Chinese State Enterprises and their Reform

The far-reaching changes in the economic environment in China since the start of the reform period have directly affected enterprise behaviour and have important implications for future enterprise reform. The growth of market transactions has been accompanied by an increase in competition which has forced State-Owned Enterprises (SOEs) to cut costs and upgrade quality. The growing exposure of Chinese enterprises to international markets and foreign business practices has led to an upgrading of their organization and management structure. The multiplication of the sources of external funds for investment has facilitated the establishment of new enterprises and provided enterprises with wider opportunities for diversifying risk. And the rapid growth of the economy has provided room for the non-state sector to expand without a major contraction of the state sector. But many problems still remain, notably with regard to government interference in the day-to-day management of the SOEs, the development of appropriate and effective governance structures, the need for efficiency-enhancing industrial restructuring, and reform of employment relations and the social security system. This article considers these problems and makes recommendations regarding future reform initiatives particularly with regard to loss-making enterprises.     

Zone of tolerance for banks: a diagnostic model of service quality

Service quality has become an increasingly important factor for success and survival in the banking sector. Provision of high-quality service aids in meeting several requirements such as customer satisfaction and its consequent loyalty and market share, soliciting new customers, financial performance, and profitability (Cui, C.C., Lewis, B.R., & Park, W. (2003). Service quality measurement in the banking sector in South Korea. International Journal of Bank Marketing, 21(4), 191–201.). This paper presents the bank service quality measurement in its extended form. It deals with the concept of ‘zone of tolerance’ in judgments of service quality proposed by Zeithaml, Berry, and Parasuraman (1993, The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science, 21(1), 1–12.). The ‘zone of tolerance’ is recognized in the service quality literature as representing a range of expectations and an area of acceptable outcomes in service interactions. The present study describes the zone of tolerance for young customers’ service expectations and determines the customer satisfaction level for banks. The study focusses only on the youth market to formulate long-term strategies because young customers tend to keep themselves up to date with latest technological developments. A conceptual model BANKZOT is presented in this study, and the results demonstrate that evaluation of services can be scaled according to different types of expectations – ‘desired' and ‘adequate’ – and that customers use these two types of expectations as a comparison standard in evaluating bank services. The findings reveal that young customers have a narrow zone of tolerance with regard to the services provided by the banks. The results with respect to gap analysis reveal that there was a shortfall in the service quality provided by the banks in the sample, with the largest gap being found in tangibles and empathy of service quality dimensions. The results of exploratory factor analysis reveal that the SERVQUAL model is found to be uni-dimensional in this study. The results, managerial implications, and future research implications are discussed in detail.     

Developing the Islamic Financial Services sector in Italy: An institutional theory perspective

The growth of the Islamic Financial Services (IFS) sector has received much attention recently due to the resilience demonstrated by the sector during the financial crisis. While IFS continue to grow rapidly in much of Asia, there has been limited institutional support for the development of the sector in Europe, which has historically been slow to realize the sector’s potential. Italy is one such country in Europe that has a growing Muslim population but has yet to develop the IFS sector. Using the institutional theory perspective, we highlight the role the Italian government can play in developing the regulative elements that facilitate the establishment of the IFS sector, and the introduction of Islamic financial products in the country. We propose that a developed IFS sector in Italy would help attract investment from countries in the Middle East and North African region, and would also facilitate the financial inclusion of the Muslim population in the domestic market.     

External Shocks and the HIPC Initiative: Impacts on Growth and Poverty in Africa

Abstract: The paper uses a simple macroeconomic model to estimate the impact of debt relief and terms of trade shocks on growth and poverty in African countries. For the 18 heavily indebted poor countries (HIPCs) that reached the enhanced HIPC decision point by end‐December 2000, the basic quantitative findings are that HIPC debt relief has boosted economic growth in these countries by an average of 2.9 percent per annum and that the computed result of this increase in growth is a reduction in poverty by an average of 2.2 percent per annum. However, the paper shows that recent deteriorations in the terms of trade have counter‐balanced these positive effects by lowering growth by an average of 2.0 percent per annum and by increasing poverty by an average of 1.3 percent per annum. Clearly, much of the positive impact emanating from the HIPC Initiative has been eroded due to recent deteriorations in the terms of trade. The paper also estimates the net effect on growth and poverty of the recently agreed 100 percent multilateral debt relief. This is predicted to boost economic growth by an average of 5 percent per annum and reduce poverty by about 5.3 percent per annum for the group of all African HIPCs. The paper concludes that 100 percent debt relief is crucial for Africa, but that more aid and policies need to be focused on a long‐term development strategy that fosters the necessary structural transformation.     

Over-Reaction by Security Market Analysts: The Impact of Broker Status and Firm Size

The aim of this study is to provide an examination of short-term earnings forecasts for evidence of systematic over-reaction. Analysts' predicted changes in earnings are compared with the realised changes to identify the contribution of systematic error (bias and generalised over-reaction) to the mean square error. A second analysis investigates whether analysts over-react to prior earnings changes. For both analyses, the impact of firm size and analysts' broker status are investigated.     

Effects of parking and cordon charge policies on tourist's modal shift in central business district of Mashhad city,Iran

The second largest holy city of the world, Mashhad, attracts high volumes of tourists and pilgrims every year. Most visitors travel by private car and are a source of considerable funds for the local economy. Among road users, tourists as one of the major traveller categories in Mashhad city behave differently due to the particular trip purpose. The aim of this research is to model tourist's shifting modes of travel behaviour when policy measures, such as the parking and cordon fares, are implemented. The tourists’ preferences were examined using binary logit analysis when different options of travel cost and time scenarios were provided. Results indicate that travel time, parking cost, cordon cost, education level and vehicle price influence tourist's modal choice. In addition, the finding shows that congestion pricing will be more effective than a parking pricing strategy in encouraging switching of modes.     

Asymmetric impacts of disaggregated oil price shocks on uncertainties and investor sentiment

This paper aims to examine short- and long-run asymmetries in the impacts of disaggregated oil price shocks on economic policy uncertainty, stock market uncertainty, treasury rates, and investor (bullish and bearish) sentiment in the US. To this end, we use a nonlinear auto-regressive distributed lag cointegration approach, which allows us to capture both positive and negative disaggregated oil shocks. We find that oil demand shocks are the main drivers of both measures of uncertainty, while oil supply shocks affect treasury rates. However, both oil demand shocks and oil supply shocks affect investor sentiment, with certain differences in the effects of positive and negative shocks. The overall effects of both oil demand and supply shocks—whether positive or negative—are stronger in the long-run than in the short-run. Additionally, we apply rolling causality and reveal evidence of a rather homogenous causal flow from disaggregated oil shocks to the variables studied, particularly around global stress periods. Our findings have implications for asset pricing and portfolio risk management and suggest policy formulations that differentiate between disaggregated positive and negative oil price shocks.

     

How do foreigners perceive? Exploring foreign diners’ satisfaction with service quality of Chinese restaurants

China has received 138 million inbound trips in 2016. The purpose of travel may vary but these international travelers visit Chinese restaurants as an integral part of their travel experience. Our study tries to comprehend their dining experience and regional differences in service quality (SQ) perceptions. The findings indicate that food and process quality significantly influence satisfaction and behavioral intentions. More importantly, the results reveal that international travelers roving through all the six continents hold significantly different perceptions regarding SQ attributes of Chinese restaurants. Additionally, we found proficiency in Chinese language as a significant contributor in generating dissimilar perceptions.     

Industry-level determinants of the linkage between credit and stock markets

This paper examines the relationship between US credit default swaps (CDS) and stock returns on an industry-wide basis across a number of investment horizons, with particular focus on the major determinants of such a relationship. Wavelet analysis is first applied to extract the CDS–stock wavelet correlation for each US industry. Then, Bayesian Model Averaging is employed to identify the key driving factors of the industry CDS–stock wavelet correlations at short- and long-term horizons. The empirical results indicate that the wavelet correlations between the industry CDS and stock returns are primarily negative over time and across time scales. Moreover, the CDS–stock correlation at longer horizons exhibits a much more stable pattern than its counterpart at shorter time frames. The results also demonstrate that the volatility of US Treasury and stock markets, as measured by the MOVE and VIX indices, respectively, the volatility of volatility, as captured by the VVIX index, and US economic policy uncertainty, as measured by the EPU index, are the most robust determinants of the correlation between CDS and stock returns at shorter and longer horizons for most US industries. In contrast, the Fama–French systematic equity factors exhibit a practically negligible explanatory power on the CDS–stock link.     

The ethics of ‘going green’: the corporate social responsibility debate

A significant proportion of authors of green business texts proposes that managers should be the instigators and guardians of a societal change towards sustainable development. There is the notion of managerial duty towards the environment. This paper attempts to unravel the implications of this call for managerial eco‐heroism. The reason that this unravelling is important is that there is a growing body of evidence suggesting that win–win situations – the ‘low hanging fruit’ – are progressively becoming less apparent for many firms. This implies a conflict between profitability and environmental performance. This translates into a (perhaps familiar) scenario for business: one greener option is more expensive, and the financial gains associated with it are insufficient to justify it on the grounds of profitability – ‘going green’ then means losing potential profits. A neoclassical and a socio‐economic perspective are provided as foundations for managerial reasoning. Even though the corporate social responsibility debate is not resolved, it is nonetheless of importance, not least because environmentally proactive managers might intend to increase social well‐being but actually reduce it through their green decision‐making. Thus the real‐world applicability of the positions adopted by the opposing philosophical schools is analysed. Copyright © 1999 John Wiley & Sons, Ltd and ERP Environment.