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Article
Publication date: 18 July 2011

Evangelos Tsoukatos and Yiannis Dimotikalis

341

Abstract

Details

EuroMed Journal of Business, vol. 6 no. 2
Type: Research Article
ISSN: 1450-2194

Article
Publication date: 18 July 2011

Alexander Salhi and Andreas Kern

In recent years, Mediterranean Partner countries (MPCs) have been ambitious about reforming their banking and financial systems. Former state‐owned banks have been…

Abstract

Purpose

In recent years, Mediterranean Partner countries (MPCs) have been ambitious about reforming their banking and financial systems. Former state‐owned banks have been privatised, and restrictions for international capital flows have been lowered to accelerate investment activities and spur regional economic growth. The purpose of this paper is to evaluate these latest developments against the backdrop of the state‐of‐the‐art literature and derive implications for a reformed institutional setting for sound financial market governance in the Mediterranean region.

Design/methodology/approach

Building on recent empirical literature on the relationship between financial development, financial governance, and economic growth, this paper empirically assesses the validity of the so‐called finance‐growth nexus for Mediterranean Partner countries.

Findings

The findings indicate that the current institutional set‐up renders an efficient allocation of savings impossible, and thus represents a strong binding constraint on economic growth. In this regard, it is found that adverse financial governance practices have substantially contributed to this outcome.

Practical implications

This paper argues for upgrading domestic regulatory frameworks before continuing a sequential integration and liberalisation process.

Originality/value

It is thought that this attempt is unique in explicitly formulating a comprehensive role for the Euro‐Mediterranean Partnership (EMP) in assisting MPCs on financial governance issues. In this respect, it identifies prevailing incentive schemes for regional actors and opportunities for the EU to actively support the implementation of a reform agenda for financial institutions in the EMP framework.

Details

EuroMed Journal of Business, vol. 6 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 18 July 2011

Zoe S. Dimitriades and Nancy Papalexandris

This exploratory research seeks to examine the relationship between employee commitment and financial performance in the Greek retail banking sector.

Abstract

Purpose

This exploratory research seeks to examine the relationship between employee commitment and financial performance in the Greek retail banking sector.

Design/methodology/approach

A total of 331 questionnaires were completed by bank employees. Data were analyzed via confirmatory factor analysis, reliability analysis, correlation and mediation analysis.

Findings

Contrary to expectations, both employee attitudes (affective commitment) and perceptions (morale climate) were unrelated to business financial performance.

Research limitations/implications

Because of the chosen research approach, results may lack generalizability. Therefore, researchers are encouraged to test the reported findings further.

Practical implications

Current findings might enhance understanding of the relationship between affective organizational commitment and financial performance in Greek retail banking.

Originality/value

The paper extends the existing service profit chain research, offering insights into employee commitment and its relationship with financial performance, in the relatively under‐researched Greek context.

Article
Publication date: 18 July 2011

Simona Mihai Yiannaki

Most recent bank bailouts, from a financial and economic perspective, turn political. This paper seeks to frame ten effective implications/lessons of the most recent bank…

1061

Abstract

Purpose

Most recent bank bailouts, from a financial and economic perspective, turn political. This paper seeks to frame ten effective implications/lessons of the most recent bank bailouts of 2007‐2009 in the Western economy model when analyzing actual shareholders' value retrenchment or growth opportunities.

Design/methodology/approach

The paper uses a literature review and a re‐conceptualized framework of event study methodology, secondary data analysis of qualitative and quantitative information.

Findings

Recent bank bailouts relate to: global bailout interconnections, economic downturn and liquidity boost, abnormal returns, efficiency recovery, evasion of social costs, new opportunities for M&A, new risk management applications, opportunistic investors and eventually patience. Most important, findings recommend shareholders to grasp opportunities for bargains from bailout banks as well as to harvest their existing investments. At the same time, economic education and control become another important solution.

Research limitations/implications

Consequently, as the paper targets most recent bailouts, a still ongoing event, there is a need for extended financial data that could enhance some cause‐related solutions after economic recovery.

Practical implications

The practicality of the paper refers to guiding management of both government and financial institutions on the choice for reasoning bank bailouts, providing some critical thinking views to investors as well as academics.

Originality/value

Research or studies on the most recent financial crises bailouts have not yet been written, due to the process continuation. The novelty of the paper resides not in calculating ratios and interpreting them, but rather in looking more into some interesting strategic moves used to boost shareholders' value.

Article
Publication date: 18 July 2011

Kosmas Kosmidis and Konstantinos Terzidis

The purpose of this paper is to contribute to the debate on the current economic crisis and to highlight the importance of the counter‐party credit risk, which was…

Abstract

Purpose

The purpose of this paper is to contribute to the debate on the current economic crisis and to highlight the importance of the counter‐party credit risk, which was surprisingly neglected by the Basel Committee on Banking Supervision in its proposed enhancements to the Basel II framework. The paper supports the proposition that there is an incentive for synergy between bank management, corporate management and auditors as long as all these parties' remuneration schemes are based on the same principles.

Design/methodology/approach

In this paper an advanced IRB corporate credit‐rating system is constructed in accordance with the Basel II framework and the current literature. The impact of common creative accounting and banking practices on the manipulation of that system is explored.

Findings

The paper shows how creative accounting and banking practices can be used in manipulating an advanced IRB corporate credit‐rating system, and thus presenting a high‐risk corporation as a highly attractive (low‐risk) bank customer.

Practical implications

The regulatory authorities should take into consideration the inability of rating agencies to ascertain the risk associated with the US sub‐prime mortgage market and the decline of auditors' independence.

Originality/value

The contribution of the paper is the propositions made to the Basel Committee on Banking Supervision in order to enhance the Basel II framework, and avoid repetition of the current economic crisis in the future.

Article
Publication date: 18 July 2011

Naji Deeb Mualla

This study aims to assess and measure the sales culture within the commercial banks in Jordan, and to provide top management of these banks with the database which may be…

Abstract

Purpose

This study aims to assess and measure the sales culture within the commercial banks in Jordan, and to provide top management of these banks with the database which may be required for improving the banks' selling effectiveness.

Design/methodology/approach

The study has been conducted on a convenience sample of 1,000 employees selected from those of all the commercial banks operating in Jordan. Sales culture was measured by using the Sales Culture Index (SCI), consisting of 65 statements. The data required for this study were collected by a self‐structured questionnaire.

Findings

The findings of the study indicate that the overall employees' perception of sales culture in the surveyed banks is moderate. However, the sales culture in the non‐Jordanian banks was stronger than that in the Jordanian banks.

Research limitations/implications

As is the case in any study, some limitations relevant to this study cannot be abandoned. For instance, the findings of this study are based on self‐report perceptions of both the employees and the customers. Data collected by this approach may or may not be accurate to that extent, which reflects the respondents' real feelings.

Practical implications

The results of this study would enable management in the commercial banks in Jordan to design internal marketing programs aimed at building a strong service‐minded sales culture among employees.

Originality/value

This is a first attempt to assess and measure the sales culture in the commercial banks in Jordan.

Details

EuroMed Journal of Business, vol. 6 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 18 July 2011

Jamel E. Henchiri

Company disclosures on the web are a useful tool to promote the efficiency of financial markets. Moreover, they can be a source of strategic financial communication. The…

Abstract

Purpose

Company disclosures on the web are a useful tool to promote the efficiency of financial markets. Moreover, they can be a source of strategic financial communication. The objective of the study reported in this paper is to make an inventory of the information published on the web sites of companies listed in the Moroccan and Tunisian stock exchanges, and to compare the practices of those companies with those of their European counterparts. The study also seeks to identify the determinants of these disclosures.

Design/methodology/approach

The study develops a composite scale to measure the quality of web site disclosures. This scale is used to score the web sites of the top 91 companies listed on the Casablanca and Tunis stock exchanges in 2007. The quality of those web sites is compared with the quality of some web sites of European companies. A number of hypotheses relating to the determinants of web site quality are then tested using linear modeling techniques.

Findings

Two thirds of the firms listed in the Casablanca and Tunis stock exchanges have a web site (www.casablanca‐bourse.com). An average of 39.7 percent of Moroccan web sites and 19.4 percent of those from Tunisia meet the benchmark quality criteria used by this study, compared with between 48 percent and 61 percent for European firms. The average extended score is 32.80 percent; Moroccan firms score 38.34 percent on average, while Tunisian firms score 28.12 percent. The determinants of this information level are found to be accounting performance and the proportion of shares held by foreigners. Web site quality is also linked to firm size. Apart from those characteristics, no effect of the economic sector, the country or market performance could be detected.

Originality/value

The study presents an international comparison (north/south) and builds a novel scale in order to explain web disclosures. This is an area that has not previously been explored, and includes some financial markets that are under‐researched.

Details

EuroMed Journal of Business, vol. 6 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 18 July 2011

Ruth Rios‐Morales, Mohamed Ramady and Louis Brennan

The purpose of this paper is to analyze the role of sovereign wealth funds (SWFs) in sustaining global economies. The subject of SWFs has increasingly garnered the…

Abstract

Purpose

The purpose of this paper is to analyze the role of sovereign wealth funds (SWFs) in sustaining global economies. The subject of SWFs has increasingly garnered the concerns of policymakers, market players and scholars for two main reasons: First, these funds represent the largest concentration of capital that the world has ever known, with the Arabian Gulf SWFs becoming increasingly important global players, especially during the most recent financial crises. Second, there is the dominant role of national governments in the management of these colossal funds. This paper assesses the contrasting perspectives on SWFs and analyzes the role they can play in sustaining the global economy by engaging in foreign direct investment.

Design/methodology/approach

Both descriptive analysis and comparative analysis are used.

Findings

SWFs are large and tend to be long‐term investors and have characteristics that are compatible with foreign direct investment (FDI). There is a role for them in sustaining the global economy via FDI. This analysis suggests that only 11 percent of SWFs' investment in FDI is needed in order to counteract the forecast decline of FDI. Initiatives such as the recently established Santiago principles can help to allay the concerns of host and investor nations. This paper concludes that SWFs should be welcomed by market players and policy makers as tools of economic growth.

Practical implications

Current trends indicate that SWFs are playing an important role as a source of foreign investment, and are also reducing the impact of liquidity pressures in the international banking system. The main driving force of their investing in the global market is in securing higher returns. However, there has been unease among Western countries that have concerns that governments could use SWFs to seize control of strategic companies in sensitive sectors, for their own purposes.

Originality/value

The paper assesses the potential contribution of SWFs to FDI and highlights aspects related to fostering a code of conduct that can allay concerns around areas such as transparency, and the extent to which restrictions should be imposed by host governments.

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