The impact of long-term riskless asset on ensuring liquidity and preventing banking fragility

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Shahin
Keyword(s):  
Risk Sharing ◽  
Content Type ◽  
Asset Portfolio ◽  
Illiquid Asset ◽  
The Stability ◽  
Gain Loss ◽  
Riskless Asset ◽  
The Impact ◽  
Liquidation Cost

PurposeThrough portfolio diversification, the author identifies the risk sharing deposit contract in a three-period model that maximizes the ex ante expected utility of depositors.Design/methodology/approachIn this paper, the author extends the study by Allen and Gale (1998) by adding a long-term riskless investment opportunity to the original portfolio of a short-term liquid asset and a long-term risky illiquid asset.FindingsUnlike Allen and Gale, there are no information-based bank runs in equilibrium. In addition, the model can improve consumers' welfare over the Allen and Gale model. The author also shows that the bank will choose to liquidate the cheaper investments, in terms of the gain-loss ratios for the two types of existing long-term assets, when there is liquidity shortage in some cases. Such a policy reduces the liquidation cost and enables the bank to meet the outstanding liability to depositors without large liquidation losses.Originality/valueThe author believe that the reader would be interested in this article because it is relevant to real world where depositors rush to withdraw their deposits from a bank if there is negative information about future prospect of the bank asset portfolio and bank investment. Economists and financial analysts need to determine the suitable mechanism to improve the stability of the bank and the depositor welfare.

Influence of internal and external risks on sustainability of financial system of Аltai krai

2018 ◽  
Vol 35 (4) ◽  
pp. 133-136
Author(s):  
R. N. Ibragimov
Keyword(s):  
Sustainable Development ◽  
Financial Stability ◽  
Management Strategy ◽  
Financial System ◽  
Risk Management Strategy ◽  
The Sustainable Development ◽  
The Stability ◽  
The Impact

The article examines the impact of internal and external risks on the stability of the financial system of the Altai Territory. Classification of internal and external risks of decline, affecting the sustainable development of the financial system, is presented. A risk management strategy is proposed that will allow monitoring of risks, thereby these measures will help reduce the loss of financial stability and ensure the long-term development of the economy of the region.

The storm after the storm: the long-term lingering impacts of hurricanes on schools

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cassandra R. Davis ◽  
Sarah R. Cannon ◽  
Sarah C. Fuller
Keyword(s):  
North Carolina ◽  
Data Collection ◽  
Instructional Time ◽  
Emotional Needs ◽  
Social Emotional ◽  
Content Type ◽  
The North ◽  
State Education ◽  
The Impact

PurposeThe purpose of this paper is to identify and describe the long-term impacts of hurricanes on schools and discuss approaches to improving recovery efforts.Design/methodology/approachInterviews with 20 school districts in Texas and North Carolina after Hurricanes Harvey (2017) and Matthew (2016). In total, 115 interviews were conducted with teachers, principals, district superintendents and representatives from state education agencies. Interview questions focused on the impact of storms and strategies for recovery.FindingsThe authors uncovered three long-term impacts of hurricanes on schools: (1) constrained instructional time, (2) increased social-emotional needs and (3) the need to support educators.Research limitations/implicationsThis paper focuses on two storms, in two states, in two successive years. Data collection occurred in Texas, one academic year after the storm. As compared to the North Carolina, data collection occurred almost two academic years after the storm.Practical implicationsThis paper illuminates strategies for stakeholders to implement and expedite hurricane recovery through; (1) updating curricula plans, (2) providing long-term counselors and (3) supporting educators in and out of school.Originality/valueTo date, very few studies have explored the ways in which schools face long-term impacts following a disaster. This paper provides insight to the challenges that prolong the impacts of disasters and impede recovery in schools. With hurricanes and related disasters continuing to affect schooling communities, more research is needed to identify the best ways to support schools, months to years after an event.

Mcdonald’s versus Vikram Bakshi

2021 ◽  
Vol 11 (4) ◽  
pp. 1-27
Author(s):  
Nitin Pangarkar ◽  
Neetu Yadav
Keyword(s):  
Emerging Markets ◽  
Multinational Corporations ◽  
Service Industry ◽  
Executive Development ◽  
Content Type ◽  
Academic Level ◽  
Quick Service ◽  
Term Performance ◽  
The Impact

Learning outcomes The case illustrates the challenges of managing JVs in emerging markets. specifically, after going through the case, students should be able to: i.Analyze the contexts in which firms need to form JVs and evaluate this need in the context of emerging markets such as India; ii.Understand how multinational corporations can achieve success in emerging markets, specifically the role of strategic (broader than the product) adaptation in success; iii.Evaluate the impact of conflict between partners on the short-term and long-term performance of a JV; and iv.Create alternatives, evaluate each alternative’s pros and cons, and recommend appropriate decisions to address the situation after a JV unravels and the organization is faced with quality and other challenges. Case overview/synopsis McDonald’s, the global giant in the quick service industry, entered India in 1993 and formed two JVs in 1995 one with Vikram Bakshi (Connaught Plaza Restaurants Ltd or CPRL) to own and operate stores in the northern and eastern zones, and another with Amit Jatia (Hardcastle Restaurants Private Limited or HRPL) to own and operate stores in the western and southern zones. Over the next 12 years, both the JVs made steady progress by opening new stores while also achieving better store-level metrics. Though CPRL was ahead of HRPL in terms of the number of stores and total revenues earned in 2008, the year marked the beginning of a long-running dispute between the two partners in CPRL, Bakshi and McDonald’s. Over the next 11 years, Bakshi and McDonald’s tried to block each other, filed court cases against each other and also exchanged recriminations in media. The feud hurt the performance of CPRL, which fell behind HRPL in terms of growth and other metrics. On May 9, 2019, the feuding partners reached an out-of-court settlement under which McDonald’s would buy out Bakshi’s shares in CPRL, thus making CPRL a subsidiary. Robert Hunghanfoo, who had been appointed head of CPRL after Bakshi’s exit, announced a temporary shutdown of McDonald’s stores to take stock of the current situation. He had to make a number of critical decisions that would impact the company’s performance in the long-term. Complexity academic level MBA, Executive MBA and executive development programs. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 11: Strategy.

Enterprise risk management and sustainability of banks performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Babajide Oyewo
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Management Practice ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Banking Reform ◽  
Content Type ◽  
Enterprise Risk ◽  
The Impact

PurposeThis study investigates firm attributes (namely level of capitalisation, scope of operation, organisational structure, organisational lifecycle, systemic importance and size) affecting the robustness of enterprise risk management (ERM) practice, the extent to which ERM affects the performance of banks and the impact of ERM on the long-term sustainability of banks in Nigeria. This was against the backdrop that the 2012 banking reform was a major regulatory intervention that mainstreamed ERM in the Nigerian banking sector.Design/methodology/approachThe study employed a mixed methodology of content, trend and quantitative analyses. Ex post facto research design was deployed to analyse performance differential of banks, with respect to the implementation of ERM, over a 10-year period (2008–2017). A disclosure checklist developed from the COSO ERM integrated framework was used to assess the robustness of ERM by content-analysing divulgence on risk management in published annual reports. The banking reform periods were dichotomised into pre- (2008–2012) and post- (2013–2017) reform periods. Jonckheere–Terpstra test, independent sample t-test and Mann–Whitney test were applied to analyse a total of 1,036 firm-year observations over the period 2008–2017.FindingsResult shows that bank attributes significantly affecting the robustness of risk management practice are level of capitalisation, scope of operation, systemic importance and size. Performance of banks improved slightly during the post-2012 banking reform period. This suggests that as banks consolidate on the gains of ERM, benefits of the regulatory policy on risk management may be realised in the long run. Result also shows that ERM enhances long-term performance, connoting that effective risk management could serve as a competitive strategy for surviving turbulence that typically characterises the banking sector.Practical implicationsThe emergence of level of capitalisation, scope of operation, systemic importance and size as determinants of ERM provides empirical evidence to support the practice of reviewing the capital requirements for banking business from time to time by regulatory authorities (i.e. recapitalisation policy) as a strategy for managing systemic risk. Top management of banks may consider instituting mechanisms that will ensure risk management is given prominence. A proactive approach must be taken to convert risks to opportunities by banks and other financial institutions, going forward, to cope with the vicissitudes of financial intermediation.Originality/valueThe originality of the study stems from the consideration that it provides some new insights into the impact of ERM on banks long-term sustainability in a developing country. The study also contributes to knowledge by exposing the factors determining the robustness of risk management practice. The study developed a checklist for assessing ERM practice from annual reports and other risk management disclosure documents. The paper also adds to the scarce literature on risk governance and risk management.

Corporate social responsibility and financial performance: bidirectional relationship and mediating effect of customer loyalty: investigation in Sweden

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abir Hichri ◽  
Moez Ltifi
Keyword(s):  
Corporate Social Responsibility ◽  
Financial Performance ◽  
Customer Loyalty ◽  
Mediating Effect ◽  
Content Type ◽  
Global Context ◽  
Bidirectional Relationship ◽  
Corporate Social ◽  
The Impact

Purpose The study is based on a hybrid model composed of accounting and business data and is amongst the first to test the impact of corporate social responsibility (CSR) performance on the financial performance of the company, as well as the impact of financial performance on CSR performance. The bidirectional logic chosen by the study is rarely adopted in the global context and has never been tested in the Swedish context. Moreover, the purpose of this paper is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies. Design/methodology/approach Data was collected from a sample of 110 Swedish companies during the period 2009–2019. This study collects the data from the Thomson Reuters Eikon database. A multiple regression analysis was performed to test the hypotheses. Findings The results confirmed the bidirectional relationship between CSR performance and company financial performance. This means that CSR performance positively influences the company’s financial performance. Similarly, financial performance positively influences the company’s CSR performance. Moreover, customer loyalty has a positive and significant mediating effect on the company’s CSR performance-financial performance relationship. Originality/value This study adds several inputs. The first contribution of the research is to test a hybrid model composed of accounting and commercial data. This model is amongst the first to test the impact of CSR performance on the financial performance of the company and the impact of financial performance on CSR performance. The second contribution is the bidirectional logic chosen by the study which is rarely adopted in the global context and has never been tested in the Swedish context. The third contribution is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies. The fourth contribution is the choice of the field of investigation for the reliability of the data used and the generalisation of the results obtained.

Does salience matter in investment decision?

Kybernetes ◽  
2019 ◽  
Vol 48 (8) ◽  
pp. 1894-1912
Author(s):  
Samra Chaudary
Keyword(s):  
Investment Decision ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Individual Investors ◽  
Short Term ◽  
Content Type ◽  
Multigroup Analysis ◽  
Money Managers ◽  
The Impact

Purpose The paper takes a behavioral approach by making use of the prospect theory to unveil the impact of salience on short-term and long-term investment decisions. This paper aims to investigate the group differences for two types of investors’ groups, i.e. individual investors and professional investors. Design/methodology/approach The study uses partial least square-based structural equation modeling technique, measurement invariance test and multigroup analysis test on a unique data set of 277 active equity traders which included professional money managers and individual investors. Findings Results showed that salience has a significant positive impact on both short-term and long-term investment decisions. The impact was almost 1.5 times higher for long-term investment decision as compared to short-term decision. Furthermore, multigroup analysis revealed that the two groups (individual investors and professional investors) were statistically significantly different from each other. Research limitations/implications The study has implications for financial regulators, money managers and individual investors as it was found that individual investors suffer more with salience heuristic and may end up with sub-optimal portfolios due to inefficient diversification. Thus, investors should be cautious in fully relying on salience and avoid such bias to improve investment returns. Practical implications The study concludes with a discussion of policy and regulatory implications on how to minimize salience bias to achieve optimum and diversified portfolios. Originality/value The study has significantly contributed to the growing body of applied behavioral research in the discipline of finance.

The effect of green purchasing on purchasing performance: the moderating role played by long-term relationships and strategic integration

2016 ◽  
Vol 31 (2) ◽  
pp. 312-324 ◽  
Author(s):  
Javier González-Benito ◽  
Gustavo Lannelongue ◽  
Luis Miguel Ferreira ◽  
Carmen Gonzalez-Zapatero
Keyword(s):  
Design Methodology ◽  
Purchasing Management ◽  
Environmental Practices ◽  
Content Type ◽  
Strategic Integration ◽  
Green Purchasing ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

Purpose – The purpose of this paper is to analyse the relationship between the environmental management of purchases and firm performance. The authors examine the moderating role played by two variables: the establishment of long-term relationships with suppliers and the strategic integration of the purchasing function. Design/methodology/approach – The authors conduct an empirical study on a sample of 100 Portuguese firms. Findings – Evidence reveals that green purchasing management improves the performance of the purchasing function, although the impact is greater when the organisation forges lasting alliances with its suppliers. Originality/value – This paper contributes to the study of the consequences of introducing environmental practices into the purchasing function, especially with regards to the formation of a panel of sustainable suppliers. Specifically, this research provides evidence to show that the implementation of those practices has positive impacts on the operating performance of the purchasing function and that the said effect is greater when a firm establishes long-term relationships with its suppliers.

scholarly journals Impact of COVID-19 on the trade of goods and services in Spain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asier Minondo
Keyword(s):  
Negative Impact ◽  
The European Union ◽  
Firm Level ◽  
Health Crisis ◽  
Content Type ◽  
Goods And Services ◽  
Containment Measures ◽  
Trade Of Services ◽  
The Impact

Purpose This paper aims to analyze the impact of COVID-19 on the trade of goods and services in Spain. Design/methodology/approach This paper uses monthly trade data at the product, region and firm level. Findings The COVID-19 crisis has led to the sharpest collapse in the Spanish trade of goods and services in recent decades. The containment measures adopted to arrest the spread of the virus have caused an especially intense fall of trade in services. The large share of transport equipment, capital goods, products that are consumed outdoors (i.e., outdoor goods) and tourism in Spanish exports has made the COVID-19 trade crisis more intense in Spain than in the rest of the European Union. Practical implications The nature of the collapse suggests that trade in goods can recover swiftly when the health crisis ends. However, COVID-19 may have a long-term negative impact on the trade of services that rely on the movement of people. Originality/value It contributes to understand how COVID-19 has affected the trade in goods and services in Spain.

scholarly journals Effects of agricultural credit on wheat productivity of small farms in Sindh, Pakistan

2018 ◽  
Vol 78 (5) ◽  
pp. 592-610 ◽  
Author(s):  
Abbas Ali Chandio ◽  
Yuansheng Jiang ◽  
Feng Wei ◽  
Xu Guangshun
Keyword(s):  
Wheat Yield ◽  
Considerable Proportion ◽  
Small Scale ◽  
Small Farms ◽  
Short Term ◽  
Agricultural Credit ◽  
Data Set ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to evaluate the impact of short-term loan (STL) vs long-term loan (LTL) on wheat productivity of small farms in Sindh, Pakistan. Design/methodology/approach The econometric estimation is based on cross-sectional data collected in 2016 from 18 villages in three districts, i.e. Shikarpur, Sukkur and Shaheed Benazirabad, Sindh, Pakistan. The sample data set consist of 180 wheat farmers. The collected data were analyzed through different econometric techniques like Cobb–Douglas production function and Instrumental variables (two-stage least squares) approach. Findings This study reconfirmed that agricultural credit has a positive and highly significant effect on wheat productivity, while the short-term loan has a stronger effect on wheat productivity than the long-term loan. The reasons behind the phenomenon may be the significantly higher usage of agricultural inputs like seeds of improved variety and fertilizers which can be transformed into the wheat yield in the same year. However, the LTL users have significantly higher investments in land preparation, irrigation and plant protection, which may lead to higher wheat production in the coming years. Research limitations/implications In the present study, only those wheat farmers were considered who obtained agricultural loans from formal financial institutions like Zarai Taraqiati Bank Limited and Khushhali Bank. However, in the rural areas of Sindh, Pakistan, a considerable proportion of small-scale farmers take credit from informal financial channels. Therefore future researchers should consider the informal credits as well. Originality/value This is the first paper to examine the effects of agricultural credit on wheat productivity of small farms in Sindh, Pakistan. This paper will be an important addition to the emerging literature regarding effects of credit studies.

Consumer responses to the failure of self-service banking technology: moderating role of failure stability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nedra Bahri Ammari ◽  
Abir Hsouna ◽  
Mounia Benabdallah ◽  
Anish Yousaf ◽  
Abhishek Mishra
Keyword(s):  
Word Of Mouth ◽  
Positive Impact ◽  
Negative Word ◽  
The Self ◽  
Content Type ◽  
Consumer Dissatisfaction ◽  
Self Service ◽  
The Stability ◽  
Self Service Technology ◽  
The Impact

PurposeThe purpose of this study is to investigate the impact of dissatisfaction and anger, driven by the failure of the self-service technology of banks, on customers' post-purchase behavioural reactions, such as complaints, negative word-of-mouth (NWOM) and supplier change. The stability of the failure is proposed to moderate these relationships.Design/methodology/approachThe proposed research model was tested through data collected from an online survey of a Tunisian sample of 300 respondents, using the scenario method.FindingsThe study validates the positive impact of dissatisfaction on anger and negative word-of-mouth, as well as that of anger on complaint behaviour and negative word-of-mouth. The relation between dissatisfaction and negative word-of-mouth is mediated by anger. When the failure is stable, dissatisfied users of the self-service technology seek to enhance their negative word-of-mouth and supplier change. The results also show that the stability of the failure enhances the effect of anger on complaint behaviour.Practical implicationsBanks should invest efforts to accelerate the recovery of services to reduce consumer dissatisfaction and anger and prevent adverse behavioural outcomes. Further, they need to ensure that failures are not repeated, as failure stability activates some otherwise non-significant behavioural outcomes, like supplier change.Originality/valuePrevious works have focused on the impact of dissatisfaction and negative emotions for interpersonal services, but very few works have come to associate dissatisfaction, anger, complaint, negative word-of-mouth and supplier change in an integrative framework for an self-service technology failure.

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