Gadjah Mada International Journal of Business
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TIME-VARYING BETA AND VOLATILITY IN THE KUALA LUMPUR STOCK EXCHANGE
No full textThe paper analyzes the relationship between beta risk and aggregate market volatility for 12sized-based portfolios for the case of Malaysia using daily data from January 1988 to December 2000. The analysis is conducted for the entire sample as well as various sub-samples corresponding to (i)the upward trend in the market from January 1988-December 1992; (ii) the huge influx of portfolio investments from January 1993-June 1997, and (Hi) the Asian crisis and its aftermath from July 1997-December 2000. The results generally suggest instability in beta risk due to its significant response to aggregate market volatility. Additionally, we also note that the direction of relationship between beta risk and market volatility seems to depend on stock market conditions or sub-samples used. Namely, beta risk seems to decrease with increasing market volatility for the whole sample as well as the first and the third sub-samples. However, for the second sub-sample, their relationship turns to be positive. Lastly, the author have evidence for the Malaysian case that size does not play significant role in the way beta risk responds to aggregate market volatility. These results have important implications for investment decisions as well as for event analyses employing the market model to generate abnormal returns
REAL STOCK PRICES AND THE LONG-RUN MONEY DEMAND FUNCTION IN MALAYSIA: Evidence from Error Correction Model
Get PDFThis study adopts the error correction model to empirically investigate the role of real stock prices in the long run-money demand in the Malaysian financial or money market for the period 1977: Q1-1997: Q2. Specifically, an attempt is made to check whether the real narrow money (M1/P) is cointegrated with the selected variables like industrial production index (IPI), one-year T-Bill rates (TB12), and real stock prices (RSP). If a cointegration between the variables, i.e., the dependent and independent variables, is found to be the case, it may imply that there exists a long-run co-movement among these variables in the Malaysian money market. From the empirical results it is found that the cointegration between money demand and real stock prices (RSP) is positive, implying that in the long run there is a positive association between real stock prices (RSP) and demand for real narrow money (M1/P). The policy implication that can be extracted from this study is that an increase in stock prices is likely to necessitate an expansionary monetary policy to prevent nominal income or inflation target from undershooting
The Impact of the Tick Size Reduction on Liquidity: Empirical Evidence from the Jakarta Stock Exchange
Get PDFOn July 3, 2000, the Jakarta Stock Exchange (JSX) reduced its tick size from Rp25.00 to Rp5.00. This study examines the impact of the tick size reduction on the JSX bid-ask spread, market depth, and trading activity. Using daily data, this study finds that the rupiah spread, percentage spread, and depth decreased significantly. All of these findings are not surprising since they are consistent with previous studies conducted in several different markets.In contrast to previous studies, this study finds that the key variable in determining the difference in performance of JSX stocks following the tick size reduction is the price of the stock. Specifically, all the trading activity measures e.g. in the number of trades, share volume, and rupiah volume, increased for low-priced stocks. Conversely, trading activity decreased for high-priced stocks. The possible explanation is that absolute tick size Rp5.00 is too small in economic terms for JSX high-priced stocks, so those decrease the investors’ willingness to trade
The Influence of Firm Ecological Recruitment Advertisements On Organizational Attractiveness and Career Choices: An Experimental Research
Get PDFThis present study investigates college students’ interest to a green company and intention to work for the company. This study also investigates how much salary they are willing to receive to work for the company. The results of the study show construct validity evidence that being attracted to the organization and desire to pursue a job in the organization are divergence constructs. Both constructs are influenced by different factors in magnitude. This study also finds that environmental information stated in the recruitment brochure can positively influence applicants’ interest and intention to pursue a job in the company. Yet, applicants only react positively to an environment-friendly company that offers high pay level. They are more attracted to an environment-friendly company that offers high pay level. However, this relationship does not influence applicants’ intention to pursue a job. Applicants’ personal concern on the environment do not influence applicants’ interest and intention to pursue a job in a green company. This suggests that a positive environmental information articulated in the recruitment brochure could positively affect potential recruits, even when applicants did not personally see herself or himself as being particularly pro-environment
Perception of Professional Engineers toward Quality of Worklife and Organizational Commitment: A Case Study
Get PDFThis empirical investigation was aimed to determine the pattern of the relationships between the perceived presence of quality of worklife (QWL) factors and organizational commitment using samples from professional engineers in Malaysia. Engineers in private sector were selected to participate in this study. A total of 250 sets of questionnaires were sent to the selected organizations, and 152 useable questionnaire representing a response rate of 60.8% were used for statistical analysis. A QWL measure consisting of seven factors: growth and development, participation, physical environment, supervision, pay and benefit, social relevance, and workplace integration was developed based on Walton’s (1974) conception. The three-component model and measure of organizational commitment developed by Allen and Meyer (1990) was adopted in this study. Results of regression analysis indicated that only two QWL factors, growth and development and pay and benefit, were significant in explaining organizational commitment. Implication and suggestions for further research are also discussed
INTRAGROUP COOPERATION VS. INTRAGROUP COMPETITION: A Meta-Analytical Study
Get PDFThis study examines whether intragroup cooperation outperforms intragroup competition. Intragroup cooperation is a work setting when individuals in a group perceive that their goal attainments are positively related; while intragroup competition is a work setting when individuals in a group perceive that their goal attainments are negatively related. Performance is defined as group productivity level, speed of solving problems, and quality of the group outcomes.Meta-analytical method is used to test the hypothesis. The method combines and compares eight studies from various research disciplines i.e., education, psychology, organization, and business and accounting. The studies being analyzed also vary in terms of the research and experimental setting such as manufacturing operations and problem solving games.Meta-analytical study is relatively rare in Indonesia, so that this study is important to introduce and to show the importance and the benefit of the analysis for concluding a large number and different research in a similar domain of research question. In a simple term, a meta-analysis is a quantitative literature review. However, the analysis has a more powerful procedure (than the conventional literature review) to indicate more clearly, and in quantitative terms, the consistency, the differences and similarities of previous studies.The author found that intragroup cooperation outperforms intragroup competition is held across different experimental subject educational backgrounds such as education, psychology, and business and accounting. However, the extent of the difference in performance is higher in the subjects with psychology background than that of the subjects with business and accounting background. The reason is that business and accounting subjects are more exposed to competitive environments than those whose backgrounds are psychology and sociology
Business Location and Success: The Case of Internet Café Business in Indonesia
Get PDFThis research aims to examine the relationship between business location decision and business success. The case is Internet café business in Indonesia. This research is addressed to answer these main questions: (1) what factors do underlie location decision for an Internet café business?; and (2) does location decision determine success of Internet café business? A field research is conducted to answer these questions.Factor analysis applied to 17 location factors reveals five underlying dimensions of business location decision. They are centrality, business environment, business venue, cost, and labor. Based on responses from 93 Internet cafés in three locations (i.e. Yogyakarta, Surabaya, and Lombok), the author finds that favorable location of business is positively related to business success. More specifically, a regression analysis reveals that availability of utilities, proximity to schools/universities and security affect business success in a positive direction, while proximity to highways, being in commercial center affect in a negative direction. The independent variables explain 23 percent of total variance
Electronic Commerce Success Model: A Search for Multiple Criteria
No full textThe current study attempts to develop and examine framework of e-commerce success. In order to obtain comprehensive and robust measures, the framework accomodates key factors that are identified in the literature concerning the success of electronic commerce. The structural model comprises of four exogenous variables (Internal Driver, Internal Impediment, External Driver and Exgternal Impediment) and one endogenous variable (Electornic Commerce Success) eith 24 observed variables. The study that was administered within large Australian companies using questionaire survey concluded that benefits for both internal organization and external parties from the use of e-commerce were the main factor tro predict perceived and/or expected success of electronic commerce
The Development of Small and Medium Entreprises Clusters in Indonesia
No full textSmall and Medium Enterprises (SMEs) in Indonesia are very important not only for employment creation, but also as important sources of economic growth and foreign currencies generation through exports. Since the early 1980s, the Indonesian government has adopted SME development policy through a clustering approach. This paper reviews the existing empirical studies on development of SME clusters in Indonesia. This paper deals with two main questions. First, what are the critical success factors of development of an SME cluster. Second to what extent this policy has contributed to the dynamic of SME clusters in the country. The paper argues that in many cases, the development policy has not been so successful. In essence, most failures can be attributed to the fact that one or more critical factors for successful SME cluster development were either not existing or not addressed correctly. Neglecting cluster linkage to markets is one reason of the failure. Prerequisite for successful cluster development is the cluster's potential to access to growing market, either domestic or abroad
Interest Rate Policy, Inflation and Economic Growth: A Policy Evaluation of Indonesia, 1969-1997
Get PDFAccording to Shaw (1973) and McKinnon (1973), the most important element of economic development is financial liberalization. This action will eliminate the distortion, as what the government of Indonesia did on June 1, 1983 through deregulation of banking. The government eliminated the ceiling of credit and gave a full authority to each bank to determine their interest rates. This study looks up to Fry (1995) model to test McKinnon-Shaw hypothesis. The models were regressed with dummy variable. This effort will give illustration or conclusion of the structural change, that happened specifically caused by environmental or policy changes.Generally, insignificant in the relationship between interest rates in national saving and investment in Indonesia could be caused by financial mechanisms those very long and complex channels. That is why real interest rates could not give effect to national saving directly. Export, especially from oil and gas and foreign debt were growth-stimulating factors. Meanwhile, money supply, which supported by tight money policy and balance budget policy caused Indonesian inflation along those periods. The periodically analysis shows that deregulation of June 1983(PAKJUN) were success to mobilize public fund, encourage investment on real sector, and increase the economic growth, but failed to control the inflation rate. The implementation of October 1988 deregulation (PAKTO) had flourished the establishment of new banks and created good competition among them. The competition had no longer on interest rate. Therefore, it can be said also the easy requirements of establishing banks become contra productive for PAKJUN policy, which had laid to the market mechanism.Basically, either PAKJUN or PAKTO was not policies in which urgently implemented in Indonesia. Those financial deregulations were not supported by the existence of deregulation on real sectors, so that the financial deregulations were not effective to achieve their goals