The Impact of Liquidity on Debt Maturity After a Financial Crisis: Evidence from the Gulf Cooperation Council Region

This article contributes to the existent literature on corporate debt maturity by studying a new channel through which firms may mitigate the effects of a major economic downturn such as the 2008 global financial crisis. More specifically, using a sample of 208 listed firms in the Gulf Cooperation Council (GCC) region, we find that an increase in firms’ current ratios after the crisis is associated with an increase in long-term financing. We also find that a financially constrained firm can still access long-term financing if its current ratio after the crisis is beyond a specific threshold. Additionally, we highlight the differences in the typical drivers of debt structure between GCC countries and industries.     

The UK New Regulatory Framework of High-Cost Short-Term Credit: Is There a Shift Towards a More “Law and Society” Based Approach?

In the wake of the 2008 financial crisis, the consumer credit market in the UK has witnessed a proliferation in the number of high-cost short-term credit (HCSTC) providers promising easy access to credit without the complications of credit history. This act of generosity came at a very high price, which on some occasions reached 4000% APR. After refusing for many years to interfere with the credit price and other aspects of the HCSTC business’ practices, the Government since 2014 started to impose certain regulatory restrictions on the sector including a cost cap, January 2015, on what HCSTC providers can charge. This article argues that the FCA’s credit cost cap and other regulatory measures taken since 2014 signify an important shift in the regulatory approach to HCSTC. It argues that the neoliberal ‘law and economics’ theoretical paradigm is no longer the foundation of the regulatory framework. Instead, the Government has shifted towards a Polanyian ‘law and society’ based approach, which is attentive to the vulnerability of HCSTC consumers and consequently more capable of protecting them. This article concludes by arguing how this newly adopted approach can be further advanced.     

Ethnic minority consumers' responses to sales promotions in the packaged food market

Many scholars have stressed the significance of understanding ethnic minority subcultures and the associated cultural dimension for marketing. Most of the previous research involving ethnic minority consumers has largely focused on coupon usage and remains North American in origin and application. Also, previous research emphasises the short-term nature of sales promotions, ignoring their dynamic effects in specific consumption settings such as the family. The paper explores ethnic consumers' responses to different sales promotional formats for packaged food products in family settings. Face-to-face in-depth interviews were conducted in original settings involving ethnic participants who regularly shopped at mainstream supermarkets, and who were the principal grocery shoppers for the family. Findings suggest that sales promotions have the potential to make consumers more responsive, less responsive or even hostile to sales promotional offers and while some promotions are better perceived than others, their overall effectiveness is largely determined by their “net-worth” as perceived by ethnic consumers in a given shopping situation. The paper discusses implications for retailers, particularly for those having store locations in market areas with high concentrations of ethnic consumers.     

Efficiency and risk in commercial banking: empirical evidence from East Asian countries

This paper analyses the effects of off-balance sheet (OBS) activities and various types of risks on the cost and profit efficiencies of banks in seven East Asian countries between 2001 and 2008. Cost and profit efficiency scores are estimated using the data envelopment analysis approach. The results of this analysis are then used to identify the impact of OBS activities and risk exposures on cost and profit efficiencies using a Tobit regression. Bank insolvency risk (as measured by z-scores) is positively related to profit efficiency, while interest sensitivity, size, equity to total assets and OBS exposures all impact on cost efficiency. The analysis of the impact of input and output slacks illustrates that in around 1 in 5 cases banks’ cost efficiency can be improved by adjusting the former variables, whereas in only around 1 in 100 cases a similar outcome is possible for profit efficiency.     

Currency crisis transmission through international trade

The Eurozone recent crisis has shown how balance of payments problems in less developed European Monetary Union (EMU) member countries can affect EMU trading partners, spreading the crisis to a larger group of countries. This paper introduces a three-country dynamic general equilibrium model to analyze whether and how terms of trade effects can generate a spillover effect or a currency crisis transmission between countries. Specifically, using a two period model, it incorporates world market clearing conditions for tradables into a new theoretic model, analyzes net capital flow movements between countries, and establishes cross-border macroeconomic linkages. This paper shows how a currency crisis can transmit through the real (trade) sector channel of the economy.     

Invariance of conditional maximum utility

The consumer benefit in a discrete choice model is often measured by maximum utility. We characterize the conditional (on the chosen alternative) and the unconditional distribution of maximum utility. We show that among a wide class of distributions (independent with convex supports) of error terms, the Type I extreme-value distribution is the unique distribution which ensures that all the conditional distributions of maximum utility coincide. Moreover, we show that for i.i.d. (with convex support) error terms, the invariance of conditional expected maximum utility characterizes the multinomial logit model.     

Tourism in ASEAN-5: A novel panel unit-root test for shocks persistence with gradual structural breaks and common factors

This study investigates whether shocks to tourist arrivals in Indonesia, Malaysia, Philippines, Singapore, and Thailand (ASEAN-5) are permanent or transitory, given the frequent and severe external shocks experienced by the tourism industry. Using monthly data from 2000 to 2019, we employ a novel panel unit-root test that controls for cross-correlations, multiple gradual structural breaks, and other nonlinearities present in the data to assess the stationarity properties of tourist arrivals. Additionally, we apply a panel unit-root test that controls for cross-correlations and allows for abrupt structural changes for robustness. The empirical findings reveal that shocks to tourist arrivals in the ASEAN-5 countries exert persistent effects. Our results demonstrate nonstationarity within the series, illuminated by our careful consideration of both gradual and abrupt structural breaks. This finding underscores the necessity for policy interventions to mitigate the impact of adverse shocks on the tourism industry.     

Problem-centred research and knowledge-based theory in the professional accounting setting

The paper discussess the emerging need for theory development and much more extensive task and context analysis with respect to cognition in the professional accounting setting (“accounting” being taken to include the various accounting, auditing, tax and related subjects about which accounting professionals exercise judgment). The paper examines how such theory development and task and context analysis can improve the research and its contribution to understanding the professional settings that are the province of accounting research. Our analysis reflects our proposal that accounting judgment research contribute more strongly to the general body of accounting research, and deal better with practitioners' problems. From our analysis, we conclude that the lack of theory development is associated with several problems in the research, including an over-emphasis on transference of simplified models from psychology, inappropriate use of normative criteria for evaluating performance, and an over-emphasis on accountants and auditors rather than accounting and auditing. We offer a large number of constructive comments about task analysis, theory development and other steps to guide future accounting judgment research.