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1 – 10 of 762Mohammed Ayoub Ledhem and Mohammed Mekidiche
This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the…
Abstract
Purpose
This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the non-parametric analysis.
Design/methodology/approach
This paper applies panel quantile regression with Markov chain Monte Carlo optimization as an optimal non-parametric approach to investigate the effect of Islamic securities on economic growth starting from 2013Q4 to 2019Q4 in Southeast Asia. Total issued Islamic securities holdings are employed as a measure for Islamic securities, while the gross domestic product is employed as a proxy for economic growth. The sample includes all working Islamic financial foundations in the top progressive Islamic securities markets' countries of Southeast Asia (Malaysia, Indonesia and Brunei Darussalam).
Findings
The findings confirm that the increase of issuing Islamic securities in Islamic capital markets of Southeast Asia is increasing the levels of economic growth, reflecting the weighty role of the Islamic capital market development as an active contributor to economic growth.
Practical implications
This research would fill the literature gap by exploring Islamic securities–economic growth nexus in Southeast Asia using a robust non-parametric approach based on the endogenous growth theory for better estimation results. The findings of this review serve as a roadmap for financial analysts, policymakers and decision makers to stimulate the Islamic securities markets as another source of finance which can promote the economic growth.
Originality/value
This research is the first that investigates empirically the Islamic securities–economic growth nexus in Southeast Asia using a new empirical investigation built on the non-parametric analysis and outlined within the theoretical context of the endogenous growth model to gain robust evidence about this nexus.
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King Carl Tornam Duho and Joseph Mensah Onumah
The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.
Abstract
Purpose
The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.
Design/methodology/approach
Both asset and income diversification are computed and an unbalanced panel data set of 32 banks covering the period 2000–2015 have been used. The panel corrected standard error regression has been used to account for serial correlation and heteroscedasticity.
Findings
The study found that intellectual capital determines the choice of diversifying. Precisely, intellectual capital motivates asset diversity but it dissuades income diversification. Human capital and structural capital are major components that determine asset diversity decisions. Income diversification decision, in this case to choose a focus strategy, is determined by human capital. This gives credence for the human capital theory in Ghana. Competition encourages a focus strategy. Bank size and leverage enhances income diversification while stock exchange listing and government ownership fosters the focus strategy.
Practical implications
Diversification strategy, knowledge base of staff, corporate governance and internal control have been considered as factors leading to the collapse of some Ghanaian banks in 2017–2018. The study provides relevant insights for regulators, decision support units and corporate boards. Intellectual capital and value added metrics should be used for modelling and decision making as they have value relevance.
Originality/value
This is a premier study that has examined the nexus between diversification strategy and intellectual capital in banks.
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Oluyemi Theophilus Adeosun and Oluwaseyi Omowunmi Popogbe
Human capital flight from developing countries to developed nations has been rising and giving concerns to governments and scholars alike. This paper aims to explore the impact…
Abstract
Purpose
Human capital flight from developing countries to developed nations has been rising and giving concerns to governments and scholars alike. This paper aims to explore the impact migration from Nigeria has on economic output growth by focusing on the migration rate, remittances, population growth and secondary school enrolment. This has not received adequate attention in the literature, as many papers have primarily focused on the impact of remittances on economic growth.
Design/methodology/approach
Leveraging on the macro-level approach to migration, remittances and the economy, this research considers the nexus among the human capital flight and output growth variables by using the autoregressive distributed lag (ARDL) method of analysis for time series data between 1986 and 2018.
Findings
The net migration rate from Nigeria was found from the empirical analysis to be more disadvantageous for the economy, given its negative relationship with economic growth despite the large volume of foreign incomes (remittances). It also shows that secondary school enrolment positively and significantly impacted the Nigerian growth rate in the long run.
Originality/value
This research has widened the use of variables by combining net migration rate, remittances from abroad, population growth rate and secondary school enrolment to obtain a more robust outcome with implications for research and practice.
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Faizi Weqar, Zubair Ahmad Sofi and S.M. Imamul Haque
The prime intention of this study is to examine the influence of intellectual capital (IC) on the financial performance of Indian companies listed on Standard and Poor Bombay…
Abstract
Purpose
The prime intention of this study is to examine the influence of intellectual capital (IC) on the financial performance of Indian companies listed on Standard and Poor Bombay Stock Exchange Sensitive Index (BSE SENSEX).
Design/methodology/approach
The study employs the data of 30 most significant and most prominent companies of India listed on BSE SENSEX for 10 years from 2009–2010 to 2018–2019. Value Added Intellectual Coefficient (VAICTM) methodology developed by Pulic (2000) was employed for measuring the efficiency of the IC.
Findings
The efficiency of IC is substantially and positively associated with the financial performance of the Indian companies as measured by return on assets (ROA), market-to-book (MB) ratio and return on equity (ROE). Amongst the three dimensions of VAIC, capital employed efficiency (CEE) was the most vital element in contributing to the firm financial performance, followed by human capital efficiency (HCE). Structural capital efficiency (SCE) only helps in enhancing the ROA of Indian firms.
Research limitations/implications
The study results are only restricted to the 30 companies of India listed on S&P BSE SENSEX Index. Thus generalization of the result needs especial caution.
Originality/value
The study fills the void in the current literature of IC and business performance and extends the understanding of their relationship by providing empirical evidence.
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Hammed Agboola Yusuf, Waliu Olawale Shittu, Saad Babatunde Akanbi, Habiba MohammedBello Umar and Idris Abdulganiyu Abdulrahman
In this research, we examine the role of financial development, FDI, democracy and political instability on economic growth in West Africa.
Abstract
Purpose
In this research, we examine the role of financial development, FDI, democracy and political instability on economic growth in West Africa.
Design/methodology/approach
The study uses the dynamic fixed effects technique on the secondary data obtained from 1996 to 2016.
Findings
Our empirical findings suggest that even though no significant relationship is established in the short run, the long-run coefficient of FDI is found to be significant and positive; a 1% increase in FDI inflow into the West African sub-region results in a 0.26% increase in economic growth. The coefficient of democracy is significant neither in the short run nor in the long run, but political instability is found to significantly and negatively impact the growth of the countries. Finally, the estimate of financial development–growth nexus follows the supply-leading hypothesis.
Research limitations/implications
This research affirms the proposition that FDI is a relevant means of technology and knowledge transfers, thus resulting in increasing returns to production as a result of productive spillovers, which drives the growth of the economy. Consequently, an efficient institution – where the rule of law, political stability and economic freedom are top priorities – is a key to accelerate the growth of the West African economy. Similarly, we confirm the validity of the supply-leading hypothesis in West Africa. As such, by deepening the financial system, the growth of the subregion is propelled because an efficient financial system is a basis for sustainable development.
Practical implication
The applicable policies are those that promote growth through FDI, financial development, democracy and political instability. The governments of West African countries are enjoined to promote policies that attract FDI into the subregion and promote financial sector credits so that economic performances may be enhanced. In addition, the governments of West African subregion should fully entrench democratic practices and enhance a stable and sustainable political environment. This will not only restore investor confidence but will also facilitate the inflow of FDI into the West African economy.
Originality/value
Our study is the first to jointly examine these important growth determinants, especially in the context of West Africa. This becomes necessary in order to open the eyes of policy makers to the need for entrenched full democracy and to proffer sustainable cures to the frequent unrests in the subregion. The use of Pesaran (2007) technique of unit root is also a deviation from several existing studies. One advantage of this technique over others is that being a second-generation test, it tests variable unit root in the presence of cross-sectional dependence.
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Murad Harasheh and Francesca De Vincenzo
The study introduces a new approach to leverage-value relationship. Besides applying the classical regression models, the study deals with leverage as a continuous treatment…
Abstract
Purpose
The study introduces a new approach to leverage-value relationship. Besides applying the classical regression models, the study deals with leverage as a continuous treatment variable implemented on the firm’s value using the dose-response function (DFR).
Design/methodology/approach
After proper model calibration and splitting the treatment (leverage) into ten doses, a response function is generated, which enables the realization of the dose level at which the firm’s value is maximized. Furthermore, the study tests the pecking order theory (POT) and the trade-off theory (TOT) using the threshold model to see whether firms are under or over-indebted. The analysis is carried out on panel data from small-medium enterprises (SMEs), providing more valuable insights than large and mature companies.
Findings
The study used two leverage measures: total liabilities ratio and bank debt ratio. Value is measured by the market capitalization and Tobin’s Q. In general, the study finds a positive relationship between leverage and value; POT is not strongly supported, firms are below their optimal leverage and there is a certain leverage dose that would maximize firms’ value.
Practical implications
Since the threshold model and DRF show that SMEs are under-indebted, firms could benefit from extra leverage doses without affecting the firm’s risk profile, especially in a low-interest rate regime, and the potential increase in public-private expenditure after Italy obtained the European Recovery Funds.
Originality/value
The study contributes to new knowledge and understanding of financial leverage from new methodological perspectives, offering valuable insights from SMEs using novel approaches.
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This paper describes the parent–child relationships of upper-middle-class Chinese parents and their adolescent children who were “parachuted” to the United States for private high…
Abstract
This paper describes the parent–child relationships of upper-middle-class Chinese parents and their adolescent children who were “parachuted” to the United States for private high schools. With parents remaining in China and children in the United States, thousands of miles away, such a transnational educational arrangement complicates the already volatile parent–child relationships during the adolescent years. Through ethnographic interviews of 41 students and 33 parents, I demonstrate different forms of child–parent relationships in a transnational education setting: those who found that the further physical and temporal distance has brought the parent–child relationship closer through frequent communications, children who experienced “accelerated growth” yet questioned the necessity, and delicate parent–child relationships due to increasing transnational cross-cultural or intergenerational differences. These types of parent–child relationships are not comprehensive of all the lived experiences of the “parachute generation,” yet they shed new light on transnational education and the unintended emotional dimensions of educational migration. In a transnational context for an economically well-off group, parental absence or separation of children and parents is no longer a clear-cut concept and has different layers of meanings, taking into account the frequency of communication, duration of spring and winter breaks and the existence of third-party agents such as for-profit intermediaries (or educational consultants) and host families. The diverse patterns of parent–child relations reveal the heterogeneity and complexities of “doing family” across geographic spaces and global educational hierarchies, as well as the roles of communication technologies, the tempo of mobilities and educational intermediaries.
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Amitava Mondal and Chiranjit Ghosh
The impact of the intellectual capital disclosure (ICD) on the cost of equity capital (COEC) is not well established in the aspect of the Indian scenario. So the objective of this…
Abstract
Purpose
The impact of the intellectual capital disclosure (ICD) on the cost of equity capital (COEC) is not well established in the aspect of the Indian scenario. So the objective of this paper is to examine not only the overall effect of ICD but also the individual effect of human capital disclosure (HCD), relational capital disclosure (RCD) and structural capital disclosure (SCD) on COEC.
Design/methodology/approach
This research work is conducted by regressing COEC, firm size, leverage, industry type and disclosure index. The disclosure index is prepared based on content analysis of disclosure made in the annual reports of a sample of 50 companies listed in the Nifty 50 index for the year 2018–2019. But in this paper 20 companies are eliminated due to their negative COEC and rest 30 companies are used as the sample companies for this study.
Findings
The outcome of this study indicates a negative association between the disclosure of intellectual capital (IC) as a whole and the COEC. But a negative association only for two components (human capital and structural capital) with the COEC is found only when the association of COEC with the categories of ICD is considered.
Originality/value
This is the first study that examines the nexus between the level of ICD and its impact on the COEC in India context.
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Fisayo Fagbemi and Richard Angelous Kotey
The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality.
Abstract
Purpose
The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality.
Design/methodology/approach
The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019.
Findings
Findings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions.
Originality/value
The divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel.
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Felicitas Nowak-Lehmann and Elena Gross
This paper aims to analyze the effectiveness of aid in stimulating investment using different measures of aid and up-to-date panel time-series techniques. This study controls for…
Abstract
Purpose
This paper aims to analyze the effectiveness of aid in stimulating investment using different measures of aid and up-to-date panel time-series techniques. This study controls for endogeneity by using dynamic ordinary least squares (DOLS) and minimizes the risk of running a spurious long-run relationship by using series that are cointegrated. This paper finds evidence that aid promotes investment in countries with good institutional quality and gain interesting insights on the influence of country characteristics and the amount of aid received. Aid is ineffective in countries with unfavorable country characteristics such as a colonial past, being landlocked and with large distances to markets. Aid can boost investment in regions that receive high (above-median) amounts of aid such as Africa and the Middle East but not in regions that receive low amounts of aid. Investment-targeted aid is effective but non-investment-related aid can also enhance investment.
Design/methodology/approach
Regressions on the aid-investment nexus are based on either a rather simple (115 countries) or an extended/augmented investment model (91 countries). The data covers the period of 1973–2011 and 1985–2011 if the institutional quality is included. This study estimates the relationship between aid and investment by applying the DOLS/dynamic feasible generalized least squares technique which is based on a long-run relationship of the regression variables (cointegration). In this framework, this paper incorporates country-fixed effects, control for endogeneity, autocorrelation and take heteroscedasticity and cross-country correlation of the residuals into account.
Findings
This study finds empirical evidence that aid promotes investment in countries with good institutional quality and gain interesting insights on the role played by country characteristics and the amount of aid received. Aid is ineffective in countries with unfavorable country characteristics such as the colonial past, being landlocked, distant from markets. Aid can boost investment in regions that receive high (above-median) amounts of aid such as Africa and the Middle East. Investment-targeted aid is effective but non-investment-related aid also able to enhance investment.
Research limitations/implications
The study looks at the investment to gross domestic product (GDP) ratio (including domestic investment and foreign direct investment (FDI)) and, hence does not disentangle these factors. It looks at the net effect (positive and negative impact together) and, therefore does not allow to identify the direct crowding out the impact of aid. Of course, if this paper finds that aid has a negative impact on investment, it is clear that aid must have crowded out either domestic investment or FDI or both.
Practical implications
The authors think that it is relevant to have identified the circumstances and settings in which foreign aid can be particularly effective and in which foreign aid needs accompanying measures that improve the effectiveness of aid. Also, it is relevant that the relative amount of aid received (aid-to-GDP ratio) must be quite high so that aid can increase investment.
Social implications
This study sees that the least developed, low-income countries and (in terms of regions) the sub-Saharan Africa countries benefit from aid. This is very desirable. This paper further sees that higher relative amounts of aid do help more and that it is helpful to care about a better institutional quality in developing countries. Hence, this study provides some support for the desirability of aid.
Originality/value
The paper was done very diligently, and this study is very confident that the results are robust. This paper is also confident that this study has studied the long-run (which is of special importance) nexus between aid and investment. The estimation technique used is original, as it combines regular DOLS with corrections for autocorrelation and cross-section dependence.
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