Testing the production efficiency of the investment sector in Kuwait using two-stage approach

2015 ◽  
Vol 31 (2) ◽  
pp. 109-123
Author(s):  
Abdulwahab Alsarhan ◽  
Nayef Al-Shammari ◽  
Mohammad Alenezi
Keyword(s):  
Financial Crisis ◽  
Production Efficiency ◽  
Global Financial Crisis ◽  
Efficiency Score ◽  
Two Stage ◽  
Policy Makers ◽  
Content Type ◽  
Factors Affecting ◽  
Second Stage ◽  
Investment Companies

Purpose – Testing the efficiency in the economy has been highly pronounced since the financial crisis in 2008, as many countries have started to deregulate their economic sectors. The potential impact of testing efficiency is thus the key driver of world output and welfare. For this purpose, the main objective of the Capital Market Authority consists of more regulation of securities trading to boost economic efficiency. In particular, the purpose of this paper, is to examine the efficiency of 40 investment companies in Kuwait. In this study, the authors investigate the efficiency in the investment sector in Kuwait. Studying such a case is important for several reasons. First, the investment sector in Kuwait is affected by the World Trade Organization (WTO) conditions and regulations for more market liberalization. Second, most studies on efficiency have focussed on developed countries, such as those of Europe and the USA, with very few studies examining developing countries, such as Kuwait. Third, the study efficiency features is important in helping policy makers evaluate how the investment sector will be affected by increasing competition and then formulate policies that affect that sector and the economy as a whole. Design/methodology/approach – In this study, we use non-parametric data envelopment analysis (DEA) to estimate investment companies’ efficiency in Kuwait. The authors test predictions of the model using yearly data for 2006-2010. In the analysis, the authors follow the two-stage approach suggested by Coelli et al. (1998). In the literature on DEA efficiency score measurement, this two-stage approach is the most prominent. This approach uses the efficiency score, measured by the DEA model, as the dependent variable in a regression model with explanatory variables that are supposed to capture the impact of external factors (Hahn, 2007). In the second stage, the authors used a Tobit model to investigate factors affecting the efficiency in the Kuwaiti investment sector. Findings – The findings of the second stage suggest that 2008-2010 had a negative impact on firms’ efficiency in Kuwait. The results confirm the substantial influence of the 2008 global financial crisis on the investment sector in Kuwait. In addition, the results show that factors affecting production efficiency in the investment sector in Kuwait include the total revenues, total assets, government participation, and Islamic firm dummy. These second-stage results are confirmed using different specifications of a fixed effect model, a random effects model, and a logit model. Originality/value – The results may be utilized by both monetary authorities and policy makers in establishing the general economic policy in the country. A number of policy implications may be derived from the estimates obtained in the current paper. First, the results show that the investment sector in Kuwait faced a sharp drop in its efficiency in 2008 due to the global financial crisis. This result tells us that there was a spillover effect of the global financial crisis in the Kuwaiti investment market, as companies in this market are highly vulnerable to global shocks. As a result, the investment sector needs to be regulated by, for example, encouraging more company mergers and acquisitions. Second, to meet the appropriate regulations in the investment sector in Kuwait, monetary authority in Kuwait should take into consideration the WTO conditions for more openness in the economic sector. Therefore, companies in the investment sector should be more efficient to compete with foreign investment companies that decide to enter into Kuwaiti market. Therefore, the need for regulations in the Kuwaiti investment sector is more necessary than before. Third, the study of efficiency features is important to help policy makers evaluate how the investment sector will be affected by increasing competition and then formulate policies that affect that sector and the economy as a whole. Furthermore, monetary policy can play an important role in influencing the efficiency in the investment sector. Therefore, the Central Bank of Kuwait should take a leading role in regulating abnormal financial activity in the Kuwaiti market.

International stock markets Integration and dynamics of volatility spillover between the USA and South Asian markets: evidence from Global financial crisis

2020 ◽  
Vol 14 (5) ◽  
pp. 779-794
Author(s):  
Umm E. Habiba ◽  
Shen Peilong ◽  
Wenlong Zhang ◽  
Kashif Hamid
Keyword(s):  
Financial Crisis ◽  
South Asian ◽  
Stock Markets ◽  
Global Financial Crisis ◽  
Volatility Spillover ◽  
Policy Makers ◽  
Content Type ◽  
Volatility Spillovers ◽  
Emerging Stock Markets ◽  
The Usa

Purpose The purpose of this paper is to investigate the cointegration and volatility spillover dynamics between the USA and South Asian stock markets, namely, India, Pakistan and Sri Lanka. The main objective of this study is to provide the knowledge about integration of financial market and volatility spillovers before, during and after global financial crisis to investors, fund managers and policy-makers. Design/methodology/approach The Johansen and Juselius cointegration test, Granger Causality test and bivaraite EGARCH model have been applied in this study to examine integration and volatility spillovers between selected stock markets. Findings The findings show that long-term integration between the USA market and South Asian emerging stock markets. It is found that USA stock market has causal relationship with emerging stock markets in short-term. The findings of EGARCH model reveal that asymmetric volatility spillover effects significant in all selected stock markets in pre, during and post-crisis periods. Furthermore, significant volatility spillover is found from stock markets of USA to all selected South Asian markets during and post-crisis periods. However, volatility spillovers from USA to India and Sri-Lanka markets are significant, while insignificant in case of Pakistani market in pre-crisis period. Overall, we find that returns and volatility spillover effects are higher in financial crisis period as compared to non-financial crisis period. Practical implications The findings of this paper have important implications for investors, portfolio managers and policy-makers. They can take potential benefits from international portfolio diversification by considering all these facts. The understanding and knowledge of across volatility transmission help them to maximize the gains from diversification and minimize the risk. Policy-makers can develop such strategies which protect the markets of these economies from future financial crisis. Originality/value Although in finance literature numerous studies have been conducted on integration between different stock markets, most of the studies investigated the integration and volatility spillovers between developed stock markets. However, many studies also analyzed the integration among emerging stock markets in literature review but it is hard to find studies in the context of South Asian stock markets on the effect of global financial crisis on stock markets. The main contribution of this study is to investigate the stock markets integration and volatility transmission between the USA and South Asia by considering the effect of recent 2007 US subprime financial crisis.

Financial distress determinants among SMEs: empirical evidence from Sweden

2020 ◽  
Vol 47 (3) ◽  
pp. 547-560 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Financial Distress ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Binary Logistic Regression ◽  
Data Availability ◽  
Cross Sectional ◽  
Data Set ◽  
Content Type ◽  
The Global Financial Crisis

PurposeThe purpose of this study is to empirically investigate determinants of financial distress among small and medium-sized enterprises (SMEs) during the global financial crisis and post-crisis periods.Design/methodology/approachSeveral statistical methods, including multiple binary logistic regression, were used to analyse a longitudinal cross-sectional panel data set of 3,865 Swedish SMEs operating in five industries over the 2008–2015 period.FindingsThe results suggest that financial distress is influenced by macroeconomic conditions (i.e. the global financial crisis) and, in particular, by various firm-specific characteristics (i.e. performance, financial leverage and financial distress in previous year). However, firm size and industry affiliation have no significant relationship with financial distress.Research limitationsDue to data availability, this study is limited to a sample of Swedish SMEs in five industries covering eight years. Further research could examine the generalizability of these findings by investigating other firms operating in other industries and other countries.Originality/valueThis study is the first to examine determinants of financial distress among SMEs operating in Sweden using data from a large-scale longitudinal cross-sectional database.

What drives the venture capital investments in China?

2019 ◽  
Vol 13 (3) ◽  
pp. 574-602 ◽  
Author(s):  
Yixi Ning ◽  
Gubo Xu ◽  
Ziwu Long
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Global Financial Crisis ◽  
High Growth ◽  
Investment Strategies ◽  
Stock Market Crash ◽  
Content Type ◽  
Risk Levels ◽  
Aggregate Amount ◽  
A Share

Purpose This study aims to examine the venture capital (VC) industry in China. It has demonstrated a history of high growth with significant variations over time. The authors have examined the trends and determinants of VC investments in China over a 20-year period from 1995 to 2014. They find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. initial public offerings (IPOs), interest rate, price-to-earnings ratio, etc.). They also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk levels by allocating more capital to later-stage investments and securing more deals with later-round financings. However, after the 2008 global financial crisis, the China’s venture industry has recovered faster compared to the US counterpart response. Design/methodology/approach The authors first perform trend analysis of VC investments at an aggregate level, by stages of development, and across industry from 1995 to 2014.To test H1 and H2, the authors use multiple regression models with lagged explanatory variables. To test H3, the authors use univariate tests to compare the measures of VC investments at an aggregate level, stage funds ratios, stage deals ratios and financing series ratios during both a five-year and seven-year time windows around the 2007 A-Share stock market crash and the subsequent financial crisis. Findings The development of the VC industry in China has demonstrated a history of high growth with significant variation over time. The authors find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. IPOs, interest rate, price-to-earnings ratio, etc.). The authors also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk by allocating more capital to later-stage investments and securing more deals with later-round financings. However, the China VC industry has recovered faster compared to the USA just after the 2008 global financial crisis. Research limitations/implications There are also limitations in the study. The VC data in China in the earlier 1990s might not be very reliable due to the quality of statistics. Therefore, the trend analysis and discussions mainly focus on the time after 2000. Also, the authors cannot find VC financing sequence data for the analysis. Second, there is no doubt that the policy impact from Chinese transforming economic system and government policies on its VC industry is substantial (Su and Wang, 2013). However, they cannot find an appropriate variable to be included in the empirical models to consider this effect. Further study on this area would provide meaningful information. Third, although the authors have done comparison study between the VC industry in China in this study and the VC industry in the US documented in Ning et al. (2015) and discussed some interesting findings, more in-depth research in this area will be very useful. Practical implications The findings have meaningful implications for VCists and start-up companies seeking equity financings in China. VCists should closely monitor macroeconomic and market conditions to make appropriate adjustments to their risk and investment strategies. Entrepreneurs seeking equity financings for their business could also monitor the identified macroeconomic and market indicators, which can help them with their timing and to negotiate a better equity financing deal. VC financing is more likely to succeed when key macroeconomic and market indicators become favorable. Originality/value This paper contributes to the literature by testing the supply and demand theory on the VC market proposed by Poterba (1989) and Gompers and Lerner (1998) from the macroeconomic perspective using 20 years’ VC data from China. The authors also examine how the 2007 A-Share stock market crash and the subsequent financial crisis affected VCists to adjust their risk levels and investment strategies. It provides useful information for international academia and policymakers to understand the quick rise of China VC industry. The authors also find that the macroeconomic drivers of VC industry are somewhat different under different economic systems.

Consumer behaviour towards willingness to pay for Halal products

2019 ◽  
Vol 121 (2) ◽  
pp. 492-504 ◽  
Author(s):  
Waqar Ahmed ◽  
Arsalan Najmi ◽  
Hafiz Muhammad Faizan ◽  
Shaharyar Ahmed
Keyword(s):  
Willingness To Pay ◽  
Structural Equation ◽  
Quantitative Research ◽  
Reasoned Action ◽  
Raw Material ◽  
Equation Modeling ◽  
Muslim Country ◽  
Policy Makers ◽  
Content Type ◽  
Factors Affecting

PurposeThe purpose of this paper is to empirically analyze the factors affecting Muslim consumers’ willingness to pay (WTP) for Halal food, products and operations by employing theory of reasoned action.Design/methodology/approachThis study has used quantitative research methodology and collected data from 350 questionnaires from a densely populated city of Pakistan. Partial least squares-structural equation modeling was used to analyze the data.FindingsThe results show that the concerns about Halal, religiosity, perception of usefulness of Halal and product ingredients have a significant impact on WTP for Halal foods, while attitude has an insignificant impact on WTP. Moreover, the extent of demand for Halal certification is significantly affected by WTP.Originality/valueThe study highlighted the concerns of the Muslim consumers with respect to Halalness of the products and operations despite living in a Muslim country. It is recommended that the policy makers, food authorities and health institutions should conduct regular inspections of foods, products and producers’/manufacturers’ operations to ensure that all the procedures from manufacturing of the raw material till the finished goods follow Islamic principles to make them completely Halal.

Global financial crisis, ownership structure and firm financial performance

2017 ◽  
Vol 34 (4) ◽  
pp. 447-465 ◽  
Author(s):  
Ali Salman Saleh ◽  
Enver Halili ◽  
Rami Zeitun ◽  
Ruhul Salim
Keyword(s):  
Financial Crisis ◽  
Financial Performance ◽  
Ownership Structure ◽  
Family Firms ◽  
Global Financial Crisis ◽  
Ownership Concentration ◽  
Financial Leverage ◽  
Content Type ◽  
Crisis Period ◽  
The Global Financial Crisis

Purpose This paper aims to investigate the financial performance of listed firms on the Australian Securities Exchange (ASX) over two sample periods (1998-2007 and 2008-2010) before and during the global financial crisis periods. Design/methodology/approach The generalized method of moments (GMM) has been used to examine the relationship between family ownership and a firm’s performance during the financial crisis period, reflecting on the higher risk exposure associated with capital markets. Findings Applying firm-based measures of financial performance (ROA and ROE), the empirical results show that family firms with ownership concentration performed better than nonfamily firms with dispersed ownership structures. The results also show that ownership concentration has a positive and significant impact on family- and nonfamily-owned firms during the crisis period. In addition, financial leverage had a positive and significant effect on the performance of Australian family-owned firms during both periods. However, if the impact of the crisis by sector is taking into account, the financial leverage only becomes significant for the nonmining family firms during the pre-crisis period. The results also reveal that family businesses are risk-averse business organizations. These findings are consistent with the underlying economic theories. Originality/value This paper contributes to the debate whether the ownership structure affects firms’ financial performance such as ROE and ROA during the global financial crisis by investigating family and nonfamily firms listed on the Australian capital market. It also identifies several influential drivers of financial performance in both normal and crisis periods. Given the paucity of studies in the area of family business, the empirical results of this research provide useful information for researchers, practitioners and investors, who are operating in capital markets for family and nonfamily businesses.

Benchmarking the efficiencies of Indonesia’s municipal water utilities using Stackelberg data envelopment analysis

2015 ◽  
Vol 22 (4) ◽  
pp. 588-609 ◽  
Author(s):  
Andreas Wibowo ◽  
Hans Wilhelm Alfen
Keyword(s):  
Data Envelopment Analysis ◽  
The Body ◽  
Water Utilities ◽  
Data Envelopment ◽  
Two Stage ◽  
Restrictive Assumption ◽  
Content Type ◽  
Second Stage ◽  
Municipal Water ◽  
The Impact

Purpose – The purpose of this paper is to present a yardstick efficiency comparison of 269 Indonesian municipal water utilities (MWUs) and measures the impact of exogenous environmental variables on efficiency scores. Design/methodology/approach – Two-stage Stackelberg leader-follower data envelopment analysis (DEA) and artificial neural networks (ANN) were employed. Findings – Given that serviceability was treated as the leader and profitability as the follower, the first and second stage DEA scores were 55 and 32 percent (0 percent = totally inefficient, 100 percent = perfectly efficient), respectively. This indicates sizeable opportunities for improvement, with 39 percent of the total sample facing serious problems in both first- and second-stage efficiencies. When profitability instead leads serviceability, this results in more decreased efficiency. The size of the population served was the most important exogenous environmental variable affecting DEA efficiency scores in both the first and second stages. Research limitations/implications – The present study was limited by the overly restrictive assumption that all MWUs operate at a constant-return-to-scale. Practical implications – These research findings will enable better management of the MWUs in question, allowing their current level of performance to be objectively compared with that of their peers, both in terms of scale and area of operation. These findings will also help the government prioritize assistance measures for MWUs that are suffering from acute performance gaps, and to devise a strategic national plan to revitalize Indonesia’s water sector. Originality/value – This paper enriches the body of knowledge by filling in knowledge gaps relating to benchmarking in Indonesia’s water industry, as well as in the application of ensemble two-stage DEA and ANN, which are still rare in the literature.

scholarly journals Changes of China’s agri-food exports to Germany caused by its accession to WTO and the 2008 financial crisis

2015 ◽  
Vol 7 (2) ◽  
pp. 262-279 ◽  
Author(s):  
Zhichao Guo ◽  
Yuanhua Feng ◽  
Thomas Gries
Keyword(s):  
Time Series ◽  
Financial Crisis ◽  
Regression Models ◽  
Structural Breaks ◽  
Global Financial Crisis ◽  
Middle Part ◽  
Change Points ◽  
Content Type ◽  
The World ◽  
Before And After

Purpose – The purpose of this paper is to investigate changes of China’s agri-food exports to Germany caused by China’s accession to WTO and the global financial crisis in a quantitative way. The paper aims to detect structural breaks and compare differences before and after the change points. Design/methodology/approach – The structural breaks detection procedures in this paper can be applied to find out two different types of change points, i.e. in the middle and at the end of one time series. Then time series and regression models are used to compare differences of trade relationship before and after the detected change points. The methods can be employed in any economic series and work well in practice. Findings – The results indicate that structural breaks in 2002 and 2009 are caused by China’s accession to WTO and the financial crisis. Time series and regression models show that the development of China’s exports to Germany in agri-food products has different features in different sub-periods. Before 1999, there is no significant relationship between China’s exports to Germany and Germany’s imports from the world. Between 2002 and 2008 the former depends on the latter very strongly, and China’s exports to Germany developed quickly and stably. It decreased, however suddenly in 2009, caused by the great reduction of Germany’s imports from the world in that year. But China’s market share in Germany still had a small gain. Analysis of two categories in agri-food trade also leads to similar conclusions. Comparing the two events we see rather different patterns even if they both indicate structural breaks in the development of China’s agri-food exports to Germany. Originality/value – This paper partly originally proposes two statistical algorithms for detecting different kinds of structural breaks in the middle part and at the end of a short-time series, respectively.

Designing an interactive model of factors affecting the health technology assessment (HTA) in Iran

2018 ◽  
Vol 23 (4) ◽  
pp. 301-311 ◽  
Author(s):  
Mohammadkarim Bahadori ◽  
Ramin Ravangard ◽  
Mahya Tohidi Nezhad ◽  
Naeimeh Pourtaheri ◽  
Sayyed Morteza Hosseini-Shokouh
Keyword(s):  
Health Technology Assessment ◽  
Technology Assessment ◽  
Health Technology ◽  
Social Dimension ◽  
Ethical Dimension ◽  
Policy Makers ◽  
Content Type ◽  
Factors Affecting ◽  
Health Technologies ◽  
Interactive Model

PurposeAccording to the great importance of community health as well as the ever-increasing development of health technologies, the importance of designing an interactive model of factors affecting health technology assessment (HTA) can be highlighted. The purpose of designing and implementing the framework of health information system assessment is to ensure that the required accurate data which are necessary to measure the main health indicators are available. The purpose of this paper is to design an interactive model of factors affecting HTA.Design/methodology/approachThis is a cross-sectional, descriptive-analytic study conducted in the Iran Ministry of Health and Medical Education in the second half of 2017. A sample of 60 experts and professionals working in the field of health technologies are selected using purposive and snowball sampling methods. Two researcher-made questionnaires are used to collect the required data. The collected data are analyzed using decision-making trial and evaluation laboratory (DEMATEL) and MATLAB R2013a.FindingsThe results showed that “Legal dimension,” “safety,” “Effectiveness” and “Social dimension” were the affecting factors and net causes, and “Current application,” “Knowledge of technology,” “Ethical dimension,” “Costs” and “Organizational dimension” were the affected factors and net effects in the interactive model. Furthermore, “Legal dimension” with the coordinates C: [1.88, 1.27] and “Ethical dimension” with the coordinates C: [1.75, −75] were known as the most affecting and most affected factors in the interactive model, respectively.Originality/valueThe DEMATEL model is an appropriate tool for managers and policy makers to structure and prioritize factors influencing the HTA. Policy makers and decision makers can use this model for identifying relationships among factors and prioritize them. Because health policy makers and managers have a major role in formulating the regulations and guidelines related to the HTA, they should pay more attention to the legal considerations in their decisions and use the management tools to move the available resources toward implementing and enforcing rules and guidelines related to the HTA.

Shareholder activism impact on efficiency in Brazil

2019 ◽  
Vol 19 (1) ◽  
pp. 141-157 ◽  
Author(s):  
Paula Guimaraes ◽  
Ricardo P.C. Leal ◽  
Peter Wanke ◽  
Matthew Morey
Keyword(s):  
Shareholder Activism ◽  
Efficiency Score ◽  
Data Envelopment ◽  
Truncated Regression ◽  
Two Stage ◽  
Content Type ◽  
Financial Characteristics ◽  
Long Term Impact ◽  
A Company

Purpose This paper aims to investigate the long-term impact of shareholder activism on Brazilian listed companies. Design/methodology/approach This study uses a sample of 194 companies in 2010, 2012 and 2014 and a two-stage data envelopment analysis to generate an efficiency score based on corporate governance, ownership structure and financial characteristics of companies. In the second stage, the study applies a bootstrap truncated regression to identify whether there is a relationship between the efficiency scores and a company-level activism index. Findings The results show a negative correlation between the efficiency scores and the activism index, suggesting that activist shareholders tend to target less efficient companies. A time analysis over the period 2010-2014 does not offer evidence of impacts of activism on changes of the efficiency scores. Practical implications Activist shareholders target less efficient companies. Shareholder activism increased after regulation that facilitated shareholder voting and required greater company transparency was introduced. Originality/value The two-stage nature of the procedure used in the analysis ascertains that this result is not spurious, assuring data separability between productive resources and contextual variables. This study contributes to the scarce literature on activism in emerging markets.

A post-global financial crisis (GFC) framework for strategic planning, assessment and management decision making for US sustainable commercial real estate

2017 ◽  
Vol 35 (6) ◽  
pp. 589-618 ◽  
Author(s):  
Pernille Hoy Christensen
Keyword(s):  
Decision Making ◽  
Financial Crisis ◽  
Real Estate ◽  
Performance Indicators ◽  
Institutional Investors ◽  
Global Financial Crisis ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Content Type ◽  
Sustainability Initiatives

Purpose The purpose of this paper is to understand both the facts and the values associated with the breadth of issues, and the principles related to sustainable real estate for institutional investors. Sustainable real estate is a growing sector within the commercial real estate industry, and yet, the decision-making practices of institutional investors related to sustainability are still not well understood. In an effort to fill that gap, this research investigates the post-global financial crisis (GFC) motivations driving the implementation of sustainability initiatives, the implementation strategies used, and the predominant eco-indicators and measures used by institutional investors. Design/methodology/approach This paper presents the results of a three-round modified Delphi study conducted in the USA in 2011-2012 investigating the nature of performance measurements and reporting requirements in sustainable commercial real estate and their impact on the real estate decision-making process used by institutional investors. Two rounds of in-depth interviews were conducted with 14 expert panelists. An e-questionnaire was used in the third round to verify qualitative findings. Findings The key industry drivers and performance indicators influencing institutional investor decision making were associated with risk management of assets and whether initiatives can improve competitive market advantage. Industry leaders advocate for simple key performance indicators, which is in contrast to the literature which argues for the need to adopt common criteria and metrics. Key barriers to the adoption of sustainability initiatives are discussed and a decision framework is presented. Practical implications This research aims to help industry partners understand the drivers motivating institutional investors to uptake sustainability initiatives with the aim of improving decision making, assessment, and management of sustainable commercial office buildings. Originality/value Building on the four generations of the sustainability framework presented by Simons et al. (2001), this research argues that the US real estate market has yet again adjusted its relationship with sustainability and revises their framework to include a new, post-GFC generation for decision making, assessment, and management of sustainable real estate.

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