Contract Enforcement and Trade

The main objective of this paper is to investigate the effect of contract enforcement on trade in a large sample of developing economies. The effects of three separate measures capturing contract enforcement (the time required to enforce a contract; the costs to enforce a contract; and the number of procedures required to enforce a contract) on trade were tested using the panel corrected standard errors method of estimation. The results show that the three measures of contract enforcement are negatively and statistically significantly correlated with trade. The findings lead to the conclusion that the ease of contract enforcement is crucial in order to facilitate the speed of trade in the developing group of countries.     

Consumer well‐being and social responsibility of subsistence entrepreneurs in subsistence marketplace

Business malpractices, such as the sale of overpriced, underweight and adulterated foodstuffs and essential commodities, can pose serious threats to subsistence consumers' wellbeing, given they are more vulnerable than their affluent counterparts. Drawing on 40 interviews with subsistence entrepreneurs in Bangladesh and Sri Lanka, our findings provide insights into the interplay between religiosity and social responsibility of entrepreneurs. We further explore how socio‐economic conditions and local embeddedness—two important characteristics of individuals in subsistence marketplaces—moderate the relationship between religiosity and social responsibility of entrepreneurs, providing implications for consumer welfare at the macro‐level. Our research makes a distinctive contribution to three streams of literature relating to social responsibility, subsistence marketplaces, and consumer affairs, with specific policy implications.     

Ethical Foundations of the Islamic Financial Industry

Journal of Business Ethics - This paper examines the ethical foundations of the Islamic financial industry which is strongly criticized for its similarity with conventional finance. In this paper,...     

ISLAMIC BANKING,COSTLY RELIGIOSITY,AND COMPETITION

In this article we explain how Islamic banks (IBs) maximize profitability in the presence of costly religiosity. Because of strong competition between IBs and conventional banks (CBs), a unique equilibrium emerges that affects the IB pricing structure. We propose a new model that identifies the optimal rate on the asset and liability sides of IBs. It shows that the financial products offered by IBs are not an exogenous function of religiosity; instead, they are endogenously determined by the nature of market forces in which IBs are operating. We show that in the presence of costly religiosity and competition, the rates of both converge. Moreover, the competitive pricing mechanism induces IBs to structure their asset- and liability-side financial products (particularly Murabaha) with a risk profile similar to that of the CB loan system. This article empirically supports the theoretical propositions by using data from 17 Muslim majority countries where both IBs and CBs coexist from 2000 to 2015. We find that, holding other factors of bank returns constant, competition significantly affects IB asset- and liability-side returns. The analysis also reveals that because of increasing competition between IBs and CBs, the market power of IBs has significantly declined over time.     

THE IMPACT OF THE INSIDER TRADING SCANDAL ON THE INFORMATION CONTENT OF THE WALL STREET JOURNAL'S “HEARD ON THE STREET” COLUMN

We examine the impact of a scandal on the information content in the “Heard on the Street” column of the Wall Street Journal. Following the scandal in 1984, the column is found to have a reduced impact on stock prices for both buy and sell recommendations. However, the stock price response to information later published in the column before the publication day is smaller for the post-scandal period. This result suggests that after the scandal, editors and authors may have become more cautious in guarding against information leaks in the column. The scandal does not appear to have changed the impact of the column on trading volume.     

Sex Differences in the Ultimatum Game: An Evolutionary Psychology Perspective

In the two-person ultimatum game, an allocator is required to split a given sum of money with a recipient. Subsequently the recipient can either accept or reject the offer. If it is accepted, both players receive their respective splits, while if it is rejected neither of them get anything. Using evolutionary psychology as the theoretical framework, we predicted and found that males made more generous offers when pitted against a female as opposed to a male. While females made equal offers independently of the sex of the recipient. That male allocators are altruistic towards female recipients and competitive with male recipients is construed as a manifestation of social rules, which evolve from the male pre-disposition to use resources for attracting mates. In contrast, females have not evolved such a pre-disposition, and thus, female allocators are more concerned about fairness when making offers to recipients. Several alternate explanations of the above findings are discussed and the evolutionary explanation is concluded as the most parsimonious one. Other potential moderators that are amenable to evolutionary explanations, namely, physical attractiveness, age and ethnicity of participants, are also discussed in this context. This revised version was published online in August 2006 with corrections to the Cover Date.     

A Multiagent Approach for Collective Decision Making in Knowledge Management

In this paper we propose an argumentative multiagent model based on a mediator agent in order to automate the resolution of conflicts between decision makers for identifying knowledge that need to be capitalized and that we call “crucial knowledge”. We follow both an argumentative approach and a multi-agent system based on a mediator agent. This new approach allows the mediator agent to elicit preference of decision makers which can be different or even contradictory while exploiting and managing their multiple points of view to identify crucial knowledge. Concrete experiments have been conducted on real data from an automotive company and on randomly generated data. We have observed that a non-argumentative approach is more sensitive to the variation of the number of knowledge than an argumentative one. Indeed, the classification results using the multiagent system are consistent with classifications of human decision makers in nearly 80% of studied cases.