Institutional quality,economic freedom and stock market volatility in the MENA region

How can a government help secure low-cost equity financing? This study offers an answer that a government can secure sustainable economic progress when policies of economic freedom are well institutionalized in a way that results in low equity volatility, thus low-cost equity financing. This study examines the quantitative and empirical associations between elements of Economic Freedom Index (being treated in this study as a proxy for institutional quality) and stock market volatility. The authors classify the institutional quality into three levels: high, medium and low. The data cover the years 1996–2014 for the MENA countries. The statistical tests include fixed and random effects, linearity versus non-linearity. The results show that stock market volatility can be mitigated and reduced when economic freedom is associated with an effective enforcement of law and efficient regulations. Nevertheless, the high freedom from corruption results in active equity trading which is associated with high volatility that leads in turn to high cost of equity financing. The study contributes to the literature in terms of offering practical insights on the pillars of economic freedom that policymakers must improve in order to mitigate or reduce equity volatility, therefore cost of equity financing.     

Board of directors’ quality and firms’ debt financing: the moderating effect of insider ownership – evidence from Omani firms

This study aims to examine the direct effects of board of directors’ quality and insider ownership on firms’ capital structure and the moderating effect of insider ownership on the relationship between board of directors’ quality and firms’ capital structure. The sample of this study consists of the time period 2005–2011. The final sample consists of 535 firm-year observations of public nonfinancial firms listed on the Muscat Securities Market (MSM). The hypotheses are tested using a random effects model. The results reveal that the coefficient sign on the board of directors’ quality is as predicted, but the coefficient sign is insignificant. Further, the results show that insider ownership is positively associated with leverage at the significant level of 10%, suggesting that the inside substantial shareholders employ higher leverage. With regard to the moderating effect of insider ownership, the findings show that the effect of the board of directors’ quality-leverage relationship becomes negative and stronger with increasing insider ownership.     

MEASUREMENT AND DETERMINANTS OF MULTI-FACTOR PRODUCTIVITY: A SURVEY OF LITERATURE

This paper surveys and synthesizes fast-growing literature on the measurement and determinants of multi-factor productivity (MFP). We identify three strands of the literature to measure MFP: the first is growth accounting, which decomposes observed economic growth into the contribution of factor inputs and technological change, called the Solow Residual; the second is index number methods, accompanied by frontier techniques; the third is growth regressions and econometric methods used to estimate productivity across countries and regions. We keep our focus on assessing the major strengths and weaknesses of commonly used methods for MFP measurement and categorize existing literature on the determinants of MFP growth into macroeconomic and institutional factors. We attempt to provide a reassessment and thematic survey of literature on the drivers of aggregate productivity, enabling policymakers to formulate effective economic policy.     

Health Literacy,Health Numeracy,and Trust in Doctor: Effects on Key Patient Health Outcomes

This research examines the roles of health literacy, health numeracy, and trust in doctor on: (1) patient anxiety when consulting a doctor; (2) frequency of physician consultations; and (3) patient subjective well-being (SWB). Our sample consisted of 4,040 adults representative of the United States in terms of age, income, and education, but equally split among White/Caucasian (50%) and Black/African American (50%) respondents. We found that functional and communicative health literacy and trust in doctor have linear and curvilinear relationships with anxiety when consulting a doctor. Health numeracy had no effect. Anxiety when consulting a doctor was associated with a lower number of physician consultations and lower SWB. We observed direct linear effects of health literacy, health numeracy, and trust in doctor on frequency of physician consultations and SWB, as well as some curvilinear effects. We found a negative relationship between health numeracy and SWB. We discuss implications of these findings for health and public policy.     

We are who we are: Incorporation of individual culture in customer satisfaction models

Despite the increasing recognition that cultural values have a major impact on consumer behavior, few studies have investigated the effect of individual culture on customer satisfaction in the global banking sector. This study designs a model of customer satisfaction that incorporates Uncertainty Avoidance (UA), and tests it among a sample of 227 Arab customers in the UAE banking sector through structural equation modeling using LISREL. Arab customers are reported to have a high UA, and it would thus be pertinent to determine how this cultural trait affects their consumer satisfaction. It was determined that perceived value and UA are direct antecedents of corporate reputation that in turn has a strong effect on satisfaction. Unexpectedly, service quality was not found to affect satisfaction. Various theoretical and managerial implications arising from the study findings are discussed, as well as potential avenues for further research in this important area.     

Board diversity and firm performance: evidence from the U.K. SMEs

This study examines the relationship between board diversity and firm performance in small- and medium-sized enterprises (SMEs) in the U.K. In particular, we investigate the role of gender and age as two dimensions of diversity. Using a large sample of SMEs (34,798 firms) located in the U.K. and focusing on the period from 2005 to 2013, our results show a significant negative association between each of gender diversity and age diversity, and firm performance. Our evidence yields important insights on the association between board diversity and firm performance, and calls suggestions for increased board diversity into question. A possible explanation for our findings could be due to the fact that our sampled firms are SMEs, whereas those in previous studies have been large enterprises. This research provides insights to entrepreneurs on how to enhance their performance, and to governments and policymakers on the development of rules that would achieve better performance in the SME sector.     

Margin rate and the cycle: the role of trade openness

Using three datasets of French manufacturing firms, this article studies the role of trade openness, in relation with the cycle, as a determinant of company margin rate. Margin rates increase as capacity utilization tightens (and vice versa), reflecting the procyclicality of margin rates. However, high import rates are limiting this procyclicality: when capacities are tight, domestic producers may not be able to serve demand, but foreign producers may substitute for them if they are already present on the market as reflected by the level of import rates.