Emerald Group Publishing Limited
Article Type: Editorial From: Qualitative Research in Financial Markets, Volume 6, Issue 3
Welcome to the final issue of Qualitative Research in Financial Markets (QRFM) for 2014. This has been another year of terrific growth and development for the journal to the extent that, as mentioned in the last issue, we are moving to four issues per year in 2015. Without the hard work of so many people, this simply would not have been possible, but on this occasion, I would like to make particular mention of the editorial advisory board, whose expertise and insights at critical points in the QRFM journey have been immensely valuable.
This issue contains five papers, diverse in content and focus, but all adding to knowledge in the discipline in substantive ways. The first study, “Prospects for Micro-Insurance in Promoting Micro-Credit in sub-Sahara Africa”, by Olajumoke Olaosebikan and Mike Adams, employs a case-study methodology to examine issues relating to insurance provision for low-income groups in The Gambia. The evidence indicates that co-operative schemes such as credit unions have distinct advantages in terms of agency costs relative to outside equity-owned banks. Importantly, the authors also suggest that micro-insurance represents an important entrepreneurial tool for mitigating against social hardships in low-income countries and reliance on external aid.
The second paper in this issue: “Measuring level of market orientation for an Islamic microfinance institution case study of Amanah Ikhtiar Malaysia (AIM)”, by Soheil Kazemian, Rashidah Abdul Rahman and Zuraeda Ibrahim also examines micro-finance structures in the developing world. In this case, interviews with 16 outward-facing managers at AIM provide evidence that the organisation performs well in two (customer interaction and inter-function co-ordination) of the three dimensions of market orientation suggested in the recent literature. Notably, however, whilst the organisation espouses its Islamic credentials, the receipt of interest payments (albeit just to meet expenses) was seen by the interviewees as counter to Sharia principles, a theme of several papers published in earlier issues of QRFM.
The third study: “Value Creation Drivers in a Secondary Buyout – the Acquisition of Brenntag by BC Partners,” by Ann-Kristen Achleitner, Christian Figge and Eva Lutz, explores the structure of the deal involved when Bain Capital, primary purchasers of Brenntag, sold the concern to BC Partners in a secondary deal. Several noteworthy findings emerge, including the tendency for continued improvements in operating performance to generate on-going value gains, even when buyer/seller skill sets are similar. The positive impact of higher managerial ownership is shown not to be a single event, not least because greater understanding of management incentives schemes develops as a result of the transaction. In addition, the higher degree of leverage evident in secondary buyouts is reported to be a function of information asymmetry reductions that secondary buyouts induce.
In “Philip Fisher’s sense of numbers: An account of the use of Quantitative Reasoning in Philip Fisher’s Qualitative Model of Equity Valuation”, the fourth paper in this issue, Carlo Massironi provides a fascinating discussion of the way in which quantitative aspects of Fisher’s qualitative valuation models can be modelled in a manner that might be of use to asset managers. The study employs a conceptual analysis methodology and generates detailed evidence regarding the link between: hard numbers, equations and related constructs; with what might commonly be referred to as qualitative reasoning.
In so doing, the paper fits well with one of the other themes in recent issues of QRFM, i.e. the link between the concrete and the more abstract interpretation of decision-making in financial markets.
The final paper: “Working Capital Management During the Global Financial Crisis: The Australian experience”, by Vikash Ramiah, Yilang Zhao and Imad Moosa, investigates the impact of the credit crunch on treasurer behaviour in Australia. Using evidence garnered from both a questionnaire survey and a series of interviews, the study reports that the worldwide events led to additional conservatism in most treasurers’ behaviour, with capital expenditures being reduced in an attempt to maintain cash levels. The findings also point to a number of specific behavioural biases, with over confidence, self-serving and anchoring/loss aversion all evident in significant numbers.