Istisna’a based monetary policy and its effectiveness in achieving full employment and price stability

2020 ◽  
Vol 13 (4) ◽  
pp. 707-726
Author(s):  
Mohammad Selim
Keyword(s):  
Monetary Policy ◽  
Labor Productivity ◽  
Full Employment ◽  
Manufacturing Sector ◽  
Value Added ◽  
High Growth ◽  
Price Stability ◽  
Theoretical Ground ◽  
Content Type ◽  
The Impact

Purpose This paper aims to explore Istisna’a as a tool of monetary policy (MP) and examines its effectiveness in achieving full employment income and price stability. Design/methodology/approach This paper uses Istisna’a as a tool of MP and examines its effects on key macroeconomic variables on purely theoretical ground. The effectiveness and the impact of Istisna’a-based MP is examined by using aggregate output and aggregate expenditure model, embedded with Islamic economic principles, including zakat function. Findings Istisna’a-based MP immediately creates well paid jobs, positively contributes and expands the size of the manufacturing sector, increases capital per person employed, labor productivity and thus increases output, employment and promotes industrialization. Increase in the size of manufacturing sector will not only increase manufactured value-added exports but also cut high valued manufactured imports and thus increases positive trade balance and eventually reduces trade deficits. Increase in labor productivity will improve the standard of living, and eventually the economy will yield sustainable high growth rates, full employment and prosperity. Originality/value This is probably one of the first attempt to systematically develop the Istisna’a-based MP with detailed MP transmission mechanism. This new contribution in the field of Islamic MP will unveil the horizon of sustainable economic growth, creation of well paid jobs, expansion of manufacturing sector, rapid industrialization and the increase in capital per person employed across the economy, and eventually Istisna’a-based MP will be one of the most effective tool of MP for transforming an economy into a relatively higher and sophisticated stages which will eventually promote sustainable development.

The effectiveness of Qard-al-Hasan (interest free loan) as a tool of monetary policy

2019 ◽  
Vol 12 (1) ◽  
pp. 130-151 ◽  
Author(s):  
Mohammad Selim
Keyword(s):  
Monetary Policy ◽  
Foreign Currency ◽  
Full Employment ◽  
Excess Demand ◽  
Price Stability ◽  
Theoretical Ground ◽  
Real World Data ◽  
Content Type ◽  
Interest Rate Policy ◽  
Islamic Economic

Purpose This paper aims to investigate the macroeconomic effects of Qard-al-Hasan (QH) as a tool of monetary policy (MP) and its effectiveness in achieving full employment and price stability in the economy. Design/methodology/approach QH-based MP and its effects on major macroeconomic variables are examined on theoretical ground by using the standard aggregate output and aggregate expenditure model within the framework of Islamic economic principles. Findings QH-based MP positively influences real sectors of the economy and increases output, and the economy returns to full employment. QH provides the lowest possible borrowing costs across the economy and thus triggers rightward shift in aggregate supply curve and thus increases output and lowers price level. In addition, increase in output eliminates excess demand or shortages and thus maintains price stability. Furthermore, QH-based MP also increases exportable surplus and exports, decreases imports as well as increases inflow of funds and foreign currency reserves with the Central Bank and thus makes MP more effective. Research limitations/implications QH-based MP is usually expansionary MP, and as such, it can be argued that there is a probability that QH-based MP may lead to higher inflation rate. However, in this study, it has been shown with real world data in Table II, that 23 countries in Group 1 have pursued zero or negative interest rate policy and their experiences mitigate such probability. Originality/value This is, perhaps, the first paper that presents a complete model of QH as a tool of MP with fully explained transmission mechanism. This is new contribution in the literature of Islamic finance where theoretical model on QH is systematically developed and applied as an effective tool of MP in attaining full employment and price stability. This model of QH-based MP can unfold a new horizon of uninterrupted economic growth, full employment and price stability by increasing output and employment, as well as by eliminating excess demand or shortages.

scholarly journals SAY NO TO INFLATION TARGETING: A CALL FOR THE ADAPTATION OF A ZERO-INTEREST REGIME

2021 ◽  
Vol 7 (3) ◽  
Author(s):  
Atiq Ur Rehman
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Full Employment ◽  
Central Banks ◽  
Policy Framework ◽  
Price Stability ◽  
Socioeconomic Indicators ◽  
Wide Range ◽  
The Impact

In its early history, monetary policy focused on numerous objectives, including stable growth, full employment, stable exchange rates and price stability. In the 1990s, many countries shifted their monetary policy framework from monetary aggregate/interest rate targeting to inflation targeting, in which inflation was regarded as the primary target of monetary policy, and interest rates the primary tool for achieving target inflation. Inflation targeting has diverted the focus of central banks from growth and employment to price stability. Unfortunately, there is considerable evidence which shows that inflation targeting frameworks are unable to control inflation in the way central banks want, and in fact lead to a greater departure from optimal growth and employment, the two key targets of sustainable development goals (SDGs). There is also evidence suggesting a strong association between inflation targeting and the move away from several other SDGs. Employing a systematic review of the related literature and Granger causality tests applied to data from various countries, this paper shows that inflation targeting fails to control inflation and has several undesirable impacts on a wide range of socioeconomic indicators. It is argued that the zero-interest regime is the optimal regime with respect to the impact on socioeconomic indicators, and also supports the interest free economy advocated by Islam.

The interrelationship between intellectual capital and firm performance: evidence from China's manufacturing sector

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jian Xu ◽  
Jingsuo Li
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Manufacturing Sector ◽  
Value Added ◽  
Physical Capital ◽  
Listed Companies ◽  
High Tech ◽  
Manufacturing Companies ◽  
Content Type ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of intellectual capital (IC) and its components (human, structural and relational capitals) on the performance of manufacturing listed companies in China. This paper also investigates the impacts of company ownership, industry attributes and region on the IC-performance relationship.Design/methodology/approachThe study uses the data of 953 manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges over the period 2012–2016. The modified value-added intellectual coefficient (MVAIC) model is applied to measure IC efficiency. Finally, multiple regression analysis is employed to test the research hypotheses.FindingsThis study reveals that IC can enhance firm performance in China's manufacturing sector. Overall, earnings are affected by physical capital, human capital (HC) and structural capital (SC), and profitability and productivity are influenced by physical capital, HC, SC and relational capital. Physical capital is the most influential contributor to firm performance. In addition, state-owned enterprises have a greater impact of IC on firm performance than private-owned enterprises; high-tech manufacturing companies have higher IC performance than non-high-tech manufacturing companies; manufacturing companies in China's eastern region have higher IC performance than the counterparts in central and western regions.Practical implicationsThe findings may help managers, stakeholders and policymakers in developing countries to effectively and efficiently manage their IC resources.Originality/valueThis is the first study to evaluate IC and its relationship with firm performance among Chinese manufacturing listed companies using the MVAIC model.

scholarly journals Women’s Economic Empowerment in Vietnam: Performance and Constraints of Female-Led Manufacturing SMEs

2021 ◽  
Vol 14 (6) ◽  
pp. 255
Author(s):  
MinhTam Bui ◽  
Trinh Q. Long
Keyword(s):  
Labor Productivity ◽  
Small And Medium Enterprises ◽  
Manufacturing Sector ◽  
Value Added ◽  
Medium Size ◽  
Formal Sector ◽  
Firm Level ◽  
Average Value ◽  
Significant Difference ◽  
Medium Enterprises

This paper identifies whether there was a performance difference among micro, small and medium enterprises (MSMEs) led by men and by women in Vietnam during the period 2005–2013 and aims to provide explanations for the differences, if any, in various performance indicators. The paper adopts a quantitative approach using a firm-level panel dataset in the manufacturing sector in 10 provinces/cities in Vietnam in five waves from 2005 to 2013. Fixed effect models are estimated to examine the influence of firm variables and demographic, human capital characteristics of owners/managers on firms’ value added, labor productivity and employment creation. We found that men led MSMEs did not outperform those led by women on average. Although the average value added was lower for female-led firms in the informal sector, the opposite was true in the formal sector where women tend to lead medium-size firms with higher value added and labor productivity. The performance disparity was more envisaged across levels of formality and less clear from a gender perspective. Moreover, while firms owned by businessmen seemed to create more jobs, firms owned by women had a higher share of female employees. No significant difference in business constraints faced by women and by men was found.

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

Implementation of lean in IT SME company: an Italian case

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marco Torri ◽  
Kaustav Kundu ◽  
Stefano Frecassetti ◽  
Matteo Rossini
Keyword(s):  
Manufacturing Industry ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Single Case ◽  
Value Added ◽  
Lean Implementation ◽  
Content Type ◽  
Italian Case ◽  
Lean Practices

Purpose In spite of huge advancement of Lean in the manufacturing sector, its advantage in the service sector is not fully investigated. The purpose of this paper is to cover this gap in particular for the information technology (IT) sector through the implementation of the Lean philosophy in a small- and medium-sized enterprise (SME), operating in the IT sector. Design/methodology/approach A case study is conducted and following the A3 model, Lean is deployed in the case company. Data were collected through on-site interviews, waste sources were identified and then countermeasures for their reduction were proposed and adopted. Findings This study reveals that the implementation of the Lean practices in an SME operating in the IT sector offers good operative and financial results, thanks to the higher productivity obtained through the reduction of non-value-added activities. Research limitations/implications This paper reports a single case study, not enough to generalize the results. Moreover, more Lean tools and practices should be tested in IT companies to assess their effectiveness. Practical implications This paper increments the knowledge base for the application of Lean and A3 model outside the manufacturing industry. This paper should assist practitioners and consultants who have the desire to understand a better way of Lean implementation in fast-growing IT industry and in SME. Originality/value Research on Lean implementation in an SME company and in IT sector is scarce. This study aims to assess the efficiency of the adoption of Lean practices following the A3 model. The results could be highly valuable for similar companies (dimension or sector), especially those that are facing transition situations in terms of size and at the same time want to improve their operations performance, efficiency and avoid waste.

Association between mass collaboration and knowledge management: a case ofJordan companies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hosam Alden Riyadh ◽  
Laith T. Khrais ◽  
Salsabila Aisyah Alfaiza ◽  
Abdulsatar Abduljabbar Sultan
Keyword(s):  
Knowledge Management ◽  
Organizational Structure ◽  
Structural Equation ◽  
Manufacturing Sector ◽  
Equation Modeling ◽  
Content Type ◽  
Mass Collaboration ◽  
Organization Level ◽  
Learning Techniques ◽  
The Impact

Purpose The key purpose of this research paper was to identify the association between mass collaboration and knowledge management in the context of Jordanian companies. Apart from that, this study also aims to examine the moderating effect of trust and leadership on the association between mass collaboration and knowledge management. Design/methodology/approach In this study, the researcher has followed theprimary quantitative method. For data collection, the researcher has conducted a survey questionnaire, whereas the sample was based on 323 participants from the manufacturing sector of Jordan specifically for data analysis; the technique of structural equation modeling was implemented. Findings All the independent variables, including organizational structure, adoptedtechnologies in mass collaboration and collaborative learning techniques, have a significantimpact on knowledge management and leadership. Moreover, leadership was also found to be significantly moderating the association between adopted technologies in mass collaboration and knowledge management. Similarly, trust also significantly moderates the association of organizational structure and adopted technologies in mass collaboration significantly with knowledge management. Research limitations/implications All study respondents were from Jordan, which might limit the generalizability of the findings. The researchers also invited for more researchers in the incorporation of the time sequence in the proposed causal relations and in the organization level through which mass collaboration and knowledge management. Originality/value This study promises to make a valuable contribution to the existing literature, as there was a lack of evidence in the previous studies regarding the impact of mass collaboration on knowledge management within the context of Jordan.

What should be lean buffer threshold for the forward-reserve warehouse?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bhavin Shah
Keyword(s):  
Mathematical Model ◽  
Customer Service ◽  
Value Added ◽  
Service Level ◽  
Buffer Size ◽  
Value Stream Mapping ◽  
Content Type ◽  
Customer Service Level ◽  
The Impact ◽  
Just Right

PurposeThe assorted piece-wise retail orders in a cosmetics warehouse are fulfilled through a separate fast-picking area called Forward Buffer (FB). This study determines “just-right” size of FB to ensure desired Customer Service Level (CSL) at least storage wastages. It also investigates the impact of FB capacity and demand variations on FB leanness.Design/methodology/approachA Value Stream Mapping (VSM) tool is applied to analyse the warehouse activities and mathematical model is implemented in MATLAB to quantify the leanness at desired CSL. A comprehensive framework is developed to determine lean FB buffer size for a Retail Distribution Centre (RDC) of a cosmetics industry.FindingsThe CSL increases monotonically; however, the results concerning spent efforts towards CSL improvement gets diminished with raised demand variances. The desired CSL can be achieved at least FB capacity and fewer Storage Waste (SW) as it shifts towards more lean system regime. It is not possible to improve Value Added (VA) time beyond certain constraints and therefore, it is recommended to reduce Non-Value Added (NVA) order processing activities to improve leanness.Research limitations/implicationsThis study determines “just-right” capacity and investigates the impact of buffer and demand variations on leanness. It helps managers to analyse warehouse processes and design customized distribution policies in food, beverage and retail grocery warehouse.Practical implicationsProposed buffering model offers customized strategies beyond pre-set CSL by varying it dynamically to reduce wastages. The mathematical model deriving lean sizing and mitigation guidelines are constructive development for managers.Originality/valueThis research provides an inventive approach of VSM model and Mathematical algorithm endorsing lean thinking to design effective buffering policies in a forward warehouse.

scholarly journals The impact of Musharakah financing on the monetary policy in the Islamic economy

2018 ◽  
Vol 3 (3/4) ◽  
pp. 139-152
Author(s):  
Hatem Adela
Keyword(s):  
Economic Theory ◽  
Monetary Policy ◽  
Interest Rate ◽  
Economic Activity ◽  
Methodological Framework ◽  
Mathematical Methods ◽  
Content Type ◽  
Return Rates ◽  
The Interest Rate ◽  
The Impact

Purpose This paper aims to contribute to formulating the methodological framework for a paradigm of Islamic economics, using the development of the conventional economics, theoretical and mathematical methods. Design/methodology/approach The study based on the inductive and mathematical methods to contribute to economic theory within the methodological framework for Islamic Economics, by using the return rate of Musharakah rather than the interest rate in influence the economic activity and monetary policy. Findings Via replacement, the concept of the interest rate by the return rates of Musharakah. It concludes that the central bank can control the monetary policy, economic activity and the efficient allocation of resources by using the return rates of Musharakah through the framework of Islamic economy. Practical/implications The study is a contribution to formulate the methodological framework for a paradigm of Islamic economics, where it investigates the impact of return rates of Musharakah on the money market and monetary policy, by the mathematical methods used in the conventional economy. Also, the study illustrates the importance of further studies that examine the methodological framework for Islamic Economics. Originality/value The study aims to contribute to formulating the Islamic economic theory, through the return rate of Musharakah financing instead of the interest rate, and its effectiveness of the monetary policy. As well as reformulating the concepts of the investment function, the present value and the marginal efficiency rate of investment according to the Islamic economy approach.

An improved modified FMEA model for prioritization of lean waste risk

2018 ◽  
Vol 11 (2) ◽  
pp. 233-253 ◽  
Author(s):  
Agung Sutrisno ◽  
Indra Gunawan ◽  
Iwan Vanany ◽  
Mohammad Asjad ◽  
Wahyu Caesarendra
Keyword(s):  
Decision Support ◽  
Loss Function ◽  
Value Added ◽  
Ordinal Scale ◽  
Decision Support Model ◽  
Integration Model ◽  
Taguchi Loss Function ◽  
Content Type ◽  
The Impact ◽  
Support Model

Purpose Proposing an improved model for evaluating criticality of non-value added (waste) in operation is necessary for realizing sustainable manufacturing practices. The purpose of this paper is concerning on improvement of the decision support model for evaluating risk criticality lean waste occurrence by considering the weight of modified FMEA indices and the influence of waste-worsening factors causing the escalation of waste risk magnitude. Design/methodology/approach Integration of entropy and Taguchi loss function into decision support model of modified FMEA is presented to rectify the limitation of previous risk reprioritization models in modified FMEA studies. The weight of the probability components and loss components are quantified using entropy. A case study from industry is used to test the applicability of the integration model in practical situation. Findings The proposed model enables to overcome the limitations of using subjective determination on the weight of modified FMEA indices. The inclusion of the waste-worsening factors and Taguchi loss functions enables the FMEA team to articulate the severity level of waste consequences appropriately over the use of ordinal scale in ranking the risk of lean waste in modified FMEA references. Research limitations/implications When appraising the risk of lean waste criticality, ignorance on weighting of FMEA indices may be inappropriate for an accurate risk-based decision-making. This paper provides insights to scholars and practitioners and others concerned with the lean operation to understand the significance of considering the impact of FMEA indices and waste-worsening factors in evaluating criticality of lean waste risks. Practical implications The method adopted is for quantifying the criticality of lean waste and inclusion of weighting of FMEA indices in modified FMEA provides insight and exemplar on tackling the risk of lean waste and determining the most critical waste affecting performability of company operations. Originality/value Integration of the entropy and Taguchi loss function for appraising the criticality of lean waste in modified FMEA is the first in the lean management discipline. These findings will be highly useful for professionals wishing to implement the lean waste reduction strategy.

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