Gadjah Mada International Journal of Business
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Female Directors and Firm Performance: Evidence from UK Listed Firms
Get PDFThe impact of female directors on firm performance has lacked consistency in the previously conducted empirical studies, which may be due to the endogeneity problem, or certain characteristics (i.e. governance, industry, competition). This study examines the relationship between female directors and firm performance by addressing those problems. This study analyses all non-financial UK listed firms during the period 2004-2012 and employs several econometric models. The regression results indicate that there is little evidence that female directors have a positive and strong relationship with firm performance. But, further analysis reports that the UK’s small listed firms experience a positive significant effect, because small firms do not suffer from the problem of over-monitoring and they have more flexibility in composing their boards of directors
The Volatility–Variability Hypotheses Testing and Hedging Effectiveness of Precious Metals for the Indonesian and Malaysian Capital Markets
Get PDFThis study evaluates the use of futures contracts for precious metals to hedge against stock market risks and their hedging effectiveness on the Indonesian Stock Exchange (IDX) and the Kuala Lumpur Stock Exchange (KLSE). This study found that gold was the most effective hedging instrument, since it produced the highest hedging effectiveness both on the IDX and the KLSE among the other precious metals. None of the hedged portfolios had a higher Sharpe’s ratio than the unhedged one on the IDX; however, all the hedged portfolios on the KLSE had a higher Sharpe’s ratio than the unhedged ones. Almost all the hedged portfolios could produce a higher Treynor’s ratio than the unhedged portfolios, both on the IDX and the KLSE. In general, this study concluded that studying some precious metals could reduce the investment risk, which was shown through the variance produced by the smaller portfolios, while gold can improve the risk-adjusted performance
Linking Corporate Risk Disclosure Practices with Firm-Specific Characteristics in Saudi Arabia
Get PDFThis study explores Corporate Risk Disclosure practices (CRD) in the annual reports of Saudi (non-financial) listed companies and investigates the relationship between the Saudi firm-specific characteristics and the level of such practices. Using content analysis of a sample of 307 company-year observations over the period of 2008-2011, the results indicate that Saudi Arabia provides a moderate level of CRD among the developed and developing countries. However, the content of this CRD is found to be of a low quality, by including non-financial, qualitative, neutral, or non-time-specific information. In addition, the unbalanced panel regression analysis shows a significant positive influence of firm size and audit firm size on the level of CRD. This indicates that Saudi companies which disclose higher risk-related information are those characterised by their larger size, and are audited by the Big 4 audit firms. This study contributes to the risk literature by providing an initial understanding of the CRD practices and their variations in light of the firm-specific characteristics in emerging markets in general and Arab countries in particular.
Comparing Risks and Benefits for Value Enhancement of Online Purchase
No full textIn a developing economy, the acceptability of e–retailing is not very new, but the potential of online marketing in market research and analysis is still largely unexplored. This article is an attempt to understand the psyche of Indian online consumers. As consumers have their own preconceived notions toward this growing purchasing environment, it becomes important for e-retailers to understand the consumers’ perceptions and attitudes toward online purchases. This paper integrates the dimensions of the risks and benefits with the Theory of Planned Behavior (TPB) to understand how consumers adopt their online purchase processes. Four hundred and sixty-eight valid responses were analyzed using structural equation modeling on AMOS 21 to identify the relationship between the different factors and the intention to purchase online. The paper concludes that consumers’ purchase intentions are jointly determined by their attitude towards online purchases and the subjective norm. Furthermore, their attitude is determined by the sub-dimensions of perceived benefits (hedonic benefit, convenience benefit, economic benefit and variety) and the sub-dimensions of perceived risk (product risk and financial risk)
Trust, Commitment and Competitive Advantage in SMEs Export Performance
No full textThe entry of small businesses into international markets has intensified. However, despite the growing presence of small businesses in international markets, studies into their international behavior, particularly regarding the effect of international relationships on international outcomes, remain limited. This study investigates the cross-border relationships of Small and Medium Enterprises (SMEs) by examining the effects of the dimensions of the key relationship on the competitive advantage and performance of SMEs in export markets. These dimensions include trust and commitment. Results indicate that trust is significantly related to commitment and export performance. Commitment is positively related to competitive advantage but not to export performance. Trust affects competitive advantage through commitment. The effect of commitment on export performance is mediated by competitive advantage. The methodology and results are presented. The conclusion, implications, and limitations of this study are also discussed
Contextual-Based Knowledge Creation for Agroindustrial Innovation
Get PDFThis paper discusses the knowledge creation process in one department, in a higher educational context, and the possible actions to take to improve the efficiency and effectiveness of the knowledge creation system in it. We conducted a case study at one department of a university that strives to improve its innovations, in terms of their quantity and quality.We used a soft system methodology to investigate the knowledge creation system in the chosen department. From the study, we conclude that the department can be considered as a learning organization, within which its staff continually create, acquire and transfer knowledge. This department has a learning environment which is conducive, concrete learning processes, and leadership that reinforces learning. In the context of producing agroindustry innovations, the knowledge creation system in this department is considered to be less effective since it frequently happens more at individual or small group levels. To improve its effectiveness, the management may facilitate the institutionalization of knowledge creation processes at every phase of the interactions between tacit and explicit knowledge
The Influence of Financial Literacy, Risk Aversion and Expectations on Retirement Planning and Portfolio Allocation in Malaysia
Get PDFThe two objectives of this paper are to examine the effect of financial literacy, risk aversion and expectations on retirement planning; and, to investigate the effect of these antecedents on the retirement portfolio allocation. Data was collected via a self-administered questionnaire from a sample of 270 working individuals in Kuala Lumpur, Malaysia. Logistic and ordered probit regressions were employed to analyse the first and second objective, respectively. The results from the logistic regression indicate that future expectations significantly influence the probability of planning for retirement. Meanwhile, individuals with higher financial literacy and lower risk aversion are more likely to hold risky assets in their retirement portfolios. Subsequently, two-sample t-test and one-way ANOVA tests were conducted to further examine the differences in financial literacy, risk aversion and expectations, across demographic subgroups. The study contributes to the literature by holistically incorporating the behavioural aspects that affect retirement planning and by exploring an uncharted issue of retirement planning—namely, the retirement portfolio allocation
The Role of Involvement as a Moderating Variable in a Country of Origin Study
Get PDFThe aim of this study is to examine the effect that the country of design and the country of manufacture has on the perceived quality of a product, and the role of involvement as a moderating variable. The conceptual framework has been tested using laboratory experiments that included a 2x2x2 between the subject’s factorial designs. Data have been collected using a randomization method to reduce any bias in the group’s variations. This data were analyzed using a one-way and two-way ANOVA. The results indicate that there is no difference between the high and low points of a product’s perceived quality, based on its country of design. Conversely, a favorable country of manufacture results in a higher perceived quality for its products, than for those of a lower scoring country of manufacture. Furthermore, consumers’ involvement, as a moderating variable, limits the strength of the country of design and the perceived quality’s relationship as this relationship is found to be stronger in circumstances where the consumers’ involvement is greater than in the less involved group’s condition. However, consumers’ involvement does not have any role as a moderating variable in the relationship between the country of manufacture and the perceived quality
The Performance of Socially Responsible Investments in Indonesia: A Study of the Sri Kehati Index (SKI)
Get PDFThis study examines the performance of the Sri Kehati Index (SKI) against the Jakarta Composite Index (JCI) as the market index, using respective daily index prices from the 1st of January 2009 to the 31st of December 2014. This study uses the risk-adjusted return of Sharpe’s Index, the Adjusted Sharpe’s Index (ASI), Treynor’s Index, Jensen’s Alpha Index, the Adjusted Jensen’s Alpha Index (AJI) and Sortino’s Ratio to examine the performance of the SKI and the JCI. Except for Sharpe’s Index and the Adjusted Sharpe’s Index, the risk-adjusted return performance of the SKI, (Treynor, Jensen’s Alpha, Adjusted Jensen’s Alpha and Sortino) outperforms the JCI as the conventional benchmark. However, Jensen’s Alpha is the only performance measure that is significant and therefore supports that the SKI outperforms the JCI during the overall period from 2009 to 2014. As there is a contradiction between the adjusted returns of Sharpe’s Index/Adjusted Sharpe’s Index and Jensen’s Alpha Index, the hypothesis that the SKI presents a higher risk adjusted performance than the JCI does cannot be accepted. Even though the performance of SKI in this study is slightly lower over the whole period of the study, it is still generating competitive returns
Can Backward-looking and Forward-looking Information Debias Prospect Effect in Earnings Announcement?
Get PDFThis study examines the important issue of whether additional pieces of information about the earnings’ characteristics (their quantitative description and predicted earnings) can debias the prospect effect of the earnings’ announcement. The prospect effect bias can be mitigated by the availability of clear information and an integrated disclosure. Additional information that is included with the previous information will make the investors’ beliefs stronger and it will debias any psychological effects.This research confirms the prospect effect’s bias that investors react more negatively when evaluating a company’s performance after a negative earnings information disclosure rather than react positively in evaluating the performance for a positive earnings information disclosure. The results also show that when additional pieces of information, such as a quantitative description and predicted earnings are added, they can mitigate the prospect effect’s bias. Additional information of predicted earnings as forward-looking oriented information has a stronger debiasing effect than that of additional information of a quantitative description as backward-looking oriented information