Bankers’ perception towards Bai Salam method for agriculture financing in Pakistan

Islamic banking is planning to increase its market share up to 12 per cent of the total banking sector in Pakistan by 2012, as compared to its current market share of 5.6 per cent. This article collected the bankers’ views towards agriculture financing under the Islamically acceptable mode – Bai Salam (forward sale agreements of crop). It further compared agriculture financing under Islamic and interest-based financial systems. Overall, findings from this article are that bankers at large are confused about the application mechanism of Bai Salam contracts mainly because of improper land record maintained by the Revenue Department, widespread illiteracy and current government policy of issuing a single loan against each passbook (property record). The article presents recommendations that can be useful for the financial institutions not only in developing effective monitoring mechanisms, but also in minimizing financial losses.     

Consumer response to child tax credit

This article uses micro-level data from the Consumer Expenditure Survey (CEX) to study consumers?? spending responses to the child tax credit. The article provides one test of the permanent-income hypothesis (PIH) that infers that temporary changes in income have little effect on consumer spending, at the initiation of the child tax credit in 1997, and a second PIH test when the credit was increased in 2003. The evidence supports the PIH in both 1997 and 2003, even using three different proxies for liquidity-constrained households. Separate from any PIH implications, our findings suggest the child tax credit did not provide a short-term consumption stimulus in either of the time periods studied. Our results therefore cast some doubt on whether this type of tax credit should be considered sound fiscal policy.     

Using the Analytical Hierarchy Process (AHP) to Construct a Measure of the Magnitude of Consequences Component of Moral Intensity

The purpose of this work is to elaborate an empirically grounded mathematical model of the magnitude of consequences component of “moral intensity” (Jones, Academy of Management Review 16(2),366, 1991) that can be used to evaluate different ethical situations. The model is built using the analytical hierarchy process (AHP) (Saaty, The Analytic Hierarchy Process, 1980) and empirical data from the legal profession. One contribution of our work is that it illustrates how AHP can be applied in the field of ethics. Following a review of the literature, we discuss the development of the model. We then illustrate how the model can be used to rank-order three well-known ethical reasoning cases in terms of the magnitude of consequences. The work concludes with implications for theory, practice, and future research. Specifically we discuss how this work extends the previous work by Collins (Journal of Business Ethics 8, 1, 1989) regarding the nature of harm variable. We also discuss the contribution this work makes in the development of ethical scenarios used to test hypotheses in the field of business ethics. Finally, we discuss how the model can be used for after-action review, contribute to organizational learning, train employees in ethical reasoning, and aid in the design and development of decision support systems that support ethical reasoning.     

The relevance of Chinese developmental experience to developing countries

The Chinese experience and success in economic development during the past 30 years are seen as a model by many underdeveloped countries. Since 1952 China has followed 2 different strategies: 1) the radical approach, emphasizing self-reliance, autarchy, and very limited foreign trade and bureaucracy, and, 2) the pragmatic approach, giving priority to heavy industry, sophisticated technology, and centralized control. Since Chinese politics became deeply intermingled with these 2 lines of thought, there is a certain degree of uncertainty about the final direction that will emerge with a degree of continuity. Obviously, evaluating China's developmental experiences for other countries' purposes is not the same as evaluating them for China's purposes. However, in its totality China has been able to demonstrate the validity of certain goals; the transplanting of Chinese strategies in foreign countries, or the mechnical imitation of Chinese innovations would not work every time; but the adoption of certain innovations, if the proper environment is available, would have a positive impact on developing societies.     

Purchasing power parity: Evidence from developing Countries

This paper utilizes the dynamic error-correction model (DECM) to examine the issue of purchasing power parity (PPP) for 11 developing countries (Argentina, Bolivia, Colombia, Cote d'Ivoire, Ecuador, Guatemala, Kenya, Nigeria, Peru, South Africa, and Venezuela). For comparison purposes, evidence from the traditional unit root methods of the augmented Dickey-Fuller (ADF) and Phillips-Perron is presented. The results from the conventional unit root tests failed to find evidence of PPP in all of the cases. However, the results from the generalized error-correction model detected evidence of PPP for nine out of the 11 countries under consideration. Based on these results, it was concluded that PPP holds in the long-run for the sample countries and that the implicit restrictions associated with unit root tests prevented earlier studies from finding evidence in support of PPP theory.The views expressed in this paper are those of the authors only. They do not reflect the views of the World Bank.     

Corporate governance and long run performance of seasoned equity issuers

This paper examines the effect of corporate governance on the likelihood of issuing Seasoned Equity Offerings (SEO) between 1990 and 2005. It also examines the long-run post-issue performance using operating and stock return measures. Our results suggest that well-governed firms are less likely to issue equity. Nevertheless, when they do so, they outperform both matching non-issuers and issuers with minimal shareholders’ rights from pre- to post-issue—with the highest operating out-performance occurring in the two post-issue years. A negative correlation exists between the post-issue performance and the anti-takeover measures, primarily, the protection associated with management entrenchment. Nonetheless, measures of board structure do not appear to affect the post-issue operating performance. Overall, corporate governance appears to be an effective internal control mechanism that restrains managers’ incentives to either take an SEO issuance decision that does not serve the interests of shareholders or invest the capital raised in value-destroying projects.     

Oligopoly models with different learning and production time scales

We propose a modelling approach to study Cournotian oligopolies of boundedly rational firms which continuously update production decisions on the basis of information collected periodically. The model consists of a system of differential equations with piecewise constant arguments, which can be recast into a system of difference equations. Considering different economic settings, we study the local stability of equilibrium, proving the destabilizing role of the time lag between two consecutive learning activities. We investigate some particular families of oligopolies showing the occurrence of both flip and Neimark–Sacker bifurcations, as well as the evidence of multistability with the coexistence between different attractors, occurring when oligopolies consisting of both technologically different and identical firms are studied.     

Social Responsibility and Performance: Does Strategic Orientation Matter for Small Businesses?

This paper examines whether strategic orientation toward corporate social responsibility (CSR) is instrumental in shaping small firms’ social responsibility practices leading to their enhanced financial performance and reputation. Data were collected from 182 small businesses operating in Malaysia based on random sampling technique and analyzed using Partial Least Squares Structural Equation Modeling. Analysis of the findings confirm that small firms’ long‐term strategic approach toward CSR is critical in driving their responsible practices toward environment, customer, community, employees, and suppliers which in turn impact small firms’ financial performance and better reputation building. These findings suggest that customers' and employees’ interests are strategic imperatives that small firms should address in enhancing their financial performance and building better reputation in the community. These findings have important implications for small firms’ strategic policy posture which are highlighted in the paper. The paper also identifies the possible limits of the research and suggests avenues for future studies.     

The exchange value of the dollar and the U.S. trade balance: An empirical investigation based on cointegradon and Granger causality tests

This article performs tests of Granger causality in the relationships between the nominal ad real exchange rates of the dollar and the U.S. trade balance as well as its price and quantity components over the period 1973:IIQ–1989:IIIQ. Our results suggest: (i) weak statistical evidence of unidirectional causality running from the nominal exchange rate to import prices and nominal trade balance (ii) no statistical support for the proposition that the real exchange rate simply “accommodates” changes in the real trade balance, and (iii) strong (no) causal links between the nominal and real exchange rates and export (import) volume. We tentatively conclude that movements in the exchange rate have a rather limited effect on the trade balance and that this effect is more likely to materialize on the export side of the trade balance.