International Journal of Economics, Management and Accounting
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Islam, The Islamic Worldview and Islamic Economics
No full textIslam, The Islamic Worldview and Islamic Economic
Fulfilment of Basic Needs: Concept, Measurement, and Muslim Countries' Performance
No full textFulfilment of Basic Needs: Concept, Measurement, and Muslim Countries' Performanc
RATE OF RETURN REGULATION: AN INDIRECT APPROACH
No full textThis paper proposes an indirect method to the "Rate of Return Regulation" (ROR) or "Cost Based Regulation," by imposing ROR on monopoly firms through tax instruments, i.e., ad-valorem tax and consumption tax. The main objective in undertaking this theoretical study of industrial economics is to investigate and compare the results of direct with indirect methods concerning the social cost of monopoly and monopoly distortions or "overcapitalization." The finding shows that the indirect method not only would not involve an inefficient allocation of resources but it is also much more demanding than the direct method in terms of government's information requirements and even increases the monopoly output higher than the level reached by direct regulation. This is relevant in the implementation of regulated firms especially in the period after privatization.JEL Classification: D420, L11
ISLAMIC BANKING: AN EVALUATION
No full textIslamic banking, a financial innovation, has come to be seen as the most 'visible' aspect of Islamization. Notwithstanding its novelty, it has made considerable progress, measured by the rapidity with which it has been adopted in the Muslim (even non-Muslim) countries in a relatively short period of time. However, the progress made by Islamic banking is seen by some Muslim economists as more apparent than real because it is not being run exclusively (or even mostly) on the basis of the Sharicah-favored profit and loss sharing (PLS) principle; rather, the fixed-rate type of financial instruments, which are seen as a 'deviation' from the Islamic ideal, have proliferated. It is argued in this paper that there is no warrant whatsoever for this misplaced 'financial puritanism', which has obfuscated the subject and its manifestations. The fact of the matter is that, deviation or not, the fixed-rate financial instruments, duly approved by the Sharicah, form an integral part of Islamic banking; and that it would be counterproductive to limit the possibilities of this institution just to the PLS principle. Hence, respecting the preferences of the consumers, Islamic banks should aim to evolve a risk-minimizing 'mixed' investment portfolio, containing both the variable and fixed-rate of return types, without any 'imperfection complex'. Even more important, rather than pursue an ambiguous financial ideal, which cannot be reached, the focus of the future reform should be to produce something strikingly original which can win the acknowledgement of the people. To this end, Islamic banking should be informed with an earnest knowledge of the ethical objectives of an Islamic economic system, the truth of which can be established only by the quality of social justice and the primacy it accords to the needs of the underclass in society. If Islamic banking is unmindful of its economic consequences and remains hooked on 'procedural purity', it will wither on the vine of public apathy, even its disapproval.JEL classification: G21, P43, P47Key words: Islamic banking, Islamic Economics, Profit and loss sharin
THE RELATIONSHIP BETWEEN TQM AND ORGANIZATIONAL PERFORMANCE: AN EMPIRICAL ASSESSMENT
No full textThis study investigates the relationship between TQM and (i) product performance and (ii) organizational performance. Cross-sectional data of 405 manufacturing firms in Malaysia is analyzed using the chi-square test. The results indicate that TQM does not have a significant relationship with product performance. However, in terms of organizational performance, TQM has a strong association with product quality and development, sales and profit, marketing, commitment to customer, respect for top management, contribution of employees, and communication between divisions.JEL classification: L20, M10Keywords: Total Quality Management, Product performance, Organizational performance
ON THE DESIGN AND EFFECTS OF MONETARY POLICY IN THE MIDDLE EAST
Get PDFIn trying to evaluate the autonomy of central banks in the Middle East, the paper examines the determinants and implications of monetary policy across a sample of countries in the region: Algeria, Egypt, Jordan, Kuwait, Morocco, Saudi Arabia, Syria and Tunisia. Monetary policy is often established as a tool to facilitate government objectives. However, some of the announced objectives - price stability, economic growth, and full employment - may be contradictory. The governments may then set the reaction function for the monetary authority to devote more attention to specific objectives that they judge to be more urgent for economic performance. Models that attempt to identify the reaction function for the monetary authority differentiate between two types of policies: rules or accommodative policies versus discretion or stabilizing policies. An accommodative policy provides a regular supply of credit to an expanding economy. A stabilizing policy, in contrast, varies the money supply to counter shocks that may deviate the economy from its objectives. The present paper seeks to shed some light on the design of monetary policy across countries that have kept a sufficient data record for empirical investigation. The empirical investigation proceeds in two steps. The first step seeks to identify the reaction function for the design of monetary policy. The second step seeks to evaluate the varying effects of monetary policy in the light of variations in the policy design. Specifically, empirical models are estimated to identify the effects of growth in money supply on real output growth and price inflation.JEL classification: E51, E52, E58, N15Key words: Monetary policy, Economic growth, Middle-East countrie
FINANCIAL PERFORMANCE MEASUREMENT AND DISTRIBUTION POLICY OF ISLAMIC FINANCIAL INSTITUTIONS
Get PDFThis paper addresses the issues of financial performance measurement and proposes the need for a profit sharing distribution policy of Islamic financial institutions. A conceptual analysis of the integral concepts of performance measurement, such as income, capital and cost of funds, is done in view of the existing accounting assumptions and principles. The importance of profit-sharing ratio and the diversity of financing contracts explained in this paper affirms the need for a more comprehensive analysis of the financial performance of Islamic financial institutions. A portfolio return model of Islamic financing contracts is proposed for the financial institutions. A profit distribution policy that states and discloses the manner of profit determination and distribution between the Islamic financial institution and the investment depositors is proposed. The policy is expected to reduce information asymmetry in meeting investment account holders' expectations. Both the accrual and cash aspects of performance measurement and distribution policy are discussed in this paper.JEL classification: G20, G31, M40, Z12Key words: Financial reporting, Performance measurement, Islamic financial institution
AGGREGATE IMPORT DEMAND BAHAVIOR FOR INDONESIA: EVIDENCE FROM THE BOUNDS TESTING APPROACH
No full textThis paper empirically re-estimates the long-run relationship between Indonesian aggregate import demand and its determinants; namely, real income and relative import prices. In contrast to previous studies (Reinhart, 1995; and Senhadji, 1998), the result of the bounds test (Pesaran et al., 2001) reveals that import volume, real income and relative import prices are cointegrated. This is an important finding from the viewpoint of the Indonesian economic policy. The estimated long-run elasticity of real income and relative price are 0.98 and -0.4 respectively.JEL classification: C22, F14Key words: Aggregate import demand, Bounds testing approach, Indonesi
A FURTHER NOTE ON THE MATHEMATICAL DERIVATION OF TFP SOURCES
Get PDFThe main objective of this paper is to theoretically show the major sources of TFP growth and its sub-components. First, we establish a method to link the TFP analysis with the theory of production Using the cost function, the sources of TFP growth are decomposed into scale and technological change effects. Second, from the first source of the TFP growth, namely scale effect, we further disentagle it into 3 elements, which are, effects due to output, price and technological change. To decompose the TFP growth rate, the transcendental logarithmic (translog) cost function is employed.JEL classification: C23, D24, O39Key words: Total factor productivity, decomposition analysis, translog cost functio
THE POWER OF PRODUCTIVITY: WEALTH, POVERTY, AND THREAT TO GLOBAL STABILITY
Get PDFBy William W. Lewis, Chicago: The Chicago University Press, 2004, ISBN: 0-226-47676-6, 339 pp. (excluding i-xxxi