Musa Darayseh

Incomplete Contract, Agency Theory, and Ethical Performance: A Synthesis of the Factors Affecting Owners’ and Contractors’ Performance in the Bidding Construction Process

This paper builds on agency theory and contract incompleteness theory to explore the ethical relation between owners and contractors in the construction process. Using factor and multivariate analysis, it transpires that cost, quality, time/past performance, and information available about the project are important factors that should be taken into account in any future contract between the owner (the principle) and the contractor (the agent). The results provide important empirical and theoretical implications in identifying the contractual elements of incomplete contracts, which, if considered, are expected to reduce the agency theory problem, while at the same time enhancing the ethical relationship between owners and contractors.

The Nature of Trends in the Per Capita Real GDP of Gulf Cooperation Council (GCC) Countries: Some Evidence and Implications

In this paper we attempt to determine whether the per capita real incomes of GCC countries are trend or difference stationary. The distinction is crucial for at least three reasons: first pertains to forecasting; while a trend stationary series tends to return to its long run steady state following a shock, a difference stationary series would tend to carry the impact of such a shock forever. The second has econometric implications because even minor divergences from difference stationarity would lead to non-robust cointegration estimations. The third is about economic theory where the distinction between the neoclassical and endogenous growth models can be settled via empirics of difference or trend stationarity. As the GCC countries strive for more economic integration, correct identification of trends becomes vital in policy making. Our research shows that there is evidence that the per capita real GDP of GCC countries is difference stationary.

Bank Specifics, Economics Environment, And Agency Theory: Determinants Of Banking Performance In GCC

ABSTRACT:The financial models used in the literature to investigate the performance of banks show mixed results and a low R in many of the studies. Therefore, Agency theory can be used in addition to the financial models to give investors enough information about banking industry performance. The sample used in this study consist of accounting information (bank specifics) and market information (macroeconomic variables) for a group of national and foreign banks located in the GCC countries during the period 2002 to 2013. The final sample consists of 115 banks with completed data collected from Bankscope database for financial data. The macroeconomic data were collected from sources such as the International Monetary Fund, International Financial Statistics, National Statistics, and the World Bank. Regression models have been developed to examine the factors that may determine banks performance in the GCC. The results of the study provide evidence that the models used in this paper are significant, indicating that all models containing the above financial and macroeconomics factors are important and statistically significant in determining and explaining bank performance. Even though our results indicate that the above factors are important in measuring bank performance, we believe that the agency theory could be used to shed some lights and provide insights on factors affecting bank performance in the GCC countries. There appears to be a need for a common understanding, a balancing of risks with financial rewards, and a building of long-term relationships. The findings enhance our theoretical understanding of the importance of these factors in creating an environment of trust that governs the behavior of the owners and managers, and hence reduces the agency problem. As for general management, the results indicate that opportunistic behavior can be lessened by managing the relationship between the two parties through a contract that clearly specify these factors. Therefore, this paper paves the way for further research in this area.

ACCOUNTING SPECIFICS AND WORK ENVIRONMENT, DETERMINANTS OF ACCOUNTANTS’ JOB PERFORMANCE

In this paper, we study the working environment relation between management and accountants and investigate the factors that affect the job performance of accountants. Using factor and multivariate analysis, we find that there are very important factors, such as the work environment, job attributes and scope, personal knowledge and self-development, as well as compensation/benefits are important determinants of the performance of accountants and provide information about the relationship between owners and agents that should be taken into account in studying and investigating any future relationship between management and accountants. The results provide important empirical and theoretical implications in identifying the elements of an accountant’s job performance, which, if considered, are expected to reduce jobs problem, while at the same time enhancing the relationship between management and accountants.

Measuring type I and type II errors in an estimation model: an empirical analysis; the case of bankruptcy

The objective of this study is to generate a model that will measure the cost of type I and type II errors in a logistic estimation model. The papers objective also is to find out how cost behaves when the cut-off point changed in an estimation model which leads to different decisions that should be made by investors and decision-makers. In other words, how will the investors and decision-makers behave when the expectation about the companys future changed which will lead to different costs in regard to making an investment decisions? The results in this study indicate that the best possible cut-off score and the percentage of type I errors fall as the relative cost of type I error increases, reflecting the changing trade-off between type I and type II errors. The results also show that changing in cut-off point lead to different decisions from investors and decision-makers.

Nonlinear dynamics in multinational financial data

We test for the presence of non‐linear dynamics in real stock return, in the American, British, and Japanese equity markets. Evidence on non‐linearities will have important implications for financial analysts. The results provide evidence of nonlinear structure in stock returns, in the three markets, suggesting that linear models, such as Ordinary Least Squares or Vector Autoregressive (VAR), may not always be appropriate for analyzing data.