Open Access Original Research Article

Mathematical Model of the Influence of Knowledge Transfer on the Location Choice of a Multinational Company

Dorota Leszczyńska, Erick Pruchnicki

Journal of Economics, Management and Trade, Page 321-331
DOI: 10.9734/BJEMT/2013/4268

Introduction: Research works haven’t yet shed much light on the performance of the location choice of multinational companies. The aim of this publication is to highlight the link between the transfer of knowledge flows and the location of a multinational company.

Methodology: We put forward a conceptual approach allowing to formulate the equations of a mathematical modelization of its consequential performance.

Results and Discussion: Our research has led us to highlight some types of managerial behaviour which will ensure the location performance within a cluster.

Conclusion: We have shown that the embedded knowledge is very important for the location choice of a multinational company. We concluded model for this location choice.

Open Access Original Research Article

Financial Intermediation and Economic Growth in Sudan: An Empirical Investigation, 1970-2011

Safiat Ali Saber Ali

Journal of Economics, Management and Trade, Page 332-358
DOI: 10.9734/BJEMT/2013/3387

This paper investigates empirically the long-run relationship and short-run dynamic linkages between financial development and economic growth in Sudan during the period 1970- 2011. The study employs the autoregressive distributed lag (ARDL) approach to co-integration. The analysis is carried out using three indicators to measure the level of financial developments which are the ratio of the credit provided to private sector by commercial banks as a percentage of GDP, the ratio of liquid liabilities of commercial banks to nominal GDP and the broad money supply as a percentage of GDP. We also include four control variables in our analysis. These variables are inflation rate, trade openness, gross investment and government expenditures. As financial development indicators concerned, the result of the long run analysis indicates that credit to the private sector and the liquid liabilities exert positive effect while money supply affect real per capita GDP negatively. The credit to the private sector and the liquid liabilities coefficients have expected signs. Although the relation between financial development indicators and real per capita GDP is low and insignificant especially in the case of liquid liabilities and money supply, credit to the private sector is the only indicator that affects the economy in Sudan in the long-run. Although we could not find any short-run relationship between the explanatory variables and real per capita GDP in Sudan, these variables are found to be related in the long-run. The results indicate that government expenditure, inflation, money supply and trade openness exert negative effects, while investment, private credit and liquidity have positive effect on real per capita GDP. These findings may be attributed to the weak capital base of Sudanese banks, the high cost of borrowing due to insufficient inter-bank competition, the risk of extending credit to sectors other than trade, which is considered by banks as unjustifiably high and the absence of an appropriate investment climate required to foster significant private investment and promote growth in the long run.

Open Access Original Research Article

Analysis of the Competitive Environment of Tourist Destinations Aiming at Attracting FDI by Applying Porter’s Five Forces Model

Gordana Dobrivojević

Journal of Economics, Management and Trade, Page 359-371
DOI: 10.9734/BJEMT/2013/4180

Aims: The aim of this article is to come to the conclusion whether Porter’s five forces model can be adjusted for the purpose of assessing competitive environment of the tourist destination, in order to attract Tourism Foreign Direct Investments (TFDI), and use it as such as an alternative method for comprehension and enhancement of competitive advantage.

Study design:  Research paper.

Methodology: The research relies on the well-known Porter’s five forces, which the author adjusted and applied on local tourism destination. It was tested whether in this way opportunities and threats for the development of tourism in the local destination could be found, and the possibility of strengthening its position in relation to the five forces, in order to enhance the competitive advantage of a destination, for the purpose of defining strategies for attracting TFDI.

Results: By applying the adjusted Porter’s five forces on the example of Divcibare in Serbia, opportunities that allow the development of tourism products in line with world trends were recognized, the necessity of improving the quality of accommodation and services and the need for greater administrative and procedural efficiency of local self-government were pointed out, as well as trends and volume of FDI outflows that needs to follow in finding potential investors.

Conclusion: The research has shown that by applying the adopted Porter’s five forces, tourist destinations are given an opportunity to see their position in the domestic market, compared to their competitors, consider the extent and trend of investment flows in the world and the trends in the global tourism market and develop their services and contents in accordance with them. Tourist destinations can also realize the opportunities that are offered to investors in other countries and compare and consider that await investors in making investment decisions in their country and local tourist destination.

Open Access Original Research Article

Technological Innovations in Microfinance Institutions in the Three Northern Regions of Ghana

Stanley Kojo Dary, Haruna Issahaku

Journal of Economics, Management and Trade, Page 372-388
DOI: 10.9734/BJEMT/2013/4951

Microfinance institutions (MFIs) in the three northern regions of Ghana continue to find ways of meeting the aspirations of the poor. One way they try to achieve this goal is by adopting technological innovations. This paper explored technological innovations in a sample of 41 MFIs drawn from the three northern regions of Ghana. Chi-square test was used to test the relationship between characteristics of MFIs and the adoption of technological innovations. The Spearman’s rho was used for robustness checks. The findings revealed that computer based technology is the most widely adopted technology followed by telephone, counting machine, internet, satellite, fax machine, and ATM in that order. The study found the adoption of these technological innovations to be significantly related to factors such as board size, number of males in board, board tenure, frequency of board meeting, size of workforce, number of employees with tertiary education, investment in R&D, number of branches or outlets, and sources of funding. According to the MFIs, government policy, competition, regulatory and legal environment, infrastructure and firm specific factors such as client exit rate, human resource capacity and distributional challenges affect their innovative behaviour. A key recommendation flowing out of the study is that, much as the adoption of technological innovation is good, it must be done with caution. A thorough risk assessment must be conducted by MFIs prior to the introduction of any new technology.

Open Access Original Research Article

Budget Deficits and Long-Term Interest Rates in Japan

Khurshid M. Kiani, Toshihiro Uchida

Journal of Economics, Management and Trade, Page 389-404
DOI: 10.9734/BJEMT/2013/5146

The effect of budget deficits on the economy is one of the most important unresolved issues in public economics and macroeconomics. Based on a simple loanable funds model that describes the relationship between budget deficits and long-term interest rates, this study empirically quantifies how Japan’s large budget deficits affects long-term interest rates and the slope of the yield curve in Japan. Estimation based on the quarterly data for the period 1981.II-2009.I reveals statistically significant evidence of the positive link between budget deficits and long-term interest rates. This finding supports the Keynesian view of the budget deficit and is generally consistent with the recent studies that employed improved and expanded dataset in the United States.

Open Access Original Research Article

Semiparametric Stochastic Frontier Estimation Using Generalized Additive Models

Morteza Haghiri

Journal of Economics, Management and Trade, Page 405-418
DOI: 10.9734/BJEMT/2013/5149

This article specified a semiparametric stochastic frontier function using generalized additive models that accounts for random noise in the sample data. We estimated the parameters of the model by applying the generalized spline-smoothing approach to measure technical efficiency scores of Wisconsin dairy producers between 1993 and 1998. Results showed that the sample dairy producers did not use resources efficiently, as the estimated mean technical efficiency score was found to be 0.778. Unlike precedent studies, we found no correlation between the estimated technical efficiency scores and four farm-specific characteristics, such as operation type, milk system, barn type, and milk frequency.

Open Access Original Research Article

An Empirical Study on Consumers Preference for Mobile Telecommunication Attributes in Nigeria

Emmanuel O. Oyatoye, Sulaimon O. Adebiyi, Bilqis B. Amole

Journal of Economics, Management and Trade, Page 419-428
DOI: 10.9734/BJEMT/2013/3427

Aims: The study empirically analyzed consumers’ preference for mobile telecommunication attributes in Nigeria, using conjoint analysis.

Study Design: Survey design, through 200 dedicated mobile phone users, were conveniently sampled in Yaba and Akoka environs of Lagos State for the conjoint study. They ranked telecommunication services profiles with 18 eighteen combinations, using 1 and 18 to indicate highest and lowest preference, respectively, and different combinations of attributes for their preferences.

Place and Duration of Study: Phone users in Yaba and Akoka environs were interviewed within three months (October 2012 to December 2012).

Methodology: Orthogonal methods were used to design 18 cards that were used for the interview and which were ranked by respondents (phone users). They were then analyzed with the use of ordinary least squares (OLS) regression, with the aid of statistical package for social sciences (SPSS).

Results: The result shows cost attribute, the adjusted part-worths for the low, moderately and high levels, respectively, as follows: -2.396 - 10.204 = -12.600; 12.99 -10.204 = 2.785; and 10.205 -10.205 = 0 which was consistent with economic theory. The mobile telecom users in the study area prefer a mobile service with a lower cost to one with a higher cost.

Conclusion: The study concluded that telecom service providers in Nigeria should strive harder to improve services where the customers’ preferences lie: affordable service, wide coverage, followed by clarity of call, being the most desirable attributes by consumers, rather than undirected promotional strategies that hardly aid loyalty of customers to their network only while also involving huge costs.

Open Access Original Research Article

The Differentiated Research of China’s Monetary Policy’s Effect on Stock Price under the SVAR Model----Empirical Analysis Based on Different Economic Backgrounds

Jianfei Leng, Pei Tang

Journal of Economics, Management and Trade, Page 429-441
DOI: 10.9734/BJEMT/2013/4527

This paper empirically analyzes the impact of China’s monetary policy on stock price in different economic backgrounds by constructing the SVAR (Structural Vector Auto Regression) based on the standard VAR (Vector Auto Regression). The results show that: (i) In different economic backgrounds, the direction and size of China’s monetary policy’s impact on stock price are not same; (ii) There exist different impacts on stock price from monetary policy in short run, but in long-term the impacts do not exist in two economic backgrounds.

Open Access Original Research Article

The Likelihood of Corporate Entrepreneurship in Large Corporations

Lok Tak Ming

Journal of Economics, Management and Trade, Page 442-452
DOI: 10.9734/BJEMT/2013/4585

Entrepreneurship becomes more important nowadays in the strategic management process, in particular, in the company’s ability to increase profitability over time. From the view of entrepreneurship, entrepreneurs notice opportunities from where they act and create new hierarchies or ventures to organize transactions. If the entrepreneur happens to be the firm’s manager and when the management function is distinguished from the entrepreneurial function, agency problems arise in the new hierarchy. The firm’s manager could act against corporate entrepreneurship if he decides to explore the innovation concept for his own benefits to setup his own business. This paper sought to explore the feasibility of corporate entrepreneurship in large corporations under the consideration of conflict of interest, the characteristics of the manager, and the moral consideration of the manager. This is an explanatory research which used three case studies through semi-structured interviews. The results of the three case studies and the cross cases analysis support the existence of the conflict of interest in determining whether to explore the innovation concept for the corporation or his own benefits. It also confirms the importance of the characteristics of the manager and the moral consideration of the manager in the decision-making process on how to explore the innovation concept. All the cases confirmed that the likelihood of corporate entrepreneurship in large corporations is low as the manager is likely to explore the innovation concept for his own benefits.

Open Access Original Research Article

Repayment Performance among Cassava and Yam Farmers under Nigerian Agricultural Bank Smallholder Loan Scheme in Cross River State, Nigeria

E. A. Ajah, E. O. Eyo, S. O. Abang

Journal of Economics, Management and Trade, Page 453-467
DOI: 10.9734/BJEMT/2013/5006

This study analyzed credit worthiness and loan repayment performance of cassava and yam farmers in cross river state. Specifically, the study assessed credit worthiness of borrowers, identified factors that discriminate between credit worthy and non credit worthy farmers and analyzed factors that influence the farmers’ ability to loan repayment. Purposive and multistage random techniques were used in selecting respondents from which primary data were collected using questionnaires. A total of 150 crop farmers were used in the study. Method of data analysis utilized were means, frequencies, percentages, discriminant analysis and the multiple regression analysis. The results revealed that only 56% of the respondents were creditworthy. Also, farmers with better educational level, larger farm sizes, longer years of farming, proper loan supervision, and low total operating expenditure to income ratio were credit worthy farmers. While farmers with lower loan to asset ratio were said to be non credit worthy. The results of the linear regression model showed that farmers with higher educational level, larger loan amount, and adequate supervision repaid their loans more. An increase in these variables increased their repayment ability. While farmers with longer years of farming, and those whose loans were disbursed late repaid less of their loans. An increase in these variables decreased their repayment ability. The study recommended that more supervision should be exercised on loan beneficiaries to encourage prompt repayment of loan. The bank should consider those with higher level of educational if complete repayment is to be achieved.

Open Access Original Research Article

Determinants of Resource-Seeking Foreign Direct Investment: Co-Integration and Causality Analysis for Saudi Arabia

Mohammad Hanif Akhtar, Mohammad Bashir Khan, Shahzad Hussain

Journal of Economics, Management and Trade, Page 468-478
DOI: 10.9734/BJEMT/2013/3739

Although, a vast amount of literature has emerged on determinants of FDI across the globe, yet research in a Saudi Arabian context remains limited. This study is an attempt to fill this gap where determinants of resource-seeking FDI are analyzed over a period of 30 years. The study uses Johansen tests of cointegration to find out the effect of hypothesized variables as determinants of resource-seeking FDI. In order to determine a causal link among the tested variables, a Granger causality test is also conducted. On overall basis, it can be concluded that the resource-seeking FDI in the country is mainly driven by greater trade openness, resilient fiscal performance and existence of greater oil reserves.

Open Access Original Research Article

Interactions between Asset Prices and Monetary Policy in Taiwan: A Structural VAR Model

Chun- Chang Lee, Chih- Min Liang, Wen- Hui Wu, Shu- Man You

Journal of Economics, Management and Trade, Page 479-497
DOI: 10.9734/BJEMT/2013/4835

Aims: This paper analyzes the role of house prices in monetary policy transmission mechanisms in Taiwan using structural VAR (SVAR). The discussion of the role of asset prices in the monetary policy transmission mechanism can help us determine the effectiveness of monetary policy.

Results: The contemporaneous effect of contractionary monetary policy on house prices exhibits a significant and positive relationship, and the response gradually approaches zero. The contemporaneous effect of contractionary monetary policy on stock prices is negative and statistically insignificant. The empirical results of this study may not support the transmission role of house and stock prices due to the low interest rate and the possibility of non-banking system channels of investment and consumption capital sources. Shocks to house and stock prices have no simultaneous impact on monetary policy; the impact gradually appears in the third or fourth quarter after such shocks.

Conclusion: The result suggests that the asset market plays a prominent role in the Taiwan monetary policy setting, though the immediate response is small.

Open Access Original Research Article

An Analysis of the Factors Influencing Consumers’ Adoption of Mobile Money Transfer Services (MMTs) in Masvingo Urban, Zimbabwe

John Marumbwa, Munyaradzi Mutsikiwa

Journal of Economics, Management and Trade, Page 498-512
DOI: 10.9734/BJEMT/2013/4670

The ever-expanding technological innovations have stirred a phenomenal transmutation of the face of businesses across the globe, especially the mobile telecommunications sectors resulting in the introduction of mobile money transfer services (MMTs). This paper sought to analyse the factors that influence consumers’ adoption of MMTs from a consumer behavioural perspective based on the extensions of the construct extracted from the propositions made by Davis (1989) in his Technology Acceptance Model (TAM) and Rogers (1983) in the Diffusion of Innovation theory. In Zimbabwe, the mobile telecommunication companies, Econet Wireless Zimbabwe, Telecel Zimbabwe and the government owned Netone have launched the mobile money transfer businesses. However, the major concern related to this paradigm shift of sending money has been the market acceptance and the actual usage of these products with particular emphasis on the factors influencing consumers’ adoption decisions. It was concluded that the perceived ease of use, consumers’ perceived usefulness of the service, perceived trust and the perceived relative advantage of MMTs are the critical determinant factors in influencing consumers’ adoption decisions.

Open Access Original Research Article

Assymetric Effect of Oil Price Shocks on Exchange Rate Volatility and Domestic Investment in Nigeria

Hodo B. Riman, Emmannuel S. Akpan, Amenawo I. Offiong

Journal of Economics, Management and Trade, Page 513-532
DOI: 10.9734/BJEMT/2013/4098

Aim: The paper aimed at examining the asymmetric effect of oil price shock on exchange rate and domestic investment in Nigeria.

Study Design: Country case study.

Place and Duration of Study: Nigeria. Time series data ranging from 1970-2010.

Methodology: This study utilised elaborate econometric analysis which tests the sensitivity of exchange rate, private investment, public investment, per capita income and industrial production to oil price shocks, using the Impulse Response Functions (IRFs) and Variance Decomposition (VDC) techniques within a Vector Autoregressive (VAR) framework.

Results: The result clearly revealed that while government expenditure exhibited immediate positive response to oil price shock, public investment, private investment and industrial production exhibited negative response to oil price shock, further confirming the evidence of “Dutch disease” in Nigeria. The variance decomposition analysis further revealed that exchange rate, government expenditure and domestic investment were mainly affected by oil shock, particularly, in the short run.

Conclusion: The study concludes that volatility in crude oil prices has negative impact on domestic investment and industrial development in Nigeria. It is recommended among other things in this study that the usual practice of sharing oil windfalls to the three tiers of government should be discouraged; rather, the central government should allocate these windfalls to priority sectors of the economy to enhance development.

Open Access Original Research Article

Greenhouse Gas Emission Reduction Goals at Public Institutions: The Case of a Land-Grant University

Ryan M. Yonk, R. Christopher Martin, Kayla Dawn Harris

Journal of Economics, Management and Trade, Page 533-549
DOI: 10.9734/BJEMT/2013/3971

Aims: We apply several theories to the problem of greenhouse gas emission and energy consumption reduction goals at large public institutions. We discuss the history of the movement for reduced greenhouse gas emissions at universities and introduce a case university. We test our case university’s energy consumption for evidence of reductions.

Methodology: We develop two base OLS model for on-campus energy consumption. We build time series elements into the models to test for statistically significant reductions in monthly energy consumption.

Results: We do not find evidence for reduced energy consumption at the case university over the twelve year time period (n=146).

Conclusion: Several theoretical problems make reducing energy consumption or greenhouse gas emissions at large public institutions particularly challenging. The case university we analyzed has failed to make meaningful energy consumption reductions despite setting ambitious goals.

Open Access Original Research Article

Effectiveness of Loan Delinquency Management Strategies of Formal Lenders among Farmers in Akwa Ibom State, Nigeria

Eyo Emmanuel O., Merrian A. Nwaogu, I. A. Asuquo

Journal of Economics, Management and Trade, Page 550-562
DOI: 10.9734/BJEMT/2013/4301

This paper analyses the effectiveness of loan delinquency management strategies used on farmers in Akwa Ibom State, Nigeria. The specific objectives are to; assess the management strategies aimed at reducing loan delinquency; compare the extent of loan default among lending institutions and analyze the impact of some variables in reducing loan repayment problems, under the existing regime of loan delinquency management strategies. A multistage sampling technique was used to select 8 banks and 92 farmers included in this study. The questionnaire was the primary tool of data collection. Data analyses utilized descriptive statistics and the logit model. The results show that the loan delinquency reducing strategies used were not satisfactory, with a mean management quality score of 82. The loan default rate was still high despite these delinquency reducing strategies. In fact, 82% of the loan beneficiaries were delinquent. However, the mean delinquency rate was highest in the microfinance banks (27%) and lowest in the commercial banks (11%). The findings in this research confirm that the loan delinquency reducing strategies were not judiciously implemented by the lenders. Also, the behavior of selected variables under the going delinquency management regime suggest that primary occupation, loan size, loan use, duration of loans and visits of bank officials are some of the variables that need to be manipulated to achieve the desired level of loan repayment. Invariably, proper implementation of the existing loan delinquency management strategies and proper manipulation of factors that support loan repayment would be invaluable in enhancing the effectiveness of the existing loan delinquency management strategies in reducing loan repayment problems in Akwa Ibom State, Nigeria.

Open Access Original Research Article

Effect of Firm Size and Profitability on Corporate Social Disclosures: The Nigerian Oil and Gas sector in Focus

O. T. Ebiringa, Emeh Yadirichukwu, E. E. Chigbu, Obi Joseph Ogochukwu

Journal of Economics, Management and Trade, Page 563-574
DOI: 10.9734/BJEMT/2013/5147

The objective of this paper is to examine the effect of firm size and profitability on the extent of corporate social disclosures by Oil and Gas firms in Nigeria. A sample of twenty quoted companies selected using the simple random sampling technique was utilized for the study. Secondary data retrieved from content analysis of the audited financial reports of the selected companies for 2011 financial year was employed in the study. The ordinary least squares regression technique was used for data analysis. The findings among other shows that an insignificant negative correlation exists between CSR disclosure and firm size. Profitability is significantly positively related to CSR disclosure of the companies. We recommend that there is urgent need for regulatory agencies to develop a CSR disclosure framework that focuses considerably on utilizing firm profitability and providing incentives and penalties as the case may be for firms’ corporate social responsiveness level.

Open Access Review Article

Discrete Choice Models and Individual Travel Constraints in Nigeria: A literature Review

Gambiyo Suleiman Purokayo, Soon Jan-Jan, Hussin Abdullah

Journal of Economics, Management and Trade, Page 307-320
DOI: 10.9734/BJEMT/2013/4650

Travel constraints in contemporary Nigeria have affected all sectors of the economy. This trend had impacted on small traders in terms of higher cost of doing business, and individual travel behavior over time. Insecurity and travel time constraints had affected the growth of the entrepreneurial environment in most cities in Nigeria. In some regions trade and commerce have experienced very low performance. In most of the Northern Eastern states and big commercial centers in Kano, markets and commercial activities have remained closed due to high security alerts.

Aims: To highlight various travel constraints affecting mobility as a result of the growing insecurity on Nigerian roads.

Study Design: This study examines some literature on discrete choice and travel-based models.

Place and Duration of Study: Contemporary travel constraints in Nigeria from 2000–2012, and the growing ethno-religious crisis in different parts of the country.

Methodology: Review of literature.

Results/observations: The working of these models is effective where the choice set is not constrained, and the independent irrelevant alternatives (IIA) may not include options/alternatives with a “lesser evil” definitions. This is because it is restrictive for behavioural choice, (utility may be ranked). In advanced market economies, infrastructure has been a springboard for creating and enhancing trade hubs that promotes trade and commerce. A high Infrastructure gap exists in less developed countries as a result of fiscal policy problems, high population and the process of prioritizing development programs by the political machineries.

Conclusion: In a typical developing country like Nigeria – a low middle income country, most literature has been concerned with the lack of productivity of roads: (i) accessibility, the ability to access safe transport in terms of cost and travel time and (ii) connectivity, to be able connect or link up some volatile routes – in terms of security and other adverse road conditions.