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Article
Publication date: 6 June 2008

Fadzlan Sufian

The purpose of the present paper is to examine the impact of off‐balance sheet (OBS) activities on non‐bank financial institutions' (NBFI) productivity.

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Abstract

Purpose

The purpose of the present paper is to examine the impact of off‐balance sheet (OBS) activities on non‐bank financial institutions' (NBFI) productivity.

Design/methodology/approach

The paper utilized the Malmquist Productivity Index (MPI) methodology, which allows us to examine five different indices namely, the productivity change (TFPCH), technological change (TECHCH), efficiency change (EFFCH), pure technical efficiency change (PEFFCH), and scale efficiency change (SECH) indices. A series of parametric and non‐parametric tests are performed to examine whether the merchant banks and finance companies were drawn from the same population. Finally, a multivariate analysis based on the GLS fixed and random effects estimators are employed to examine the relationship between the productivity scores derived from the MPI with NBFI specific characteristic variables.

Findings

The empirical findings suggest that Malaysian NBFIs have exhibited productivity progress during the study period. The decomposition of the TFPCH index into its EFFCH and TECHCH components indicates that the Malaysian NBFIs productivity progress was mainly attributed to technological progress rather than efficiency increase. We have also examined the productivity progress/regress of different NBFI groups operating in Malaysia. The results suggest that while the merchant banks have exhibited productivity progress attributed to the increase in efficiency, the finance companies on the other hand have exhibited productivity decline due to the decline in efficiency. The inclusion of OBS items has resulted in a lower Malaysian NBFIs productivity growth. However, the findings suggest that while the merchant banks' productivity was enhanced with the inclusion of OBS items, the finance companies' productivity growth seem to have worsened. The results suggest that the omission of OBS items may result in the TECHCH of both the merchant banks and finance companies to be overestimated. Conversely, the inclusion of OBS items has had positive impact on both the merchant banks' and finance companies' efficiency. The empirical findings also suggest that the omission of OBS items resulted in the overestimation of both the merchant banks and finance companies scale inefficiency.

Research limitations/implications

The paper can be extended to consider the production approach along with the intermediation approach, which has been applied in this paper. Investigation of changes in efficiency over time by employing the data envelopment analysis approach could yet be another extension to the paper.

Originality/value

This paper provides new empirical evidence on the productivity of NBFIs, particularly in a developing economy.

Details

Studies in Economics and Finance, vol. 25 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 8 August 2016

Jie Guo and Harry Bouwman

To understand why the penetration of handset-based mobile payment in most countries is still low has been an important research topic for the last 15 years, and it has…

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Abstract

Purpose

To understand why the penetration of handset-based mobile payment in most countries is still low has been an important research topic for the last 15 years, and it has been analyzed from different perspectives. However, the analysis of a single aspect cannot provide a sophisticated answer to the complicated underlying question. The purpose of this paper is to understand how a relatively successful m-payment ecosystem is created and sustained through the coopetition of various actors.

Design/methodology/approach

To that end, the authors analyze the case of Alipay wallet, the m-payment service provider with the largest market share in China, and focus on understanding the motivations and subsequent actions of the organizations cooperating in the Alipay wallet core ecosystem.

Findings

The results show that actors with heterogeneous and complementary resources can forge sustainable collaboration. Within an ecosystem, although always constrained by resources and capabilities, the actions that the core actors take and the resulting power imbalances are dynamically changing, reflecting actors’ aim of reducing uncertainty.

Research limitations/implications

The main limitation of this case is that it was conducted in a Chinese context, which has specific features that may not apply to other cases. In addition, this study is based on a single case study in a single country, without comparing the results to any other cases or countries. Therefore, some modifications may have to be made when applying the framework and generalizing the results.

Practical implications

With regards to the practical perspective, the Alipay case may serve as an example that other providers follow, taking similar actions to increase the dependency of others and reduce their own dependency on others. It is helpful to take a keystone strategy to create value within the ecosystem and share this value with other participants. Moreover, Alipay acts as the platform provider, in addition to managing value creation within the ecosystem and sharing that value with the other participants. Alipay focuses on the business and strategic needs of the core actors, without threatening their main business, for example, Alipay focuses on micro-payments, which does not pose a direct competition to banks, who mainly rely on macro-payments to generate profit. Micro-payments are often related to high transaction costs for banks. In addition, although it is difficult to define the boundaries of actors in the ecosystem, the core business of every actor is the key competitive or even survival condition. This notion should be taken into consideration by actors whose actions affect the business of other ecosystem partners. For instance, Alipay will not aim to become a bank, as they know that if they do so, they cannot connect any other bank to their platform. In other words, the scope and boundary of the actors are clearly identified so that the core business will not be threatened. Sords, we can learn from Alipay that it pays off to focus on one area, and not to let your competitors challenge you.

Originality/value

The authors proposed the StReS framework for analyzing a business ecosystem by combining resource-based review, resource dependency theories and network analysis for investigating the motivations of the organizations cooperating in the core ecosystem and the actions they have taken to reduce dependency and uncertainty.

Article
Publication date: 20 January 2020

Haroun Rahimi

The purpose of this study is to explore the role of hawala in supporting Afghanistan’s business climate. It illustrates the use of hawala as credit and its importance for…

Abstract

Purpose

The purpose of this study is to explore the role of hawala in supporting Afghanistan’s business climate. It illustrates the use of hawala as credit and its importance for the local merchant community.

Design/methodology/approach

The empirical data presented in this article draws from more than 83 semi-structured interviews with Afghan merchants, business leaders, hawaladars and judicial officials, conducted between March and August 2017 in five major provinces of Afghanistan, namely, Kabul, Herat, Balkh, Nangarhar and Kandahar. These five provinces collectively represent half of Afghanistan’s economy, one-third of Afghanistan’s total population and more than four-fifth of Afghanistan’s urban population. The commercial courts that sit in these five provinces hear more than 90% of total commercial disputes in the country.

Findings

In Afghanistan, despite their reputation for being the bankers of terrorists and criminals, hawaladars primarily serve Afghan merchants – the overwhelming majority of their customers – helping them cope with an uncertain business climate. Within supply chains, Afghan importers rely on credit-hawala to protect themselves from the interruptions of cash flow that are prevalent throughout the Afghan economy.

Practical implications

Drawing on extensive field research, this article highlights how hawala stabilizes financing and markets in Afghanistan, arguing that while hawala regulations are necessary to counter abuse of hawala, regulators must be cognizant of how hawala is used in financing of legitimate businesses, or they will exacerbate the problems of access to credit.

Originality/value

While the historical studies of hawala reveal its inextricable link with trade financing, the current hawala literature completely neglects hawala systems’ contemporary financing role. Instead, the literature is completely dominated by the globalization trend of terrorism, money laundering and worker migration. Neglecting the trade financing role of hawala causes policymakers not to appreciate the impacts of hawala regulations on the trade fully. Overlooking hawalas’ role in financing transnational trade also results in the exclusion of an important group of stakeholders – namely, merchant-users of hawala services who are the main beneficiaries of hawaladars’ financing services – from the process of regulation of hawala systems. The main reason that hawala regulations have failed to gain tractions in countries such as Afghanistan is that these regulations have not been cognizant of the multifaceted functions of hawala markets and do not include all stakeholders in the regulation process.

Details

Journal of Money Laundering Control, vol. 23 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

Book part
Publication date: 21 August 2012

Huseyin Leblebici

Purpose – This paper focuses on a unique historical case study of industry evolution in order to develop a road map where historical and strategic research could develop a…

Abstract

Purpose – This paper focuses on a unique historical case study of industry evolution in order to develop a road map where historical and strategic research could develop a common ground for trans-disciplinary inquiry.

Design/methodology/approach – The industry I explore is the Universal Credit Card Industry since its inception with the Diners Club in 1949 until its maturity in late 1990s. My empirical objective here is to develop a historically detailed and theoretically rich case study in which evolutionary processes are discovered as a result of the historical narrative.

Findings – The historical account of the industry demonstrates how the evolution of alternative business models as organizing forms has led to the establishment of interorganizational platforms with unique ecosystems. These alternative business models, through various experimentations, have ultimately produced two critical interorganizational organizations, one based on an open-loop system represented by Visa and MasterCard, and the other based on a closed-loop system represented by Diners Club and the American Express. The historical account also shows that in a given industry competition is not only among specific firms in the industry but also among the business models and the platforms created by these models.

Originality/value – I conclude that historical analyses reveal the nature of competition not only among firms but also among alternative business models where traditional strategy research rarely covers.

Details

History and Strategy
Type: Book
ISBN: 978-1-78190-024-6

Keywords

Article
Publication date: 1 February 1986

Brian Metcalfe

Until the Campbell Report in 1981 the Australian government had a stated policy of not permitting foreign banks authority to carry out banking business in Australia or to…

Abstract

Until the Campbell Report in 1981 the Australian government had a stated policy of not permitting foreign banks authority to carry out banking business in Australia or to acquire interests in Australian banks. Following the report Australia now represents one of the most deregulated financial environments. In February 1985, 16 foreign banks were invited to establish full service banking operations. Considerable potential exists for these entrants but the banks will need to identify their competitive advantages quickly in relation to both indigenous and other foreign banks. All banks will try to expand market share by capitalising on their strengths and servicing recognisable market niches.

Details

International Journal of Bank Marketing, vol. 4 no. 2
Type: Research Article
ISSN: 0265-2323

Keywords

Case study
Publication date: 10 October 2017

Sarit Markovich, Nilima Achwal and Eric Queathem

This case features Stripe, a startup that enables merchants to accept payments from customers on the web, on mobile devices, and at the point of sale (POS). Stripe was…

Abstract

This case features Stripe, a startup that enables merchants to accept payments from customers on the web, on mobile devices, and at the point of sale (POS). Stripe was launched in 2011 by the Collison brothers and quickly gained traction with e-commerce startups, particularly software and platform developers who needed help building their payment processing infrastructures. Stripe incurred high fixed costs in developing its platform and had low margins per transaction, so the company needed to reach high processing volumes (i.e., scale) to survive. This was challenging, as Stripe competed with large payment processors and traditional banks that had high processing volumes and were able to offer merchants significantly lower rates than Stripe. Still, merchants valued Stripe#x0027;s solution because it was simple and versatile. Students assume the role of the Collisons to think about possible strategies Stripe could pursue to process higher volumes of transactions. Students are challenged to think about the potential response of the incumbents to Stripe's different growth alternatives. The teaching note presents the Value Net framework and discusses the importance of considering complementors and their effect on a firm's strategy. Finally, a discussion about Stripe's potential entry into the Indian market allows students to apply the concepts they learned in the discussion of a new market.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

Keywords

Article
Publication date: 1 February 1980

Richard M.S. Wilson

In this introductory overview an indication of the range of financial services that is available will be presented, along with some examples of marketing practices in…

Abstract

In this introductory overview an indication of the range of financial services that is available will be presented, along with some examples of marketing practices in relation to these services and some observations about some of the suppliers of financial services. This coverage will then be followed by a brief review of research in the field of financial services marketing, a note on careers in this field, and a summary of courses in the field.

Details

Managerial Finance, vol. 5 no. 3
Type: Research Article
ISSN: 0307-4358

Article
Publication date: 1 January 1990

Kitty Young and Kin‐Chok Mun

In recent years, the Asian financial market hasgrown in significance and Hong Kong, Tokyo andSingapore are all striving for an increasing sharein the market. In this…

Abstract

In recent years, the Asian financial market has grown in significance and Hong Kong, Tokyo and Singapore are all striving for an increasing share in the market. In this article the authors examine the strengths and weaknesses of the three centres and discuss the role of each. It appears that Tokyo will become the primary Asian financial centre, with Hong Kong acting as a regional centre focusing on business with China, and Singapore likely to develop a market niche in special financial instruments and on serving the Southeast Asia market. The authors analyse the implications of these developments on the marketing strategies of different types of banks in Hong Kong.

Details

International Journal of Bank Marketing, vol. 8 no. 1
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 15 July 2020

Boon Cheong Chew, Xiaobai Shen and Jake Ansell

This study aims to investigate the entrance of Chinese-based Alipay’s mobile-payment (m-payment) technology into Malaysia. Malaysia allowed this entry of the first foreign…

Abstract

Purpose

This study aims to investigate the entrance of Chinese-based Alipay’s mobile-payment (m-payment) technology into Malaysia. Malaysia allowed this entry of the first foreign m-payment company because it would allow Chinese tourists spending while they are visiting Malaysia. It will view this entrance from a Malaysian perspective.

Design/methodology/approach

The views of Malaysian players (Bank Negara Malaysia officers, three Malaysian banks’ officers, Alipay-Malaysia officers, airport section manager, convenience store manager and airport store sales executive) were sought via qualitative interview concerning Alipay’s entry into the Malaysian market. Respondents who had relevant knowledge and/or were involved in Alipay m-payment technology development in Malaysia were contacted, while there remainder were obtained by snowballing. Secondary data was collected from Bank Negara Malaysia’s policy, three Malaysian banks’ reports, the Alipay-Malaysia public statements and the Airport and Convenience Store reports. Triangulation using primary and secondary data was used to safeguard the validity and reliability of the outcomes.

Findings

The entry strategy used by Alipay was different from those reported in previous studies. The establishment of Alipay-Malaysia was the first element of the “mode of entry” gaining pioneer status in Malaysia. The next stage was gaining support from Bank Negara Malaysia-Malaysian Central Bank and three Malaysian banks (Maybank, Public Bank and CIMB) through collaborative ventures with Alipay-Malaysia Sdn. Bhd., leading to acceptance nationwide by local merchants. The key driver of acceptance being Chinese outbound tourists in Malaysia.

Research limitations/implications

This case study was conducted during the early implementation of Alipay in Malaysia from 2015 until April 2019. During this period, there were challenges due to the lack of primary data. These were overcome by the support from the respondents and the secondary data.

Practical implications

This study contributes to insights from a different entry strategy that used tourism as a leading force. This can give guidance to other m-payment service providers or other countries as m-payment technology recipient about “market entry strategy” and “modes of entry” following Alipay’s approach.

Originality/value

To date, no study has been conducted to investigate the nature of Alipay m-payment in Malaysia. This qualitative study has examined the new phenomenon regarding how Alipay entered the Malaysian market. Moreover, this study can also contribute new insights into the existing theory of “market entry strategy” in terms of Alipay’s tourist-based approach.

Details

Qualitative Research in Financial Markets, vol. 12 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 1 May 1986

Gregory R. Elliott

The banking/finance industry in Australia is on the verge of rapid and fundamental change in the areas of government regulation, industry structure, EFT technology and…

Abstract

The banking/finance industry in Australia is on the verge of rapid and fundamental change in the areas of government regulation, industry structure, EFT technology and payment systems, marketing innovation and merchant/wholesale banking. Such a changed environment will cause organisations to engage in continuous strategic planning and new adaptive strategies which focus on the changing relationships between the institution and its customers and competitors. The marketing function will assume new and increased responsibilities. Marketing management will require a far more strategic approach than before. The viability of some institutions may be threatened by these changes. These views are the result of a long‐range Delphi forecasting study conducted in 1982. Although rapid developments have invalidated some of the findings, the forecast of a less regulated, more competitive, open, dynamic and responsive industry remains valid.

Details

International Journal of Bank Marketing, vol. 4 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

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