Yusnidah Ibrahim

Stock Price Index and Exchange Rate Nexus in African Markets

ABSTRACT This paper examines the relationship between stock price index and exchange rate in six African markets using monthly data for the period January 2007 to October 2015. A quantile regression approach is used. This methodology is shown to perform better than the ordinary least squares estimators, particularly when the conditional distribution is heterogeneous. Our empirical evidence reveals an interesting pattern in the association of these two financial markets in Africa, which shows that the negative relationship between stock and foreign exchange markets is more apparent when exchange rates are extremely low or high. The negative relationship between the two variables is in line with the portfolio balance effect.

Institutional distance factors influencing firm performance: A hypothetical framework from cross-border mergers and acquisitions

ABSTRACT:Cross-border mergers and acquisitions (CBMAs) have long been used as an important strategy for firms’ international strategic expansion. Thus, CBMAs have become an increasingly important approach utilized by a large number of firms in multiple regions across the globe. It has gained in popularity over the last few decades. However, the occurrence of CBMAs has grown dramatically in the last few decades, academic research on this type of strategic action has not kept pace with the changes. Though there is considerable research in the area, it is unfortunately fragmented, leaving gaps that need to be addressed. Herein, the researchers have scrupulously reviewed the relevant literatures which pledge strategic supports for firm performance following CBMAs strategy under cross-national distance. The relevant literature on this topic is also tabulated and grouped by institutional based view to indicate major findings. Most importantly, the study identifies gaps in the literature and highlight ten institutional distance factors that provide directions that influence on firm performance following CBMAs in different institutional settings in different countries because institutions vary across countries because of their path-dependent nature. It has influence on firm performance following CBMAs. It is a fast and direct way for firms in one country to acquire advanced strategic assets in another country in order to improve their competitive advantage. This study is an effort to discuss the institutional distance (ID) factors that could influence on firm performance following CBMAs. Using the institution-based view (IBV) as a theoretical lens, this study emphasizes on the impact of formal and informal ID factors on firm performance following CBMAs. The study argues that formal institutional distance (political, economic, political, administrative, and infrastructural) could positively affect acquiring firm performance, while informal institutional distance (cultural, demographic, knowledge, connectedness, and geographical) could negatively affect acquiring firm performance. So, favourable institutional distance is obviously important for firms in demonstrating positive performing following CBMAs.

The determinants of involuntary delisting rate in the Egyptian IPO equity market

Purpose - – The purpose of this paper is to examine the determinants of involuntary delisting rate for the Egyptian initial public offerings (IPOs) issued over the period 1992-2009. Design/methodology/approach - – A definition of survival time that considers the date when the new Egyptian listing rules were enforced to track delisting status for each IPO firm for five survival years is relied on. Binary logit regression analysis is used to identify these determinants. Total sample is divided into two subsamples: the first subsample covers the period from 1992 to 2004. It is used to estimate the logit equations and to predict delisting status of firms included in the second subsample, which covers the period from 2005 to 2009. Findings - – The probability of involuntary delisting decreases significantly with the increase in firm size, institutional ownership, assets growth rate, operating efficiency, offering size, initial returns and insider ownership. However, it increases significantly in IPO firms with high financial leverage. Based on the estimated logit regression equations, the status of the six firms included in the second subsample are correctly predicted. Practical implications - – The results provide several implications for investors, issuing firms and setters of listing rules. Originality/value - – This study uses new variables, such as firm type, institutional ownership and listing variables. In addition, several theories are tested and supported.

The Implications of Graduate Labor Market Performance in Designing a Student Loan Scheme for Malaysia

This chapter examines graduate labor market performance and its implications in the design of a student loan scheme for higher education in Malaysia. The current mortgage-type loan scheme under the National Higher Education Fund Corporation (NHEFC) creates a major problem in terms of loan defaults which contribute to high implicit subsidies and concerns related to the sustainability of this scheme. With high unemployment among fresh graduates and where over-education is found to be prominent among employed graduates, it is likely that the current mortgage-type loan scheme creates a heavy burden on many graduates with relatively low incomes. The important concept relates to what is known as the ‘repayment burden’, the proportion of a debtor’s income that is required to meet repayment obligations. To understand the extent of repayment burdens, age-earnings profiles are estimated for Malaysia and it is found that the earning ability of graduates varies by level and field of study. The current mortgage-type student loans are shown to impose quite high repayment burdens, particularly for graduates in arts and social sciences, with the results helping us to understand the extent of loan defaults. Adjusting the data to include unemployed graduates, which results in a more informed repayment burden calculation, adds very considerably to our assessment of the average repayment difficulties. In assessing the efficacy of the current loan scheme, we compare the implicit subsidies under the current mortgage-type student loans with a proposed (hypothetical) income contingent loan (ICL).

Cross-border merger and acquisition activities in Asia: the role of macroeconomic factors

This paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian Nations) countries, namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, over the 1996-2015 period.,The study uses alternative panel data methods, including pooled mean group, mean group and dynamic fixed-effect estimators.,The results indicate that gross domestic product (GDP), interest rate, exchange rate, money supply and inflation rate are the most important macroeconomic factors explaining the trends of cross-border mergers and acquisition outflows of the ASEAN-6 countries. Specifically, GDP, money supply and inflation rate have significant positive relationships with acquisition outflows, while interest rate and exchange rate exert significant negative influence. On the other hand, the authors find four significant macroeconomic factors explaining the trends of the inward acquisitions. Essentially, GDP, money supply and inflation rate have significant positive impacts on inward acquisitions, while the impact of exchange rate is negatively significant.,Unavailability of data limits this study to pool six sample countries from ASEAN, instead of ten representative member countries.,The results of this study can signal to firms or investors, involving in cross-border mergers and acquisitions, where to direct foreign resources flows. Moreover, having the knowledge about the relative levels of market size and other macroeconomic factors in both home and host countries can be of great importance for investment decision. Therefore, policymakers of ASEAN countries should make appropriate macroeconomic policies that can stimulate inward and outward acquisitions.,The main contribution of this paper is that it is the first to present the analysis of macroeconomic influences on the trends of inward and outward merger and acquisition activities in six ASEAN countries.

Central Public-Private Partnership (PPP) Development Facility for Enhancing Government Obligation and Efficiency in PPP Project

The implications of public-private partnership (PPP) concept has gained utmost attention from different governments around the world because of the opportunities inherent in it in terms of overcoming budgetary constraints, improved service quality, enhanced efficiencies in procurement and risk management, and prospects of generating managerial and technical capabilities. The government obligations in PPP projects are often limited to feasibility study, transaction support and implementing linked government or public sector projects which subsequently raise the question regarding how the required funds should be mobilized by the government for these services as upfront development cost. Generally, any government agency driving a PPP project has to secure budgetary allocation from the central authority for performing the government-side obligations, which is often a complicated and time consuming process due to other priorities of the central treasury. To overcome this challenge, establishment of a central PPP development facility by the government is required. The ability to create and manage such a facility within the government mechanism will ensure seamless development and implementation of PPP projects by different government agencies and will contribute to foster a good relationship between the government and the private sector investors.

Agency costs and Islamic bond issuers' long-run performance in Malaysia

The extensive issuance of Islamic bonds in different parts of the world raises the question of whether such a financing activity leads to better firm performance or not and what the determinants are of this performance. The literature offers scant answers. Thus, this study measures the long-run performance of Malaysian firms following their Islamic debt issues and explores the agency cost explanations of the performance. One-, two-, and three-year stock return performances are measured by the buy and hold abnormal return (BHAR) of Islamic debt issues using samples of 113, 101, and 86 Islamic debt issues, respectively, in the 2001-2009 period. The significance of the performance is tested by heteroscedasticity-and-serial correlation-consistent t-statistics. The determinants of BHAR are investigated using the ordinary least square regression method. The results show a significant positive long-run performance beyond a one-year period that is negatively influenced by growth opportunity and free cash flow when the issue increases the debt ratio.

Towards the Factors affecting Small Firm Growth: Review of Previous Studies

The objective of the paper is to review the previous studies on factors affecting small business growth or performance for the period of 2006-2014. The review of the literature of factors affecting small business growth or performance based on the papers available in online and published in referred journals is focused. 34 papers are considered as the primary research topic. Each of the articles has been used as the unit of analysis. The four broad areas of factors has been focused namely owner-manager characteristics, characteristics of firm, financial factors and external environment. The paper provides some ideas and approaches used in the previous literature to describe small business growth and factors affecting the growth. The literatures suggest that there is no unified theory or model to describe small business growth. Although there are many studies on the issue, still the theory of small business growth is very fragmented and inconsistent. The new theoretical perspectives are highly required for the growth process in small businesses sectors. Considering the approaches used in the previous literature, new research approaches may be adapted for more understanding of small business growth and the growth factors.

Green economy: assessing the greenness of the Malaysian economy

The purpose of this study is to provide a comprehensive definition of a green economy and further to assess the greenness of the Malaysian economy. The study also shows how different definitions and policy approaches are likely to meet economic development goals. The study is entirely based on secondary data (e.g. academic journals, trade journals, books, magazines, government reports, corporate reports on green economy). The findings indicate that, although recognised as an early pioneer in environmental policy, its disjointed implementation capacity and incongruent policy perspective has led to limited achievements in sustainability performance. We conclude that though there are both, institutional and market constraints to fully realise the green growth potential, Malaysia is mid-way in terms of readiness of embracing green growth, and it scores slightly lower in terms of distance to a green economy destination. Its limitations and further research proposals are discussed.