Governance and growth of professional service firms

We argue that partnerships are the optimal governance structure for professional service firms (PSFs) based on our analysis of their need for collegial controls, the use of tacit knowledge, and an investigation of agency costs. However, these factors and the resulting choice of partnership as a governance structure constrain the ability of PSFs to successfully pursue growth strategies. In addition, their growth potential is further circumscribed by diversification limitations, as well as reputational and resource constraints.     

The Effects of Currency Depreciation on Industry Trade Flows between Malaysia and China

ABSTRACT

This article investigates the impact of real depreciation of ringgit/yuan on Malaysian bilateral trade with her largest trading partner, China, over the period of 1987 to 2013. Using disaggregated import and export data from 39 industries, the results from the bounds testing approach to co-integration and error-correction model reveal that the real bilateral exchange rate has short- and long-run effects in the majority of the industries. However, the short-run effects shift into the long run in nine out of 20 import industries and in 13 out of 20 export industries. Most of these are small industries producing intermediate goods.     

Colonialism and environmental perception in Northern Nigeria

Concern about the environment in colonial northern Nigeria developed out of a series of controversies and practices, particularly those relating to agriculture. Increasingly, local practices that have sustained the population and the environment for centuries are subjected to “scientific” scrutiny. Though many of these practices were either misunderstood or not understood at all, this did not stop the subjugation of local practices to “science”. However, this “scientific” enterprise was often conflict-ridden, with important questions being resolved only after the intervention of political authorities. The resulting colonial practices in the fields of irrigation, forest management and the application of chemical fertilizer continue to dominate the thinking of state officials in post-colonial Nigeria, leading to unsustainable policies. An earlier colonial tradition of investigating the practices of local farmers and the constraints therein would have been a more appropriate basis for post-colonial policy.     

Fixprice-flexprice industries among Malaysian agrobased manufacturing: An input-output approach

Industries can be classified into fixprice sectors according to their pricing behaviour. Although Hicks and Morishima have broadly classified manufacturing industries into fixprice and the rest of the economy into flexprice, using cost-based input-output models, the present paper reclassifies Malaysian agrobased manufacturing into flexprice and nonagrobased manufacturing into fixprice categories. By compiling annual sectoral price indices, both for intermediate and primary inputs, the model estimates sectoral residual profits of 1978 and 1983 vintage technologies.     

Perceived Environmental Dynamism and Managerial Risk Aversion as Antecedents of Manufacturing Outsourcing: The Moderating Effects of Firm Maturity

This study investigates how perceived environmental dynamism and managerial risk aversion influence a firm's manufacturing outsourcing activities. Based on a survey of 86 small manufacturing firms, the study found that higher levels of perceived environmental dynamism and managerial risk aversion are associated with increased outsourcing activity. These relationships are moderated by firm maturity such that newer firms engage in more manufacturing outsourcing than their mature counterparts when the environment is perceived to be more dynamic. Mature firms were found to outsource more than newer firms when their top-management teams were relatively more risk averse.     

The balance sheet channel of monetary policy: the panel evidence of Egypt

This paper examines the effects of monetary policy on firms’ investments in Egypt using disaggregated data and generalized method of moments (GMM) technique. It develops the neoclassical investment model by adding the interaction between user cost of capital and cash flow (CF). Therefore, monetary policy affects investment through three effects: user cost of capital, CF and interaction between them. Using a sample of 124 firms, the empirical finding supports the relevance of balance sheet channel (BSC) and the heterogeneous effect of monetary policy on investment. This finding signals that monetary authority should take cognizance of the stability of interest rate to stabilize firm-level investment.     

To Help or Not to Help? The Good Samaritan Effect and the Love of Money on Helping Behavior

This research tests a model of employee helping behavior (a component of Organizational Citizenship Behavior, OCB) that involves a direct path (Intrinsic Motives → Helping Behavior, the Good Samaritan Effect) and an indirect path (the Love of Money → Extrinsic Motives → Helping Behavior). Results for the full sample supported the Good Samaritan Effect. Further, the love of money was positively related to extrinsic motives that were negatively related with helping behavior. We tested the model across four cultures (the USA., Taiwan, Poland, and Egypt). The Good Samaritan Effect was significant for all four countries. For the indirect path, the first part was significant for all countries, except Egypt, whereas the second part was significant for Poland only. For Poland, the indirect path was significant and positive. The love of money may cause one to help in one culture (Poland) but not to help in others. Results were discussed in the light of ethical decision making.

The quality effect: Does financial liberalization improve the allocation of capital?

We document evidence of a “quality effect” of financial liberalization on allocative efficiency, as measured by dispersion in Tobin's Q across firms. We predict that financial liberalization, by equalizing access to credit, is associated with reduced variation in expected marginal returns. We test this prediction using a new financial liberalization index and firm-level data for five emerging markets: India, Jordan, Korea, Malaysia, and Thailand. We find robust evidence that financial liberalization, rather than financial deepening, is associated with improved allocative efficiency.     

Economic uncertainty and growth performance: a macroeconomic modeling analysis for Pakistan

This paper investigates the effects of economic uncertainty on growth performance of Pakistan through developing a small macroeconomic model. The GARCH method has been used for construction of economic uncertainty variables related to macroeconomic policies. The structural outcomes clearly indicate that economic policy uncertainty affects negatively on real and nominal sectors of Pakistan. The forecasting of model and different policy uncertainty simulation shocks also indicated that an adjustment in economic policies due to change of policy objectives create uncertain environment in country, which not only deteriorates the investment climate of country, it also affects the economic growth. Our study concludes that economic uncertainty not only reduces the current investment and economic growth, it also affects the future decision of investment and economic growth. This study suggests that sustainable and steady economic policies always reduce economic uncertainty and promote the confidence of economic agents, which help in achieving the targets of investment, trade and economic growth. Our study also maintains the predictability and reliability of government policies for the accomplishment of macroeconomic goals and economic development of country.     

Foreign and Domestic Shocks: Macroeconomic Responses of ASEAN-3 Countries

Abstract

The study provides new empirical evidence on the relative importance of foreign and domestic shocks on selected ASEAN-3 (Malaysia, Indonesia, and Thailand) macroeconomic variables. Three structural vector auto regression models are estimated for each country. The focal point is given on the formulation of the sources of foreign factors. The first model uses trade-weighted foreign variables of both US and Japan to represent the foreign factors. The other two models use US and Japan by themselves, respectively, to represent the foreign factors. Two important results are emerged. First, foreign sectors play an important role in influencing macroeconomic variables of each of the ASEAN-3 country, especially in the medium and the long-run horizon. Second, most of the time, the Japanese factors are more dominant than the US factors in influencing domestic output and inflation for each of the ASEAN-3 countries.