This paper reports evidence of short-term momentum profits in a study of 700 stocks traded in the emerging Malaysian stock market. For this purpose, momentum portfolios were formed over a full sample period and other sub-periods that included the Asian Financial Crisis, Global Financial Crisis and the period between the two crises. Significant negative returns were observed during the economic downturn brought about by the Asian Financial Crisis, consistent with literature. Moreover, the results showed positive returns over the period characterised by rising market index. This finding is consistent with publication and may be explained as due to investors' confidence being high in a rising market. In addition, individual stock momentum observed was studied to determine whether it was attributable to industry effect, which is a less explored topic. The results of the current study showed that strategies of buying past winning industries and selling past losing industries appeared to be profitable in this market. Thus, this research's findings have added to the literature on this topic from an emerging market place.
Investment, portfolio selection, momentum strategies, industry momentum
This paper reports how six bank-specific characteristics and several market and macroeconomic factors influence Japan's commercial bank performance in the recent years that cover global crises. The results suggest that net interest margin is an important performance variable. It is negatively correlated with credit risk, capital adequacy, while liquidity risk, asset quality, management efficiency have positive influences. The effects of income diversification and size are positive though not significant; so, is bank concentration positive for performance. GDP growth and money supply have negative and significant relationships on performance although their effects are marginal compared with bank-specific variables. The global crisis did have significant effect. To take into account profit persistence, GMM technique was applied and it produced moderate support for earnings persistence and there is good deal of competition. These are findings on Japanese banking.
Net interest margin, Credit risk, Liquidity, capital, managerial efficiency, and Generalized Moments Method.
Recent trend shows that foreign investment has increased rapidly, and raises a question as to whether managerial characteristics impact international diversification, as claimed by the Uppsala internationalisation process theory. This paper investigates the relationship between top management team's characteristics and firm's Outward Foreign Direct Investment, that is, international diversification. This study focuses on 83 of the top 100 largest Malaysian multinational firms. The entropy measure is used as the proxy for level of international diversification. Age, international experience, educational level and functional background are proxies reflecting the management's cognitive abilities and competencies. The findings showed that age and functional background have significant positive influence on the level of international diversification. In addition, the results also suggested there is a reasonable support for upper echelons theory and Uppsala internationalisation process theory.
International diversification, entropy, upper echelons theory, Uppsala internationalisation process theory
This paper discusses on identifying the effects of regulators-guided mergers on production efficiency gains of Malaysian banks as measured by revenue efficiency ratio. The paper also examines the potential bank-specific and macroeconomics determinants correlated with revenue efficiency. The study sample consisted of banks that were engaged in mergers during 2002-2009 matched with those not engaged in mergers as the control sample. Results showed that revenue efficiency did not improve after the merger. Meanwhile, size, market power and management quality were shown to be correlated with revenue efficiency.
The paper examines internal (bank specific) and external (macro and market) determinants of profit efficiency in the Bangladesh banking sector. The analysis consists of two stages. In the first stage, Data Envelopment Analysis (DEA) method was employed to compute profit efficiency of 31 commercial banks operating in the Bangladesh banking sector during the period of 2004 to 2011. In the second stage, panel regression analysis was used to examine contextual factors influencing the productive efficiency of banks. It was found that credit risk, non-interest income and bank size negatively influenced bank profit efficiency. On the other hand, the findings indicate that lower (higher) liquidity has positive (negative) impacts on the profit efficiency of banks operating in the Bangladesh banking sector. Nonetheless, no statistically significant influence of ownership structures was found on bank profit efficiency. Likewise, Bangladesh banks seemed not to have been significantly affected by the global financial crisis. The paper could be extended to include more variables, the non-parametric Malmquist Productivity Index (MPI) method and production function, along with intermediation function. The findings from this study are expected to contribute significantly to regulators, bank managers, investors, and also the existing knowledge on the level of profit efficiency of the Bangladesh banking sector. The paper seeks to provide for the first time empirical evidence on the profit efficiency of the Bangladesh banking sector.
Banks; Profit Efficiency; Data Envelopment Analysis; Panel Regression Analysis; Bangladesh
We researched a significant topic on exchange rate behavior by restating the test procedures in a novel manner and applying an appropriate econometric methodology to re-examine exchange rate behavior of the US economy. The central research question is: Do inflation differences across two economies fully account for exchange rate changes, if controls for non-parity factors are embedded while controlling for interest rate differences? The results affirm, for the first time, that price parity factor holds well while other factors - interest rates and non-parity factors – also affect exchange rates significantly. Our tests also identifies the time to equilibrium to be 0.139 (13.9%) per quarter to adjust to equilibrium value. In our view, these findings extend our knowledge of how the US dollar behavior is consistent with parity and non-parity theorems. Prior tests have been inconclusive on parity factors. The Malaysian Ringgit is heavily dependent on the US dollar exchange rate, and our findings thus have monetary policy implications for the Malaysia's regulators.
The Islamic concept of accountability includes full disclosure of information to wider stakeholders, be it information on companies' financial or non-financial matters. The objective of this study was to examine the differences in perception between Muslim and non-Muslim fund managers regarding the usefulness of information on the environment in investment decision making. A questionnaire survey was used and 59 responses were received. No differences were found in perception between Muslim and non-Muslim fund managers related to several companies' environmental attributes and environmental information types. This implies that the Islamic worldview is not reflected in the perception of Muslim fund managers. This study makes a significant contribution to research in environmental reporting, particularly for companies and practitioners in Malaysia in the context of accountability in Islam. The study suggests some preliminary insights into the use of environmental information by Muslim and non-Muslim fund managers in Malaysia.
Environmental information, perception, fund managers, Islam, accountability
The focus of this study was to examine the effect of ownership structure and the independent board chair as the moderating variable on the performance of companies in the finance industry of the Main Market of Bursa Malaysia. The study used a total of 185 observation data collected from 37 finance companies from the years 2007 to 2011. The results of the study showed that the independent board chair as the moderating variable had a negative relationship with the finance companies' Tobin's Q value. The literature advocates that the independent board chair has an influence on the monitoring of owner managers and in safeguarding minority shareholders' economic interest. On the other hand independent chair control and monitoring of company decisions can be affected by the dominant voice of the CEO, the majority presence of executive directors, the presence of owner manager and leverage.
Activity-based costing (ABC) has been touted as being able to provide insights into profitability by segregating revenues and costs into the various activities that give rise to them. However, empirical findings on the performance benefits of ABC are mixed. This paper demonstrates how to make the most of ABC in evaluating costs of flexible, part-time versus committed, full-time teaching resources at a Korean public university. Unattractive compensation packages in academia is an issue of concern that leads to a range of problems from shortage of staff in academia to street protests and even suicides in South Korea. The structured, cause-and-effect approach of ABC provides insights into various avenues for improvement in the university's performance evaluation system and compensation packages to facilitate better deployment of flexible and committed teaching resources.
Financial reporting based on Syari'ah is very important to ensure reliability and usefulness of information. The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has developed various accounting and auditing standards to ensure the quality of financial reports produced by institutions involved in Islamic products. The Malaysian Accounting Standards Board (MASB) has also taken the effort to come out with FRS-i-1, Presentation of Financial Statements of Islamic Financial Institutions (formerly known as MASB-i-1), to follow in the footsteps of AAOIFI. The education sector could take part in this caravan by updating the curriculum to incorporate the changes that are happening to better prepare the future workforce. However, very few institutions of higher learning in Malaysia offer Syari'ah-based Accounting (SbA) courses in their accounting programmes. The purpose of this study is to identify the level of awareness and knowledge of accounting academicians on SbA and to determine whether there is a need to offer SbA courses in institutions of higher learning so as to equip future accountants with SbA knowledge. Therefore, the objective of this study is to examine the level of awareness of SbA amongst accounting academicians and to understand reasons for higher learning institutions in Malaysia to offer SbA courses in their accounting programmes in the future. The respondents of this study were 40 accounting lecturers from selected Malaysian public institutions of higher learning. This study showed that there was a high degree of awareness among the academicians who agreed that SbA is needed to account for Islamic products and the majority agreed that SbA should be offered at institutions of higher learning. This study has several implications for society, government policies and education sectors. The academicians foresee the future needs of SbA in order to meet the demand in the Islamic Capital Market.
Syari'ah-based accounting, level of awareness, academicians