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Article
Publication date: 25 March 2021

Ahmed Imran Hunjra, Tahar Tayachi, Rashid Mehmood and Anwaar Hussain

Economic risk plays a vital role in firm's cash holdings. We aim to determine the impact of economic risk on the firm's cash holdings.

Abstract

Purpose

Economic risk plays a vital role in firm's cash holdings. We aim to determine the impact of economic risk on the firm's cash holdings.

Design/methodology/approach

The data is collected from the DataStream from 2002 to 2018, which covers 552 listed firms in the manufacturing sector of Pakistan, Sri Lanka, India and Bangladesh. We apply a two-step dynamic panel estimation to analyze the results.

Findings

We use the variance of inflation and variance of interest rate as proxies of economic risk. Our results show that variance of inflation has a significant and negative effect while the variance of interest rate has a significant and positive effect on firms' cash holdings in selected countries. Furthermore, we find economic risk negatively affects the firm's cash holdings in the country-wise analysis. Firms should maintain a reasonable amount of cash reserves to handle uncertain situations.

Originality/value

This study may provide insights to financial decision-makers of a firm for better cash management according the economic conditions of the country.

Details

Journal of Economic and Administrative Sciences, vol. 38 no. 3
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 23 February 2022

Ahmed Imran Hunjra, Fazal Muhammad and Saber Sebai

Earnings management (EM) plays a vital role in risk management. This paper aims to investigate the impact of real earning management (REM) on credit risk.

Abstract

Purpose

Earnings management (EM) plays a vital role in risk management. This paper aims to investigate the impact of real earning management (REM) on credit risk.

Design/methodology/approach

This paper measures the credit risk by the expected default frequency of Kealhofer, McQuown and Vasicek model. This paper uses data from 2011 to 2020 of Pakistani manufacturing listed firms. This paper applies the fixed effect to analyze the results and generalized methods of moments to handle the heterogeneity issue.

Findings

This paper finds that the impact of REM on corporate credit risk is positive and significant and that of sales manipulation is negative and significant. This paper also reports similar outcomes of the robustness test using dynamic panel regression.

Originality/value

The findings of this study may help managers to modify the EM strategy to minimize corporate credit risk. Furthermore, the findings of this study are important for investors to enhance their understanding of firms’ accounting information, REM activities and cash flow patterns. It further suggests the manager should consider credit risk as an important factor while practicing REM.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 31 December 2021

Tahar Tayachi, Ahmed Imran Hunjra, Kirsten Jones, Rashid Mehmood and Mamdouh Abdulaziz Saleh Al-Faryan

Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management…

Abstract

Purpose

Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management Ownership structure is an important mechanism that influences the value of firm, financing and dividend decisions. This paper aims to examine the impact of the ownership structures, i.e. managerial ownership, institutional ownership on financing and dividend policy.

Design/methodology/approach

The authors use panel data of manufacturing firms from both developed and developing countries, and the generalized method of moments (GMM) is applied to analyze the results. The authors collect the data from DataStream for the period of 2010 to 2019.

Findings

The authors find that managerial ownership and ownership concentration have significant and positive effects on debt financing, but they have significant and negative effects on dividend policy. Institutional ownership shows a positive impact on financing decisions and dividend policy for sample firms.

Originality/value

This study fills the gap by proving the policy implications for both firms and investors, as managers prefer debt financing, but at the same time try to ignore dividend payment. Therefore, investors may not invest in firms with a higher proportion of managerial ownership and may choose to invest more in institutional ownership, which lowers the agency cost.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 1 July 2018

Haroon Bakari, Ahmed Imran Hunjra, Stephen Jaros and Imamuddin Khoso

This study aims to explore the moderating role of cynicism about change in the positive relationship between authentic leadership and employee commitment to change.

1099

Abstract

Purpose

This study aims to explore the moderating role of cynicism about change in the positive relationship between authentic leadership and employee commitment to change.

Design/methodology/approach

This study used an exploratory research design with deductive approach to invite responses of doctors, nurses and para medical staff of public sector district hospitals, set to be privatized, on structured close-ended questionnaires. Data gathered from four hospitals chosen because they were undergoing restructuring that facilitated the testing of our propositions were analyzed through structural equation modeling using AMOS. A total of 271 usable responses (response rate of 65 per cent) were analyzed. Interaction and simple slope tests were applied to test moderating effects.

Findings

Results indicate that authentic leadership is positively related to commitment to change. Cynicism about change moderated this positive relationship such that a high level of authentic leadership has a stronger impact on commitment to change when cynicism is low rather than when cynicism is high.

Practical implications

Results show that in Pakistani hospitals undergoing restructuring, leaders who use authentic leadership will have followers who are more committed to enacting the planned changes, but this effect is magnified if followers are not cynical about the change. Thus, regulators of public sector hospitals may benefit from this study by developing authenticity in hospital leaders to mitigate cynicism about and enhance their commitment to change.

Originality/value

This study is the first which has explored relationships among cynicism about change, authentic leadership and commitment to change in a privatization context of Pakistan. Findings should be tested in other cultural contexts to determine generalizability.

Details

Leadership in Health Services, vol. 32 no. 3
Type: Research Article
ISSN: 1751-1879

Keywords

Article
Publication date: 12 August 2020

Ahmed Imran Hunjra, Mahnoor Hanif, Rashid Mehmood and Loi Viet Nguyen

The purpose of this paper is to investigate the impact of diversification, corporate governance and capital regulations on bank risk-taking in Asian emerging economies.

Abstract

Purpose

The purpose of this paper is to investigate the impact of diversification, corporate governance and capital regulations on bank risk-taking in Asian emerging economies.

Design/methodology/approach

The authors applied the generalized method of moments to analyze a sample of 116 listed banks of ten Asian emerging economies for the years 2010–2018.

Findings

The authors found that diversification, board size, CEO duality and board independence, block holders and capital regulations significantly affect bank risk-taking. In particular, nontraditional income sources such as noninterest income and adoption of diversification strategies minimize bank risk-taking.

Practical implications

It is expected that the outcomes of this study can be used by banks in Asian emerging economies that seek to reduce risk-taking by managing the diversification of their income streams and managing the impacts of capital regulation and implementing sound corporate governance features in monitoring their operations. This study suggests practical risk minimizing strategies for banks. First is the sourcing of nontraditional income and adoption of diversification strategies. Second, maintaining nonexecutive directors on the board would enhance monitoring of business activities. Third, maintaining deposit insurance would reduce bank’s risk. Government provides insurance to depositors to motivate them to deposit their funds into the banks. This, in return, facilitates banks to overcome risk. However, banks need to be cautious of any increase in capital ratio, as channeling funds into risky investments would increase risk.

Originality/value

This study is the first to investigate the impacts of corporate governance, diversification and regulation on bank’s risk-taking in a cross-country setting of ten Asian emerging economies.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 31 May 2022

Ploypailin Kijkasiwat, Ahmad Usman Shahid, M. Kabir Hassan and Ahmed Imran Hunjra

This study examines the influence of access to finance and social capital on the improvement of the corporate performance of non-listed firms of Southeast Asian countries…

Abstract

Purpose

This study examines the influence of access to finance and social capital on the improvement of the corporate performance of non-listed firms of Southeast Asian countries. Furthermore, this paper also explores the mediating role of firms' access to finance between the association of social capital and the improvement of corporate performance.

Design/methodology/approach

This study utilizes the Bank Business Environment and Enterprise Performance Survey from 2015 to 2017. Specifically, the survey was administered by the World Bank. Data were analyzed using structural modeling in Smart-PLS.

Findings

The findings show that firms' access to finance and social capital significantly influences the improvement of corporate performance. Additionally, the study’s analysis further reports the mediating role of firms' access to finance between the association of social capital and the improvement of corporate performance.

Practical implications

This study has implications for governments, regulators and policymakers for enhancing access to finance and social capital, and improving corporate performance.

Originality/value

This paper establishes the importance of firms' access to finance and social capital for improving firms' overall performance in the broader context of Southeast Asia.

Details

Managerial Finance, vol. 48 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 3 August 2021

Muhammad Munir Ahmad, Ahmed Imran Hunjra, Faridul Islam and Qasim Zureigat

The authors examine the impact of asymmetric information on firm's financing decisions, the feedback effect of changes in capital structure on the level of asymmetric…

Abstract

Purpose

The authors examine the impact of asymmetric information on firm's financing decisions, the feedback effect of changes in capital structure on the level of asymmetric information, and the speed of adjustments in capital structure on its target leverage.

Design/methodology/approach

The authors extract the data on 280 non-financial firms listed in the Pakistan Stock Exchange (PSX) from the DataStream. The authors implement the generalized method of moments (GMM), complemented by the fixed effect model (FEM) to estimate the model coefficients.

Findings

The authors find that asymmetric information significantly affects the financing decisions; and that on average, firms adjust 26% of the total debt toward their target capital structure. The negative effect from the difference between the observed and target changes in leverage on asymmetric information confirms that capital structure changes act as a signal for future profitability and helps the management to lower its level of asymmetric information.

Originality/value

The findings offer fresh insight into the effect of asymmetric information on financing decisions, as well as the speed of adjustment of capital structure toward its target leverage, in the context of the firms working in emerging markets like Pakistan. To the authors’ best knowledge, this is the first study to investigate the impact of asymmetric information on financing decisions that incorporate firm's age, size and the global financial crises 2007–2008. The authors construct an asymmetric information index using both accounting and finance measures of asymmetry.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 4 November 2020

Ahmed Imran Hunjra, Asad Mehmood, Hung Phu Nguyen and Tahar Tayachi

The authors examine the impact of credit, liquidity and operational risks on the financial performance of commercial banks of South Asia.

1260

Abstract

Purpose

The authors examine the impact of credit, liquidity and operational risks on the financial performance of commercial banks of South Asia.

Design/methodology/approach

Data are extracted from DataStream of 76 commercial banks of four countries, i.e. Pakistan, India, Bangladesh and Sri Lanka for the period 2009–2018. The generalized method of moments (GMM) is used to analyze the results.

Findings

All three risks are significantly associated with financial performance. The authors find that Z-score positively affects the bank performance, whereas the nonperforming loans (NPLs) ratio has a negative impact on financial performance of bank. Liquidity risk analyses show the current and loan-to-deposit (LTD) ratios positively and negatively, respectively, affect financial performance. While operational risk positively affects financial performance. The authors further present the significant effects of joint occurrence of credit and liquidity risks on financial performance.

Practical implications

For managing credit risk, banking management should ensure the policies for granting loans and timely reimbursement of the loan installments from customers. Bank managers should regularly monitor the liquidity position by maintaining the necessary levels of loans and deposits. Management should retain a healthy capital charge to meet operational risks.

Originality/value

Credit, liquidity and operational risks are considered the most important categories of risk which are faced by financial institutions. To the best of the authors’ knowledge, this is the first study which investigates the impact of these risks on banks’ financial performance in selected South Asian countries. The results of this study have relevance and probable generalizability about the impact of risks on the performance of banks in emerging markets.

Details

International Journal of Emerging Markets, vol. 17 no. 3
Type: Research Article
ISSN: 1746-8809

Keywords

Content available
Article
Publication date: 24 May 2021

Zied Ftiti

273

Abstract

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 1
Type: Research Article
ISSN: 1985-2517

Article
Publication date: 1 May 2020

M. Nazmul Islam, Fumitaka Furuoka and Aida Idris

The purpose of this paper is to propose a conceptual framework for ensuring employee championing behavior (ECB) during organizational change for business organizations in…

1065

Abstract

Purpose

The purpose of this paper is to propose a conceptual framework for ensuring employee championing behavior (ECB) during organizational change for business organizations in Bangladesh.

Design/methodology/approach

On the basis of previous literature, this paper proposed a framework for ensuring ECB during organizational change.

Findings

This paper proposed transformational leadership (TL), which enhances the championing behavior of the employee. In addition, valence, work engagement and trust in leadership act as potential mediators between TL and championing behavior. This paper also proposed organizational alignment (OA) as a potential moderator that influences ECB in the context of organizational change.

Research limitations/implications

This paper highlights numerous influential factors that enhance ECB. This proposed conceptual framework will be validated by the empirical evidence in future research.

Practical implications

This paper provides new insights for business leaders to understand the importance of ECB during organizational change. Moreover, this research underlined the effectiveness of valence, work engagement and trust in leadership and OA to nurture ECB in the time of organizational change, which helps managers of the business organizations to make efficient strategies to tackle organizational change.

Originality/value

This paper adopted Kurt Lewin’s change management theory and integrated with different factors associated with organizational change (TL, valence, work engagement, trust in leadership and OA) to propose a model to understand the mechanism of enhancing ECB in the context of change in Bangladesh’s business organizations.

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