Search results

21 – 30 of over 11000
Article
Publication date: 1 January 1999

Jacob M. Chacko

It has been eight years since the Eastern European nations decided to move away from a command economy and adopt free market economic policies. The transformation process has not…

Abstract

It has been eight years since the Eastern European nations decided to move away from a command economy and adopt free market economic policies. The transformation process has not been without problems, however their efforts and successes in many areas are commendable. Among the Eastern European nations, Hungary has been by far the most successful in transforming its economy and currently first in line for membership into the European Union and the enlarged North Atlantic Treaty Organization (NATO). The study assesses the attractiveness of Hungary for foreign investors, by using the country risk assessment model developed by Haner and Ewing (1985). Based on the discussion, this paper proposes recommendations for prospective investors.

Details

Competitiveness Review: An International Business Journal, vol. 9 no. 1
Type: Research Article
ISSN: 1059-5422

Article
Publication date: 20 September 2021

R. Sreedevi, Haritha Saranga and Sirish Kumar Gouda

This paper aims to examine the relationship between environmental factors, risk perception and decision-making in risk management. Specifically, using attribution theory, the…

1564

Abstract

Purpose

This paper aims to examine the relationship between environmental factors, risk perception and decision-making in risk management. Specifically, using attribution theory, the authors study the influence of macro-level logistical capabilities of a host country on a firm’s actual and perceived supply chain risk, and examine if this country-level factor and the firm level perception of risk affect a firm’s decision-making in risk management.

Design/methodology/approach

This study uses a combination of primary data from 932 manufacturing firms from 22 countries and secondary data from the logistics performance index (LPI), and empirically tests the conceptual framework using partial least squares structural equation modeling.

Findings

Key results reveal that a country’s logistical capabilities, measured using LPI, have a significant impact on managers’ risk perception. Firms located in countries with high LPI perceive lower risk in their supply chain both in the upstream and downstream, and therefore do not invest much in external integration, compared to firms in low LPI countries, and hence are exposed to high risk.

Originality/value

This is one of the first empirical studies linking a country’s logistical capabilities with supply chain risk perceptions, objective supply chain risk and supply chain risk management efforts of a firm using the International Manufacturing Strategy Survey database.

Details

Supply Chain Management: An International Journal, vol. 28 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

Book part
Publication date: 16 February 2006

Dalia Grigonytė

Theory suggests that as long as a country runs a balanced budget regime, there is no linkage between fiscal variables and the interest rates. In the case of fiscal expansion that…

Abstract

Theory suggests that as long as a country runs a balanced budget regime, there is no linkage between fiscal variables and the interest rates. In the case of fiscal expansion that is not sufficiently covered by government revenues, however, the government has two options to finance its deficit: printing money or additional borrowing. Both options lead to an increase in the risk premia on government bonds. One strand of literature focuses on a currency crisis that emerges as a necessary outcome in light of contradictions between fixed exchange rate, and fiscal and financial fundamentals. If government bonds are denominated in domestic currency, the government can reduce their real value by higher inflation or by devaluation of the national currency. In order to bear this risk foreign investors require a currency risk premium. Governments can eliminate the risk of currency devaluation by issuing bonds denominated in foreign currencies, but the default risk remains and it depends on public finances. Another strand of the literature looks at the relation between fiscal variables and government bond yields in the framework of portfolio balance model.

Details

Emerging European Financial Markets: Independence and Integration Post-Enlargement
Type: Book
ISBN: 978-0-76231-264-1

Article
Publication date: 1 January 2000

Shaker A. Zahra and Carol Dianne Hansen

Privatization is a popular strategy for restructuring the national economies of advanced and advancing countries. This strategy centers on promoting the forces of the free market…

Abstract

Privatization is a popular strategy for restructuring the national economies of advanced and advancing countries. This strategy centers on promoting the forces of the free market system by transforming state‐owned enterprises into private companies and changing their ownership and management systems. These changes can alter organizational cultures and promote risk‐taking, innovation and entrepreneurship. This article examines the contributions of privatization to entrepreneurship in new ventures and established companies, outlines factors that can limit entreprenurial gains from national privatization programs, and discusses the implications of entrepreneurial changes that occur following privatization for global competitiveness.

Details

Competitiveness Review: An International Business Journal, vol. 10 no. 1
Type: Research Article
ISSN: 1059-5422

Book part
Publication date: 2 September 2020

Ramona Rupeika-Apoga, Inna Romānova and Simon Grima

Introduction – Stability of commercial banks is on the back stone of a country’s economy and its development, making bank stability one of the main concerns of financial…

Abstract

Introduction – Stability of commercial banks is on the back stone of a country’s economy and its development, making bank stability one of the main concerns of financial regulators. The bank stability models for large and small economies differ significantly.

Purpose – In this chapter we examine the determinants of bank stability in a small post-transition economy, based on the case of Latvia. Latvia has a well-organized banking system, providing a wide range of services to local and international customers. Besides, the Latvian banking sector is quite unique in Europe as it comprises two sets of banks with radically different target groups of customers and sources of revenue.

Methodology – To carry out this study we analysed panel data of the quarterly financial statements of Latvian banks operating during the period 2012-2017.

Findings – We found evidence of a negative significant relationship between size and bank stability, negative significant impact of liquidity risk on bank stability, a positive significant relationship between capital adequacy and bank stability, as well as a positive significant relationship between credit risk and stability. These results increase the importance of a sufficient level of capital adequacy ratio and liquidity to maintain bank stability. In general, the results of the study confirm the results of other studies on bank stability of small economies, with some exceptions due to the unique situation in term bank business models applied by Latvian banks. The current study provides valuable policy implications to small post-transition economies and stakeholders in general.

Details

Contemporary Issues in Business Economics and Finance
Type: Book
ISBN: 978-1-83909-604-4

Keywords

Book part
Publication date: 28 September 2015

Md Shah Azam

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and…

Abstract

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

Details

E-Services Adoption: Processes by Firms in Developing Nations
Type: Book
ISBN: 978-1-78560-325-9

Keywords

Article
Publication date: 2 September 2014

Lama Tarek Al-Kayed, Sharifah Raihan Syed Mohd Zain and Jarita Duasa

This paper aims to examine the effect of capital structure on Islamic banks’ (IBs) performance to provide guidance to finance managers for raising capital funds. As newcomers to…

7290

Abstract

Purpose

This paper aims to examine the effect of capital structure on Islamic banks’ (IBs) performance to provide guidance to finance managers for raising capital funds. As newcomers to the markets, IBs are facing a trade-off. They can either use high capital ratios which increase the soundness and safety of the bank and lower the required return by investors, or depend on deposits and Islamic bonds which are considered cheaper sources of funds due to their tax rebate. An IB’s management must carefully decide the appropriate mix of debt and equity, i.e. capital structure, to maximize the value of the bank.

Design/methodology/approach

Using a sample of 85 IBs covering banking systems in 19 countries, the study uses a two-stage least squares method to examine the performance determinants of IBs to control the reverse causality from performance to capital structure.

Findings

After control of the macroeconomic environment, financial market structure and taxation, results indicate that IBs’ performance (profitability) responds positively to an increase in equity (capital ratio). The result is consistent with the signaling theory which predicts that banks expected to have better performance credibly transmit this information through higher capital. Optimal capital structure results of the IBs found a non-monotonic U-shaped relationship between the capital-asset ratio and profitability, supporting the efficiency risk and franchise value hypotheses.

Research limitations/implications

Due to limitations for market data, the study uses book accounting ratios. Future research where market data are available could use performance measures, such as Tobin’s Q in performance determinants models.

Practical implications

The non-monotonic relationship found between IBs’ return on equity and capital ratios suggests that equity issuances for IBs’ with low capital ratios (lower than the turning point of 37.41 per cent) are expensive and have a negative effect on their profitability. On the other hand, managers of well-capitalized IBs (banks with capital ratios beyond 37.41 per cent) are advised to rely on equity when faced by a decision to raise capital, as the capital ratio starts to affect their profitability positively.

Originality/value

Islamic banking literature has been silent on IBs’ capital structure and its relevance; this study will try to fill in the existent gap.

Details

Journal of Islamic Accounting and Business Research, vol. 5 no. 2
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 18 March 2021

Heba Masoud and Mohamed Albaity

This study examines the effect of general trust (GT) and confidence in banks (CIB) on bank risk-taking. Besides, it explores the moderating role of CIB on the relationship between…

Abstract

Purpose

This study examines the effect of general trust (GT) and confidence in banks (CIB) on bank risk-taking. Besides, it explores the moderating role of CIB on the relationship between GT and bank risk-taking.

Design/methodology/approach

Secondary data was obtained from the World Value Survey, World Bank and BankFocus from 2011 to 2018. Two-step system GMM estimator was used to examine the links between the GT and CIB with bank risk-taking in MENA region.

Findings

Results indicated that both GT and CIB negatively influenced bank risk-taking. Moreover, CIB weakened the negative relationship between GT and bank risk-taking. However, the results were different for MENA region as compared to the full sample.

Originality/value

The studies on the link between trust and bank risk-taking are either carried out on an international sample or using a developed economies sample. However, the authors believe that developing economies might exhibit different relationships due to cultural and structural differences present in developed countries. Besides, the authors believe that testing the moderating effect of CIB could shed more light on the differences between developing and developed countries.

Details

Journal of Economic Studies, vol. 49 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 17 February 2012

Bing Yu

This paper examines relationship between bargaining powers of creditors as well as employees and financial leverage across countries. The purpose of this paper is to explore roles…

3706

Abstract

Purpose

This paper examines relationship between bargaining powers of creditors as well as employees and financial leverage across countries. The purpose of this paper is to explore roles of creditors and employees in capital structure decisions under different legal and political regimes across countries.

Design/methodology/approach

Using country‐level creditor rights index and labor rights index as a proxy for bargaining powers of creditors and employees, respectively, the author addresses the interaction between creditors as well as employees and shareholders. The paper tests the impact of employee rights and creditor rights on capital structure across countries.

Findings

The author finds a positive relationship between employee rights and firms' use of debt and a negative relationship between creditor rights and firm debt ratio.

Social implications

The paper provides a new perspective to interpret international variation in financial leverage in the world. The results obtained from this paper help us to understand financial leverage in different countries with various corporate governance mechanisms.

Originality/value

This paper takes all stakeholders into account when studying agency problems; it explores the role of creditors and employees in financing decision making under various corporate governance patterns and political and legal systems across countries.

Details

Managerial Finance, vol. 38 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 16 November 2018

Michela Matarazzo, Giulia Lanzilli and Riccardo Resciniti

The purpose of this paper is to investigate whether, in the context of a cross-border acquisition, the acquirer’s country image (CI) could moderate the relationship between the…

Abstract

Purpose

The purpose of this paper is to investigate whether, in the context of a cross-border acquisition, the acquirer’s country image (CI) could moderate the relationship between the acquirer’s corporate reputation (CR) and consumers’ repurchase intentions towards the products of the post-acquisition target.

Design/methodology/approach

The authors examined the roles played by the acquirer’s CR and the acquirer’s CI on consumer behaviour by considering an Italian target firm with a high reputation and comparing four foreign acquiring firms with different combinations of CR (poor/good) and CI (high/low).

Findings

It was found that both CR and CI have a significant impact on Italian consumers’ intention to repurchase the products of the post-acquisition target. Furthermore, the results show a greater increase in consumers’ repurchase intentions when a good reputation of the acquirer is paired with a high CI for the acquirer, but a high CI cannot compensate for a poor CR.

Originality/value

The research investigates, in the context of cross-border acquisitions (CBAs), the impact of the acquirer’s CR and the acquirer’s CI on the host country consumers’ repurchase intentions after the CBA, which has not previously been thoroughly examined. It can help managers to understand the conditions under which CBAs will be favourably evaluated.

Details

Journal of Product & Brand Management, vol. 27 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

21 – 30 of over 11000