Organizations and Markets in Emerging Economies
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National or Global? Moderated Mediation Impact of Sports Celebrity Credibility on Consumer’s Purchase Intention
Get PDFThe paper aims to examine the role of localness of a sports celebrity and a level of product involvement in the mediated impact of the perceived product quality on the relationship between a sports celebrity’s credibility and consumers’ purchase intention in a developing economy. A total of 253 respondents participated in an experiment including the localness of 2 sports celebrities (global vs national) and2 product involvement (high vs low) levels. The study determined that sports celebrity credibility had both direct and indirect effects on respondents’ intention to buy, but product involvement moderated the direct impact of sports celebrity credibility on the consumer’s intention to buy a product. The direct impact was noticed in the case of low involvement products, and no impact was observed in the situation of high involvement. Besides, the study showed that global sports celebrities enjoyed a higher level of attractiveness, but the trustworthiness was higher for national celebrities. Finally, moderation analysis showed that the mediation effect of the localness of a sports celebrity on the relationship between credibility and intention to purchase depended on the type of measured effect – direct or indirect. This study expands the research on the effects of celebrity credibility on the consumer’s intention to purchase in developing economies
Consumer Entitlement Inventory: A Scale Extension and Application to the Vietnamese Retail Context
Get PDFThe consumer entitlement (CE) construct is a key variable in the exchange process in retail environments. The original Consumer Entitlement Inventory (CEI) was developed and applied within Western cultural boundaries. The main contribution of this study is the extension of the original CEI to better fit the Vietnamese context and to demonstrate its applicability in the context of an emerging economy with a Confucian culture. The study also contributes to expanding the range of identified boycott motives in the literature and clarifying their mechanism via social exchange theory. The extended CEI scale was tested using exploratory factor analysis and confirmatory factor analysis, using a sample of 603 respondents. Qualitative and quantitative research results show that the extended CEI has two dimensions, namely intransigence, and demand and distinction, with adequate content, reliability, convergent validity, and discriminant validity. This study also aimed to apply the extended CEI to an exploration of the relationship between CE and willingness to boycott. Research results from another independent study with 450 respondents using a structural equation model confirmed the positive relationship between CE and willingness to boycott. In addition, theoretical implications are discussed
Does Emigration Hurt the Economy? Evidence from Lithuania
Get PDFThis study explores the economic impact of population emigration with special reference to the case of Lithuania. For this reason, we developed a SVAR model and applied related IRF and FEVD tools using quarterly data for the period of 2001-2020. Our findings reveal that a positive shock in emigration is related to lower unemployment. It is also found that the increased emigration is linked to higher real wage growth but with a lower confidence interval. Moreover, our estimates suggest that international out-migration increases real GDP growth in the short term, with no significant effects in the long run perspective. Finally, we found that most of the emigrants-to-be were inactive for a long term prior to departure, which offers a new look into the consequences of Lithuanian emigration, suggesting that the economic losses of emigration could be overstated. This study contributes to the knowledge about the impact of emigration on the economy and specifies directions for further studies in the field
Is CSR Expenditure Relevant to the Firms in India?
Get PDFThe present study examines the relevance of Corporate Social Responsibility (CSR) expenditure to the firms in the mandatory regime in India. The paper has its theoretical basis from the instrumental aspect of the Stakeholder theory, which assumes a positive influence of CSR over financial performance. Therefore, the study hypothesizes that the firms which fulfill the CSR expenditure requirement will exhibit higher stock returns and lower systematic risk. Since India mandated CSR in the year 2014, the data of four years (2016-2019) for the sample of 426 National Stock Exchange (NSE) listed Indian firms are taken to employ the OLS regression method. The CSR expenditure in the mandatory regime was not found to be relevant to the firms because of an insignificant positive impact of mandatory CSR expenditure on stock returns. Thus, the instrumental aspect is not supported by the findings. However, the findings indicate a decrease in the systematic risk of the firms. Only a few studies in India investigated this phenomenon in the mandatory regime. Further, the contributions of the study to the CSR literature are fairly useful from the perspective of firms, investors, policy-makers, regulators, scholars, and countries that are planning for legislating CSR
Decomposition of the Sources of Real Exchange Rate Misalignment in Egypt: Evidence from the ARDL Model: An Evidence from ARDL Model
Get PDFThis paper examines the behavior of the real exchange rate in Egypt over the period 1965–2018 by attempting to pursue three interrelated purposes. The first is to investigate the extent of deviations between the actual exchange rate and its equilibrium level and illustrate the magnitude of any currency misalignments. The second is to search for the different phases of over- and undervaluation of the local currency and explain the accompanying economic policies and/or factors leading to them. The third and ultimate purpose is to explore the role of transitory and permanent factors in deviating the actual real exchange rate from its equilibrium level. Understanding these factors should help in the design of economic policies directed to address the misalignment of the local currency. An autoregressive distributed lag (ARDL) bound test approach is used and conducted for both the bilateral and effective real exchange rates to achieve these three purposes during the selected period. To derive the equilibrium exchange rate estimate, the behavioral equilibrium exchange rate (BEER) approach is adopted. The findings reveal that the Egyptian pound was misaligned from its equilibrium value during most of the examined period. The results confirm the relative importance of the terms of trade and degree of openness variables in determining the equilibrium real exchange rate in Egypt followed by investment ratio and government consumption variables. The local currency witnessed a recent phase of overvaluation, which began in 2009, until the free float of the local currency in November 2016, after which, the Egyptian pound was found to have experienced a new phase of undervaluation till the end of the period examined. The findings show a considerable relative impact of fundamental-based factors over a prolonged period spanning from 1986 to 2003 and at the end of the period examined as well. Moreover, the documented results lend general support to the fact that both permanent or fundamental-based factors and short-run shocks prove to be important influential factors impacting currency misalignment in Egypt
The Role of Animosity, Religiosity, and Allocentrism in Shaping Purchase Intention through Ethnocentrism and Brand Image
Get PDFWith the long history of the relationship between Indonesia and China, various sentiments may arise and influence the consumer purchasing decision. This study aims to determine the impact of animosity towards China, religiosity, and allocentrism of the Indonesians on the intention to purchase Chinese brands smartphones, mediated by consumer ethnocentrism and brand image. This study has 215 valid responses and was carried out using SPSS 25. Structural Equation Modelling (SEM) was performed using AMOS 22. The results show that consumer ethnocentrism is significantly influenced by animosity, religiosity, and allocentrism. Brand image can mediate between consumer ethnocentrism and purchase intention. This study gives a better understanding of Indonesian consumer ethnocentrism with animosity towards China, religiosity, and allocentrism, which will affect the Chinese brand image and Indonesians’ intention to purchase the product
Economic Consequences of Covid-19 Pandemic: An Analysis of Exchange Rate Behaviour
Get PDFThis paper examines the effect of Covid-19 on currency exchange rate behaviour by taking a sample of 37 countries over a period from 4th January 2020 to 30th April 2021. Three variables, such as daily confirmed cases, daily deaths, and the world pandemic uncertainty index (WPUI), are taken as the measure of Covid-19. By applying fixed-effect regression, the study documents that the exchange rate behaves positively to the Covid-19 outbreak, particularly to daily confirmed cases and daily deaths, which implies that the value of other currencies against the US dollar has been depreciated. However, the impact of WPUI is insignificant. On studying the time-varying impact of the pandemic, the study reveals that the Covid-19 has an asymmetric impact on exchange rate over different time frames. Further, it is observed that though daily confirmed cases and daily deaths show a uniform effect, WPUI puts an asymmetric effect on the exchange rate owing to the nature of economies
Tax Planning, Corporate Governance and Financial Performance of Selected Quoted Non-Financial Companies in Nigeria (2007–2018)
Get PDFThis study examines the interactive effect of tax planning and corporate governance on the financial performance of 50 non-financial quoted companies in Nigeria between 2007 and 2018. The study sample that covers 9 sectors was selected purposively through stratified random sampling. Data used were collected from the audited annual reports and accounts of selected quoted companies in Nigeria and fact books published by the Nigeria Stock Exchange. A system GMM was employed to estimate the dynamic models, and results show that ownership structure (OS) and capital intensity (CI) exerted a significant and positive impact on the returns on assets. This implies that OS plays a significant role to ensure that CI triggers an increase in the return on assets of the quoted Nigerian companies. However, board diversity and thin capitalization wielded a significant and negative influence on return on assets. This study thus recommends that companies should put in place a strong corporate governance mechanism that will monitor, check and balance tax planning activities and strategies adopted by the management of quoted companies in Nigeria
The Impact of Currency Misalignment on Trade Balance of Emerging Market Economies
Get PDFThis study is an attempt to examine the impact of currency misalignment on the trade balance of emerging market economies from 1980 through 2016. It firstly measures the equilibrium RER and corresponding misalignment series of 21 EMEs separately adopting a single equation approach and then includes them in the trade regression together with undervaluation and overvaluation to estimate the dynamic relationship between the trade balance and real exchange rate misalignment employing the system generalized method of moment estimation approach. The study suggests that, being a composite series of undervaluation and overvaluation, higher real exchange rate misalignment helps recover trade imbalances. It also identifies that undervaluation improves trade balance, while overvaluation cuts it down. The study identifies that the misalignment series of RER for most of the EMEs are substantially dominated by overvaluation episodes, and hence the opposing impact of undervaluation and currency misalignment on the trade balance of EMEs is not surprising. From the policy perspective, competitiveness achieved through currency movements helps emerging market economies not only to improve trade balance but also to withstand vulnerability that arises from huge external borrowings creating a strong external payment position
Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study
Get PDFThe field of behavioral finance has actively researched behavioral elements influencing the choices of individual investors. This study also contributes to the behavioral finance and examines the effect of an increase in a foreign firm’s partial ownership in a domestic firm on the local individual investments in that domestic firm. Specifically, using a controlled lab experiment the study examines the investments of Pakistani individual investors between a purely Pakistani firm and a Pakistani firm with three different levels of Chinese ownership (portfolio, minority, majority). The experimental results show that with reference to Chinese minority ownership in a Pakistani firm, the potential investors are 47% (61%) less likely to invest in a Pakistani firm with Chinese portfolio (majority) ownership than in a purely Pakistani firm. The study uncovers an important non-monetary factor in the form of a foreign firm’s partial ownership that can significantly influence the choices of individual investors. It also makes an important contribution to the growing literature on the Chinese foreign investments specifically in Pakistan by exploring how potential individual Pakistani investors are likely to react to an increase in Chinese investments in Pakistani firms