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Article
Publication date: 9 June 2021

Muhammad Aftab, Amir Rafique and Evan Lau

The sticky-price monetary model of exchange rate states the overshooting hypothesis as, exchange rate depreciation beyond its long-term value in response to an increase in…

Abstract

Purpose

The sticky-price monetary model of exchange rate states the overshooting hypothesis as, exchange rate depreciation beyond its long-term value in response to an increase in money supply owing to the sticky nature of prices. Because of interest and relevance to policy, there is a huge extant literature on it but with mixed findings that suggest the need for further studies to refine the findings. Pakistan’s rupee exchange rate against the US dollar depreciated 128.44% over the period May 2007–December 2018. Considering this substantial decline in rupee's value, this study aims to examine either the rupee short-run value is over-shot of its long-term value.

Design/methodology/approach

This study uses a linear ARDL approach that segregates the short-run and long-run effects thus clarifying the premise of exchange rate overshooting. Furthermore, this study also uses nonlinear ARDL as a robustness check incorporating structural breaks.

Findings

Findings based on a linear model show evidence of exchange rate undershooting that means a positive money shock causes the exchange rate to appreciate. A nonlinear analysis also provides support to these findings. However, the increase in relative money supply has more such effect than that of a decrease in the relative money supply. Moreover, the authorities’ inclination to stabilize the exchange rate appreciates its short-run value.

Originality/value

This study substantiates the overshooting hypothesis literature by considering the role of asymmetric effects of exchange rate determinants and structural breaks that is a rare attempt in the extant literature.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 14 November 2016

Omar Khalid Bhatti, Muhammad Aftab Alam, Arif Hassan and Mohamed Sulaiman

The current study aims to examine the relationship between Islamic spirituality (IS), Islamic social responsibility (ISR) and workplace deviance (WD).

Abstract

Purpose

The current study aims to examine the relationship between Islamic spirituality (IS), Islamic social responsibility (ISR) and workplace deviance (WD).

Design/methodology/approach

Data were collected from 400 Muslim employees of 9 business groups in Pakistan from manufacturing and services industry. The structure equation modeling was used to test the hypotheses, and the proposed model was assessed through renowned model fit indices.

Findings

The findings revealed that IS and ISR help curtail WD. The study also provides empirical support to the hypotheses that employees with high levels of IS and social responsibility will tend to avoid deviant behavior at workplace.

Originality/value

This study proposed IS and ISR as two possible stimuli that can help reduce employee deviant behavior at workplace. The findings of the present study revealed that IS, as well as ISR, is inversely related to WD. The present results augmented the existing body of knowledge regarding workplace spirituality in the field of organization behavior and further enriched the WD theory by offering new empirical relationships from an Islamic perspective.

Details

Humanomics, vol. 32 no. 4
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 9 March 2020

Muhammad Aftab Alam and Kashif Mateen Ansari

The purpose of this paper is to demonstrate how an open innovation strategy of public management in the energy sector enables the creation of innovation ecosystems and how…

Abstract

Purpose

The purpose of this paper is to demonstrate how an open innovation strategy of public management in the energy sector enables the creation of innovation ecosystems and how it reduces the cost of wind energy projects in energy-poor countries.

Design/methodology/approach

This research study reflects on seven wind energy startups (WESs) in Pakistan using quantitative and qualitative data following a sequential mixed-methods approach. First, it draws from growing literature on innovation and renewable energy management to conceptualize an open innovation ecosystem model around WESs. It then tests this model using cost analyses of wind projects and identifies possible cost-saving strategies. Finally, follow-up interviews with managers in investigated projects cross check study findings and validate the model.

Findings

Three noteworthy findings can help policymakers in developing countries to effectively meet the future energy challenges and get benefit from international funding opportunities: by protecting lenders on approved terms rather than offering sovereign guarantee to operating firms; by letting the government take control of the initial development phase; and by giving off-take guarantees to the manufacturers.

Practical implications

It offers policy recommendations to energy sector managers about guarantees, financing, regulators, governmental control, tariffs and transfer of technology that can significantly curtail outlays.

Originality/value

Results suggest that adopting an open innovation ecosystem model can potentially save around 6 per cent ($4-$7m) in the overall cost of a 50 MW wind energy project.

Details

International Journal of Energy Sector Management, vol. 14 no. 5
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 7 August 2017

Muhammad Aftab and Ijaz Ur Rehman

This paper aims to examine the influence of exchange rate risk on the bilateral trade of two closely connected East Asian open economies – Malaysia and Singapore – at…

Abstract

Purpose

This paper aims to examine the influence of exchange rate risk on the bilateral trade of two closely connected East Asian open economies – Malaysia and Singapore – at industry level.

Design/methodology/approach

This study estimates import and export demand models considering 65 import and 65 export industries of Malaysia, with Singapore using monthly data over the period 2000-2014. Generalized Auto Regressive Conditional Heteroskedasticity (GARCH) model is used to measure the exchange rate risk, and autoregressive distributed lag (ARDL) approach to co-integration is used to examine the study empirical models.

Findings

The findings suggest that exchange risk has an impact on a moderate number of industries in the short run; however, this influence endures in very few industries in the long run. It is interesting to note that exchange rate volatility expedites import demand for the large Malaysian import industries like gas and plastic.

Originality/value

No prior study has explored the topic at industry level focusing on the bilateral trade flows between Malaysia and Singapore. This research serves important implications while thinking about exchange rate risk and trade linkage in a case of open economies trade pairs that are highly integrated in presence of a variety of bilateral trade agreements and economic groupings.

Details

Studies in Economics and Finance, vol. 34 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

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Article
Publication date: 9 January 2017

Muhammad Aftab, Karim Bux Shah Syed and Naveed Akhter Katper

After the fall of fix exchange rate regime in early 1970s, the nexus between the exchange rate volatility and trade flows has been of a great interest to the policy makers…

Abstract

Purpose

After the fall of fix exchange rate regime in early 1970s, the nexus between the exchange rate volatility and trade flows has been of a great interest to the policy makers and researchers. Resultantly an extensive literature is available on the topic. However, the research findings are inconclusiveness so far. The purpose of this paper is to examine the exchange-rate volatility and bilateral industry trade link between the two important countries of Southeast Asia, i.e. Malaysia and Thailand.

Design/methodology/approach

This study employs Generalized Autoregressive Conditional Heteroskedasticity (GARCH) (1, 1) to measure exchange rate volatility and autoregressive distributed lag (ARDL) model to study the relationship between exchange rate volatility and trade flows. ARDL approach is suitable to accommodate the mix cases (i.e. stationary and first difference stationary). The paper considers 62 Malaysian exporting and 60 Malaysian importing industries with Thailand over the monthly period 2000-2013.

Findings

Findings suggest the influence of exchange-rate volatility on the trade flows in a limited number of industries. Large industries like instruments and apparatus experience negative influence from exchange-rate volatility.

Originality/value

Past literature continued to be inconclusiveness on the nexus between exchange-rate volatility and trade flows due to its over-reliance on the aggregated data. Besides, the past studies are more based on quarterly or yearly frequency data. These issues contribute to the aggregation bias. This research focusses on a country bilateral trade pair, using industry level disaggregated monthly data. Such research is rare in Malaysian-Thai bilateral trade context. This study uses a suitable estimation approach and also draws valuable implications.

Details

Journal of Economic Studies, vol. 44 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 28 September 2012

Muhammad Aftab, Zaheer Abbas and Farrukh Nawaz Kayani

The purpose of this paper is to explore the impact of exchange rate volatility at sectoral level on the exports trade of Pakistan. All the sectors involved in the export…

Abstract

Purpose

The purpose of this paper is to explore the impact of exchange rate volatility at sectoral level on the exports trade of Pakistan. All the sectors involved in the export trade (proposed by the State Bank of Pakistan, by commodity), were used to study this relationship at a more minute level.

Design/methodology/approach

Quarterly data regarding research were collected over the period 2003 to 2010 from databases of State Bank of Pakistan and International Monetary Fund financial statistics. The bound testing approach proposed by Pesaran et al., was used to study the relationship between sectoral export and exchange rate volatility, while augmented Dickey Fuller (ADF) and Phillips Perron tests were used to test the unit root of series and GARCH,proposed by Bollerslev, was used to study exchange rate volatility.

Findings

The results show that exports are negatively influenced by exchange rate volatility and relative prices while positively affected by foreign income. This relationship holds for all sectors where bound testing revealed the existence of long‐ run relationship, although some equations results were not statistically significant.

Practical implications

The paper's findings can be used to form such policies which result in a stabilized and competitive exchange rate, so that Pakistan's exports can be increased.

Originality/value

Previous studies have been conducted on aggregated data set for exports in the Pakistani context, which hinders pertinent information; however this information is possible by studying disaggregated data. The paper fills a research gap by taking sectoral level data, to divulge the behavior of individual sectors against exchange rate volatility.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 5 no. 3
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 25 January 2013

Muhammad Mohsin Butt and Muhammad Aftab

The purpose of this paper is to empirically investigate the influence of consumer attitude towards Halal banking on e‐service quality and e‐satisfaction, in an online…

Abstract

Purpose

The purpose of this paper is to empirically investigate the influence of consumer attitude towards Halal banking on e‐service quality and e‐satisfaction, in an online Islamic banking context. The proposed model also aims to investigate the relationships among e‐service quality, e‐satisfaction, e‐trust and e‐loyalty.

Design/methodology/approach

A questionnaire was designed to collect data from the regular users of online services of Islamic banks in Pakistan. Convenience sampling method was adopted to collect data from the existing customers of six Islamic banks, residing in five major urban centres of Pakistan. A total of 350 questionnaires were distributed, out of which 292 returned questionnaires were suitable for further analysis. Structural equation modelling procedure was used to test the proposed research model.

Findings

The results of this research suggest that attitude towards Halal banking positively influences perceived e‐service quality and overall e‐satisfaction with the online services of Islamic banks. Furthermore, perceived online service quality enhances customer e‐satisfaction and their e‐loyalty towards the bank. Similarly, e‐trust mediates the relationship between e‐satisfaction and e‐loyalty.

Practical implications

This study enhances our understanding of how specific religious attitudes can positively influence consumer assessments of a bank's perceived e‐service quality and their overall e‐satisfaction with it.

Originality/value

Much of the previous research on Islamic banking has been descriptive in its nature. This study contributes to the existing literature by exploring the causal effect of attitude towards Halal banking on consumer perceptions about the e‐service quality and e‐satisfaction with the online services of Islamic banks.

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Article
Publication date: 3 August 2015

Muhammad Aftab, Rubi Ahmad and Izlin Ismail

This study aims to examine the dynamics between exchange rate and equities contextualizing the current liberal currency regime in China. This investigation also extends…

Abstract

Purpose

This study aims to examine the dynamics between exchange rate and equities contextualizing the current liberal currency regime in China. This investigation also extends the analysis to explore the potential important factors influencing the interactions between these two markets. After exchange rate reforms, currency issue has emerged as a new dimension in portfolio decisions and diversification strategies in Chinese equity markets.

Design/methodology/approach

This research uses the dynamic conditional correlation generalized autoregressive conditional heteroskedasticity model proposed by Engle (2002) to explore the dynamic interactions between the currency and stock markets. Further, the paper uses regression analysis to explore the explanatory channels of the correlation. The sample comprises 1,265 listed companies over the period 2005-2012 with daily, weekly and monthly observations. To make analysis robust, the study also considers different exchange rates and equities belonging to different industries.

Findings

The findings suggest that exchange rate and stock price are related negatively. This conduit increases during the financial crisis period. This association is more prominent at monthly frequency than that of daily and weekly frequencies, which may refer to the noise factor in the high-frequency data. For a portfolio diversification point of view, currency may be considered an alternative diversifier against equity in China. The results also suggest a weak influence of market forces on the association between the currency and stock markets.

Originality/value

Much of the related past research is based on co-integration approaches and limited to the relationship between currency and equity markets without exploring the determining channels of this important connection. This study uses a more suitable approach to examine the topic and also investigates the determinants. Besides, previous studies take index data which may be poor to depict the overall market outlook. This paper proceeds with firm-level data which are more appropriate to expose the overall market outlook and investor behavior. This research also draws valuable implications.

Details

Chinese Management Studies, vol. 9 no. 3
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 3 August 2015

Yuanhui Li and John Ferguson

The purpose of the papers included in this issue is to cover a broad range of contemporary issues in Chinese corporate financial management and therefore provide the…

Abstract

Purpose

The purpose of the papers included in this issue is to cover a broad range of contemporary issues in Chinese corporate financial management and therefore provide the readers with important insights into Chinese financial markets as well as the social and economic consequences of firm behavior in the Chinese context.

Design/methodology/approach

The first part of this issue is a special section on “Corporate Finance and Corporate Social Responsibility”, which includes three papers that explore various aspects of corporate social responsibility (CSR) from a finance perspective – including the relationship between CSR and the cost of equity, the “insurance-like effect” of CSR and competition in corporate philanthropy. The remainder of the issue includes seven further papers that cover a wide range of finance-related topics, including currency and equity, monetary policy, cross-border mergers and acquisitions, earnings management, overseas investment, information disclosure, social capital and cosmopolitanism. All of the papers included in this issue are based on empirical research that draws on primary and secondary data from Chinese financial markets and from the information disclosures of Chinese enterprises.

Findings

The authors are confident that such in-depth discussions and analysis will help researchers and practitioners to develop a better understanding of the issues faced by Chinese managers in the context of China’s economic transformation. The findings reported in this issue will help inform and develop Chinese management theories based on a wide range of Chinese management practices.

Originality/value

Each paper in this issue reports on different aspects of finance, reporting and management in the Chinese context, discussing findings that have both relevance and significance beyond China.

Details

Chinese Management Studies, vol. 9 no. 3
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 22 April 2020

Naveed Iqbal Chaudhry, Muhammad Azam Roomi and Iqra Aftab

The purpose of this paper is to analyze the influence of financial, monitoring and experiential expertise of audit committee chair (ACC) and HR, monitoring and…

Abstract

Purpose

The purpose of this paper is to analyze the influence of financial, monitoring and experiential expertise of audit committee chair (ACC) and HR, monitoring and experiential expertise of nomination committee chair (NCC) on the financial performance (FP) of the firm.

Design/methodology/approach

Quantitative approach was used in this study to collect data from 50 non-financial firms of Pakistan and to analyze the data through e-views for testing hypotheses.

Findings

The findings revealed that financial and monitoring expertise of ACC and experiential expertise of NCC positively influence return on assets, return on equity and the net profit margin of the firm. However, no significant influence of experiential expertise of ACC and monitoring and HR expertise of NCC on FP was found.

Research limitations/implications

The findings of this study will help firms of Pakistan to understand what expertise of their ACC and NCC can contribute to the enhancement of their FP. However, the current study examined the non-financial firms of Pakistan only.

Originality/value

Past studies have never shown the particular focus on different types of expertise of “Chairs” of nomination and audit committees in a combined research to analyze their impact on FP of firms. The present study has abridged this gap in the field of expertise of chairs of board committees so, it will open new areas of discussion for future researchers in domains of “agency theory”, “human capital theory” and corporate governance.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

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