Jaratin Lily

Exchange Rate Movement and Foreign Direct Investment in Asean Economies

The inflows of foreign direct investment (FDI) are important for a countrys economic development, but the world market for FDI has become more competitive. This paper empirically analyses the exchange rate movements and foreign direct investment (FDI) relationship using annual data on ASEAN economies, that is, Malaysia, the Philippines, Thailand, and Singapore. By employing ARDL bounds test approach, the empirical results show the existence of significant long-run cointegration between exchange rate and FDI for the case of Singapore, Malaysia, and the Philippines with all countries recording negative coefficient implying that the appreciation of Singapore dollar, Malaysian ringgit, and the Philippine peso has a positive impact on FDI inflows. Using the ECM based ARDL approach for causality test, both Singapore and the Philippines show long-run bidirectional causality between exchange rate and FDI whereas long-run unidirectional causality running from the exchange rate to FDI in Malaysia. Furthermore, this study also found that short-run unidirectional causality running from the exchange rate to FDI exists in Singapore.

Is economic growth sufficient for poverty alleviation? Empirical evidence from Malaysia

Malaysias success story has been highlighted by the remarkable social transformation and poverty reduction accompanying rapid economic growth. Some three decades ago, more than half of the population was poor, the number of illiterates was high, and the average person could only hope to live until the age of 48. The proportion of poor people is currently down to 5.6 percent, 90 percent of adults are literate, and life expectancy is up to 68 years. Although Malaysias population has increased from approximately 10 million in the 1960s to about 28 million in 2010, the number of poor people has dropped significantly during this period. This paper attempts to determine the empirical relationship and importance of growth for poverty reduction in Malaysia. The results show that growth explains much, but not all, about the evolution of poverty. Economic growth is necessary but not sufficient for poverty reduction, especially if the objective is rapid and sustained poverty reduction. This study proposes that if a policys objective is focused on poverty alleviation, poverty reduction as well as economic growth should be simultaneously taken into account as the final target.

Service Quality and Customer Loyalty: The Mediating Role of Customer Satisfaction among Professionals

The study of e-consumer behavior is getting more attention in e-commerce related literature. Acknowledging the importance of e-commerce, this study aims to investigate the influence of e-service quality dimensions efficiency, requirement fulfilment, accessibility, privacy and responsiveness on customer satisfaction and customer loyalty as well as to understand the mediating effect of customer satisfaction on e-service quality and customer loyalty. The study employed survey strategy using a self-administered questionnaire with professionals working in different industries and business settings located in Sabah, Malaysia. Study results indicated that out of five e-service quality dimensions, efficiency, accessibility, privacy and responsiveness are positively affecting customer satisfaction but in contrast accessibility had insignificant impact on customer satisfaction. Meanwhile, efficiency, accessibility and responsiveness were found to have a positive and significant relationship with customer loyalty. The findings of hierarchical regression indicated that customer satisfaction partially mediated the effects of efficiency, privacy and responsiveness on customer loyalty. Based on these findings, the study implications and suggestions regarding future research are discussed.

Benefits of Facebook fan/brand page marketing and its influence on relationship commitment among Generation Y: Empirical evidence from Malaysia

Abstract This study aims to understand the influence of relational benefits of Facebook brand/fan page towards relationship commitment among Generation Y. Additionally, this study also investigates the mediating effect of customer satisfaction on the relationship between relational benefits and relationship commitment. A total of 195 sets of online questionnaire were collected using snowball sampling method for the statistical data requirement of SmartPLS. The analysis found significant positive relationships between relational benefits and relationship commitment, however, only on social, functional, and special treatment benefits. Surprisingly, the findings also showed an insignificant mediation effect of customer satisfaction on the relationship between relational benefits and relationship commitment. The research findings are valuable to both the theoretical and businesses adopting social media as a marketing strategy. Marketers employing the Facebook or other social media in catering and reacting to the Generation Y needs will benefit the most; securing their confidence and loyalty towards purchasing a certain brand.

Revisiting Exchange Rate Exposure: A Case Study of Malaysia and Singapore

This paper investigates the relationship of foreign exchange rate movements on national market returns in Malaysia and Singapore using multi-bilateral exchange rates Euro (EUR), Japanese Yen (JPY) and Chinese Renminbi (CNY). The contemporaneous, asymmetric and lagged exchange exposure framework is used to investigate the nature of these exchange rate movements towards national market returns. Our study results show that both Malaysia and Singapore market returns are exposed to those currencies. The relationship of JPY and CNY exchange rate movements towards national market returns is contemporaneous in both countries. Meanwhile, EUR has a contemporaneous effect on national market returns in Malaysia but a lagged 1-month relationship in Singapore. Only JPY exchange rate returns have significant asymmetric effects on national market returns in Singapore. Future research should be conducted at industry and firm levels for more countries to better understand the stylised exchange rate exposure for mitigation purposes. Choice of the market index should also be taken into consideration when investigating the exchange rate exposure at the country level.

Exchange Rate Exposure: Does International Involvement Matter?

This paper investigates the effect of exchange rate movements on large non-financial firms’ share returns in Malaysia and Singapore using multi-bilateral exchange rates namely the Euro (EUR), US Dollar (USD) and Chinese Renminbi (CNY). Our empirical results show that only a few firms in both Malaysia and Singapore are exposed to exchange rate movements. More firms in Singapore are exposed to exchange rate movements than Malaysia, especially to EUR and CNY. Surprisingly, only three of the large non-financial firms in Singapore are exposed to USD and none in Malaysia. In both Malaysia and Singapore, the majority of the exposed firms have a high level of foreign sales ratio (more than 25%), but in the case of Singapore, it seems that a firm with a low level of foreign involvement (<5%) is also exposed to the studied currencies. The results disclosed that the majority of exposed Singapore firms would mainly benefit from CNY appreciation and USD depreciation, meanwhile Malaysian firms benefited from CNY appreciation and EUR depreciation. The insignificant exchange rate movements in most firms imply that these large firms mitigate the effect of the exchange rate movements through hedging programmes. Future research should include more firms and countries with different levels of market capitalisation to better understand the stylised effect of exchange rate exposure in firm-level analysis.

Revisiting Uncovered Interest Rate Parity: An Empirical Testing Using Bounds Test Approach

This study attempts to provide empirical evidence on the Uncovered Interest Rate Parity (UIRP) theory with Malaysia taken as a case study. Though theoretically sound, the UIRP does not seem to hold well empirically. Using quarterly data spanned from the first quarter of 1998 to the third quarter of 2010, the empirical results revealed the violation of the UIRP theory. This indicates that there is a possibility of arbitrage opportunity between Malaysia and the studied markets (Japan, Singapore and United Kingdom) due to the violation of Efficient Market Hypothesis (EMH). The study also found the absence of the forward premium puzzle in any cases.