Behavioral determinants of nonperforming loans in Bangladesh

2020 ◽  
Vol 5 (2) ◽  
pp. 327-340
Author(s):  
Ratan Ghosh ◽  
Kanon Kumar Sen ◽  
Farzana Riva
Keyword(s):  
Interest Rate ◽  
Moral Hazard ◽  
Internal Control ◽  
Positive Impact ◽  
Statistical Significance ◽  
Equation Modeling ◽  
Business Risk ◽  
Content Type ◽  
Nonperforming Loans ◽  
Moral Hazard Problem

PurposeOver the last ten years (2010–2019), the amount of nonperforming loans (NPLs) has been more than tripled in the banking industry of Bangladesh. Thus, this paper explores the behavioral dimensions, which contribute to the NPLs.Design/methodology/approachBy analyzing social, cultural, psychological, political, economic, internal control mechanism and law enforcement contexts of Bangladesh, this study identifies nepotism (NE), moral hazard (MH ), inadequate collateral (IC), poor credit assessment (CA), lack of proper monitoring (LPM), repayment flexibility (RF), business risk (BR) and lending interest rate (LIR) as the catalysts of raising NPLs. Next, a structured questionnaire survey has been performed in Bangladesh among bank officials who closely work in credit risk management, credit supervision, corporate finance and loan recovery department. Finally, partial least squares (PLS) path modeling, a variance-based technique of structural equation modeling, is used in this study as a statistical tool to analyze the data.FindingsThis study finds that moral hazard problem, lack of proper monitoring, inadequate collateral and nepotism have significant positive impact on the raising of NPLs. Unfortunately, this study does not find any statistical significance of poor credit assessment, business risk and repayment flexibility on the NPLs in Bangladesh. Finally, this study reveals that lending interest rate has significant positive impact on the NPLs. Hence, this study concludes that domestic lending interest rate is not lower enough, and so this double-digit interest rate affects negatively to loan repayment.Research limitations/implicationsThis study concludes that moral hazard problem of borrower, lack of board independence, lack of proper monitoring, form and extent of collateral, management lobbying, indecorous personal guarantee by management, dependent-independent directors and nepotism are extensively contributing for occurring NPLs in Bangladesh. These noninstitutionalized stimulators should adequately be scrutinized by regulatory bodies, policy makers and banks. Besides, LIR needs to be decreased in a convenient level for mitigating NPLs.Originality/valueThis study is the empirical evidence of behavioral dimensions related with the growth of NPLs in Bangladesh by taking direct response from knowledgeable bankers.

Understanding the mobile payment technology acceptance based on valence theory

2017 ◽  
Vol 29 (8) ◽  
pp. 2027-2049 ◽  
Author(s):  
Ahmet Bulent Ozturk ◽  
Anil Bilgihan ◽  
Saba Salehi-Esfahani ◽  
Nan Hua
Keyword(s):  
Technology Acceptance ◽  
Individual Difference ◽  
Positive Impact ◽  
Equation Modeling ◽  
Mobile Payment ◽  
Privacy Concern ◽  
Content Type ◽  
Utilitarian Value ◽  
Valence Theory ◽  
Practical Implications

Purpose This study aims to examine factors affecting restaurant customers’ intention to use near field communication (NFC)-based mobile payment (MP) technology. More specifically, based on the valence theory, this paper examined the impacts of users’ negative valence (perceived risk and privacy concern) and positive valence (utilitarian value and convenience) perceptions toward their NFC-MP technology acceptance. Furthermore, the impacts of individual difference variables (smartphone affinity and compatibility) on users’ negative and positive valences and on their behavioral intentions were analyzed. Design/methodology/approach A self-administered online questionnaire was used to collect the data of the study from 412 restaurant customers. A confirmatory factor analysis (CFA) was used to validate the measurement model. To test the hypothesized model, structural equation modeling (SEM) was used. Findings The study findings demonstrated that privacy concern, utilitarian value and convenience significantly affected individuals’ NFC-MP technology acceptance. In addition, compatibility significantly influenced negative and positive valance constructs and smartphone affinity had a positive impact on positive valance constructs only. Practical implications This study provides valuable practical implications for restaurant operators and hospitality technology vendors in the context of mobile payment systems. Originality/value This study successfully extended the valence framework by adding individual difference constructs to it.

Does employee willingness to take risks affect customer loyalty? A moderated mediation examination of innovative behaviors and decentralization

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohd Ahmad Al-Hawari ◽  
Shaker Bani-Melhem ◽  
Faridahwati Mohd. Shamsudin
Keyword(s):  
Personality Traits ◽  
Customer Loyalty ◽  
Structural Equation ◽  
Positive Impact ◽  
Equation Modeling ◽  
Frontline Employees ◽  
Content Type ◽  
Mediating Role ◽  
Hotel Managers ◽  
Innovative Behaviors

Purpose This study aims to build on the trait activation and interactionist perspective theories to investigate the effect of frontline employees’ (FLEs) willingness to take risks on hotel guest loyalty by assessing the mediating role of their innovative behaviors. It also examines whether decentralization strengthens the positive impact of willingness to take risks on innovative behavior and, subsequently, customer loyalty. Design/methodology/approach The authors collected multilevel data from various sources – hotel FLEs (n = 183), hotel operation managers (n = 46) and hotel guests/customers (n = 266) – from five-star hotels operating in Dubai. Structural equation modeling and PROCESS macro (version 3.5) were used to analyze the data. Findings The findings showed that willingness to take risks indirectly (via innovative behaviors) affects guest/customer loyalty positively. This effect is strengthened when the hotel is decentralized. Practical implications This study provides insight into how hotel managers can foster customer loyalty. More specifically, they can do so by establishing employees’ innovative behaviors triggered by employees’ positive personality traits and by giving employees more autonomy. Originality/value The present study addresses recent calls to investigate the positive impact of FLEs’ personality traits, attitudes and behaviors on customer loyalty.

Building trust by signaling trustworthiness in service retail

2014 ◽  
Vol 28 (5) ◽  
pp. 361-373 ◽  
Author(s):  
Husni Kharouf ◽  
Donald J. Lund ◽  
Harjit Sekhon
Keyword(s):  
Customer Loyalty ◽  
Structural Equation ◽  
Positive Impact ◽  
Past Research ◽  
Customer Relationships ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Survey Responses ◽  
Customer Trust

Purpose – The purpose of this paper is to investigate the role of retailer trustworthiness in driving customer trust and the subsequent impact on loyalty. The authors position trustworthiness as a mediator in the link between retail strategies and the development of trust. They model customer loyalty to the service retailer as a function of the trust created through trustworthy perceptions. Design/methodology/approach – The authors validate their model using 420 survey responses from customers in a service retail setting. Nine research hypotheses were tested using structural equation modeling. Alternate models are estimated, and the results provide support for the theory-based trustworthiness mediation model. Findings – Trustworthy behaviors first build trustworthiness, which then translates into customer trust and ultimately has a positive impact on both behavioral and attitudinal loyalty. Research limitations/implications – The research highlights the importance for retailers to signal their trustworthiness to build customer trust and loyalty. Researchers should measure trustworthiness perceptions when examining customer relationships and managers should plan strategically to develop both trust and trustworthiness with their customers. Originality/value – This study is one of the first to investigate the mediating effect of trustworthiness on customer loyalty in service settings. While past research has investigated dimensions of trustworthy behaviors, none has included a measure of trustworthiness perceptions and consumer trust in the same theoretical model. The results of the research provide important insights for both researchers and managers.

Impacts of city personality and image on revisit intention

2015 ◽  
Vol 1 (1) ◽  
pp. 50-69 ◽  
Author(s):  
Hong-bumm Kim ◽  
Sanggun Lee
Keyword(s):  
Structural Equation ◽  
Positive Impact ◽  
Equation Modeling ◽  
Causal Relationships ◽  
City Image ◽  
Content Type ◽  
Dynamic Image ◽  
Revisit Intention ◽  
The Relationship ◽  
The City

Purpose – The purpose of this paper is to examine the causal relationships of city personality and city image, together with the possible effect of city image on the revisit intention of visitors, through empirical validation, so that some meaningful implications can reveal to city planners and marketers how the city tourists can be affected by the personality and image of the city. Design/methodology/approach – This study offers an integrated approach to understanding the relationship between city personality and city image. The research model investigates the relevant relationships among the underlying dimensions of city personality and city image by using a structural equation modeling (SEM) approach. Data obtained from a sample of 302 respondents drawn from a web-based survey in South Korea were analyzed with AMOS program. Findings – The results of this empirical study indicate that city personality positively or negatively affect city image depending on the nature of constructs. Positive relationships are found to exist between excitement as well as sophistication personality and dynamic image of city. On the contrary, the relationship between sincerity personality and dynamic image is negative. All the specific three images of city: dynamic, specific, and static image show positive impact on revisit intention of city tourists. Originality/value – The empirical results of this study provide tenable evidence that the proposed SEM designed to consider city personality and city image, and revisit intention simultaneously is acceptable. Even though in the previous literature, researchers tried to explain the relationship between city personality and city image, the conceptual model and empirical studies pertaining to causal relationships among those constructs have not been thoroughly examined. It is believed that this study has a substantial capability for generating more precise applications related to city tourism, especially concerning city personality and city image.

The verification of effective leadership style for TQM

2014 ◽  
Vol 31 (7) ◽  
pp. 822-840 ◽  
Author(s):  
Young Sik Cho ◽  
Joo Y. Jung
Keyword(s):  
Leadership Style ◽  
Effective Leadership ◽  
Positive Impact ◽  
Primary Data ◽  
Equation Modeling ◽  
Future Research ◽  
Successful Implementation ◽  
Total Quality ◽  
Content Type ◽  
Study Results

Purpose – The purpose of this paper is to verify the universal applicability of total quality management (TQM) across national boundaries. Specifically, the authors examined the validity of the isomorphic nature of TQM leadership style by comparing survey samples from both USA-based firms (n=112) and China-based firms (n=121). Design/methodology/approach – The authors collected the primary data through a survey research method. Confirmatory factor analysis (CFA) and structural equation modeling (SEM) were adopted to test the hypothesized research model. Findings – The study results did not support the universality of TQM practices. For example, the results reveal that in the USA-based firms, transformational leadership has a more significant positive influence on TQM practices, while in the China-based firms, transactional leadership has a more significant positive impact on TQM practices. Originality/value – Most of the existing literature on TQM assumed that the most effective TQM leadership style would be universal across organizational or international boundaries. However, our findings imply that the effective leadership style for successful implementation of TQM practices could be contingent on the cultural background embedded within the firms. Therefore, the authors anticipate the findings of the study will guide future research on TQM and create a new path to find solutions not only for optimizing the successful implementation of TQM, but also for minimizing the current high level of TQM failures.

The effects of knowledge creation process on organizational performance using the BSC approach: the mediating role of intellectual capital

2018 ◽  
Vol 22 (4) ◽  
pp. 802-823 ◽  
Author(s):  
Gholamhossein Mehralian ◽  
Jamal A. Nazari ◽  
Peivand Ghasemzadeh
Keyword(s):  
Organizational Performance ◽  
Intellectual Capital ◽  
Knowledge Creation ◽  
Structural Equation ◽  
Positive Impact ◽  
Equation Modeling ◽  
Success Factor ◽  
Content Type ◽  
Key Dimensions ◽  
The Relationship

PurposeKnowledge is a key success factor in achieving competitive advantage in the current fast-paced and uncertain economic environment. Several studies in the literature have analyzed the relationship between knowledge creation (KC) and organizational success; however, the mechanisms by which KC leads to accumulation of intellectual capital (IC) and thereby affects various dimensions of organizational performance are understudied. The purpose of this paper is to examine how KC and IC and their relationship influence key dimensions of organizational performance.Design/methodology/approachA research model was developed and tested based on the literature in the areas of KC, IC and organizational performance. This study uses a survey sent to companies in an intensive knowledge-based industry. The balanced scorecard (BSC) approach was used to measure the key dimensions of organizational performance.FindingsThe results from structural equation modeling (SEM) on 470 completed questionnaires received from the pharmaceutical companies in Iran reveal that KC activities lead to the accumulation of organizational IC and IC has a crucial and positive impact on the BSC. Furthermore, the results from the path analysis indicate that IC mediates the effects of KC on the BSC.Practical implicationsThe findings of this study contribute to the extant literature on the relationship between knowledge and organizational performance by demonstrating that knowledge and KC lead to performance when organizations utilize KC activities and leverage them to accumulate IC. Once used effectively, IC will result in a better performance in the knowledge-intensive environments.Originality/valueThis is the first study that investigates how KC contributes to firm performance by incorporating the mediating impact of IC on the BSC. The proposed model and results will help organizations to identify the mechanisms through which KC initiatives improve organizational performance.

Barriers to radical innovation in research institutions in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jianhua Yang ◽  
Rafif Al-Sayed
Keyword(s):  
Theoretical Model ◽  
Latent Variables ◽  
Structural Equation ◽  
Business Models ◽  
Research Collaboration ◽  
Statistical Significance ◽  
Radical Innovation ◽  
Equation Modeling ◽  
Research Institutions ◽  
Content Type

Purpose This study aims to develop a better understanding of radical innovation performance and proposes a comprehensive and theoretical model of the barriers impeding radical innovation from the perspective of researchers working in research institutions in China. Both quantitative and qualitative techniques were used to test the hypotheses regarding barriers to radical innovation and the model proposed in this research. Design/methodology/approach The data was collected through questionnaires and semi-structured interviews with researchers from different research institutions across several cities in China. Next, the data was analyzed by deploying the structural equation modeling technique and calculating the statistical significance of correlations, regression and path coefficients among the latent variables. Findings The results indicated the major barriers impeding radical innovation in Chinese research institutes. Based on these findings, suggested policies, regulations and business models are put forward that can promote radical innovation in these institutes through increasing research freedom, enhancing organizational flexibility, attracting talented researchers and expanding research collaboration. Originality/value The research proposes a comprehensive and theoretical model of the barriers impeding radical innovation from the perspective of researchers working in research institutions in China.

Impact of business model innovations on SME’s innovativeness and performance

2019 ◽  
Vol 14 (4) ◽  
pp. 521-539 ◽  
Author(s):  
Rimantas Gatautis† ◽  
Egle Vaiciukynaite ◽  
Asta Tarute
Keyword(s):  
Business Model ◽  
Structural Equation ◽  
Positive Impact ◽  
Equation Modeling ◽  
Future Research ◽  
Data Set ◽  
Content Type ◽  
Innovation Activities ◽  
Organizational Inertia ◽  
Multiple Characteristics

Purpose Business model innovations (BMIs), their drivers and outcomes are attracting increasing attention in academic literature. However, previous studies have mainly focused on large companies, while knowledge of BMI in small-to-medium-sized enterprises (SMEs) is limited. Therefore, the purpose of this paper is to add new insights into how related BMI drivers, practices and outcomes are in relation to SMEs. Design/methodology/approach An extensive review of the existing literature was performed. Consequently, the relationships between BMI drivers, BMI practices and outcomes of BMI were developed as a conceptual framework. An empirical study was carried out. A structural equation modeling (SEM) procedure was used to empirically test the model using a quantitative data set of Lithuanian SMEs (n=73). Findings The study provides insights into the relations between BMI drivers, BMI practices and outcomes of BMI in SMEs. The findings of SEM, four drivers (innovation activities, strategic orientation, market and technology turbulence, respectively) are indicated to contribute to BMI of SMEs. In addition, the results proved that the implementation of BMI practices leads to strategic and architectural changes in firms and has a positive impact on SMEs performance and innovativeness. Research limitations/implications Empirical research is focused on a limited number of internal and external BMI drivers, which have an influence on BMI in SMEs from one geographical region. Consequently, there are many external and internal BMI drivers which also may have an influence on BMI in SMEs, such as industry life cycle, organizational inertia and leadership. Meanwhile, SMEs possess multiple characteristics, i.e. a phase of maturity, gender of CEO, firm size and industry; therefore, the aforesaid aspects are considered to be significant limitations. In addition, the importance of SMEs characteristics as mediators for the effects on a firm’s performance and innovativeness should be considered in future research avenues. Practical implications Findings of this research can be used by SME managers to better understand how firms might actively engage in BMI practices, what drivers lead to BMI and, in turn, affect their firm’s performance and innovativeness. SME managers should be encouraged to pay attention to strategic and architectural changes of BM that can contribute to enterprise performance and innovativeness. Originality/value This paper adds to the stream of BMI research by empirically exploring drivers and outcomes of BMI in SMEs. In addition, this paper fulfills research gaps proposed by Bouwman et al. (2018), Foss and Saebi (2017), Heikkilä, Bouwman and Heikkilä (2018) and Lambert and Davidson (2013), and enhances the current overall understanding of BMIs.

Understanding the influence of lean and agile strategies on creating firms’ supply chain risk management capabilities

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqar Ahmed ◽  
Muhammad Zaki Rashdi
Keyword(s):  
Risk Management ◽  
Supply Chain ◽  
Empirical Evidence ◽  
Internal Control ◽  
Market Condition ◽  
Equation Modeling ◽  
Supply Chain Risk ◽  
Content Type ◽  
Management Capabilities ◽  
The Impact

Purpose Lean and agile strategies are two basic supply chain paradigms that strategist decouples based on their internal and external environment. This study aims to identify the influence of market orientation (MO) and quality management (QM) deployment on the supply chain strategies. Furthermore, this study also seeks empirical evidence of the impact of these core strategies on creating risk management capabilities. Design/methodology/approach Quantitative research technique is deployed to explain the phenomenon. The data was gathered through a structured scale questionnaire from supply chain professionals working at different manufacturing firms. Valid data of 134 respondents is then analyzed through partial least squares structural equation modeling for further empirical understanding. Findings The outcome of the research indicates that MO capability; as an external drive is a key to make an operational strategy. QM as an internal control is more prone to formulating a lean strategy (LS). Another important finding is that LS does not complement risk management capabilities especially in an uncertain market condition. Practical implications The study suggested concrete implications for risk management through the right mix of lean and agile supply chain strategies. There are some good insights for the supply chain policy-makers working in a developing country. Originality/value This study will provide empirical evidence for managing supply chain risk through an effective strategy making.

Interest rate liberalization and economic growth nexus: does corruption matter?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdulhadi Aliyara Haruna ◽  
Abu Sufian Abu Bakar
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Positive Impact ◽  
Reform Process ◽  
Negative Effects ◽  
African Countries ◽  
Cross Sectional ◽  
Content Type ◽  
Interest Rate Liberalization ◽  
The Impact

Purpose This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries. Design/methodology/approach The study used the modified version of Driscoll and Kraay’s model by Hoechle, which solved the effects of cross-sectional dependence and heteroscedasticity. Findings The findings reveal a positive impact of the index on economic growth, and it was found that foreign direct investment (FDI) and credit to private sector by banks (CPSB) all stimulate economic growth. The interaction terms of corruption with FDI and CPSB indicate negative effects that show how corruption erodes the benefits of liberalization. Finally, the paper recommends the pursuit of appropriate policies with the sole aim of eradicating corruption and providing a conducive environment for business. Originality/value The paper developed a composite domestic financial liberalization index to capture the timing and essential dimensions of the reform process. The study investigates the effect of interest rate liberalization on economic growth and the relevance of corruption. Most of the recent and past studies only examined the impact of interest rate reforms on growth without investigating the relevance of corruption.

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