Search results
1 – 10 of 12Much prior work involving director incentives and corporate behaviour has been focussing on their absolute dollar value or the intrinsic value and generated mixed findings…
Abstract
Purpose
Much prior work involving director incentives and corporate behaviour has been focussing on their absolute dollar value or the intrinsic value and generated mixed findings. Comparison theories, however, suggest that the relative value of an incentive may be the main drive for individual performance. This study attempts to investigate the role of director relative pay in promoting the board’s intervention with unrelated diversification decisions.
Design/methodology/approach
The analysis uses data from firms operating in more than one segment during the period from 1999 to 2019. Data were obtained from WRDS databases. Ordinary least squares (OLS) regression analysis and the two-stage system generalized method of moments (GMM) were run to test the hypotheses. To test the robustness of the findings, alternative proxies for the key independent variables were used in separate analyses.
Findings
The results support the hypothesis that unrelated diversification negatively impact firm performance, while higher director relative pay will help reduce unrelated business diversification. The absolute director pay, however, has no significant impact on corporate strategic choices. The results also highlight the moderating effect of director overcompensation. Director overcompensation will cancel out the impact of relative director pay on unrelated diversification.
Originality/value
This study takes a fresh theoretical perspective by framing the investigation using the dimensional comparison theory to address the single untended comparison framework in the director pay structure – the intra-individual framework. It is the first to investigate the role of director relative pay in corporate strategic choices. The findings support the contention that the relative value of the incentive is an important indicator of the effectiveness of the pay.
Details
Keywords
Mahfooz Alam, Shakeb Akhtar and Mamdouh Abdulaziz Saleh Al-Faryan
This paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC…
Abstract
Purpose
This paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC) nations.
Design/methodology/approach
For the Corporate Governance Index, the authors examined board accountability, transparency and disclosure and audit committee, while Tobin’s Q, return on equity and return on assets are used to measure the bank’s profitability. The study used a two-stage analysis based on balanced panel data for robust findings. Sample of this study consists of 60 commercial banks from India and 60 banks from SAARC nations for the period of 2009–2021. This study used panel regression and a generalized method of moment approach using the CAMELS framework on banking industry-specific variables to determine their respective impacts.
Findings
The findings of this study suggest that board accountability is positive and significantly affects the profitability of banks as indicated by return on assets, return on equity and Tobin’s Q. In contrast, the audit committee has a positive and insignificant impact on return on assets, return on equity and Tobin’s Q, while transparency and disclosure have a negative and significant impact on these metrics. Furthermore, the country dummy result shows a significant positive impact on all the bank performance parameters, implying that Indian banks have the highest degree of convergence with corporate governance as compared to other SAARC nations.
Research limitations/implications
This study provides insight to the regulators, policymakers and financial institutions to evaluate the role of corporate governance in emerging economies. However, the findings of the study should be interpreted with caution, as the results are sensitive to the disparity between India and other SAARC nations' government policies, climatic circumstances and cultural or religious traditions.
Originality/value
To the best of the authors’ knowledge, this is the first attempt to gauge the performance of Indian banks vis-à-vis SAARC nations using the CAMELS framework approach. Further, findings of this study suggest some novel evidence tying corporate governance quality with the profitability of banks among SAARC nations.
Details
Keywords
Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management…
Abstract
Purpose
Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management practices on organizational performance of small- and medium-scale enterprises.
Design/methodology/approach
Data were collected from 45 small-sized and 72 medium-sized firms. Data supported the hypothesized relationships. Construct reliability and validity were established through confirmatory factor analysis. The conceptual model and hypotheses were evaluated by using structural equation modeling.
Findings
The results indicate that working capital significantly influenced organizational performance. Capital budget management significantly influenced organizational performance. A non-significant influence of asset management on organizational performance was observed.
Research limitations/implications
The generalizability of the findings will be constrained due to the research’s SMEs focus and cross-sectional data.
Practical implications
The study’s findings will serve as valuable pointers for stakeholders and decision-makers of SMEs in the development of well-articulated and proactive financial management systems to ensure competitiveness, sustainability, viability and financial competences.
Originality/value
The study adds to the corpus of literature by evidencing empirically that financial management practices significantly influenced SMEs’ performance.
Details
Keywords
This study aims to investigate the relationship between geographic diversification (GD) and export performance (EP) by analysing a sample of small exporters in an emerging market.
Abstract
Purpose
This study aims to investigate the relationship between geographic diversification (GD) and export performance (EP) by analysing a sample of small exporters in an emerging market.
Design/methodology/approach
The study sample comprised 96 small and medium-sized exporting enterprises (SMEs) in Vietnam. The data is analysed using multiple regression analysis (MRA), Hayes' process model and fuzzy-set qualitative comparative analysis (fsQCA).
Findings
The results indicate that GD significantly negatively affects EP. In this dilemma, the export market orientation (EMO) and digital transformation positively moderated the relationship between GD and EP, such that the negative effect of GD on EP was weaker when EMO and digital were stronger.
Originality/value
This initial study contributes significantly to international business theories and practices, which reveal the role of GD via firm digital capacity and EMO in thriving SMEs’ EP. This study might grant new insight into international business and a critical approach to addressing the new insights small firms may face in a fragile but technologically advanced world.
Details
Keywords
Fahrettin Pala, Aylin Erdoğdu, Muhammad Ali, Faisal Alnori and Abdulkadir Barut
The purpose of this study is twofold. First, this research explores the level of Islamic financial literacy of customers in the context of Islamic banking. Second, this study…
Abstract
Purpose
The purpose of this study is twofold. First, this research explores the level of Islamic financial literacy of customers in the context of Islamic banking. Second, this study examines the determinants of customer adoption of Islamic banking in Turkey.
Design/methodology/approach
This study gathered sample data from 409 participants determined using the purposive sampling method. In the study, first, the reflective measurement model is used to examine the reliability, validity and multicollinearity problems of the variables. Then, AMOS structural equation model (SEM) is used to reveal the relationship between Islamic financial literacy and Islamic banking services. Additionally, this study performed both descriptive and inferential analysis to understand customer literacy about Islamic banking and their adoption behavior of Islamic banking.
Findings
The results obtained from descriptive assessment indicate that Turkish customers of Islamic banking possess sufficient literacy about Islamic banking. Moreover, the results from SEM indicate that the adoption of Islamic banking by customers is significantly predicted by the role of Sharia Board management, Islamic banking and purpose of financial institution, religious factor and legitimacy of Islamic financial system.
Research limitations/implications
This study focuses only on the level of knowledge and perceptions of customers who have accounts in Islamic banks or financial institutions in Turkey. It does not focus on the level of knowledge and perception of Muslims who do not have accounts in Islamic banks and financial institutions.
Originality/value
Previous studies on Islamic banking are mostly studies that investigate customers’ perceptions of the Islamic banking system and why individuals prefer Islamic banks. In particular, studies examining the relationship between individuals’ Islamic financial literacy level and Islamic banking preferences are limited. This study is considered to be an original study as it investigates the relationship between the Islamic financial literacy level of individuals and their adoption of Islamic banking services in Turkey.
Details
Keywords
Rahman Ullah Khan, Karim Ullah and Muhammad Atiq
This study aims to synthesize the existing literature with insights gained from interviews conducted with regulatory experts. The objective is to analyse the challenges associated…
Abstract
Purpose
This study aims to synthesize the existing literature with insights gained from interviews conducted with regulatory experts. The objective is to analyse the challenges associated with incorporating cryptocurrencies into regulatory frameworks and to explore constraints in the regulatory institutionalization of cryptocurrencies.
Design/methodology/approach
The study methodology consists of two steps. The first step is to identify regulatory constraints in the literature review and in the next step, interviews are conducted with officials of the State Bank of Pakistan (SBP). The study used a qualitative case study methodology, in which a single case (regulatory constraint) was selected as a unit of analysis.
Findings
The findings show that lack of traceability, legal status, lack of governmental control due to decentralization, difficulty enforcing laws, volatility, lack of skills with regulators and difficulty integrating cryptocurrencies into the current financial system are the main obstacles to the introduction of a regulatory framework. Thus, on a broader conceptual level, the findings can be grouped into opportunism, lack of strategic capability and fragmented global laws.
Research limitations/implications
This study could inform global cryptocurrency regulation discussions, sharing a developing country’s views on balancing the government, central banks, the financial sector and public interests. This could guide countries to consider cryptocurrency adoption in similar situations. This could affect the cryptocurrency market, impacting demand, supply and investor trust in Pakistan.
Practical implications
The study has implications for policy making officials. The research aims to offer valuable insights to the SBP and other regulatory authorities, helping them identify potential risks and create an effective regulatory framework for cryptocurrencies.
Social implications
The study has implications for society in knowing about the volatile nature of cryptos and anonymity of their issuers, which poses regulatory constraints. This then implies its harmfullness to its traders and the huge losses that may arise from their trading due to its volatile nature.
Originality/value
This study contributes to the literature on the constraints, responsibilities and consultation framework of cryptocurrency regulations.
Details
Keywords
Salma Husna Zamani, Rahimi A. Rahman, Muhammad Ashraf Fauzi and Liyana Mohamed Yusof
Policymakers are developing government-level pandemic response strategies (GPRS) to assist architecture, engineering and construction (AEC) enterprises. However, the effectiveness…
Abstract
Purpose
Policymakers are developing government-level pandemic response strategies (GPRS) to assist architecture, engineering and construction (AEC) enterprises. However, the effectiveness of the GPRS has not been assessed. Therefore, this study aims to investigate the interrelationships between GPRS and AEC enterprises. To achieve that aim, the study objectives are to compare GPRS effectiveness between small-medium and large AEC enterprises, develop groupings to categorize interrelated GPRS and evaluate the effectiveness of the GPRS and interrelated constructs.
Design/methodology/approach
A systematic literature review and semi-structured interviews with 40 AEC industry professionals were carried out, generating 22 GPRS. Then, questionnaire survey data was collected among AEC professionals. In total, 114 valid survey answers were received and analyzed using the Kruskal–Wallis H test, normalized mean analysis, factor analysis and fuzzy synthetic evaluation.
Findings
Small-medium enterprises have four distinct critical GPRS: “form a special task force to provide support in maneuvering COVID-19,” “provide infrastructure investment budgets to local governments,” “develop employee assistance programs that fit all types of working groups” and “diversify existing supply chain.” Large enterprises have two distinct critical GPRS: “provide help in digitalizing existing construction projects” and “mandate COVID-19 as force majeure.” Eighteen GPRS can be categorized into the following five constructs: “market stability and financial aid,” “enterprise capability management,” “supply chain improvement,” “law and policy resources” and “information and workforce management.” The former two constructs are more effective than other GPRS constructs.
Originality/value
This is the first paper that evaluates the effectiveness of GPRS for AEC enterprises, providing new evidence to policymakers for well-informed decision-making in developing pandemic response strategies.
Details
Keywords
Kamal Hossain, Mohammad Nurul Alam, Mohd Rizal Muwazir, Ali Alsiehemy and Noor Azlinna Azizan
The aim of this study is to examine the effects of innovativeness (INN), proactiveness, (PRC) and risk-taking (RIT) on the export performance of apparel small and medium-sized…
Abstract
Purpose
The aim of this study is to examine the effects of innovativeness (INN), proactiveness, (PRC) and risk-taking (RIT) on the export performance of apparel small and medium-sized enterprises (SMEs) and the role of differentiation and low-cost leadership (LCL) strategies as mediating effects between entrepreneurial orientation (EO) dimensions and the performance of exporting firms. INN, RIT and PRC are considered EO dimensions.
Design/methodology/approach
A cross-sectional survey was carried out by providing a questionnaire to the owners, directors and senior managers of the apparel SMEs – the primary data of 550 treated by structural equation modeling (SEM) technique for final data analysis.
Findings
The study has revealed the positive dimensional effect of EO on export performance. For the mediation effects of differentiation and LCL, differentiation strategy (DS) positively mediates between INN, PRC and export performance. However, no mediation has been found between RIT and export performance. On the other hand, LCL has found positive effects between INN, RIT and export performance. However, the mediation effect was absent between PRC and export performance.
Research limitations/implications
Limitations/implications- This study has been conducted on only Muslim owners, senior export managers and directors of apparel SMEs in Bangladesh. It has examined the two main competitive strategies as a mediator between EO dimensions and export performance. The findings of this study are based on one country data analysis.
Practical implications
EO, differentiation and low-cost leadership (LCL) strategy are resources and capabilities of an organization to create a competitive advantage to enhance performance. The factors of this research are helpful for SME practitioners.
Originality/value
The direct and indirect effects (differentiation and LCL strategy) of EO dimensions on export performance in an emerging country, i.e. the South-Asia region, is a pioneer study. Therefore, current research has theoretical and managerial implications for the international business and strategic management literature.
Details
Keywords
Shailesh Rastogi and Jagjeevan Kanoujiya
The main aim of the study is to explore the volatility spillover effect of cryptocurrencies (Bitcoin, Ethereum and Litecoin) on inflation volatility in India.
Abstract
Purpose
The main aim of the study is to explore the volatility spillover effect of cryptocurrencies (Bitcoin, Ethereum and Litecoin) on inflation volatility in India.
Design/methodology/approach
A popular tool, the Bivariate GARCH model (BEKK-GARCH), to study the volatility spillover effect, is applied in the study. Monthly data of cryptocurrencies and inflation (WPI and CPI indices) are gathered from 2015 to 2021.
Findings
Significant short-term responsiveness of volatility of cryptocurrencies on the inflation volatility is found. In addition to this, the significant volatility spillover effect from the cryptocurrencies to the inflation volatility is found.
Practical implications
The findings of the current paper can be of use for inflation management, target inflation policies and policies to contain the volatility of cryptocurrencies. The significance of the current paper is relevant as governments worldwide are officially recognizing cryptocurrencies and starting the process of launching their official virtual currency.
Originality/value
No other study is observed on the topic. Hence, the contribution and novelty of the findings of the current paper are very high and add value to the nonexistent literature on the topic. Lack of the number of inflation observations (data of CPI and WPI are available only in monthly frequency) crimps the model estimation. As the cryptocurrencies become old, more data points will be available by design, and such problems can be resolved, and better model estimation may be possible.
Details
Keywords
This study aims to investigate the impact of terrorism on financial inclusion that is achieved through automated teller machine penetration and bank branch expansion.
Abstract
Purpose
This study aims to investigate the impact of terrorism on financial inclusion that is achieved through automated teller machine penetration and bank branch expansion.
Design/methodology/approach
Eight countries that are the most terrorized countries in the world were analysed using the panel fixed effect regression model and the generalized linear model.
Findings
The results provide evidence that terrorism reduces the level of financial inclusion in countries experiencing terrorism, but the presence of strong legal institutions, accountability governance institutions and political stability governance institutions mitigate the adverse effect of terrorism on financial inclusion.
Originality/value
A growing literature has shown that terrorism affects the economy, yet little is known about its impact on financial inclusion.
Details