An emerging Asian niche market for exports

The primary aim of this article is to explore the potential of the Australia‐Sri Lanka trade relationship. In achieving this, the business climates of both markets that are considered vital to effective trading are discussed in detail. Thus, the article analyzes, explores, and provides the rationale for tagging Sri Lanka as an emerging niche market for exports. This research article preserves its originality in providing vital analysis and trends in international business between the two countries, which is beneficial not only for potential exporters in the rest of the world, but also for the academics and economic policymakers. © 2010 Wiley Periodicals, Inc.     

State vs. market in search of good governance: The case of Sri Lanka telecommunications industry reforms

This research investigates the relationship between the state and the market under independent regulation that accompanied telecommunications‐sector reforms in Sri Lanka. It assesses whether the telecommunications regulator has been functioning in line with market principles. Building on the findings of an exploratory study undertaken for a doctoral degree in 2006–07, the study finds that the regulator has been performing under a plethora of constraints: institutionally, politically, legally, and socially. Institutionally, the regulator is affected by its own internal problems, a lack of capability and capacity, and a complexity created by the other agencies. Politicians have become exceptionally powerful, affecting every function of the regulator. Legal provisions have proven inadequate. Socially, regulatory functions are affected, causing delays. It is important to highlight the fact that these are interconnected; one creates or influences another. The findings suggest that the environment in which the regulator operates affects the credibility and effectiveness of a regulatory framework. The authors, with their extensive expertise, argue that such blockages could be overcome through various measures proposed in the conclusion. © 2010 Wiley Periodicals, Inc.     

What Men and Women Really Want: Differences in Gender-Based Evaluations of Service Recovery Efforts

Under increasing domestic and global pressures, the survival of small agri-businesses in developing countries such as Sri Lanka is being challenged because of their poor strategic focus and weak coordination along the supply chain. The quality, efficiency, and versatility of production, processing, distribution, and marketing systems play a significant role in the competitiveness of agri-businesses. Improved competitiveness requires closer coordination along the supply chain so as to decrease transaction costs and create opportunities for differentiation. In Sri Lanka, the government has a greater role to play in developing an enabling environment for the chains to which small agri-businesses belong.     

Public-Sector Accounting and E-Governance in Developing Countries: Case of Sri Lanka

This article analyzes how new public financial management system should address the efficiency and effectiveness of the public sector and the emerging accrual basis accounting with e-governance for greater e-transparency on public-sector accounting in Sri Lanka. Despite the setting up of e-framework in 1983, the Sri Lankan public-sector accountancy environment during the last two decades raises concerns about efficiency, effectiveness, and accountability of the e-framework. The findings provide evidence of the importance of the economy and efficiency in the usage of public funds to provide more convenient access to government accounting information for citizens in Sri Lanka.     

Doing business in China I. The business environment in China—getting to know the next century’s superpower

This article is the first of two parts of a comprehensive analysis regarding the key issues involved in doing business in China. By examining the complex business environment, it aims at helping foreign businessmen and investors to master the key background knowledge for being successful in the Central Kingdom ("know‐what"). A key theme is China’s immense diversity, variety, and complexity, as well as enormous competitive intensity, which are unrivaled by any other market in the world. Foreign businessmen often underestimate these aspects. The article reviews China’s historical development, political structure and climate, international relations, economy, and foreign trade. China’s infrastructure and energy structure, legal framework, competitive environment, as well as market structure and potential also are analyzed. © 2000 John Wiley & Sons, Inc.     

Doing Business in India

On its independence in 1947, India was among the two most industrialized nations in Asia. Since then it adopted a “mixed economy” approach that hindered its national growth and the optimum utilization of its immense resources (both natural and human). To re‐establish itself as an economic force in the region, India liberalized its economy in early 1990s. The adoption of the “free market economy” model has created great opportunities for foreign businesses. This article provides useful information on the complex business environment, aimed to help foreign businessmen and investors to develop a good understanding on key background knowledge for being successful in India. It reviews Indian historical development, political structure and climate, international relations, and economy and foreign trade. India's infrastructure, legal framework, socio‐cultural set‐up, competitive environment, as well as market structure and potential are also analyzed. © 2001 John Wiley & Sons, Inc.     

Economic Roots of Political Conflict: The Case of Sri Lanka

The escalation of political conflicts in many developing countries and their impact on economic development have been topical issues in recent development literature. The overwhelming emphasis on ‘ethnic conflicts’ in the literature has, however, precluded analysts from looking at political conflicts beyond their ethnic dimension, in the wider context of the development process. In particular, because of the preoccupation with ethnic roots as the prime source of these conflicts, reverse causation, running from economic policy to political conflict, has been virtually ignored in the debate. The purpose of this paper is to fill this gap through an in‐depth case study of the ‘twin political conflict’ in Sri Lanka – the Tamil separatist war in the North and the Sinhala youth uprising in the South – with emphasis on its economic roots. The findings suggest that fundamental contradictions in the national development policy in the restrictive trade regime of Sri Lanka were at the heart of the country's twin political conflict.     

Diversification potential of Asian frontier,BRIC emerging and major developed stock markets: A wavelet-based value at risk approach

This study examines the portfolio risk and the co-movements between each of the BRIC emerging and South Asian frontier stock markets and each of the major developed stock markets (U.S., UK and Japan), using the wavelet squared coherence approach as well as the wavelet-based Value at Risk (VaR) method. The results show that the co-movements and diversification benefits between these markets vary over time and across frequencies. Additionally, the co-movements are intensified in the wake of the recent global financial crisis (GFC) and the Eurozone sovereign debt crisis (ESDC). More precisely, the wavelet-based VaR ratio indicates that including a BRIC or a South Asian (particularly Pakistan and Sri Lanka at both the short- and long-term) stock market in a portfolio of the developed stock markets reduces the resulting portfolio's VaR. Specifically, adding China in the medium term to this portfolio reduces risk in the pre- and during both the GFC and ESDC periods. By assigning optimal weights to the different market assets in the portfolio formulation, the analysis thus has implications for international investors.     

Determinants of Speed of Adjustment (SOA) toward Optimum Capital Structure: Evidence from Listed Firms in Sri Lanka

This research article aims at examining the determinants of speed of adjustment (SOA) toward the optimum capital structure (OCS). Particularly, this study focuses the impact of firm-specific factors and corporate governance factors on the capital structure adjustment in the Sri Lankan context. The methodology utilizes the benefits of the partial (stock) adjustment model, namely, two-step panel framework using generalised method of moments (GMM) to determine the SOA to OCS. The results indicate that Sri Lankan firms are found to have an OCS and do rapidly adjust toward their target structures. Further this study reveals that profitability, size, tangibility, nondebt tax shields, and governance factors such as directors’ compensation and CEO duality significantly affect the SOA to OCS. The past studies in the emerging market context hardly go into corporate governance factors, leaving a large space for research in the area of capital structure. This study of the listed firms in Sri Lanka contributes to the literature, by examining the determinants of SOA to OCS decision.     

Going Alone: The Case for Relaxed Reciprocity in Freeing Trade

We examine the output elasticity of infrastructure for four South Asian countries viz., India, Pakistan, Bangladesh, and Sri Lanka using panel cointegration techniques for the period 1980–2005. In this context, we develop an index of infrastructure stocks and investigate the impact of infrastructure on output. The study finds a long-run equilibrium relationship between output and infrastructure along with other relevant variables, such as gross domestic capital formation (GDCF), labor force, international trade and human capital. The results reveal that GDCF, labor force, export and expenditure on human capital exhibit a positive contribution to output. More importantly, infrastructure development contributes significantly to output growth in South Asia. Further, the panel causality analysis shows that there is mutual feedback between total output and infrastructure development.     

Sectoral Analysis of Corporate Capital Structure Choice–Emerging Market Evidence from Sri Lanka

ABSTRACT

This paper empirically investigates the overall corporate capital structure of the Sri Lankan-listed companies, the determinants in general and the inter-industry differences in particular. The impact of ten determinants has been analyzed cross-sectionally, both for the market as a whole and for each individual industry, to observe any sectoral differences. Though the long-term debt utilization is relatively low in the financial structure of Sri Lankan firms, the variables of capital structure choice are not significantly different from those located in developed markets signaling a positive move towards a market-driven economy. Yet, variations could be seen across industry classes to some extent in terms of their capital structure decisions, confirming the evidences of literature.     

Enhancing youth's attitudes towards microcredit in the bottom of the pyramid markets

The bottom of the pyramid (BOP) market comprises a huge customer size of approximately 4 billion globally; hence, segmentation is necessary within this market. The BOP market refers to an aggregate of customers who survive on relatively low‐income levels. In this respect, youth in war‐affected regions can be considered to be a segment of the BOP market. However, there is scant research on customers' attitudes and purchase behaviours in the BOP markets or segments therein. Hence, the purpose of this research is to investigate war‐affected youth's attitudes towards microcredit and the related drivers of these attitudes. The literature revealed four types of attitudes towards microcredit: positive affect, perceived benefits, perceived deterrents and default risk perceptions. Also, knowledge of microcredit and entrepreneurial desire were considered to be the drivers of these attitudes. A total of 795 valid completed surveys were collected from youth aged 18 and above who live in the Northern Province of Sri Lanka. The findings revealed that positive affect enhanced intentions to obtain microcredit, whereas perceived deterrents reduced them. Knowledge of microcredit enhanced attitudes towards microcredit. Also, entrepreneurial desire enhanced the association between positive affect and intentions to obtain microcredit and it decreased the negative association between perceived deterrents and intentions to obtain microcredit. The implications to theory and practice have been discussed which will go a long way in enhancing the attitudes towards microcredit among war‐affected youth and possibly those in the other segments of the BOP market.     

SriLankan Airlines Offers 50% off on Fares and Packages for Golden Jubilee of China- Sri Lanka relations

SriLankan Airlines is offering an amazing 50% off on airfares from Beijing to Colombo and holiday packages in Sri Lanka, to celebrate 50 years of close relations between China and Sri Lanka.     

Third world strategies for regulating drug advertising and marketing

In the pharmaceutical area, third world countries have been particularly subjected to excessive pricing and manipulative marketing practices by multinational corporations. Sri Lanka has gained some experience in curbing abuses by establishing a State Pharmaceuticals Corporation. It has been able to achieve substantial price cuts for pharmaceuticals and to adapt to changing economic and political circumstances. The control of advertising and marketing practices remains a problem but has been tackled in Sri Lanka by an Act of 1980. Until similar laws are enacted greater attention should be given to the individual patient by doctors becoming more circumspect in prescribing drugs.

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Strategien der Länder der Dritten Welt zur Regulierung des Vertriebs und der Werbung von Arzneimitteln

Zusammenfassung Länder der Dritten Welt sind für multinationale Unternehmen auf dem Arzneimittelsektor ein bevorzugtes Objekt für Ausbeutung durch überhöhte Preise oder manipulatives Marketing. Der Autor, mit diesen Problemen an leitender Stelle persönlich vertraut, beschreibt Versuche in Sri Lanka, Mißbräuche ausländischer Unternehmen durch Errichtung einer staatlichen pharmazeutischen Gesellschaft (State Pharmaceuticals Corporation) zu bekämpfen.Das Unternehmen hat wesentliche Preisreduzierungen für Arzneimittel erreicht und sich an geänderte wirtschaftliche und politische Verhältnisse anpassen können. Werbung und Vertriebsmethoden werden neuerdings in Sri Lanka — wie in anderen Ländern der Dritten Welt — durch ein Gesetz von 1980 kontrolliert, das allerdings für homöopathische und ähnliche Produkte nicht gilt. In der Zukunft kommt es darauf an, den individuellen Patienten durch eine vorsichtigere Verschreibung von Arzneimitteln mehr Aufmerksamkeit zu widmen.

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D. C. Jayasuriya is Attorney-at-Law and Senior State Counsel. His address is 40/12, Swarnadisi Place off Koswatte Road, Nawala, Sri Lanka.     

CPIT Further Pushing China-Sri Lanka Business Cooperation

In the mid-December, Dong Song-gen, Vice President of CCPIT led a .delegation to visit Sri Lanka. Dur-ing the visit, Mr. Dong met Mr. Kosala, President of Sri Lanka Industrial and Commerce Association and Mr. Peiris, Minister of Trade.     

Market Orientation in a Sample of Food and Beverage Processing Firms in the Western Province,Sri Lanka

This study empirically investigates the market orientation strategy of firms operating in the food and beverage industry in the Western Province of Sri Lanka. Market orientation was conceptualized through three sets of activities: intelligence generation, intelligence dissemination, and responsiveness. Firms were grouped based on the level of market orientation and were compared. It was revealed that one group had a separate marketing division with specialized marketing personnel and a positive top management philosophy toward market orientation. Firms in this group showed a greater level of performance compared to firms in other groups.     

The Growing Dominance of China in South Asia: An Indian Perspective

India's economic relations with its neighbors are important for the stable and peaceful development of the South Asian region and for its own security. In a globalized world, economic relations play a major role in deciding political relations and collaboration at multilateral fora. In the context of China's increasing trade and investment relations with India's neighboring countries, the present study examines where and how China has been improving its presence vis-à-vis India in Bangladesh, Pakistan, Sri Lanka, and Nepal. Further, the study also explores the factors of India's loss of market in its neighboring countries and suggests remedial measures.     

Factors Affecting Ethical Management: Comparing a Developed and a Developing Economy

This paper compares a number of ethical management practices of firms in two different economies. The recent behaviour of firms, described in terms of industry, size, international involvement and ownership, in a developed, western economy (Australia) are contrasted with the behaviour of similar firms in an emerging, eastern economy (Sri Lanka). This paper extends an earlier empirical study by Batten, Hettihewa and Mellor (1997) on the relationship between key firm-specific variables and firm ethical management practices in Australia by drawing on similar survey data from Sri Lanka to facilitate an international comparison. The importance of this study is that it provides a valuable insight into the impact the level of economic development may have on ethical management behaviour and practice.     

中国茶叶在日本市场的价格竞争力研究

本文分析了中国茶叶在日本市场的价格走势,在此基础上利用LA-AIS模型对中国茶叶在日本市场的价格竞争力进行了实证分析。结果表明,在日本市场,除斯里兰卡外,中国茶叶的价格竞争力高于其他国家。中国茶叶在日本市场的策略重点是:不断改善产品质量以符合日本市场的准入要求。     

Indian economy and Indian private equity

India's gross domestic product has been growing at more than 8% in the past few years, making it the fourth‐largest economy in terms of purchasing power parity. According to a Goldman Sachs report, India could become the second‐largest economy in the world by 2050. The key growth drivers are investments in infrastructure, domestic consumption, and a hub for global outsourcing. This is further supported by growth‐oriented policies by the government. The favorable environment has led to the growth of the private equity market. India received approximately U.S. $17.5 billion of investments in private equity in 2007, making it the number‐one destination in Asia. Indian private equity has been mainly focused on providing growth/expansion capital to the company as compared to buyouts in the developed markets. © 2008 ICICI Bank Limited. Printed with permission.