL;DR: Empirical data from 207 online consumers in France supports the hypothesis that consumers avoid OVAs by using ad blocker software due to irrelevant advertisement contents, lack of perceived authenticity of advertisement contents and most importantly due to the lack of interactivity.
Abstract: The objective of this research is to explain the factors contributing toward consumers online video advertisement (OVA) avoidance behavior. Empirical data from 207 online consumers in France supports the hypotheses concerning the effect of relevance of contents, perceived authenticity and interactivity of OVAs. The findings suggest that consumers avoid OVAs by using ad blocker software due to irrelevant advertisement contents, lack of perceived authenticity of advertisement contents and most importantly due to the lack of interactivity. We conclude the study by offering some suggestions for reducing consumers avoidance of OVAs by increasing interactivity.
TL;DR: In this article, the authors investigated key indicators for optimising supply chain performance of light vehicle manufacturers in South Africa and revealed that competitiveness in cost, quality and product offerings are paramount to automotive manufacturers in today's turbulent environment.
Abstract: This article investigates key indicators for optimising supply chain performance of light vehicle manufacturers in South Africa. The article is based on a survey conducted among light vehicle manufacturers in South Africa with origins in Asia and Europe. Semi-structured interview questionnaire was used based on purposive sampling technique and the data was analysed using SPSS. The findings revealed that quality, final product delivery reliability and cost were highly rated and the most important indicators for the South African automotive market. Innovation (radical and incremental changes) was the least important among the indicators sampled. The article further revealed that there is a perceived difference on the importance of supply chain indicators between manufacturers of Asian and European origins. Final product delivery reliability and order delivery lead time tended to be more important to European manufacturers compared to Asian manufacturers. The article attests to the fact that competitiveness in cost, quality and product offerings are paramount to automotive manufacturers in today’s turbulent environment. It also reveals key competitive criteria used by European and Asian manufacturers based in South Africa. The article contributes to literature on SCM and reveals the way in which vehicle manufacturers in South Africa do business.
TL;DR: In this paper, the authors investigate whether access to different financial capital sources offers competitive advantages in China's highly regulated market and identify sources and analyze financial capital relationships that affect competitive advantages.
Abstract: We investigate whetheraccess to different financial capital sources offers competitive advantages inChina's highly regulated market. To identify sources and analyze financialcapital relationships that affect competitive advantages, we study 6750firm-year observations from 2000-2009. Firms gain competitive advantages whenthey can access internal and external financing in equities, bonds andequity-financed capital. Financial industry reforms benefit large private andgovernment-owned firms. Regional institutional developments help to accesssources of external financial capital. Implications include the need tomobilize external financial resources for small and private firms and furtherreform security regulations to ensure fair competition and sustainability.
TL;DR: In this article, the authors investigate the relationship between determinants of Foreign Direct Investment (FDI) inflows and their determinants in MENA (Middle East and North Africa) region during the period 1970-2010.
Abstract: This paper aims to investigate the relationship between Determinants of Foreign Direct Investment (FDI) inflows and their determinants in MENA (Middle East and North Africa) region during the period 1970- 2010. Using panel data techniques, we take into account the both hypothesis economic dependencies and structural breaks. We find that the macro determinants like openness, growth rate, exchange rate, and economic instability have a long-run impact on FDI inflows in our panel.
TL;DR: In this paper, the authors define shift contagion as a significant increase in correlations in stock returns after a shock and test whether contagion effects exist, during the financial crisis between the U.S stock market and the OECD ones.
Abstract: This study tests whether contagion effects exist, during the financial crisis between the U.S stock market and the OECD ones. We define shift-contagion as a significant increase in correlations in stock returns after a shock. The identification of the break point, the financial crisis, is made by the structural break test of Bai-Perron (2003). Then, time-varying correlation coefficients are estimated by the Dynamic Conditional Correlation (DCC) Multivariate GARCH Model. In order to recognize the contagion effects, we test whether the mean of the DCC coefficients in post-crisis period differs from that in the pre-crisis stable period. Empirical findings show that the OECD stock markets have displayed a significant increase in the means of correlation coefficients between the pre-crisis and post-crisis periods. This proves the existence of contagion between the U.S and the studied markets.
TL;DR: In this paper, the influence of board composition on the level of accountability for non-profitorganizations in Malaysia is examined and the results of the study provide useful information to regulators in theircontinuous efforts to improve accountability in the non-profit sector.
Abstract: Non-profitorganizations (NPOs) are generally subjected to less stringent regulatory requirementsthan for-profit organizations. As such, NPOs are generally reluctant to sharemore comprehensive information with the various stakeholders and may notrecognize the need for accountability. The purpose of this study is to examinethe influence of board composition on the level of accountability for NPOs inMalaysia. Board composition and the level of accountability are obtained fromthe content analysis of annual reports of 234 societies registered withRegistrar of Societies in Malaysia for the financial period 2010. The level ofaccountability (ADI) examined is based on two main components, transparency andcompliance while board composition examined in this study consists of boardsize, board professionalism and board members with political connections.Results of this study provide evidence that the overall level of accountabilityis low. This infers that more comprehensive regulatoryrequirements or at the very least, the existence of best practices with regardsto accountability can be a useful mechanism in enhancing the accountability ofNPOs. In addition, theresults also highlight that an optimum mix of board members mattersin ensuring efficient resource strategy and consequently enhance the level ofaccountability in NPOs. Overall,the findings in this study provide useful information to regulators in theircontinuous efforts to improve accountability in the non-profit sector. This inturn can enhance the credibility and sustainability of the NPOs.
TL;DR: In this paper, the authors found that about one third of those surveyed for the study feel an increased risk in B2C online transactions over the previous year, and that absolute majority of them have never or rarely shopped on a web site they are not familiar with.
Abstract: Since the beginning of e-commerce, trustworthiness of commercial web sites has been a constant issue, and, very likely, it will continue to be. When an online shopper cannot trust a web site where he or she intends to make a purchase, the online shopper would perceive a risk of transactional security and a risk of privacy of personal information. In regard to this perceived risk in online transactions, this study is set out to find the change in the level of perceived risk in Business-to-Consumer (B2C) e-commerce and to test whether or not consumers trust a web-centric company at their first visit to the companys web site. Two major findings of this study are that about one third of those surveyed for the study feel an increased risk in B2C online transactions over the previous year, and that absolute majority of them have never or rarely shopped on a web site they are not familiar with. It is further found that even an attractive deal cannot affect the risk-averse behavior of online shopping. From the findings of the study, it is concluded that risk-averse online shopping behavior is a manifestation of increased perceived risk in B2C online transactions.
TL;DR: In this paper, the authors examined the transmission of the US subprime crisis across BRIC financial markets and examined the extent of contagion, and found interesting evidence of volatility spillovers from US financial sector to all the BRIC market's financial sectors both in the full sample and crisis period.
Abstract: Although, there is an apparent consensus about the contagion effects of the current US subprime crisis. However, the transmission and repercussions of US subprime crisis, as well as the nature of the transformation suffered by different economic sectors between the US and other markets are such empirical questions that have not been dealt with comprehensively, yet. In this paper, by utilizing the multivariate GARCH analysis of Engle and Kroner (1995) for which a BEKK representation is adopted, we examine the transmission of the US subprime crisis across BRIC financial markets. Moreover, to identify the extent of contagion, we also inspect the diffusion of US subprime crisis to BRIC equity market’s financial and industrial sectors. We found interesting evidence of volatility spillovers from US financial sector to all the BRIC market’s financial sectors both in the full sample and crisis period. Similarly, except Chinese industrial sector, we observe contagion effects from US to Brazilian, Russian and Indian equity market’s industrial sectors. Our results exhibit direct linkage for both returns and volatility between the US equity market and the BRIC markets. Equity markets of Russia and India, however, were found hardly hit during the crisis period among the BRIC countries. Finally, we found no support for the decoupling view while investigating the fastest growing emerging markets, the BRIC countries.