September 2016 (Journal of Accounting, Finance and Economics)

September 2016 (Journal of Accounting, Finance and Economics)

Total Articles - 9

Pages 108 – 122

Author: Ali Faya Alhassan

This study examines transfer pricing behaviour for the purpose of shifting profits between national tax jurisdictions with different rates of profit tax in the context of the Saudi oil and gas sector as well as that of several other countries (i.e., Australia, Canada, Czech Republic, France, Korea, Japan, Kuwait, Norway, Poland, Sweden, UK and US). The methodology of the Bartelsman and Beetsma (2003) is proposed as the basis for testing the hypothesis. The results of this study show that the Bartelsman and Beetsma (2003) model when applied to the Saudi Arabia oil and gas sector does not detect transfer pricing behaviour for the purpose of shifting profit. However, the Bartelsman and Beetsma (2003) model when applied to other countries such as Japan, Korea, Norway, Poland, and the United Kingdom does show results that suggests the presence of transfer pricing behaviour for the purpose of shifting profits.

Pages 90 – 98

Author: Angelo Marinangeli

There are few studies that take into consideration the effects of the Italian rating downgrade in the context of the current crisis. This paper aims to identify which sovereign debt downgrades have had the highest impact on the stock market. More specifically, the study analyzed a sample of shares belonging to the key sectors, that is, finance, technology, fashion, food and beverage and health sectors. In addition, the analysis was conducted in order to verify if the “border downgrades” have an amplified impact on the stock market than the other ones. It was found, through the ‘event study dummy’ approach methodology, that the transitions from one grade to another have had a greater impact than transitions into the same grade. Moreover, the first Italian downgrade had an important impact on the stock market returns, because this downgrade represented the alarm bell that the crisis was intensifying also in the country under consideration. Only in the technology industry did the first downgrade had no effect. In fact, the technology industry is more robust because it can be defined as the most innovative industry, and so it detected the crisis earlier.

Pages 1 – 14

Author: Almici Alex, Cassano Raffaella and Costa Valentina

Sustainability in the food and the pharmaceutical industry has become a hot topic as the several cases of malpractice reported by worldwide media in recent years shows. This research aims at identifying the reasons for the diffusion of non-ethically sustainable practices in these sectors, by evaluating the effectiveness of the company’s internal controls. To achieve this aim, a content analysis was performed considering the largest European pharmaceutical and food companies, listed on one or more of the main stock exchanges. Main findings underline many internal controls’ vulnerabilities to corruption.

Pages 15 – 35

Author: Mobashsher Mannan Fahad and Nisar Ahmed

This paper examines the arbitrage opportunities from Filipino Investors’ perspective in relation to their main trading partner, Japan. The study has been conducted with data between 1994-2013. Findings suggests absence of IFE and PPP. The exchange rate is affected by 1346 macro-forces. Investors or consumers should conduct a combination of technical and fundamental analysis to identify trends. Dominant higher real-interest rates and cheaper commodities at home suggest the local market to be stable, but for arbitrage opportunity seekers, it is proven that there exist such chances with different levels of risks involved depending on the era and the macro-economic conditions.

Pages 36 – 48

Author: Rita O. Koyame-Marsh

The limited success of Saudization program in curbing the unemployment of Saudi Nationals led to the introduction of a supplemental program called the “Nitaqat” in 2011. This paper gives an overview of the Saudization and Nitaqat programs. It also examines the performance of the Saudization program pre and post Nitaqat. Data show that Nitaqat has led to a significant increase in the number of Saudis employed in the private sector. However, it has not been able to reduce the unemployment rate among Saudis while causing the exacerbation of Ghost Saudization and the closure of more than 200,000 firms in two years.

Pages 49 – 64

Author: Obaid S AlMotairy

Assessing the achievement of learning goals is essential part of every business program and school to prepare students for the future. There is an agreement among the experts that class room time should be rationalized and student should spend also their time for the critical thinking. There is a great demand for students having the attributes of critical thinking who can meet the expectation of advance technology savvy employers. In response to the demand of the stakeholders, accounting schools have abandoned traditional methods of teaching. They leaned towards the accounting students who possess the attributes of writing and of presentation skills on the current issues, of enhanced skills of critical thinking and communication. The College of Business and Economics at Qassim University, Saudi Arabia has undertaken a project, policies, measures and steps to raise learning outcomes and the level of critical thinking among the accounting students. This paper intends to numerically measure the learning outcomes, indicators of critical thinking and at the end endeavoured to assess the association between learning outcomes and critical thinking. It turns out, at the end of a project, that methodology developed for the current study has significant impact in terms of attaining desired learning outcome and raising the level of critical thinking by the accounting students.

Pages 65 – 77

Author: Rabia Shakir

The role of monetary policy is vague in the sense that the nature of macroeconomic variables is dynamic. This fact of dynamicity has made it difficult to capture the exact notion of the behavior of macroeconomic variables. This study was carried out to evaluate the effectiveness of the monetary policy transmission mechanism in the banking system of Pakistan. The study also looked into the magnitude at which tools of monetary policy transmission mechanism affects economic growth in Pakistan. With the beginning of the era of consumer banking, consumption expenditures have grown rapidly because of increased financial services availability. Such an increase in consumption expenditures increases the aggregate demand over time, thereby creating demand pull inflation which is in contrast to the monetary policy objectives. Therefore, the study sought to provide an intuitive explanation of this contrast in monetary policy measure that encourages inflation, through an indirect transmission mechanism in Pakistan. The hypothetical framework was developed by considering four variables, namely; money supply, real lending rates, inflation rate and real GDP. The techniques of co-integration and granger’s causality are applied to the past 35 years of data (1980-2015) to determine the direction and strength of relationships between variables. However, the results are quite disparate to monetary theory; the analysis of data revealed that when supply of money increases in the economy, real lending rate decreases. Consequently, households consume more as credit is available at low cost; thus, they save less and spend more.

Pages 78 – 89

Author: Divya Gakhar

Derivatives were introduced in Indian securities market as it offers various benefits like price discovery, efficiency and transparency. This paper analyses lead lag relationship between Nifty Index futures and Nifty Index spot prices. By taking daily price data from 4-06-2000 to 05-02-2015 of Nifty Index futures and Nifty index cash market price, we have tried to understand whether Nifty futures prices leads the spot market price or vice versa. By using cointegration test, granger causality test, Vector error correction model and diagnostic testing results have been analysed. VECM results indicate that there is long run causality which exists running from near month nifty futures to nifty index and short run relationship also exists between two markets.

Pages 99 – 107

Author: Mohammed T. Abusharbeh and Sana’ Jamil Sous

This study aims at investigating the relationship between risk and return for the listed stocks in Palestinian exchange market. Moreover it also examines the validity of capital assets in Palestinian stock market. Thus, ordinary least square (OLS) is used to analyze data variables and to test the research hypotheses. The empirical result reveals that the intercept term of individual companies is insignificantly different from zero and the slope is equal to the excess return of market index. This result proves significant relationship between risk and return. Moreover, the findings conclude that the higher beta is not associated with higher level of individual stock return. This indicates that the securities market line has non-linearity relationship between risk and return. It means that CAPM is not a good predictor for stock prices in Palestinian exchange market over the selected sample period. Therefore, this relationship is not quite enough to compensate investors for their market risk because systematic risk shows a nonlinear relationship with returns during the period of study. Thus, this paper recommends other sound assets pricing model in predicting future stocks returns.

Total Articles- 9

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