Multidivisional structure and capital structure: The contingency of diversification strategy

This study examines the relationship between the implementation of the multidivisional (M-form) organizational structure, capital structure and diversification strategy. Findings indicate that implementation of the M-form structure from a hierarchical (U-form) structure is associated with a general increase in the long-term debt-to-equity ratio for all firms, a result that supports a free-cash-flow argument for the use of debt in restructuring to reduce the opportunism of management. Further, as implied by arguments from transaction cost economics, the debt-to-equity ration differs for different types of diversification strategy.     

Unemployment and underemployment in Bangladesh agriculture

The paper starts with a critique of the various concepts of unemployment and underemployment from which follows the framework in which the author seeks to investigate and estimate unemployment and underemployment. Unemployment is broken down into various categories so that one can know the composition of the agricultural unemployed and underemployed. All the previous estimates had failed to provide such information. In the rest of the paper various estimates are made and implications discussed in the contest of the framework outlined and using first hand information from a survey of some villages conducted by the author himself.     

Luddites, the industrial revolution, and the demographic transition

Technological change was unskilled-labor-biased during the early industrial revolution, but is skill-biased today. This implies a rich set of non-monotonic macroeconomic dynamics which are not embedded in extant unified growth models. We present historical evidence and develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. In a setup with directed technological change, and fixed as well as variable costs of education, initial endowments dictate that the early industrial revolution be unskilled-labor-biased. Increasing basic knowledge then causes a growth takeoff, an income-led demand for fewer but more educated children, and a transition to skill-biased technological change in the long run.     

Conceptualizing Consumer Ethnocentrism in a Developing Country: Validity and Applicability of CETSCALE in Bangladesh

This article argues that the traditional belief that “consumer ethnocentrism is a phenomenon of the developed countries only” is no longer true. To establish this argument, this study assesses the applicability of the Consumer Ethnocentric Tendencies Scale (CETSCALE) to a developing country Bangladesh. The methodology is based on 788 samples collected from 27 districts of Bangladesh. Results show that for three chosen sociodemographic groups namely, students, job holders, and businessmen, the CETSCALE is to a much extent applicable as the groups have shown positive attitudes in retaining 12 to 14 items out of the 17 items of the original scale.     

Variance swaps,non-normality and macroeconomic and financial risks

This paper studies the determinants of the variance risk premium and discusses the hedging possibilities offered by variance swaps. We start by showing that the variance risk premium responds to changes in higher order moments of the distribution of market returns. But the uncertainty that determines the variance risk premium – the fear by investors to deviations from normality in returns – is also strongly related to a variety of macroeconomic and financial risks associated with default, employment growth, consumption growth, stock market and market illiquidity risks. We conclude that the variance risk premium reflects the market willingness to pay for hedging against these financial and macroeconomic sources of risk. An out-of-sample asset allocation exercise shows that the inclusion of the variance swap reduces the modified value-at-risk with respect to a portfolio holding exclusively the equity market portfolio.     

Price volatility and the political economy of resource-rich nations

This paper attempts to understand how price volatility affects the political transition of a resource-rich nation. Two states reflect price volatility: ‘high prices’ and ‘low prices’. We argue that whether or not political transition (i.e., a switch from one regime to another) will take place in a particular state depends critically on the kind of goods a country produces. If the main economic activity in a country is the extraction of “point-source” resources such as oil that demands capital-intensive production, the opportunity cost of switching the existing regime does not alter if the price of the resource changes but the benefit becomes more lucrative. Therefore, the incumbent group is most vulnerable during ‘high prices’. If the main economic activity of the nations is the production of “diffused resources” such as coffee that requires labor, prices do affect the opportunity cost. Nations concentrating in these commodities face acute political crisis during downturns.     

The Role of Individual Variables,Organizational Variables and Moral Intensity Dimensions in Libyan Management Accountants’ Ethical Decision Making

This study investigates the association of a broad set of variables with the ethical decision making of management accountants in Libya. Adopting a cross-sectional methodology, a questionnaire including four different ethical scenarios was used to gather data from 229 participants. For each scenario, ethical decision making was examined in terms of the recognition, judgment and intention stages of Rest’s model. A significant relationship was found between ethical recognition and ethical judgment and also between ethical judgment and ethical intention, but ethical recognition did not significantly predict ethical intention—thus providing support for Rest’s model. Organizational variables, age and educational level yielded few significant results. The lack of significance for codes of ethics might reflect their relative lack of development in Libya, in which case Libyan companies should pay attention to their content and how they are supported, especially in the light of the under-development of the accounting profession in Libya. Few significant results were also found for gender, but where they were found, males showed more ethical characteristics than females. This unusual result reinforces the dangers of gender stereotyping in business. Personal moral philosophy and moral intensity dimensions were generally found to be significant predictors of the three stages of ethical decision making studied. One implication of this is to give more attention to ethics in accounting education, making the connections between accounting practice and (in Libya) Islam. Overall, this study not only adds to the available empirical evidence on factors affecting ethical decision making, notably examining three stages of Rest’s model, but also offers rare insights into the ethical views of practising management accountants and provides a benchmark for future studies of ethical decision making in Muslim majority countries and other parts of the developing world.     

Determinants of Demand for Delivery Services in Sudan: An Empirical Investigation with Reference to Khartoum State, 2004*

Abstract: Using multinomial logistic methods, we examined the determinants of the delivery care seeking behavior of women in Khartoum State of Sudan, as well as the impact of changes in the attributes of public delivery services on the market shares of delivery services. Time distance and transportation cost have significant negative effects, while the random ‘quality’ coefficient is positive but not significantly different from zero. Further, the likelihood of choosing home over public delivery services increases with order of birth. The positive effects of women's education and household income are most important for those who prefer private over home delivery whereas the use of modern antenatal services is decisive in choosing modern over home delivery. Also, shifts in demand toward public delivery services resulting from improvements in quality and qualifications of medical staff might be undermined by the reduction in demand emanating from a rise in the order of delivery, time distance and transportation cost to public delivery institutions. The income effects are more pronounced, particularly for the share of private delivery services. Educated women tend to shift from home to modern delivery services.