• The Journal of Asian Finance, Economics and Business
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• v.8 no.4
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• pp.21-32
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• 2021

This paper aims to investigate the relationship between country-level institutional quality and public debt in the context of Pakistan. The hypotheses of this study were assessed by using the country-level institutional quality data for Pakistan throughout the years from 1996 to 2018. Data came from the World Databank, IMF and Worldwide Governance Indicators databases. For the analysis, ordinary least square, quantile regression and robust regression were employed to assess the factors influencing the public debt. The results of this study indicate that the factors of voice and accountability, regulatory quality, and control of corruption have a positive and significant relationship with public debt, while political stability, government effectiveness, and the rule of law have a negative and significant effect on public debt. Based on the findings, a weak country-level institutional quality poses a substantial market risk as it signals the existence of an unfavorable economic condition that raises public debt. It was also revealed that an improved performance of country-level institutional quality can lead to the improvement of financial market transparency, hence reduce public debt. In contrast to previous studies, the present study will be breaking ground in enhancing public insight regarding the impact of country-level institutional quality on Pakistan's public debt.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.39-47
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• 2021

This research aims to confirm if the COVID-19 pandemic has had an impact on existing sectors, and how that affects the Indonesian Stock Exchange (IDX) market returns. The research method used is an event study employing market models in nine sectors of the Exchange with purposive sampling technique, and supported by Ordinary Least Square (OLS) regression. Based on the calculation of abnormal returns in the period of 30 days before up to 30 days after, the financial property, real estate, and construction sector results show a decreased abnormal return value. The infrastructure, utilities, and transportation sectors also show an abnormal return value that tends to be constant, while the abnormal return value increases in other sectors. Judging from the cumulative value of abnormal returns, the most affected sector is financials, followed by the trade, service, and investment sectors. The consumer goods and mining industry sectors are still optimistic, while other sectors show temporary negative sentiment. Overall, the stocks on the Indonesia Stock Exchange (IDX) were affected by the COVID-19 pandemic with a cumulative negative value of the average abnormal return sample. The results using OLS regression also strengthen the relationships between the COVID-19 pandemic, and negative and significant market returns.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.953-965
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• 2021

This study aims to analyze the benefits of corporate social responsibility (CSR) performance on corporate risk in controversial and non-controversial industries. The hypothesis of this study is based on the conflicting effects of industry type on CSR and firm risk. The research sample consisted of 927 companies listed on the Indonesia Stock Exchange from 2016 to 2019. The main method for data processing was the ordinary least square method and subgroup analysis as a robustness test. The findings suggest that the performance of CSR can reduce corporate risk. However, the impact was only significant for non-controversial firms and weakened for controversial industries. These results support risk management and signaling theory. Firm risk in this study reflects the company's total risk, further research can categorize it into systematic and idiosyncratic risk. Besides, the number of samples of controversial industry research is not as much as non-controversial; further research can use paired samples. Regulators can use the results to create a new policy regarding CSR implementation. This study contributes to the existing literature by showing that the ability of social responsibility to reduce corporate risk only works in non-controversial industries. This result may be due to the controversial industry receiving negative stigma from its stakeholders.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.875-883
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• 2021

In view of integration and development, compliance with regulations on information disclosure has important implications for users. Corporate social responsibility disclosure (CSRD) is an increasing concern of the community and society. CSRD always poses many challenges for the profitability of banks. The article uses the ordinary least square method to examine this relationship and employs timeseries data of five years from 18 Vietnamese listed banks from 2015 to 2019. The analysis is informed by Jensen and Meckling's Agency theory, Freeman's Stakeholder theory, and Dowling and Pfeffer's Legitimacy theory. The study results show that, with the CSRD dependent variable, return on assets (ROA) and net interest margin (NIM) have an opposite influence, but return on equity (ROE) has no effect on CSRD, while on the profitability dependent variable, CSRD has a different influence from ROA, ROE, and NIM. To enhance the relationship between CSRD and profitability, Vietnamese listed banks need to comply with CSRD as well as demonstrate responsibility to the community and society. Managers need to have clear development policies and strategies to ensure both profitability and responsibility regarding social and community activities. The State Securities Commission of Vietnam should enforce strict sanctions, conduct inspection, and complete evaluation criteria for Vietnamese listed banks.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.2
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• pp.387-399
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• 2021

This study mainly aims to examine the effect of intangible assets on the value relevance of the Gulf Cooperation Council (GCC)-listed non-financial firms. This study tested three types of models by using a large sample of non-financial firms listed in GCC countries as emerging markets from 2008 to 2016. The types of models are accounting information (earnings per share and book value of share) without intangible assets model, intangible assets model, and accounting information (earnings per share and book value of share) with intangible assets model. Ordinary least square (OLS) shows mixed results as intangible assets improve the value relevance of accounting information positively in UAE and negatively in Kuwait but not in other countries. The study documents a robust positive relationship between intangible assets and earnings quality in terms of value relevance in KSA and Qatar. The findings provide implications for policymakers, investors, and managers. The results suggest that intangible assets can improve the value relevance in emerging markets, such as GCC, as the need to organize the requirements of information disclosures on intangible assets and provide great transparency and additional disclosure of information about intangible assets and their components.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.1
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• pp.237-246
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• 2021

This paper explores the relationship between price mechanism and flipping activity of initial public offerings (IPOs) in Pakistan's emerging economy. This study uses a cross-sectional data set of 95 firms listed on Pakistan Stock Exchange from 2000 to 2019. This study employs the ordinary least square and quantile regression techniques to capture the relationship between price mechanism and flipping activity. The results show that book-built IPOs flip substantially less than fixed-price IPOs. This is consistent with the signaling theory assertion that roadshows are arranged by underwriters to capture investors' demand and set the offer prices of IPOs. If investors learn the fair values of quality IPOs, then the offer prices will be close to the intrinsic values, thus reducing flipping. The findings also provide conclusive evidence for understanding the usefulness of and the more relevant information regarding the pricing mechanism. In particular, it provides a better understanding of how companies actually use the pricing mechanism information in the flipping of IPO shares. The results of this study are also valuable to underwriters, and regulators, for instance, provides underwriters with the discretion to allocate the IPO shares and the SECP, in revising regulation on the disclosure of IPO pricing methods.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.4
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• pp.287-298
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• 2022

Indonesia is an agrarian country with the significant development of Shariah banking. This study aimed to estimate the effect of Third Party Funds (TPF), Non-Performing Financing (NPF), Exchange Rates (ER), and Bank Indonesia Shariah Certificates (SBIS) on the Sharia Agriculture Sector Financing in Indonesia during 2014-2020. This study used the Ordinary Least Square (OLS) technique to analyze the data. The coefficient of determination test showed that 99.19% of Sharia financing in the agricultural sector was influenced by TPF, NPF, Exchange Rate, and SBIS variables. The estimation results showed that the variables of TPF and ER significantly affected Sharia Financing for Agricultural Sector (PP). Meanwhile, the NPF and SBIS variables had no significant effect on PP. This research showed the resilience and accuracy of Islamic banking in selecting financing and can support the development of other Islamic financial instruments such as SBIS. Simultaneous test results demonstrated the existence of the estimating model. Because of the character of the Indonesian nation as an agricultural country, this study advised Sharia banking to prioritize the usage of third-party funds from the public for the agricultural industry. Sharia banking also needed to produce Islamic finance products that fit the agriculture business sector's needs.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.9
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• pp.11-22
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• 2021

This study investigates the long-run relationship between the de jure economic, political, and social globalization and foreign direct investments in the Gulf Cooperation Council (GCC) to establish whether policies that foster trade and investment relations among geographical entities can help revive the GCC countries from the prevailing economic debacles of the COVID-19 pandemic. This study is driven by the GCC's quest to fully overcome the economic challenges occasioned by the outbreak of the global pandemic and position itself as the most potent regional economic bloc in the Middle East and North Africa (MENA) region. The study employs the panel data of the six GCC countries of Bahrain, United Arab Emirates, Kuwait, Qatar, Oman, and Saudi Arabia from 1971 to 2017. The findings of the panel fully modified ordinary least square regression estimation show that the de jure economic and social globalization have a significant positive impact on the region's foreign direct investment inflows. The impact of the de jure political globalization on foreign direct investment is statistically significant but negatively signed. Based on the preceding findings, we offer some holistic policy recommendations to the GCC region as recipes for timely recovery from the economic impact of COVID-19 and beyond.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.9
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• pp.249-260
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• 2021

This research explores the effects of intellectual capital on knowledge management processes (creation of information, knowledge sharing, and use of knowledge) and innovation performance. The data was gathered from 224 fashion accessories in Thailand using a questionnaire. The population was collected on December 16, 2019 (https:/www.ditp.go.th) from a list database of the Department of International Trade Promotion, Ministry of Commerce of Thailand (2019). A questionnaire mail survey technique was used to collect data. Executives or managers were the key participants in this study. The statistical technique used to analyze is the ordinary least square regression. The findings show that intellectual capital has a significant positive effect on information management systems. Likewise, information management techniques have a significant positive effect on innovation performance. Moreover, increasing the use of information tends to make staff willing to use the knowledge to improve the quality and quantity of the service. This tendency contributes to productivity gain. Through the interaction of processes of information use, self-reflection, and input from customers, employees tend to increase the production of knowledge that eventually develops the results of the innovation. Hence, organizations should value knowledge management process elements to improve efficiency, and thus innovation.

• The Journal of Asian Finance, Economics and Business
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• v.10 no.2
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• pp.163-174
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• 2023

This study aims to investigate the effect of the composition of the board and ownership structure on a firm's value in Jordanian firms. Specifically, it aims to determine the effect of board size, (CEO) duality, and family, foreign, institutional, and government ownership on a firm's value. An ordinary least square regression (OLS) was employed to examine the study hypotheses in a sample of 35 Jordanian industrial firms (175 firm-year observation) for a period of five years from 2016-2020. As measured by Tobin's Q (Q ratio) and market-to-book (MB ratio) for Jordanian industrial firms listed on Amman Stock Exchange (ASE). The result found that foreign ownership, institutional ownership, and family ownership have a significant and positive effect on firm value. By contrast, government ownership does not have a significant effect on firm value. With respect to board composition (CEO duality and board size), the study results found no evidence to support the effect of board composition on firm value. The study recommended the concerned authorities with several recommendations, most notably: taking the necessary measures to ensure the continuity and growth of family businesses because of their positive impact on the value of the company and economic growth, spreading awareness about how governance protects the interests of investors.