September 2015 (International Review of Business Research Papers)

September 2015 (International Review of Business Research Papers)

Total Articles - 17

Pages 1 – 12

Author: Jiandong Li and Lin Tan

We report the specific feature of the block trading in the Chinese stock market. There are discounts in the block trading contrast to the block trading premium in the United States, Japan and the majority stock markets in the world.  We show that the discount is rational because the stock’s performance after the block trading is negative. Profit taking actions and private information are possible explanations for the discount. The segmentation between regular stock market and block trading market is not supported. We show that the stock returns pre- and post- the block trading are related to the discount magnitude. Block trading discount can be regarded as an important signal about future stock’s performance.

Pages 13 – 25

Author: Rahmah Ismail, Noorasiah Sulaiman, Arawati Agus and Fariza Ahmad

The first objective of this study is to analyse the elasticity of labour-output and labour-wage for professional and technical labours. The second objective is to project the requirements of these two occupational categories for year 2015 and 2020. The analysis is based on data of four selected services subsectors, namely, professional business, education, health and information and communication technology for the period 20002010. Data are obtained from the Service Industry Survey collected by the Department of Statistics Malaysia. The results show that the elasticity of labour-output is positive, while the elasticity of labour-wage can be positive or negative depending on the occupational category and sector. The manpower requirement for the professional and technical occupations depend on the output growth and the initial stock of employment, which are dominated by the education and information and communication technology sectors.

Pages 26 – 39

Author: A. F. M. Ataur Rahman and Zayeema Sarwar

Voter participation is crucial for any democracy. Without effective participation, elections are not representative of public opinion and thus positive outcomes of democracy are hard to expect. Not surprisingly economists and researchers of other interested disciplines try to find the set of variables that explain voter participation. They used wide varieties of methodologies starting from rational voting models to game theoretic approaches. However studies are mostly focused on developed economies which already have institutionalized democracy in operation. For a growing democracy like Bangladesh situation can be different. Using data of national election of Bangladesh in this study we have found voter participation is positively related to intensity of voter competition, rate of literacy and number of centers available. Population, however, has a negative impact and the level of economic activities (district level GDP) does not seem to have an effect on voter participation.

Pages 40 – 51

Author: Eleonora Isaia, Marina Damilano and Cristina Rovera

At the time of the subprime crisis, investors strongly blamed credit rating agencies (CRAs). Six years later, we want to verify if CRAs are still suffering a reputational damage by measuring stock prices reactions to rating announcements. To test our hypothesis we conduct an event analysis on the American, EU area and Asian/Pacific stock markets over a ten-year period from November 2003 to November 2013. We find that the post crisis abnormal returns are in general lower if compared with the pre-crisis level, in particular if rating changes are far away from the speculative-junk border.

Pages 52 – 61

Author: Mohammad Nayeem Abdullah, Kamruddin Parvez, Rahat Bari Tooheen and Jyotirmoy Saha

This paper examines the relationship between stock prices and exchange rates. Both the long-run and the short-run association between these variables are explored. The study uses monthly data on four South Asian countries Pakistan, India, Bangladesh and Sri- Lanka, for the period January 2008 to December 2012. The paper applied Co-integration, Vector Error Correction Modelling Technique and Standard Granger Causality tests to examine the association between stock prices and exchange rates. No long-run and short-run association between stock prices and exchange rates for Pakistan and India was found. No short-run association was found between Bangladesh and Sri Lanka however a long-run bi-directional association between stock prices and exchange rates was detected between Bangladesh and Sri Lanka.

Pages 62 – 76

Author: Mohan L Roy and Mohammad Ashrafuzzaman

This study examines the effectiveness of modular uses of financial data in determining common stock value by testing publicly available EPS, P/E, P/NAV etc. from December 2009 to January 2014. It found the models failed to predict stock price suitably. An unusual difference was found lying between intrinsic value, determined by multiples models, and actual price. Pragmatically, analysts have little scope to verify publicly available information, which believably improvised and serves common investors as mother of generic delusion.

Pages 77 – 89

Author: Paola De Vincentiis and Patrizia Pia

The paper explores the reputational damages suffered by major and minor rating agencies as a consequence of the subprime crisis. The analysis is carried out through a standard event standard methodology on a sample of 1821 rating actions during the period November 2003 - November 2013. The evidence shows a lower market reaction to rating actions, especially when the evaluation is far away from the threshold between investment and speculative grade.

Pages 90 – 103

Author: Apriani D.R Atahau

This paper analyses the impact of bank-specific characteristics on the loan portfolio returns of government-owned banks (GBs) in Indonesia.   The data covers the pre and post GFC periods from 2003-2011 of 30 GBs (270 bank year observations). Using fixed-effect panel data regression, the results show that size, equity and liquidity affect the loan portfolio returns of GBs in Indonesia. This suggests that the lending policies and loan pricing of GBs in Indonesia may differ based on their specific characteristics. These differences could serve as prominent information for Central Bank in the governing of GBs based on their characteristics.

Pages 104 – 119

Author: Lisandra Patrice Colley

This paper examines the evolution of bilateral trade between the Caribbean Community (CARICOM) and China over the last decade (2004-2013) in order to quantitatively estimate trade potential. It aims to determine the extent and significance of current trade activity between CARICOM and China, as well as to unveil potential opportunities for increased trade cooperation. An empirical analysis is carried out using trade indices which reflect both partner-based and sectoral-based advantages. The results underscore the rising significance of China as a key trading partner for CARICOM countries. There is also a high degree of trade complementarity between the partners, and significant potential for intra-industry trade in key sectors.

Pages 120 – 131

Author: Hanna G. Adamkiewicz and Stanislaw Maciej Kot

In this paper, international competitiveness (IC) is defined axiomatically as a catalyst of productivity. IC enhances national productivity but it is not consumed when interacting with production factors. In literature, the distinction between production factors and catalysts has not been yet analysed. We have modified the Solow model in such a way that it can account for the interactions of IC with physical capital or human capital. Therefore, IC, as a business school product, reaches a solid economic foundations. The panel data from WEF’s The General Competitiveness Reports and Penn World Tables PWT8.0, for the years 2007-2011 and for 134 countries, have been used for estimating the theoretical model. We have found that IC enhances labour productivity when interacting catalytically with human capital only.

Pages 132 – 157

Author: Dilip Dutta and Xin Zheng

This paper formulates an endogenous growth theoretical model of two frequently traded and economically integrated asymmetric countries: the United States and China.  It contributes to the existing literature by analyzing technology accumulation, human capital accumulation and real GDP growth specifically under the scenario of final product trade, intermediate product trade, physical capital exchange, labor exchange, human capital exchange, as well as spillovers from technology and human capital. It extends previous literature by adding international knowledge spillover as an additional growth determinant through trade liberalization. Trade liberalization’s impacts upon the economy’s short term dynamics and long term equilibrium are associated by the developed country and the developing country’s mutual dependence in technology accumulation, human capital accumulation and international knowledge spillovers. Only policy-stimulated technology accumulation, human capital accumulation and international knowledge spillovers can generate persistently positive effects upon macroeconomic growth of the trading countries. Both US and China should therefore focus on foreign direct investment in technology and education, enhance collaboration in R&D sectors and facilitate the mechanism of international knowledge spillovers in order to enhance their economic growth.

Pages 158 – 169

Author: Erik Benrud and Ragnar Benediktsson

We use eight major sector indices in the Indonesian stock market and employ parametric and non-parametric techniques to test for weak-form efficiency over an 18-year period and over three mutually exclusive and exhaustive sub-periods. We also calculate returns for a portfolio composed of the indices using a simple trading rule and compare the properties of those returns to a broad stock-market index. The results suggest the Indonesian stock market was not weak-form efficient over some sub-periods.  Investors could have achieved superior risk-adjusted returns compared to the market portfolio using publicly available information. However, there is evidence that the level of efficiency improved after the early years of the sample.  Concluding remarks discuss the reasons for the changes in efficiency and offer suggestions for improving the efficiency of the Indonesian capital markets.

Pages 170 – 188

Author: Michel Zaitouni and Mohamed Nassar

The purpose of this study is twofold. First, it explores the effect of employees’ perception of justice on trust in their supervisor in the context of performance appraisal. Second, it assesses the role of perceived supervisor support as a mediator between organizational justice and trust in the supervisor in a non-Western society such as Kuwait. A total of 415 employees working at different hierarchical levels in three major banks in Kuwait were surveyed. Hierarchical regression analysis was used to test the research hypotheses. The results supported the hypothesized relationships between distributive, informational and interpersonal justice and trust in the supervisor but no evidence was found that procedural justice positively and significantly relates to trust in the supervisor. The relationships were partially mediated by perceived supervisor support. Data were obtained from the same industry, which limits the generalizability of this study to other industries. A longitudinal study would be helpful to examine the mediating relationship. The findings provide valuable information for the development of common understanding between Western and non-Western societies about the perception of justice in performance appraisal. The paper explores relationships related to justice perceptions in the Kuwaiti banking sector. Previous research focused mainly on procedural and distributive justice as predictors of trust in the supervisor.

Pages 189 – 198

Author: Moha Asri Abdullah, Noor Hazilah Abd Manaf, Kamrul Ahsan and S. M. Ferdous Azam

The consciousness of service quality has been catching the light worldwide. The aim of this paper is to identify the differences in service quality of retail banking between Auckland and Kuala Lumpur. This research surveyed a sample of 236 bank customers from both places, consisting 115 New Zealander from Auckland and 121 Malaysian from Kuala Lumpur region. The results draw the clear differences in service quality of retail banking between Auckland and Kuala Lumpur in terms of latest service technology, front office facilities, neat-appearing employees, solving a customer problem, performing service right the first time, accuracy of banking records, security, confidence and willingness to help customers, operating hours, sufficient ATM’s and branches as well as community programs and so on. Thus, the findings reveal the most obvious implications, considering banking service providers to further improve their service quality with greater efficiency and as a way to better compete in the current marketplace.

Pages 199 – 212

Author: Xuedong Li, Michael D. Clemes and Azmat Gani

This is the first empirical study that models the growth performance of the service sectors in China, Vietnam, Thailand, and Malaysia from 1995 to 2012. The comparative study examines the effects of variables on the expansion of the service sectors for the four countries. A simultaneous equations model is used to investigate the spillover effects between the service sectors and the manufacturing sectors. The findings illustrate a negative and significant effect of China’s manufacturing sector on its service sector and that the manufacturing sectors and exports positively and significantly influence the services sectors in Malaysia Thailand and Vietnam.

Pages 213 – 229

Author: Chao Ma and Guoxin Weng

Current research has explored that empowerment from managers helps improve employees’ performance through intrinsic motivation at Western context. However, this relationship has not been studied using data from China.  The purpose of this study was to investigate whether empowerment from managers contributes to individual job performance of employees through intrinsic motivation of employees in banking industry of Chinese context. Data is collected from 260 employees of three banks, totally 14 branches on low-Yangtze river district of China. Results indicate that empowerment from managers is positively related to job performance of employees, with the partially mediating effect of intrinsic motivation of employees. Theoretical and practical implications are discussed.

Pages 230 – 241

Author: Yuan-Hong Ho and Chiung-Ju Huang

In this paper, we use the panel vector autoregression (PVAR) model to examine the corruption-economic growth nexus in the 4 Asian Tiger economies (Hong Kong, South Korea, Singapore and Taiwan) over the period 1995 – 2011. We found that corruption has a significant effect on the economic growth rate. The results based on PVAR model shows that every 1 point improves in the corruption perceptions index score results in a 5 percent increase on GDP growth rate. Meanwhile, the degree of economic freedom and the growth rate of domestic exports both have significantly positive impact on a country’s economic growth rate. On the other hand, the effect of unemployment rate and investment rate are insignificant, but are not necessarily unimportant variables that do not have positive or negative impacts on a country’s economic growth rate.

Total Articles- 17

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