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Item Metadata only The relationship between the income and behavioural biases(Universidad ESAN. ESAN Ediciones, 2019-06-01) Isidore R., Renu; P., ChristiePurpose - The purpose of this paper is to test the relationship between the annual income earned by the investors and eight behavioural biases exhibited by the investors such as mental accounting, anchoring, gambler’s fallacy, availability, loss aversion, regret aversion, representativeness and overconfidence. Design/methodology/approach - The relationship is derived based on a questionnaire survey conducted on 436 secondary equity investors residing in Chennai, India. Findings - Analysis of variance test was performed on the normalised and non-normalised version of the biases divided in terms of the annual income earned by the investor. The test found that for the significant biases except the overconfidence bias, the investors with higher annual income were less prone to the biases when compared to investors with lower annual income. On the other hand, with respect to the overconfidence bias, the investors with higher annual income were prone to exhibit overconfidence bias when compared to the investors with lower annual income. Correlation analysis showed that the investors with high annual income were more likely to exhibit higher overconfidence bias but lower representativeness, loss aversion, availability and mental accounting biases. Originality/value - A contribution in the financial and economic front which would benefit the financial advisors to now consider the income earned by the clients as an important factor while giving financial advice to the clients and while guiding them about the biases they are prone to exhibit.Item Metadata only Financial development and economic growth: panel evidence from BRICS(Universidad ESAN. ESAN Ediciones, 2019-06-01) Guru, Biplab Kumar; Yadav, Inder SekharPurpose - The purpose of this paper is to examine the relationship between financial development and economic growth for five major emerging economies: Brazil, Russia, India, China and South (BRICS) during 1993 to 2014 using banking sector and stock market development indicators. Design/methodology/approach - To begin with, the study first examined some of the principal indicators of financial development and macroeconomic variables of the selected economies. Next, using generalized method of moment system estimation (SYS-GMM), the relationship between financial development and growth is investigated. The banking sector development indicators used in the study include size of the financial intermediaries, credit to deposit ratio (CDR) and domestic credit to private sector (CPS), whereas the stock market development indicators are value of shares traded and turnover ratio. Also, some macroeconomic control variables such as inflation, exports and the enrolment in secondary education were used. Findings - The examination of the principal indicators of financial development and macroeconomic variables have shown considerable differences between the selected economies. Results from the dynamic one-step SYS-GMM estimates confirm that in presence of turnover ratio, all the selected banking development indicators such as size of financial intermediaries, CDR and CPS are positively significantly determining economic growth. Similarly, in presence of all the selected banking sector development indicators, value of shares traded is found to be positively significantly associated with economic growth. However, the same is not true when turnover ratio is regressed in presence of banking sector variables. Overall, the evidence suggests that banking sector development and stock market development indicators are complementary to each other in stimulating economic growth. Practical implications - A positive association between financial development and growth indicates that the policymakers should take necessary measures toward simultaneous development of both banking sector as well as stock market for inducing growth. Originality/value - The present paper attempts to examine the relationship between financial development and growth using both banking sector and stock market development indicators which has not been attempted before for BRICS. Also, most of the existing studies are found in case of developed economies. This paper tries to fill this void by studying five major emerging economies.Item Metadata only Determinants of innovation: a multivariate analysis in Colombian micro, small and medium-sized enterprises(Universidad ESAN. ESAN Ediciones, 2019-06-01) Restrepo-Morales,Jorge Aníbal; Loaiza, Osmar Leandro; Vanegas, Juan GabrielPurpose – This paper aims to study the influence of innovation on micro, small and medium-sized enterprises (MSME) performance in Colombia through the 403 MSMES survey analysis. In particular, this paper measures the effect of participation in R&D alliances, product innovation and process innovation on it. Design/methodology/approach – MSME performance is measured through a composite index, estimated through principal components analysis using polychoric correlations, which is based on eight self-reported assessments of MSME performance. Then, this measure of performance is related to MSME participation in R&D alliances and the product and process development stance of the MSME based on an adaptation of the Miles and Snow business classification scheme, by means of an ANOVA and a linear regression. Findings – Colombian SMEs are not significantly benefitted from participation on R&D alliances. Instead, their performance appears to be dependent upon their internal innovation efforts directed to product development. Moreover, the results suggest that imitators get a performance almost as high as innovators. Originality/value – Innovation activities in Colombian SMEs are carried out informally, as they aremostly uninterested to engage in R&D activities and to develop new products by own initiative. Moreover,few of them have an R&D department. In regard to technology, results suggest that almost half of SMEs are classified as followers, namely, they use the same technology as competitors.Item Metadata only Impact of information and communication technology in Nigerian small-to medium-sized enterprises(Universidad ESAN. ESAN Ediciones, 2019-06-01) Okundaye, Kessington; Fan,Susan K.; Dwyer, Rocky J.Purpose – The purpose of this (qualitative, multiple-case) study is to determine how small-to medium-sized enterprise (SME) leaders in Nigeria use information and communication technology (ICT) adoption as a business strategy to increase profitability and compete globally. Design/methodology/approach – The participants for this study consisted of executive-level SME leaders who had the authority to approve ICT implementation within their respective organizations. Individual interviews were undertaken with participants to gain an understanding of their experience of determining the merits of and implementing ICT. The technology acceptance model, which specifies the relationship between perceived usefulness, perceived ease of use, attitude toward computer use and intention to use technology, was applied as a framework to explain the Nigerian SME’s ICT adoption strategies. Findings – Four major themes emerged from the data analysis: ICT adoption factors, ICT roles and benefits, role of government and SME success factors. The findings of this study may help SME leaders and government leaders address many of the factors inhibiting the adoption of ICT in SMEs in Nigeria. Practical implications – This study may ensure that SMEs are successful and able to create jobs, which in turn may help to promote socioeconomic development through adoption of ICT. Originality/value – The findings from this study contribute to the knowledge base regarding factors that affect ICT adoption by SME leaders as a business strategy to increase profitability and compete globally, particularly within SMEs in Lagos, Nigeria. It further addressed the gap in existing literature regarding other factors such as the influence of culture on ICT adoption, cost of ICT implementation, available ICT skills, infrastructure and ICT knowledge gap as the primary impeding factors of ICT adoption in Nigerian SMEs.Item Metadata only The determinants of conventional banks profitability in developing and underdeveloped OIC countries(Universidad ESAN. ESAN Ediciones, 2019-06-01) Al-Harbi, AhmadPurpose – The purpose of this study is to investigate the effect of internal and external variables on the profitability of conventional banks operating on developing and underdeveloped countries, the Organization of Islamic Cooperation (OIC) states. Design/methodology/approach – In this paper, the author uses ordinary least squares fixed-effects model on an unbalanced panel data set of all conventional banks operating in OIC countries (52 countries included from 57) over the period 1989-2008, 686 banks. Findings – The results suggest that equity, foreign ownership, off-balance sheet (OBS) activities, real gross domestic product growth, real interest rate and concentration foster banks’profitability. In addition, the results showed that the banking sector development and loans will increase banks’ profitability in the long run in the countries of the studies. In contrast, the study reported that deposits lower profitability. The study also revealed that GDP per capita, market capitalization and banks size have no impact on profitability. Practical implications – The findings of this study have considerable policy implications. First, policymakers need to regulate nontraditional activities to avoid any financial crisis because banks in OIC countries are heavily engaged in nontraditional activities to boost its profit. Second, policymakers are advised to improve the deposit insurance system to insure the stability of the financial system as well as improving banks’ profitability. Third, policymakers need to improve the efficiency of the stock market, maintain small banking system and encourage foreign investments in the banking system. Originality/value – The paper adds to the literature on the commercial bank’s profitability determinants. In particular, such study has not been conducted on OIC countries, and the study included all mainstream banks and incorporated the effect of deposit insurance system so far. Also, pure sample of conventional banks used as many conventional banks in OIC countries have Islamic windows or offer Islamic products. In addition, this study investigated the effect of OBS activities on net interest margin (NIM) because the studies that explored this interrelationship are limited especially for developing and under developed countries. The results showed that OBS activities contributed significantly and positively to return on assets and NIM. Moreover, this paper used a pure sample of conventional banks to avoid any biasness; see data section. Moreover, this study gives an idea about the economic situation and financial conditions of OIC countries during the period of the study.Item Metadata only Should banks be averse to elections? A GMM analysis of recent elections in Ghana(Universidad ESAN. ESAN Ediciones, 2019-06-01) Broni, Mohammed Yaw; Hosen, Mosharrof; Mohammed, Hardi Nyagsi; Tiamiyu, GaniyatuPurpose – Actions of incumbent politicians and firms’managers during election years have been cited as sources of many problems that afflict economies and business entities. Given the controversies surrounding the impact of elections on firms’ soundness, this paper poses a question of whether banks should be averse to elections. Specifically, this study aims to investigate the impact of elections on the profitability and efficiency of banks. Design/methodology/approach – Based on the authors’ knowledge, this is maiden analysis in this context for Ghana where relatively advanced appropriate GMM technique has been used on annual data from 2012 to 2016. Findings – This study reveals that banks make higher returns in election years. Additionally, the authors report that government’s economic policies in election years are detrimental to management efficiency,though insignificant. Practical implications – From an emerging economy perspective, this study would guide policymakers in designing policies that respond to, or minimize, the impact of elections on bank performance. The result of this analysis would also substantiate the market reaction to the changes in the economic, political and financial conditions. Originality/value – This analysis suggests that firms’performances in an election year depend on policies and political institutions in place. The authors argue that Ghana, with its exemplary democratic credentials and strong institutions, living alongside a high perception of corruption, is different. The contribution to literature is,first, by limiting this work to the banking sector of Ghana and, second, by incorporating the behaviors of incumbent governments and individuals in the regression specification model.Item Metadata only Co-authorship networks of Argentine economists(Universidad ESAN. ESAN Ediciones, 2019-06-01) Larrosa, Juan M.C.Purpose – This paper aims to provide information about the structure of collaborative work among Argentinian economics. The study provides specific applied research of social network analysis focus on this profession in this specific country. Design/methodology/approach – The contribution opted for applying social network analysis tools to papers presented in a congress and published in its proceedings. The authors focus in detecting main actors groups of co-authorship professionals acting as bridges between groups and differences between genders. Findings – The paper provides empirical insights about how co-authorship has evolved between Argentine economists. The authors find that structural properties of the network main actors both male and femalemain universities or center that affiliates them a gender gap that might be closing out. Research limitations/implications – The paper focuses on the network for the period 1964-2014 without a more detailed dynamic. It also does not explain main topics worked by the authors. Practical implications – The work provides knowledge about how groups are created in Economics in Argentina how cooperation has evolved and what has been the role of women in this development. It alsoshows how different departments and entities collaborate with diverse success in the creation of new knowledge in Economics in Argentina. Originality/value – The paper works with data from a source of information non-previously studied and contributes in explaining a particular type of collaborative work in a profession in Argentina.Item Metadata only Personal bankruptcy prediction using decision tree model(Universidad ESAN. ESAN Ediciones, 2019-06-01) Syed Nor, Sharifah Heryati; Ismail, Shafinar; Yap, Bee WahPurpose – Personal bankruptcy is on the rise in Malaysia. The Insolvency Department of Malaysia reported that personal bankruptcy has increased since 2007 and the total accumulated personal bankruptcy cases stood at 131282 in 2014. This is indeed an alarming Issue because the increasing number of personal bankruptcy cases will have a negative impact on the Malaysian economy as well as on the society. From the aspect of individual’s personal economy bankruptcy minimizes their chances of securing a job. Apart from that their account will be frozen lost control on their assets and properties andnot allowed to start any business nor be a part of any company’s management. Bankrupts also will be denied from any loan application restricted from travelling overseas and cannot act as a guarantor. This paper aims to investigate this problem by developing the personal bankruptcy prediction model using thedecision tree technique. Design/methodology/approach – In this paper bankrupt is defined as terminated members who failed to settle their loans. The sample comprised of 24546 cases with 17 per cent settled cases and 83 percent terminated cases. The data included a dependent variable i.e. bankruptcy status (Y = 1(bankrupt)Y = 0 (non-bankrupt)) and 12 predictors. SAS Enterprise Miner 14.1 software was used to develop the decision tree model. Findings – Upon completion this study succeeds to come out with the profiles of bankrupts reliable personal bankruptcy scoring model and significant variables of personal bankruptcy. Practical implications – This decision tree model is possible for patent and income generation. Financial institutions are able to use this model for potential borrowers to predict their tendency toward personal bankruptcy. Originality/value – This decision tree model is able to facilitate and assist financial institutions in evaluating and assessing their potential borrower. It helps to identify potential defaulting borrowers. It also can assist financial institutions in implementing the right strategies to avoid defaulting borrowers.Item Metadata only Return and volatility spillover across equity markets between China and Southeast Asian countries(Universidad ESAN. ESAN Ediciones, 2019-06-01) Hung, Ngo ThaiPurpose – This paper aims to study the daily returns and volatility spillover effects in common stock prices between China and four countries in Southeast Asia (Vietnam Thailand Singapore and Malaysia). Design/methodology/approach – The analysis uses a vector autoregression with a bivariate GARCHBEKK model to capture return linkage and volatility transmission spanning the period including the pre- and post-2008 Global Financial Crisis. Findings – The main empirical result is that the volatility of the Chinese market has had a significant impact on the other markets in the data sample. For the stock return linkage between China and other markets seems to be remarkable during and after the Global Financial Crisis. Notably the findings also indicate that the stock markets are more substantially integrated into the crisis. Practical implications – The results have considerable implications for portfolio managers and institutional investors in the evaluation of investment and asset allocation decisions. The market participants should pay more attention to assess the worth of across linkages among the markets and their volatility transmissions. Additionally international portfolio managers and hedgers may be better able to understand how the volatility linkage between stock markets interrelated overtime; this situation might provide them benefit in forecasting the behavior of this market by capturing the other market information. Originality/value – This paper would complement the emerging body of existing literature by examining how China stock market impacts on their neighboring countries including Vietnam Thailand Singapore and Malaysia. Furthermore this is the first investigation capturing return linkage and volatility spill over between China market and the four Southeast Asian markets by using bivariate VAR-GARCH-BEKK model. The authors believe that the results of this research’s empirical analysi would amplify the systematic understanding of spillover activities between China stock market and other stock markets.Item Metadata only Foreign direct investment and institutional stability: who drives whom?(Universidad ESAN. ESAN Ediciones, 2019-06-01) Mahmood, Nihal; Shakil, Mohammad Hassan; Akinlaso, Ishaq Mustapha; Tasnia, MashiyatPurpose – The purpose of this paper is to examine the relationship between foreign direct investment (FDI) flows and institutional stability. The focus country is Canada. It is one of the few countries where the economy remained relatively stable compared to other economies during the Global Financial Crisis. It is crucial for Canada to determine the optimal level of institutional development to attract more FDI and sustain the sound financial stability in future. Design/methodology/approach – This study uses the auto-regressive distributive lag (ARDL) approach to understand the relationship between FDI and institutional stability along with other controlled variables for instance gross national product inflation and exports. Findings – The key finding of this work is that FDI and institutional stability are cointegrated in the long run. The error correction model of ARDL shed light on institutional stability being an exogenous variable and FDI is an endogenous variable. Institutional stability affects FDI as it is exogenous. The findings will help policymakers to implement policies to strengthen the institution’s settings and this in turn will attract more investment. Originality/value – Based on previous theoretical and empirical literature most of the research points to FDI positively affect institutional stability. In some cases the relationship does not always hold true. This study will fix the gap in the literature by investigating the relationship between FDI and institutional stability of Canada.
