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Article
Publication date: 16 August 2023

Olusegun Felix Ayadi and Johnnie Williams

This study aims to explore the possibility that securities markets in selected African countries of Egypt, Kenya, Nigeria and South Africa play a significant role in capital…

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Abstract

Purpose

This study aims to explore the possibility that securities markets in selected African countries of Egypt, Kenya, Nigeria and South Africa play a significant role in capital accumulation using panel data analysis. This is done by exploring the relationship between gross fixed capital formation on the one hand and financial market development indicators on the other hand. Thus, the study aims to examine if stock market size and liquidity are determinants of capital accumulation.

Design/methodology/approach

The analysis is based on annual times series from 1991 through 2017 spanning four African stock markets. The analysis utilizes the fixed-effect and random-effect econometric models. The Durbin–Wu–Hausman test is used to choose between the two models.

Findings

The key results indicate that stock market capitalization is a positive determinant of gross fixed capital formation. The market value traded and turnover have no relationship with capital formation. Therefore, the role of stock African stock markets in promoting capital accumulation and, subsequently, industrial growth in Africa is seriously questioned.

Originality/value

Only a handful of studies have examined the role of the African securities market in promoting capital accumulation. This study is unique in which it focuses on the leading stock markets in the four corners of Africa. The markets are from Egypt in the north, South Africa from the south, Nigeria from the west and Kenya from the east. These four markets account for a significant segment of all African markets.

Details

Journal of Money and Business, vol. 3 no. 2
Type: Research Article
ISSN: 2634-2596

Keywords

Article
Publication date: 5 September 2023

Zhuo June Cheng, Yinghua Min, Feng Tian and Sean Xin Xu

The purpose of this paper is to investigate how customer relationship management (CRM) implementation affects internal capital allocation efficiency, the efficiency with which a…

Abstract

Purpose

The purpose of this paper is to investigate how customer relationship management (CRM) implementation affects internal capital allocation efficiency, the efficiency with which a firm allocates its capital across its business segments.

Design/methodology/approach

The authors use a statistical regression method to analyze a sample of 801 unique firms in the USA from COMPUSTAT and the Computer Intelligence database. This analysis examines the relation between CRM implementation and internal capital allocation efficiency and identifies the conditions under which firms benefit more from CRM implementation. They also use instrumental variables (IVs) to address endogenous concerns with a two-stage least squares (2SLS) model.

Findings

The authors find that CRM implementation is positively related to internal capital allocation efficiency. The results are robust to the 2SLS analysis with IVs. This positive relation is more pronounced for firms with effective internal control and for those operating in highly competitive markets.

Practical implications

The research implies that that CRM can have a significant cross-functional effect on corporate financing and budgeting. This also suggests that when chief marketing officers plan marketing initiatives and implement CRM, they should communicate to chief financial officers not only the direct effect but also the indirect strategic benefits of such initiatives to a firm.

Originality/value

The authors reveal a previously overlooked aspect of marketing accountability by suggesting marketing’s impact on internal capital markets. They also enrich the body of literature on CRM benefits by showing a cross-functional benefit from marketing to finance (or capital allocation).

Details

Journal of Business & Industrial Marketing, vol. 39 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 2 June 2023

Miroslav Mateev and Tarek Nasr

This paper aims to investigate the impact of capital requirements and bank competition on banks' risk-taking behavior in the Middle East and North Africa (MENA) region.

Abstract

Purpose

This paper aims to investigate the impact of capital requirements and bank competition on banks' risk-taking behavior in the Middle East and North Africa (MENA) region.

Design/methodology/approach

The study combines both descriptive and analytical approaches. It considers panel data sets and adopts panel data econometric techniques like fixed effects/random effects and generalized method of moments estimator.

Findings

Regulatory capital and market competition have different effects according to the bank’s type (Islamic or conventional). The results show that the capital adequacy ratio has a significant impact on the credit risk of conventional banks (CBs) while this effect is irrelevant for Islamic banks (IBs). However, market competition plays a significant role in shaping risk-taking behavior of Islamic banking institutions. Our results indicate that banks with strong market power may pursue risky strategies in the face of increased regulatory pressure (e.g. increased minimum capital requirements). The results were robust to alternative profitability measures and endogeneity checks.

Research limitations/implications

The most important limitation is the lack of data for some banks and years, and this paper had to exclude some variables because of missing observations. The second limitation concerns the number of IBs in the sample. However, this can be overcome by including more countries from MENA and other regions where Islamic banking is a growing phenomenon.

Practical implications

Our findings call for a change in Islamic banking’s traditional business model based on the prohibition of interest. The analysis indicates that market concentration moderates the association between capital requirements and the insolvency risk of IBs but not CBs. Therefore, regulatory authorities concerned with improving financial stability in the MENA region should set up their policies differently depending on the level of banking market concentration. Finally, bank managers are requested to apply a more disciplined approach to their lending decisions and build sufficient capital conservation buffers to limit the impact of downside risk from the depletion of capital buffers during the pandemic.

Originality/value

This study addresses banks’ risk-taking behavior and stability in the MENA region, which includes banks of different types (Islamic and conventional). This paper also contributes to the literature on bank stability by identifying the most critical factors that affect bank risk and stability in the MENA region, which can be relevant in the context of the new global (COVID-19) crisis.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 16 no. 6
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 11 January 2023

Dmitry Shevchenko, Weili Zhao and Qiyang Guo

The purpose of this study is to probe into the influence mechanism of financial opening onto industrial restructuring from the prism of financial development and examine the role…

Abstract

Purpose

The purpose of this study is to probe into the influence mechanism of financial opening onto industrial restructuring from the prism of financial development and examine the role of the credit market, capital market and currency market in transmitting the impact of financial opening onto industrial restructuring in both developed countries and developing countries.

Design/methodology/approach

In the theoretical model, the indicator of financial opening was introduced in Cobb–Douglas production function formula. Using constant elasticity of substitution utility function, based on Engel’s law, the optimal industrial structure in the economy was concluded. For the empirical analysis, data was collected from 36 developed countries and 34 developing countries during the period 2000 to 2019. Multiple mediator models with bootstrap techniques were used to identify the linkage between financial opening, financial development and industrial restructuring.

Findings

First, there is a U-shaped relationship between financial opening and industrial restructuring. Second, financial development plays a mediating role in transmitting the effects of financial opening onto industrial restructuring mainly through the credit market at the global level. Third, developed countries are in a trend of “reindustrialization,” while developing countries show a trend of “premature deindustrialization.” Moreover, for developed countries, the capital market leads to reindustrialization, while the credit market and currency market contribute to deindustrialization. For developing countries, the capital market and credit market lead to deindustrialization, while the currency market contributes to industrialization.

Originality/value

Unlike most previous researches, this paper focuses on examining three-variable relationship between financial opening, financial development and domestic industrial restructuring. Against the backdrop of the pandemic, monetary policy shifts of developed economies have led to an increase in cross-border capital flows, which will lead to the increasing risks for international financial markets and the reallocation of the global value chain. It is of great significance to clarify the linkage between these three variables in the face of a volatile international financial environment.

Details

International Journal of Development Issues, vol. 22 no. 2
Type: Research Article
ISSN: 1446-8956

Keywords

Article
Publication date: 5 April 2022

Mercedes Villanueva-Flores, Dara Hernández-Roque, Mariluz Fernández-Alles and Mirta Diaz-Fernandez

Scholars have emphasized intellectual capital’s importance for universities in obtaining competitive advantages and creating value. The purpose of this paper is to identify the…

Abstract

Purpose

Scholars have emphasized intellectual capital’s importance for universities in obtaining competitive advantages and creating value. The purpose of this paper is to identify the influences of two components of intellectual capital, relational and human capital at the international level, and psychological capital on international orientation of academic entrepreneurs, and the mediating effects of international relational and human capital.

Design/methodology/approach

On the basis of a literature review, a theoretical model is proposed to explain the relationship between the studied variables. Our hypotheses are tested on a sample of 173 academic spin-offs of Spanish universities using bootstrapping methodology.

Findings

The results show that the international market relational capital and international human capital of academic entrepreneurs influence their international orientation, and that their psychological capital is directly, and indirectly, related to international orientation through international human capital and international market relational capital.

Practical implications

This study provides a better understanding of the antecedents of the international orientation of academic entrepreneurs, which would provide an important contribution to the literature on intellectual capital, academic entrepreneurship and internationalization. The achieved results highlight important implications for training of academic entrepreneurs and for managers and management teams of companies willing to enter, or even those already operating in, international markets.

Originality/value

In this study, the international orientation of academic entrepreneurs is explained through the psychological capital that is studied jointly with two components of intellectual capital, relational and human capital at the international level. Although some recent work has focused on the study of the internationalization of academic spin-off, this line of research is still incipient.

Details

Journal of Intellectual Capital, vol. 24 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 1 May 2023

Heba Abou-El-Sood and Rana Shahin

Motivated by recent financial liberalization policies in emerging markets, this study investigates whether bank competition and regulatory capital affect bank risk taking in an…

Abstract

Purpose

Motivated by recent financial liberalization policies in emerging markets, this study investigates whether bank competition and regulatory capital affect bank risk taking in an international banking context.

Design/methodology/approach

Bank competition is regressed, using GLS regression, on various measures of bank risk, to reflect regulatory, accounting and market-based risk-taking. The authors use a sample of publicly traded banks operating in Africa during 2004–2019.

Findings

Results show that higher level of bank competition increases bank risk taking and results in greater financial fragility in the absence of banking capital regulations. Furthermore, larger capital adequacy ratios control the risk-taking incentives of managers and guard banks against the risk of default. Further tests confirm the significance of market-based risk measures over accounting and regulatory measures.

Practical implications

Findings are relevant to bank managers and regulators in their sustained effort of finding an optimal balance between bank competition and financial stability. Increased competition should be balanced with capital regulations to curtail bank excessive risky behavior and derive the social benefits of greater competition in the market while sustaining overall economic growth.

Originality/value

This study provides novel evidence in an international context. First, it uses regulatory, accounting and market-based measures of bank risk taking to reflect regulators', management and market participants' emphasis. Another original contribution is the investigation of bank competition across African economies characterized by financial liberalization, stringent banking system and interesting socio-economic challenges.

Details

Managerial Finance, vol. 49 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 24 April 2023

Majid Mohammad Shafiee, Merrill Warkentin and Setare Motamed

This study aims to investigate the key roles of human and relational capital in the export orientation and competitiveness of knowledge-intensive cooperative companies. It is also…

Abstract

Purpose

This study aims to investigate the key roles of human and relational capital in the export orientation and competitiveness of knowledge-intensive cooperative companies. It is also aimed to examine the moderating role of marketing knowledge capabilities.

Design/methodology/approach

Data from 552 managers at 86 companies, selected from knowledge-intensive export cooperatives, were analyzed with structural equation modeling with the partial least squares approach.

Findings

Results indicate that both human and relational capital exert considerable effects on competitiveness. Export orientation was a driving factor for cooperatives’ competitiveness. Human and relational capital fostered the effects of export orientation on competitiveness. Moreover, marketing knowledge capabilities were found to moderate the relationships between human and relational capital and export orientation, as well as between export orientation and competitiveness.

Originality/value

By highlighting the role of human capital and relational capital in export orientation and competitiveness, this study offers an analysis of important managerial processes within cooperative companies, which have not been sufficiently addressed in previous research. This research also demonstrated the moderating role of marketing knowledge capabilities in strengthening relationships between human and relational capital and export orientation, as well as between export orientation and competitiveness, which has been neglected in previous studies. These findings provide academics and practitioners with a new framework for examining the relationships between these constructs, which will enable them to establish strategies for achieving a competitive advantage.

Details

Journal of Knowledge Management, vol. 28 no. 1
Type: Research Article
ISSN: 1367-3270

Keywords

Article
Publication date: 9 March 2022

Dona Budi Kharisma and Afilya Hunaifa

The purpose of this paper is two-fold: to analyze the legal issues on disgorgement and disgorgement funds in Indonesia, the USA and the UK and to construct the ideal law regarding…

Abstract

Purpose

The purpose of this paper is two-fold: to analyze the legal issues on disgorgement and disgorgement funds in Indonesia, the USA and the UK and to construct the ideal law regarding disgorgement and disgorgement fund.

Design/methodology/approach

The type of legal research in this paper is normative legal research. The research approach used is a comparative approach and a legal approach. The legal materials used are all regulations on the disgorgement law and the disgorgement fund that apply in Indonesia, the USA and the UK. The technique of collecting legal materials is done by using library research techniques.

Findings

The rapid growth of the capital market in Indonesia still faces various legal issues such as various market manipulations, insider trading and illegal investment management activities. Based on the results of a comparative study, Indonesia does not yet have a calculation mechanism regarding the imposition of disgorgement on violators. Unlike Indonesia, the USA has the rules of practice and rules on fair funds and exchange commissions, and the UK has the decision procedure and penalties manual, which regulates the mechanism for calculating the imposition of disgorgement. Indonesia is solely able to use administrative action in imposing disgorgement, while in the USA and the UK, it can be through courts or direct administrative actions. These legal issues have resulted due to the lack of confidence by international investors and the growth of the investment climate in Indonesia itself.

Research limitations/implications

This study examines the regulation of disgorgement and disgorgement funds in Indonesia, the USA and the UK. However, the focus of research in this paper is limited to legal issues that occurred in Indonesia.

Practical implications

The results of this study may help to construct the ideal regulations on disgorgement and disgorgement funds in various countries and protect the capital market of the investors.

Social implications

The results of this study are expected to be helpful for the investment climate in various countries, especially developing countries.

Originality/value

The ideal legal construction regarding disgorgement, namely, parties to the mechanism for imposing disgorgement; disgorgement filing mechanism; sanctions in disgorgement; disgorgement fund sources; provider of fundholding accounts; mechanism for calculating disgorgement imposition; disgorgement fund distribution mechanism.

Details

Journal of Financial Crime, vol. 30 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 20 May 2021

Xin Xiang

The purpose of this study is to examine whether and how internal capital markets mitigate financial constraints and enhance firms' willingness to engage in R&D projects.

Abstract

Purpose

The purpose of this study is to examine whether and how internal capital markets mitigate financial constraints and enhance firms' willingness to engage in R&D projects.

Design/methodology/approach

The study uses panel data relating to 2,095 publicly traded firms in the Chinese A-share market for the period 2007–2019. The tobit regression method is applied to explore R&D investment–cash flow sensitivity of group affiliates, while the systematic generalised method of moments and dynamic ordinary least squares models are adopted to address the endogeneity problem in the robustness test.

Findings

This study finds that firms affiliated with business groups demonstrate lower R&D investment–cash flow sensitivity than non-affiliated firms do and that R&D investments are significantly influenced by the cash reserves of other group members. In terms of financing channels, this study demonstrates that group firms use internal cash and equity financing to support other members' R&D investments, while debt financing does not influence member firms' R&D investments. In addition, this study discovers that R&D spending harms the stock and operating performance of some group members.

Practical implications

The findings of this study enable business groups to focus on resource allocation and investment efficiency.

Originality/value

Although prior studies indicate that internal capital markets can enhance R&D spending, few studies reveal the mechanisms through which internal capital markets benefit R&D. This study uses a unique methodology to test the ability of the internal capital market to enhance R&D spending. In addition, group firms use internal cash flow and equity financing to support partners' R&D projects.

Details

International Journal of Emerging Markets, vol. 18 no. 4
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 12 January 2022

Olawumi Fadeyi, Stanley McGreal, Michael J. McCord, Jim Berry and Martin Haran

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade…

Abstract

Purpose

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade. However, the increase in global uncertainties in recent years due to socio-economic and political trends highlights the need for more insights into the behaviour of international real estate capital flows. The purpose of this study is to evaluate the influence of the global and domestic environment on international real estate investment activities within the London office market over the period 2007–2017.

Design/methodology/approach

This study adopts an auto-regressive distributed lag approach using the real capital analytics (RCA) international real estate investment data. The RCA data analyses quarterly cross-border investment transactions within the central London office market for the period 2007–2017.

Findings

The study provides insights on the critical differences in the influence of the domestic and global environment on cross-border investment activities in this office market, specifically highlighting the significance of the influence of the global environment in the long run. In the short run, the influence of factors reflective of both the domestic and international environment are important indicating that international capital flows into the London office market is contextualised by the interaction of different factors.

Originality/value

The authors provide a holistic study of the influence of both the domestic and international environment on cross-border investment activities in the London office market, providing more insights on the behaviour of global real estate capital flows.

Details

Journal of European Real Estate Research, vol. 16 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

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