Demand for money laundering in developing countries and its deterrence: a quantitative analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anam Javaid ◽  
Noman Arshed
Keyword(s):  
Developing Countries ◽  
Money Laundering ◽  
Least Square ◽  
Government Control ◽  
Government Officials ◽  
Demand For Money ◽  
Public Funds ◽  
Content Type ◽  
Tax Rate ◽  
The Impact

Purpose Money laundering is an activity where illegal proceeds are hidden. This often leads to a reduction in government revenue and loss of government control of public funds. This study aims to identify the important sources of growing demand for money laundering in developing countries. Further, it identifies the factors that reduce the impact of sources of demand for money laundering. Design/methodology/approach This study used the panel approach of feasible generalized least square to investigate the growing demand for money laundering in 62 developing countries and provides a moderation-based solution for managing the demand factors. Findings The empirical results of this study indicate that there are two sources that increase the demand for money laundering in developing countries. This includes a high tax rate on profit linked with private firms and businesses and diversion of public funds related to government officials and politicians. The results indicate that profit tax and diversion of funds increase the demand for money laundering. The profit tax-based money laundering can be moderated by the quality of the education system and the diversion of public funds and money laundering can be moderated using bureaucracy quality. Originality/value This is one of the first studies to empirically estimate the impact of two important sources (i.e. diversion of public funds by government officials and politicians and a high tax rate) that create demand for money laundering in developing countries. The findings help developing countries’ governments formulate policies and curb the growing demand for money laundering.

The role of audit committees in mitigating earnings management: evidence from Jordan

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taha Almarayeh ◽  
Modar Abdullatif ◽  
Beatriz Aibar-Guzmán
Keyword(s):  
Developing Countries ◽  
Earnings Management ◽  
Audit Committee ◽  
Discretionary Accruals ◽  
Least Square ◽  
Audit Committees ◽  
Institutional Setting ◽  
Content Type ◽  
The Impact

PurposeThis study examines the relationship between audit committees (ACs) and earnings management (EM) in the developing country context of Jordan. In particular, it investigates whether audit committee attributes, including their size, independence, expertise and meetings, are able to restrict discretionary accruals as a proxy for EM.Design/methodology/approachThe generalized least square (GLS) regression was used to study the association between audit committee attributes and discretionary accruals, as a proxy of EM, for a sample of industrial firms listed on the Amman Stock Exchange (ASE) during the period 2012–2020. Data were obtained from the firms' annual reports.FindingsThe regression results indicate that audit committee independence is the only audit committee attribute that seems to improve the effectiveness of ACs, in that it is significantly associated with less EM, while other audit committee attributes that were tested do not show statistically significant associations.Research limitations/implicationsIn emerging markets, like Jordan, ACs may not be an efficient monitoring mechanism; therefore, it can be argued that the prediction made by the agency theory about the role of ACs in mitigating opportunistic EM activities does not necessarily apply to all contexts.Practical implicationsA better understanding of audit committee effectiveness in developing countries could help regulators in these countries assess the impact of planned corporate governance (CG) reforms and to better monitor and enhance the performance of ACs.Social implicationsIn a setting characterized by closely held companies, high power distance and low demand for high-quality CG mechanisms, this study contributes to understanding how this business system operates, and how improving CG mechanisms could be successful in such cultures.Originality/valueThis study investigates the under-researched relationship between audit committee characteristics and EM in developing countries. In so doing, it aims to provide new insights into this relationship within the developing context case of Jordan, including if and how the institutional setting influences this relationship.

Precursory effects on entrepreneurial behaviour in the agri-food industry

2018 ◽  
Vol 10 (1) ◽  
pp. 2-22 ◽  
Author(s):  
Asif Yaseen ◽  
Muhamamd Abid Saleem ◽  
Sadaf Zahra ◽  
Muhammad Israr
Keyword(s):  
Developing Countries ◽  
Structural Equation ◽  
Strong Predictor ◽  
Dairy Industry ◽  
Equation Model ◽  
Partial Least Square ◽  
Least Square ◽  
Content Type ◽  
Entrepreneurial Behaviour ◽  
The Impact

Purpose Promoting entrepreneurship within agri-food sectors in developing countries can be a viable strategy towards economic development. Predicting which factors will foster entrepreneurial behaviour is somewhat complex. Specifically, a deeper understanding of precursory effects on entrepreneurial behaviour is required to enhance entrepreneurship in the agri-food sectors. This paper aims to explore what predicts the entrepreneurial decisions in the dairy industry of Pakistan. Design/methodology/approach The research used an integrative framework built on the entrepreneurial event model and determinants of entrepreneurial intention. Using a partial least square approach to structural equation model estimation, this study tested a conceptual model and its hypotheses based on 174 cases sampled from Pakistan’s dairy industry. Findings The research showed that intention is a strong predictor to start entrepreneurial activities in the Pakistani dairy industry. Amongst precursory factors, perceived feasibility, readiness and conviction were found strongly linked to intention when explaining the causes of entrepreneurial start-ups. Surprisingly, the impact of attitude and triggering event was not significant in explaining the phenomenon under investigation. Practical implications The findings suggest that training and education programmes can enhance critical perceptions such as desirability, feasibility and conviction among farmers to become entrepreneur. For this purpose, government should establish dairy incubation centres in different cities and transform agricultural extension department to help farmers understand market-oriented dairy farming businesses and build their capacity in farm entrepreneurship. Originality/value This research attempted to shed light on fostering entrepreneurship in the context of agri-food sectors in developing countries such as Pakistan’s dairy industry.

Practical application of anti-money laundering requirements in Bangladesh

2017 ◽  
Vol 20 (4) ◽  
pp. 428-450 ◽  
Author(s):  
Syed Alamin Ahmed
Keyword(s):  
Developing Countries ◽  
Money Laundering ◽  
Structural Development ◽  
Content Type ◽  
International Agencies ◽  
Specific Analysis ◽  
Customer Due Diligence ◽  
The Impact ◽  
Insight Into

Purpose This paper aims to provide an insight into anti-money laundering (AML) regulations in light of the global AML framework. Specific analysis is drawn using a case study of Bangladesh – the national financial culture within the country is carefully examined to establish the extent to which it is conducive to adopting such frameworks. Particular focus is placed on customer due diligence requirements, and the unique challenges posed by alternative remittance systems. The paper evaluates the impact of globalisation as well as the correlation between developments based on resources available to the respective state. Design/methodology/approach The research has primarily been conducted through the usage of relevant websites (reports compiled by national and international agencies) and journal articles in electronic format. References have been made to studies and works carried out by authors on the global AML framework. Findings The internal structural development of Bangladesh must be enhanced and the various social and economic issues must be overcome before a practical AML framework can be successfully implemented. Research limitations/implications The lack of published works on AML in Bangladesh is a shortcoming, and more work on this subject is encouraged. The absence of specific AML reports on Bangladesh has resulted in some informed assumptions based on other developing countries. Practical implications The research provides a deep insight into the global AML framework, how it can be applied to developing countries like Bangladesh and the drawbacks of implementing a universal framework domestically. Originality/value The study provides an innovative analysis, examining aspects of AML regulation in Bangladesh which have not previously been effectively studied.

Proprietary information and the cost of bank debt

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
HyunJun Na
Keyword(s):  
Least Square ◽  
Bank Loan ◽  
Content Type ◽  
Loan Contracts ◽  
Proprietary Information ◽  
Banking Deregulation ◽  
Interstate Banking ◽  
Innovative Firms ◽  
Bank Loan Contracts ◽  
The Impact

PurposeThis study explores how the firm’s proprietary information has an impact on the bank loan contracts. It explains the propensity of using the competitive bid option (CBO) in the syndicate loans to solicit the best bid for innovative firms and how it changes based on industry competition and the degree of innovations. This research also examines how the interstate banking deregulation (Interstate Banking and Branching Efficiency Act) in 1994 affected the private loan contracts for innovative borrowers.Design/methodology/approachThe study uses various econometric analyses. First, it uses the propensity score matching analysis to see the impact of patents on pricing terms. Second, it uses the two-stage least square (2SLS) analysis by implementing the litigation and non-NYSE variables. Finally, it studies the impact of the policy change of the Interstate Banking and Branching Efficiency Act of 1994 on the bank loan contracts.FindingsFirms with more proprietary information pays more annual facility fees but less other fees. The patents are the primary determinants of the usage of CBO in the syndicate loans to solicit the best bid. While innovative firms can have better contract conditions by the CBO, firms with more proprietary information will less likely to use the CBO option to minimize the leakage of private information and the severe monitoring from the banks. Finally, more proprietary information lowered the loan spread for firms dependent on the external capital after the interstate banking deregulation.Originality/valueThe findings of this research will help senior executives with responsibility for financing their innovative projects. In addition, these findings should prove helpful for the lawmakers to boost economies.

Moderating role of patriotism on sales tax compliance among Jordanian SMEs

2020 ◽  
Vol 13 (3) ◽  
pp. 389-415 ◽  
Author(s):  
Ahmad Farhan Alshira'h ◽  
Hijattulah Abdul-Jabbar
Keyword(s):  
Tax Compliance ◽  
Arab Countries ◽  
Moderating Effect ◽  
Theory And Practice ◽  
Sales Tax ◽  
Deterrence Theory ◽  
Content Type ◽  
Tax Rate ◽  
Tax Audit ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs). Design/methodology/approach In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model. Findings The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance. Research limitations/implications Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen eligible SMEs to comply to further boost their sales collections. Originality/value This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.

Impact of economic and financial crimes on economic growth in emerging and developing countries

2019 ◽  
Vol 26 (3) ◽  
pp. 910-920 ◽  
Author(s):  
Sani Abubakar Saddiq ◽  
Abu Sufian Abu Bakar
Keyword(s):  
Systematic Review ◽  
Developing Countries ◽  
Negative Impact ◽  
Meta Analysis ◽  
Eligibility Criteria ◽  
Content Type ◽  
Research Reporting ◽  
Financial Crimes ◽  
Emerging And Developing Countries ◽  
The Impact

Purpose The purpose of the study is to investigate the impact of economic and financial crimes on the economies of emerging and developing countries. Design/methodology/approach Preferred Reporting Items for Systematic review and Meta-Analysis (PRISMA) guidelines and meta-analysis of economics research reporting guidelines were used to conduct a quantitative synthesis of empirical evidence on the impact of economic and financial crimes in developing and emerging countries. Findings A total of 103 studies were searched, out of which 6 met the selection/eligibility criteria of this systematic review. The six selected studies indicated that economic and financial crimes have a negative impact in emerging and developing countries. Originality/value To the best knowledge of the authors, no published systematic review of the impact of economic and financial crimes in developing countries has been conducted to date.

Customer satisfaction with sommelier services of upscale Chinese restaurants in Hong Kong

2019 ◽  
Vol 31 (4) ◽  
pp. 532-554 ◽  
Author(s):  
Tommy Lau ◽  
Man Lai Cheung ◽  
Guilherme D. Pires ◽  
Carol Chan
Keyword(s):  
Hong Kong ◽  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Loyalty ◽  
Positive Impact ◽  
Partial Least Square ◽  
Least Square ◽  
Survey Method ◽  
Content Type ◽  
The Impact

Purpose The abolishment of the wine tax in Hong Kong has led to increased wine consumption and increased demand for wine-related professionals, such as sommeliers. Yet the importance of sommeliers’ value-adding performance in the context of upscale Chinese restaurants has not been examined. To address this gap, the SERVQUAL framework is adopted to examine the influence of sommeliers’ service quality (SQ) on customer satisfaction (CS) and loyalty in the context of upscale Chinese restaurants in Hong Kong. Design/methodology/approach The survey method is used to collect data from 302 units of the population of interest, partial least square-structural equation modelling (PLS-SEM) is used to test the links between constructs. Findings Four of the seven dimensions of sommeliers’ service quality, namely, empathy, tangibles, credibility and assurance, have a significant positive impact on customer satisfaction and customer loyalty, whereas the impact of perceived value and responsiveness on customer satisfaction and customer loyalty is positive but only marginally significant. Reliability has a weak and non-significant impact on customer satisfaction and customer loyalty. Research limitations/implications Examining a small number of upscale Chinese restaurants in Hong Kong limits generalisation of the findings to other contexts. Replication of the research in different contexts will enhance generalizability. In terms of implications, the discussion highlights the importance of sommeliers’ service performance on customers’ SQ perceptions SQ, CS and loyalty, all of which are important variables for restaurateurs. Originality/value To the best of the authors’ knowledge, this is the first study of the influence of the quality of sommelier’s SQ on CS and loyalty in upscale Chinese restaurants in Hong Kong. Given the lack of attention to this service role in the literature, the study contributes theory from which further understanding can develop.

Macroeconomic fundamentals and dynamics of the Indian rupee-dollar exchange rate

2015 ◽  
Vol 7 (4) ◽  
pp. 301-326 ◽  
Author(s):  
Chandan Sharma ◽  
Rajat Setia
Keyword(s):  
Exchange Rate ◽  
Structural Break ◽  
Cointegration Analysis ◽  
Least Square ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Indian Rupee ◽  
Macroeconomic Fundamentals ◽  
The Impact

Purpose – This paper aims to examine the relationship between Indian rupee-US dollar exchange rate and the macroeconomic fundamentals for the post-economic reform period. Design/methodology/approach – The authors have used an empirical model which includes a range of important macroeconomic variables based on the basic monetary theories of exchange rate determination. At the first stage of the analysis, they have tested structural break in the data. Subsequently, they have employed the fully modified ordinary least square, Wald’s coefficient restriction and impulse response functions (IRF) to estimate the monetary model in the long- and short-run horizons. Findings – Results of analyses indicate that the macroeconomic fundamentals determine exchange rate in a significant way, but their effect varies sizably across the periods. The IRF illustrate the importance of interest rate in controlling exchange rate volatility. Practical implications – The analysis of the behavior of inter-relationship among macroeconomic variables will help policymakers in a deep-rooted understanding of this complex and time-varying relationship. Originality/value – Most of the existing studies have tested the impact of a single or a few macroeconomic fundamentals on exchange rate. But in the present study, we have tested the impact of a range of important variables, i.e. money supply, real income or output, price level and trade balance. Further, considering the importance of structural breaks in data, they authors have employed standard tests of structural break and incorporated the issue in the cointegration analysis.

Does the second wave of COVID-19 undermine corporate immunity? International evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Huy Viet Hoang ◽  
Cuong Nguyen ◽  
Khanh Hoang
Keyword(s):  
Stock Returns ◽  
Stock Price ◽  
Fixed Effects ◽  
Management Strategies ◽  
The United States ◽  
Least Square ◽  
Content Type ◽  
The Impact ◽  
Second Wave ◽  
Practical Implications

PurposeThis study compares the impact of the COVID-19 pandemic on stock returns in the first two waves of infection across selected markets, given built-in corporate immunity before the global outbreak.Design/methodology/approachThe data are collected from listed firms in five markets that have experienced the second wave of COVID-19 contagion, namely the United States (US), Australia, China, Hong Kong and South Korea. The period of investigation in this study ranges from January 24 to August 28, 2020 to cover the first two COVID-19 waves in selected markets. The study estimates the research model by employing the ordinary least square method with fixed effects to control for the heterogeneity that may confound the empirical outcomes.FindingsThe analysis reveals that firms with larger size and more cash reserves before the COVID-19 outbreak have better stock performance under the first wave; however, these advantages impede stock resilience during the second wave. Corporate governance practices significantly influence stock returns only in the first wave as their effects fade when the second wave emerges. The results also suggest that in economies with greater power distance, although stock price depreciation was milder in the first wave, it is more intense when new cases again surge after the first wave was contained.Practical implicationsThis paper provides practical implications for corporate managers, policymakers and governments concerning crisis management strategies for COVID-19 and future pandemics.Originality/valueThis study is the first to evaluate built-in corporate immunity before the COVID-19 shock under successive contagious waves. Besides, this study accentuates the importance of cultural understanding in weathering the ongoing pandemic across different markets.

CEO behavior and sustainability performance: the moderating role of corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amel Kouaib ◽  
Asma Bouzouitina ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Corporate Sustainability ◽  
Least Square ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Impact

PurposeThis paper explores how the tension between a firm's CEO overconfidence feature and externally observable hubris attribute may determine the level of corporate sustainability performance. This work also contemplates the impact of the moderator “corporate governance practices.”Design/methodology/approachThis study uses a sample of 658 firm-year-observations using a sample of European real estate firms indexed on Stoxx Europe 600 Index from 2006 to 2019. To test the developed hypotheses, feasible generalized least square (FGLS) regression is applied.FindingsFindings suggest that a good corporate governance score strengthens the positive effect of the psychological bias (CEO overconfidence) on corporate sustainability performance while it fails to attenuate the negative effect of the cognitive bias (CEO hubris).Research limitations/implicationsThe research provides an overview of the impact of CEO personality traits on the corporate sustainability performance level in the European real estate sup-sector. As corporate governance can have a major impact to control these traits, the authors recommend European real estate companies to improve their corporate governance practices.Originality/valueThis study contributes to the existent literature this gap with two empirical novelties: (1) providing a novel insight into sustainability involvement using a sample of European real estate sup-sector and (2) investigating the moderating effect on the link between CEO psychological and cognitive biases and sustainability performance. This study provides empirical evidence that entrenchment problems arising from CEO hubris would not be mitigated by a good corporate governance practice.

Sign in / Sign up

Export Citation Format

Share Document