Jornal of Management, Economics and Industrial Organization

1-15.

Authors: Riccardo Corrado, Robert E. Flinn, Patchanee Tungjan

We are entering the fourth industrial revolution and Cambodia needs to be ready. Technologies are changing not only the way we do things but our entire life. One of the spheres affected by this revolution is Education. “Education is the movement from darkness to light”, said Professor Allan Bloom, and Cambodia is still in the shadow. The low percentage of its Gross Domestic Product (GDP) doesn’t provide enough resources to all the schools and the young generations are affected by this. But, can Cambodia try to resolve this problem beginning from the resources it already has? Recognized theories and researches proofed the effectiveness of learning by teaching, so why Cambodia doesn’t use this as a resource and an opportunity? ICT can change and it is already changing education, and with the help of students, it can make the difference in the country. In this paper, we provide an overview of the education within the country, and we analyze the possibilities and issues that Cambodia can have and would face along the way of preparing itself for the fourth industrial revolution.

35-47.

Authors: Wong Kok Yaw, Cheah Chee Keong

International business is explained by many international trade theories. In this study, four important theories (i.e. Adam Smith’s Absolute Advantage Theory, Steffan Linder’s country similarity theory, Dunning’s Eclectic Theory and New Trade Theory) are applied on Malaysia and China on their exporting activities in Asian market to explain trends in business adequately. Malaysia is well-known as the world’s largest electrical and electronic exporters while China is the top hub for manufacturing exporting. Both countries are playing significant role in Asia trading activities. They are also contributing to the world economic through their exporting.

66-94.

Authors: Md. Nurul Kabir Biplob

The purpose of this study is to investigate the impacts of budget deficit on economic growth in Bangladesh over the period of 1981-2017. This study employed the autoregressive distributed lag (ARDL) model to capture long-run cointegration along with long-run and short-run elasticity of the explanatory variables. Moreover, directional causalities between the variables used in this study have been checked using vector error correction model (VECM). The results of the analysis under ARDL model revealed that in case of Bangladesh, budget deficit positively affects economic growth both in long-run and short-run while government total expenditures lead to increase GDP only in long-run. These findings support the Keynesian proposition that budget deficits crowd-in private investments resulting economic growth. Furthermore, directional causality tests conducted using VECM explored unidirectional causality running from budget deficit to economic growth while feedback causality has been found between governments total expenditures and economic growth. For policy implications, this research provides evidence that in an emerging economy like Bangladesh, government spending through deficit financing can drive positively in the level of economic growth. Bangladesh, however, should not have the luxury of forgetting about the bad consequences of consistent and gradually increasing budget deficit at all.

1-17.

Authors: Ahmed O. Adekunle, Bello I. Abdullahi, Adedeji D. Gbadebo, Segun K. Fakunmoju

Domestic investment is a significant component of economic activities affecting Nigerian economy for decades. Sequel to this, this paper examines the effect of Foreign Direct Investment (FDI), exchange rate and energy infrastructure on domestic investment in Nigeria. Time series data obtained from Central Bank of Nigeria (CBN) Statistical Bulletin and World Development Indicator were employed using Autoregressive Distributive Lag (ARDL) Model. Empirical findings show that FDI has positive and significant effect on domestic investment while exchange rate and energy infrastructure have a positive effect on domestic investment but non significant. The policy implications of this finding is that government should adopt more stringent supervision on exchange rate, and policy to regulate execution of energy infrastructure project; and more funds needed to emancipate energy infrastructure in order to obtain desired level of domestic investment in Nigeria.

25-50.

Authors: Tokunbo S. Osinubi, Lloyd Amaghionyeodiwe, Chikaodili C. Okoye

This study assessed the optimal financing mix for Afren Public Limited Company based on the trade-off theory and evaluated the cost to the firm from deviating from that position. In doing this, we derived a firm-specific optimal capital structure using the cost of capital approach, which involved the use spreadsheet modelling through an iterative process to determine series of discount rates based on different combinations of debt and equity under the assumption of constant earnings to the firm. The base result shows that as the debt intensity increases, the equity Beta has a multiplier effect such that the cost of equity increases more than proportionately to the increase in leverage. As more debt is introduced, the risk of loan default increases, thus increasing the credit spread over the riskless rate and effectively the pre-tax cost of debt. The result from the firm’s weighted average cost of capital (WACC) and value as a function of leverage, implied optimal debt ratio is 40% and yields a WACC of 8.63% which is effectively the minimum cost of capital that maximizes the value of the firm. Between 40% and 45% leverage, the debt servicing capacity of the firm measured by the interest coverage ratio drops significantly from 4.6 to 1.4 due to high interest burden. This increased credit risk has a direct impact on the firm’s credit quality rating.

63-81.

Authors: Monorith Sean, Pathairat Pastpipatkul, Petchaluck Boonyakunakorn

This research paper aims to investigate the relationship among money supply, inflation and exchange rate in Cambodia by using Bayesian Vector Autoregressive (B-VAR) approach. This study employs the monthly data in the period of October-2009 and April-2018. This research paper applies the Money-in-Utility Function (MIU) that describes the relationship between money growth and price level. Moreover, this paper also employs the Purchasing Power Parity (PPP) which shows the relationship between exchange rate and inflation. The empirical results reveal that money supply in Cambodia, depends on its previous variable. Moreover, money supply also induces the depreciation of exchange rate of Khmer Riel against US Dollar and leads to increase in inflation. Money supply induces 8% of shock to exchange rate and 0.13% to inflation based on variance decomposition while exchange rate can cause 0.024% to inflation in Cambodia. The relative low shocks from money supply to inflation and exchange rate results in supplying money with cautious manner from National Bank of Cambodia. The empirical results are found to be consistent with the theories and some empirical studied of this related fields.

1-17

Authors: Irfan Djedovic, Ugur Ergun

This paper analyzes the volatility spillover between Dow Jones UK conventional index (GBDOW) and Dow Jones UK Islamic index. Monthly observations spanning in a period from January 2010 until June 2017 are obtained from Investing.com database. Vector Auto-regression analysis (VAR) and Impulse response functions are used in order to estimate the impact. The results show that there is a significant impact of Dow Jones UK index volatility on Dow Jones UK Islamic index volatility.

41-61

Authors: Gylych Jelilov, Kemal Ozden, Sotonye Orinaemi Briggs

This paper examines the relevant issue of insecurity in Nigeria and its implication for socio-economic development, with the available data on the level and magnitude of insecurity in Nigeria exposes an increase over time, which constitutes serious threat to lives and properties, obstructs commercial activities and discourages local and foreign investors, all which suppresses Nigeria’s socio-economic growth. This rising wave of insecurity has not subsided but has assumed an unsafe facet which is threatening the communal existence of the country as one geographical entity. In the light of the above, the paper recommends that government must be pre-emptive in dealing with security issues and threats, in view of managing security challenges. The real solution lies in government accelerating the pace of economic growth by creating an economy with a relevant social, economic and physical infrastructure to support business and industrial growth. This research paper carries out empirical research on the effect of insecurity and investment on the economy of Nigeria from 2007 to 2017, using three variables as input Nigeria Terrorism Index, Foreign Direct Investment [Inflow], Oil Prices. The study employed the use of correlation and regression techniques to analyse the collected data. Using Nigeria Terrorism Index as a proxy for insecurity and Foreign Direct Investment [Inflow] as a proxy for investment.

76-99

Authors: Mehmet Turker

Social business networking is a socioeconomic activity of like-minded entrepreneurs who share the same goals and social concerns. Participating in the social business networks at international level is an option for small businesses to penetrate and develop competitiveness in export markets. Social business networks are instrumental in overcoming the export barriers especially for inexperienced entrepreneurs since participating networks provide them with opportunities and enhance the performance of their enterprises through penetrating and developing competitiveness in overseas markets. Business networking relations of entrepreneurs provides valuable and specialized knowledge and competencies for entrepreneurs to overcome export barriers arising mainly from lack of prior knowledge of external markets and experience. The studies on export performance have addressed these barriers as impediments or limitations on the export performance of companies in general and small and medium-sized enterprises (SMEs) in particular. Most of the empirical studies in export literature mainly focus on internal or controllable factors such as managerial factors, company characteristics and competencies, and export marketing strategic capabilities, since they are significant determinants in overcoming the export barriers.This study attempts to assess the impact of engaging in the networking activities on export performance of SMEs referring these firm-level controllable determinants of export performance. The survey data collected from 248 Turkish SMEs were analyzed with SPSS AMOS 23 employing structural equation modeling (SEM) to test the validity of the hypothesized model. The findings of the study point out the positive correlation between engaging social business networks and the export performance of the enterprises. The findings also provide valuable information about the influence of firm level factors, such as the degree of internationalization, the education level of the manager, export marketing competency, size and export experience, on the relationship between engaging in the networking activities and export performance.

1-19

Authors: Theara Chhorn, Chukiat Chaiboonsri

The paper aims at estimating and forecasting international tourist arrivals to Cambodia during the time interval of 2000m1 to 2017m7, covering 209 of monthly observations. To find out factors affecting tourist arrivals, simple OLS and 2SLS with instrument variable regression are applied, on the one hand. On the other hand, several time series models of ARIMA (p, d, q), GARCH (s, r) and the hybrid of ARIMA(p, d, q)-GARCH(s, r) are employed to forecast tourist arrivals in line with AIC and BIC in selecting the best modified models. The empirical results primarily reveal that tourist arrivals are affected by exogenous factor, say exchange rate, dummy factors such as the AEC, global finical crisis, national election and Cambodia’s e-Visa. With regard to forecasting stage, the result indicates that tourist arrivals are shocked by time trend in the past period, say time (t-1). The trend is furthermore reduced due to the time lags, say time (t-2, t-3) as shown in the parameter coefficients of AR. GARCH (1, 1) model suggests that the short run persistence of shocks lies in the gap of 0.04 whereas the long run persistence lies in the gap of 0.94. Additionally, AIC and BIC propose that ARIMA(3, 1, 4) and the hybrid of ARIMA(3, 1, 4)-GARCH (1, 1) are the best model to predict the future value of tourist arrivals. The RMSE and U index obtained from measurement predictive accuracy reveal that long run 1-step ahead forecasting of 2013m12 to 2017m7 is produced the smallest predictive error amongst the others. Thus, it has more predictive power to apply long term ex-ante forecasting.

35-50

Authors: El Monineath

This empirical study examines the factors affecting export performance in Cambodia through the period of 1993-2015. This study employed Autoregressive Distributed Lag (ARDL) model to investigate the long and short-run relationship among export and its determinant factors-inflation, real exchange rate, official development assistance, and trade liberalization. The study finds that INF obtains negative relationship with EX in both short and long run meanwhile TL has positive relationship with EX. But, RER has negative impact on the export performance in the short run only; ODA poses the significant positive relationship in the long run, vice versa. Unexpected positive relationship between crisis and export would be explain by insignificant impact of 1997 ASEAN financial crisis and the remaining growth of export during 2008 world economic crisis. The significant and negative coefficient of ECMt−1 indicates the relative speed of adjustment to achieve the long run equilibrium. This study suggests that government should prioritize to maintain inflation rate and real exchange rate, which negatively associate the export performance and export competitiveness of the country, at an optimum level. This study provides concrete evidence for policymakers in conducting the feasible policies to enhance and facilitate the trade liberalization in Cambodia.

62-75

Authors: Osman Nuri Aras, Mustafa Öztürk

The effects of the main macroeconomic determinants on the sovereign credit rating of Turkey assigned by Standard & Poor’s are analyzed in this paper. As the main macroeconomic determinants, inflation rate, economic growth rate, foreign direct investment, external debt, current account debt and savings are taken into account in this study. The data related to Turkey in this study covers between 1992-2016. In this study, the Granger causality test and the OLS regression model are used for that correlations of the variables. Outcomes of the analysis show that just two in six macroeconomic determinants are effective on the sovereign credit rating. According to the results of the study, external debt and inflation rate have a statistically significant relationship with the sovereign credit rating of Turkey. The outcomes show that external debt and the inflation rate have negative effects on the sovereign credit rating of the country. The coefficient of the external debt and the inflation is negative which means that if the inflation or external debt increases the rating decreases in appropriate with the theory. On the other hand, the effects of the other four macroeconomic variables are not significant. The results of the study indicate that some factors other than the primary macroeconomic determinants are effective on the sovereign credit ratings of Turkey. The results also unveil the door for the criticism that the decisions of the credit rating agencies are biased.

1-12

Authors: Chantha Hor, Kakda Keo, Chutima Suttiprapa

This empirical study examines an import demand function for Cambodia by employing time series data during 1993-2015. This study uses Autoregressive Distributed Lag (ARDL) model to investigate the impact of relative prices, foreign direct investment, final consumption expenditure, export volume, exchange rate and foreign exchange reserve on import demand in Cambodia for both long run and short run. The study finds that relative prices and exchange rate are negative effect on import demand in Cambodia for both long and short run, while export volume is positively effect on import demand. While, foreign direct investment, final consumption expenditure, and foreign exchange reserve are insignificant impact on import demand in Cambodia. The finding suggests that the Cambodian government should monitor domestic price.

13-19

Authors: Elkhan Hasanov, Parviz Hasanov, Yadullah Babayev

Economic growth increases production and result of this increased consumption and waste. Considering the amount of waste generated every year the managing of waste is quickly becoming a tremendous problem for the environment. Thus manufacturers and the general public have come to recognize the importance of waste management. The aim of the paper is to revisit an EOQ type reverse logistics model Ritcher (1996a,b) and highlights the potential benefits of developing recycle methodology in the manufacture and remanufacture. Figures and mathematical models are developed and results investigated with examples. The developed model was compared with the model of Ritcher (1996a,b) to stress the importance of waste management.

60-67

Authors: Azlan Othman, Syuhaida Ismail, Khairulzan Yahya

In recent years, a major challenge in the field of knowledge management (KM) has been the way in which KM is implemented. Individuals and organisations are starting to understand and appreciate knowledge as the key element in the emerging competitive environment. As a preparation for the competitive industrial nation, KM is an important countenance that should be the point of convergence for the industry players. This paper wishes to draw the attention on the important of KM storing practice by focusing on consultant firms in construction industry in Malaysia. Questionnaires were distributed to about 200 respondents working in the industry, with the aim of investigating the KM storage implementation in the Malaysian consultant firms. In this paper, the data is analysed using Statistical Package of Social Sciences (SPSS) version 23.0. The analysed results from questionnaire survey and focus group showed that consultant firm in construction industries were involved in implementing KM storing in their organisation. This paper is beneficial in order to improve the KM storing practice in the organisation.