Service Quality of Traditional and Islamic Commercial Banks in Bangladesh

Purpose: This study aims to know the service quality of the different private commercial banks operating in Bangladesh with the rapid advancement in information technology and provide some guidelines to improve their service qualities. Methodology: The study used both primary and secondary data to support the objective. Primary data were collected from 240 customers, of whom 120 customers are from traditional private commercial banks and the rest from private Islamic commercial banks operating in Bangladesh using a structured interview schedule, naming SERVQUAL. The study used a convenience sampling method to select respondents. Secondary data were collected from different journals, newspaper articles, books, and various published sources. An independent samples t-test was conducted in the test of the hypothesis. Findings: This study found a significant difference between the traditional and Islamic commercial banks’ service quality and added that the study area’s customers/clients are not fully satisfied with either traditional private commercial banks or Islamic banks. However, Islamic commercial banks are showing a relatively better picture. Research Limitations: The Study is limited to Bangladesh’s small marginal market and a small sample size of only 240 respondents, which cannot sufficiently reflect the large population’s actual scenario. Practical Implications: The Study will help manage the traditional and Islamic commercial banks and policymakers to improve their service quality and improve monitoring efficiency. Originality/value: The Study extensively identified some factors to improve the traditional and Islamic commercial banks’ service quality for both the banks’ and policymakers’ management. In this regard, the critical factors can be the number of employees and the number of counters, increasing ATM services, ensuring faster services, flexible loan disbursement policy, sufficient floor space, suitable sitting arrangements, and improved online services.

Measurement of Financial Soundness of Life Insurance Companies in Bangladesh: An Empirical Study

Purpose: The study strives to measure insurance companies’ financial soundness in Bangladesh with reference to private sector life insurance companies listed in the Dhaka Stock Exchange (DSE). Methods: CARAMELS ratio analysis and multiple discriminate analysis (MDA) have been employed to determine the results using secondary data sources collected from annual reports for ten-year DSE listed companies. Findings: The study identified a satisfactory capital adequacy ratio (CAR) with a decreasing trend. Reinsurance and actuarial ratio indicate that companies hardly participate in reinsurance. In most cases, all selected companies’ expense ratio during the study period is more than the standard (20 %) of the Insurance Development and Regulatory Authority (IDRA). All the selected insurance companies hold more liquid assets than the necessity. Z scores depicted that all the selected companies are potentially sick position in terms of financial health. Originality/Value: This study measured the financial soundness of life insurance companies in Bangladesh. No in-depth study was conducted in Bangladesh, particularly on measuring the financial soundness of life insurance companies.

Foreign Aid, Debt, Tax Revenue and Government Spending in South Asia: A Panel Analysis

Purpose: Over the years, tax revenue, foreign aid, and debt play a prominent role in finance the South Asian countries’ government spending. Thus, this paper aims to analyze the effects of foreign aid, debt, and tax revenue on government spending in South Asia. Methodology: The study considers six south Asian countries over 25 years from 1990-2014. The panel data method is used to analyze the impact of explanatory variables on the dependent variable. Findings: From the empirical analysis, it is found that foreign aid, tax revenue, and total debt have a positive impact on government spending. It indicates that when these variables increase, government spending also grows significantly. However, a higher interest rate ebbs the volume of receiving debt among the sampled countries. Originality: Under this circumstance, this paper advocate that rational use of tax revenue may abate the aid dependency and debt burden in South Asian countries.

Corporate Liquidity and Profitability Management: A Study on Textile Industry in Bangladesh

Purpose: This study aims to identify, whether corporate liquidity has an impact on profitability management concerning the textile sector in Bangladesh. Design: This is a causal study where the dependent variable is profitability, measured by Return on Assets (ROA) and Return on Equity (ROE). For the independent variables, the study adopts the traditional liquidity variables, namely Current Ratio (CR), Liquid Ratio (LR), and Total Cash Ratio (TCR). This study is based on secondary data collected from the annual reports of selected textile companies. Here, multiple regression analysis and descriptive statistics techniques have been used to actualize the research objectives. Findings: The study shows that there is statistically insignificant impact of liquidity on profitability management. It is unlikely that liquidity has influences on profitability management among the textile companies in Bangladesh. Originality/Value: This study has empirically validated the impacts of corporate liquidity on profitability management. Therefore, the research can be helpful for cash management and increasing profitability concerning the textile sector.

Analysis of the Structural Decomposition of the Textile-Clothing Industry in Bangladesh

Purpose: This paper aims to introduce the technology’s role and the final demand in the textile clothing industry’s growth path (TCI) of Bangladesh. Methodology: This study applies structural decomposition analysis in the input-output framework to measure Bangladesh’s textile–clothing industry structural changes. Structural decomposition analysis is also known as growth accounting in literature. Findings: This paper finds that, from 1975 to 1995, the TCI has grown due to huge domestic demand, from 1995 to 2015, this industry has grown due to export expansion. The technology was never a key factor over low–cost labor for the development of TCI in Bangladesh. Implications: For the sustainable development of the TCI in Bangladesh, domestic demand expansion is significant. Private and public policies should reflect this expansionary (domestic demand expansion) strategy. Originality: Previous studies on the TCI were mainly descriptive; there was no decomposition analysis in the input-output framework. Moreover, this paper decomposes the growth of the TCI into technical effect and final demand effect, which are new in the ready-made garment industry of Bangladesh.

Board Composition, Insider Ownership and Firm Performance: Evidence from Post-Shock Period of Stock Prices in Bangladesh

Purpose: This study attempts to analyze the influence of board structure (board size, board independence, CEO duality, insider ownership) on performance of Bangladeshi listed nonfinancial firms during the post-shock period of stock prices. Methodology: Putting stress on the issue of controlling for any possible endogeneity problems prevails in the effects of structure of board on corporate performance this study employed the Durbin-Wu-Hausman test as the presence of endogeneity severely makes the OLS estimates biased. Therefore, satisfying endogeneity and overidentification tests the observed data have been analyzed by 2SLS as well as OLS regression models. In an attempt to choose the consistent coefficients between OLS and 2SLS a Hausman test was applied. Findings: Results of the study suggest that a board featuring more directors improve accounting measures of performance and a board having more independent directors also significantly assist firms to enhance their market measure of performance. CEO duality is found detrimental to the accounting measures of performance. Apart from, findings support that holding more ownership by insiders leads to enhance firm performance. Thus, it provides empirical evidence to support a view of agency theory that large board, board independence, and insider ownership are good incentives to the firm to monitor and supervise managerial activities and minimize agency problems. Practical Implication: Overall, findings of the study are posing some implications for academics, practitioners, and policy makers in advancing the existing knowledge domain and formulating governance policies in the context of emerging countries like Bangladesh. Originality: The driving force of this work was to investigate how effective the corporate governance directives/notifications in regard to board independence and insider ownership was in protecting the shareholders’ interest during the post-shock period of stock prices in Bangladesh. Therefore, this study provides a robust result with regard to the impacts of reformed corporate governance notification (CGN 2012) on firm performance in Bangladesh.

The Determinants of Green Banking Adoption in Bangladesh: An Environmental Perspective

Purpose: The aim of this paper is to assess the environmental factors’ influence on the green banking adoption in Bangladesh. Design/methodology/approach: This study is an empirical attempt to prove the cause and effect relationship for the hypotheses developed from a conceptual framework for which it has used both descriptive, as well as quantitative research. The survey unit of the analysis administered a simple random sampling technique over 323 respondents by using a structured questionnaire. Findings: The study identified that the customer pressure, the competitor pressure and the community pressure are the salient environmental factors which have a positive influence on green banking adoption in Bangladesh. Practical implications: The study may have significant implications providing the bank management with better understanding of the environmental factors and also the influence of it to find out appropriate strategies required to green banking practice. Research limitations: The research is mostly based on primary data focused only the customers of commercial banks as respondents ignoring managerial samples across the banks. Originality/value: To the best of the author’s knowledge, this study is one of the earliest initiatives to explore the environmental factors and its influence behind the adoption of green banking practices in Bangladesh.