View from practice: Stock market reaction to sukuk credit rating changes in Malaysia

Documented evidence on conventional bond markets shows negative market reaction to bond credit rating downgrade and no reaction to credit rating upgrade. Despite the fact that sukuk issuances make up more than 58.8% of the value of outstanding bonds in the country and Malaysia issues at least half of the world's sukuk and is widely recognized as a leader in the sukuk space, there is no documented evidence on the stock market reaction to sukuk credit rating changes. This study analyzed the wealth effect of sukuk credit rating changes in Malaysia using 16 sukuk upgrades and 20 sukuk downgrades for the period 2000–2014. The evidence shows negative market reaction to downgrades and positive significant reaction to sukuk rating upgrade. This symmetrical market reaction to sukuk credit rating changes implies the market was indifferent between bonds and sukuk from the credit rating perspective. This finding supports the notion that the credit rating agencies are Shariah‐neutral when rating these capital market instruments.     

The value relevance of corporate voluntary disclosure in the Middle-East: The case of Jordan

We examine whether higher voluntary disclosure, resulting from privatization and the accompanying governance reforms, enhances the value of privatized Jordanian firms. We use panel data for 243 firm-year annual reports (over a period of 9 years from 1996 to 2004) and employ univariate and multivariate tests in order to test our hypothesis,. We construct a governance index to proxy for the impact of privatized firms’ governance on voluntary disclosure. Also, we control for the endogeneity of voluntary disclosure in its relation with firm value. Our multivariate results indicate that voluntary disclosure is positively associated with firm value. We also find that firm value is associated with industry types as a proxy for size. However, we did not find that growth and liquidity are associated with firm value.     

Non-parametric estimation of deterministically chaotic systems

Summary This paper studies theoretical and econometric issues that arise in systems characterized by deterministic chaos. Such systems can arise from standard dynamic economic models and are extensively used in Monte Carlo and other simulation-based statistical procedures which use pseudo-random number generators. The virtues of studying chaotic laws of motion in the space of densities over the state space are shown. A complete characterization of deterministic stationary ergodic processes in that space of densities is suggested and proved when the invariant measure is unknown. The asymptotic properties of the kernel estimators of the stationary density and the law of motion in the density space are studied, and shown to hold for chaotic systems. Small sample behavior for the estimators is subjectively shown to be good even when optimal choices of the kernel and smoothing parameters are not exploited.This paper was presented at the winter meetings of the Econometric Society in Atlanta, December 1989. I am grateful to Bo Honoré, Dale Mortensen, Dan Sullivan and especially to Ian Domowitz for many useful comments on early versions of this paper. The comments of participants at Northwestern, Rochester, and UCSD Econometrics Workshops, and of three anonymous referees, are gratefully acknowledged. Related discussions with William Brock, Lars Hansen and Jeffrey Wooldridge were also very useful. All remaining errors are, of course, my own.     

Accounting in Transitional and Emerging Market Economies

The aim of this introduction is to discuss some of the challenges and problems faced by researchers who are interested in conducting research in transitional and emerging market economies and to highlight some of the key attributes and characteristics of these economies. The papers contained in this Special Section are introduced by way of providing a brief overview of their contributions and identifying other important areas that future researchers might wish to pursue.

This Special Section of European Accounting Review is devoted to publishing papers on various accounting issues in transitional and emerging market economies. In this introduction, we aim to set the scene for the papers contained in this Special Section, to highlight some of the key attributes and characteristics of transitional and emerging market economies, to provide a brief overview of the contributions published here and finally to identify some other important areas that future researchers might wish to pursue.     

Sustainable market orientation: a competitive strategic tool in an emerging economy context

The purpose of this research is to test the effect of sustainable market orientation (SMO) as a strategic tool on banks’ sustainable balanced firm performance (SBFP) in an emerging economy. The research data was collected via the survey approach through self-administered questionnaires to 445 bank employees. Exploratory Factor Analysis was employed to establish the dimensionality of the research constructs, whereas multiple linear regressions were utilised to test the research hypotheses. Results suggest that SMO is positively and significantly related to sustainable balanced performance of banks. The study confirms the SMO concept promulgated in prior studies. Employees’ opinions on bank Managers incorporating sustainability management variables into market orientation as a strategy are encouraged by scholars to engender SBFP. Strategic approaches of this kind leads to balance performance of organisations and the larger society which is central to all stakeholders. This study may be the initial quantitative investigation into SMO and SBFP in the strategic marketing literature.