Open Access Original Research Article

Estimating Household Willingness to Pay for Improved Electricity Supply in Lagos Metropolis

G. K. Babawale, A. O. Awosanya

Journal of Economics, Management and Trade, Page 672-693
DOI: 10.9734/BJEMT/2014/5396

Nigeria’s per capita electricity consumption is one of the lowest in Africa; with the residential sector being the worst hit. The supply from the state owned Power Holding Company of Nigeria (PHCN) is often erratic forcing most households to resort to the use of generators with its attendance noise and air pollution besides other adverse consequences. The study employed non-market valuation techniques (conjoint analysis, contingent method, and multivariate analysis) to assess the Willingness-to-pay for improved electricity supply using two housing estates within Lagos metropolis as case study. The study reveals the attributes of electricity supply services that give the highest utility, and also the Willingness-to-pay bids of the residents of the two estates. These results were combined and tested for sustainability based on the current cost of generating and maintaining electricity by wind turbines which is considered as one of the most cost-effective options available. Simple ‘payback’ analysis shows that the very low Willingness-to-pay bids of the residents of the two estates would barely support completely deregulated private sector participation. By implication, electricity supply to the estates under reference (including similar and estates of inferior socio-economic characteristics in the metropolis) would continue to be provided by the state-owned Power Holding Company of Nigeria (PHCN) at the existing subsidized rates.

Open Access Original Research Article

An Investigation the Effect of Auditor Partner Rotation, Auditor Size and Tenure on Investors Expected Rate of Return in Listed Companies of Tehran Stock Exchange (TSE)

Khodami Pour Ahmad, Houshmand Zaferanie Rahmat Allah, Mohammadrezakhani Vahid, Borhaninezhad saeede

Journal of Economics, Management and Trade, Page 694-705
DOI: 10.9734/BJEMT/2014/6799

Aims: The purpose of this study is to determine the impact of Audit quality attributes such as audit partner rotation, auditor size and auditor tenure on Investors Expected Rate of Return in Listed Companies of Tehran Stock Exchange (TSE).

Study Design: This research in terms of purpose is of applied type and in terms of nature is semi-experimental. That its results can be useful for a wide range of corporate stakeholders.

Place and Duration of Study: The used data have been extracted from the companies accepted in Tehran Stock Exchange (TSE) from 2005 to 2010 to determine the relationship between qualitative characteristics of audit and return rate expected by investors.

Methodology: In this Study, cost of equity is the dependent variable and Auditor Partner Rotation, Auditor Size and Tenure as the audit quality characteristics are the independent variables. Also, three control variables of ratio of book to market value, financial leverage and firm size are introduced to regression equations to control the impact of risk factors. In this regard, for measuring Cost of equity was used Gordon growth model. For data analysis and test of research hypothesis, multivariate regression equation has been used. To carry out the research, using Tadbir and Rahavard-e-Novin softwares, the required quantitative data and information have been extracted from financial statements and other financial reports of the audited companies.

Results: The results obtained from hypotheses test have shown that there is a positive and significant relationship between size of audit firm and return rate expected by investors. Therefore, the findings indicate that there is a negative relationship between auditor tenure and return rate expected by investors; however, this relationship is not statistically significant. In addition, the results show that there is a positive and significant relationship between the short-term rotation period of audit partner and return rate expected by investors.

Conclusion: According results obtained from hypotheses test, it can be inferred that cost of equity increases by increase of audit firm size. In other words, decreasing the audit quality is resulted in decrease of reliability of financial statements and risk of decision-making for investors. Moreover, the results of this research indicate that investors probably do not care much about audit firm and auditor partner tenure in their decision-makings about expected rate of return.

Open Access Original Research Article

HR Competencies: Understanding the Impact on HR and Organizational Performance in Saudi Arabia

Sunil J. Ramlall, Wafaa A. Al Yafi, Nayef Ghamri

Journal of Economics, Management and Trade, Page 706-723
DOI: 10.9734/BJEMT/2014/6311

The global economy has continued to change the nature of competition and critically, the role of HR in organizations. Saudi Arabia is undergoing many changes from a strategic business perspective and has an implied demand for HR professionals to be an integral part of the changes and develop people strategies to help organizations compete more effectively. 

This study focused on HR competencies and the extent to which current HR professionals in Saudi Arabia possess the pertinent competencies as expected in the HR profession.  Specifically, the study sought to: (i) determine if competencies are predictive of success in the HR profession, (ii) understand how competencies vary by type of position within HR (entry level, manager, director and executives), (iii) determine if there is a relationship between specific competencies and particular responsibilities of HR professionals and (iv) determine the relationship among education, years of HR experience, competencies and compensation. The data were collected through a stratified sample across industries, education, role in organization and geographic locations.  

Numerous areas are identified as gaps between competencies HR professionals should possess compared to current competencies necessary to function effectively as strategic business partners. As Saudi HR professionals continue to advance the HR profession and add value to their organizations, it is necessary for there to be emphasis on having the appropriate education, participate in continuing education and critically measure the impact of their efforts.

Open Access Original Research Article

AID-Growth Nexus Debates in Selected African Countries: A Methodological Exposition

Daud Ajape Mustafa, Hakeem Ishola Mobolaji

Journal of Economics, Management and Trade, Page 724-742
DOI: 10.9734/BJEMT/2014/5634

Aims: This study examines the effectiveness of foreign aid in selected African countries. Also, it investigates the relevance of SEM system in gauging the relationship among multiple variables like foreign aid, economic growth, investment and human capital using multiple techniques such as SURE, 3SLS and OLS. This is to provide methodological exposition and contributions in aid-growth nexus debates, especially in the sample countries.

Study Design:  Case Study.

Place and Duration of Study: Africa. Panel data ranging from 1987-2010.

Methodology: Simultaneous Equations Model (SEM) using balanced panel data approach was adopted and three techniques of estimation i.e. OLS, 3SLS and Seemingly Unrelated Regressions Estimate (SURE) were utilized. This adoption is in line with the dominant view in the literature that the best model for gauging the relationships among multiple variables like foreign aid, economic growth, investment and human capital as the case in this study is through SEM system.

Results: Our finding supports the popular view on aid effectiveness hypothesis in Africa. This is because our finding reveals that foreign aid impacts on economic growth through investment as a major transmission channel and it also impacts on human capital. Also, our findings indicate that SURE method proved to be the most efficient method for the estimation of SEM among the three techniques adopted; while OLS proved to be an appropriate technique for the estimation of SEM.

Conclusion: Essentially, the application of SURE method on SEM using Africa as a case study, is indeed a major empirical contribution from this study. Hence, due to our choice of appropriate model and estimation techniques, our finding becomes consistent with the leading view on aid effectiveness in Africa. We therefore recommend that more foreign aid should be allocated to investment and human capital. In the same vein, we suggest that subsequent studies on aid-growth nexus in Africa should take a clue from this study, especially in the area of methodological contributions.

Open Access Original Research Article

Analysis of Production Relationships in the Capture Fishery of the Middle Cross River Basin: A Stochastic Frontier Approach

I. E. Ele, S. O. Abang

Journal of Economics, Management and Trade, Page 743-754
DOI: 10.9734/BJEMT/2014/6747

Aims: Aims of the study were to carry out an empirical analysis of fish production in the capture fishery subsector. Estimates were to be made of the maximum likelihood production and inefficiency frontier functions. Also analysis of the determinants of technical efficiency was done in both rainy and dry seasons.

Study Design: Primary data were collected from fishermen through the use of questionnaires and measurement of fish catch.

Place and Duration of Study: This study was carried out in the Middle Cross River Basin, Nigeria between April 2010 and March 2011

Methodology: Multistage purposive and random sampling procedures were adopted for data collection.

Results: Findings show that labour and credit were the most important variables in fish production in the capture fishery subsector. Determinants of technical efficiency were age, fishing experience, educational level contact with extension and canoe length. The mean technical efficiency is 86% while the range is 48-99%.

Conclusions: Recommendations were made on timely and appropriately sized credit for fishermen according to seasonal needs. The use of appropriate mesh size of nets should be a policy issue that is monitored and enforced.

Open Access Original Research Article

The Effect of US Fundamentals on the Moroccan Stock Market Pre- and Post- FTA

Abdelmounaim Lahrech, Sami Alabdulwahab, Mounia Ammi

Journal of Economics, Management and Trade, Page 769-785
DOI: 10.9734/BJEMT/2014/3588

The relationship between macroeconomics and the stock market in developed countries has been for many years the object of many studies and research. However, few studies have been conducted about emerging countries and especially in the case of Morocco there is a lack of studies in this area. Therefore, this paper will be the first to analyze the impact of US fundamentals, including industrial production, real money supply and the S&P 500 on Moroccan stock prices before and after the Free Trade Agreement (FTA) signature. This study enables us to reduce the gap between the theoretical framework and research conducted for other countries. Our results showed that US macro fundamentals have a slight impact on the Moroccan stock market after the signature of the FTA and that US industrial production in particular highly influences the Moroccan index compared to the other variables studied.

Open Access Original Research Article

Role of Regulation in Micro Finance: Application of the Micro Savings Requirement Scheme in Informal Sectors

Marianne Ojo

Journal of Economics, Management and Trade, Page 786-803
DOI: 10.9734/BJEMT/2014/7487

This paper not only addresses how linkages, direct and facilitating linkages, can benefit microfinance institutions – and particularly in jurisdictions where the Savings Group Outreach involvement is particularly low, but also illustrates ways and means whereby group lending and other more recent innovative methods used by micro lenders to secure repayments, could increase the desired effects, efficiency and impact of microfinance in selected jurisdictions. In so doing, it addresses some of the existing and persisting problems of micro finance in rural areas.

An innovative aspect of the paper is evidenced through its recommendation of the Micro-Savings Requirement Scheme - which offers numerous benefits – as will be highlighted in this paper.

Open Access Original Research Article

Enterprise Excellence through Growth Strategy and Risk Management

Dhirendra Kumar

Journal of Economics, Management and Trade, Page 804-821
DOI: 10.9734/BJEMT/2014/6759

The Enterprise Excellence (EE) philosophy is a holistic approach for leading an enterprise to total excellence by achieving a sustainable significant growth in revenue and profitability, and a reduction in business cycle time while mitigating the enterprise risk and primarily focusing on the needs of the customer. There are various organizations within an enterprise but they all focus on to meet/exceed customer needs. This principle applies to all types and sizes of enterprise.

The top level elements of EE philosophy are the enterprise growth and the enterprise risk management. Enterprise growth is an integrated approach affecting every employee, every functional area and strategy within the organization. It is important to note that successful enterprise growth is likely to require significant investments in skills, processes, organization and technology. Enterprise growth initiatives may be driven by external opportunities such as market segment/customers which will force the development of strategies such as targeted market, value proposition, or new/upgraded product/service offerings. Enterprise risk must be identified, assessed and prioritized as developing growth strategy proposal which leadership has to execute to achieve goals. As business leaders lead the efforts, they have to minimize, monitor and control the probability and/or impact of unfortunate events and maximize the realization of opportunities.

Therefore, the need for enterprise growth entails a fundamental change in the way enterprises are started to optimize the probability to flourish. Those that succeed eventually must face the challenges of change; which some master and succeed in enterprise growth strategy. Most enterprises fail to transform or grow. 

The EE philosophy is applied to two businesses (Boeing and Airbus) in aerospace industry and analyzed their products and market data of more than fifty years. This analysis will demonstrate how business leaders are trying to achieve the enterprise excellence (EE) through the enterprise growth strategy while mitigating the enterprise risk.

Open Access Original Research Article

Privatization, Fiscal Policy and Macro-Economic Aggregates in Nigeria “An Impact Analysis”

Ogbuagu Anuli Regina

Journal of Economics, Management and Trade, Page 822-840
DOI: 10.9734/BJEMT/2014/6607

Aims: This study investigates the impact of privatization on fiscal policy and its interactional effects on macroeconomic aggregates in Nigeria.

Study Design: Case Study (Nigeria).

Place and Duration of Study: Nigeria, Time Series Data ranging from 1986 to 2012.

Methodology: The study employs Ordinary Least Square method of estimation on a range of structural equation models- Auto-regressive Distributed Lag Model (ARDL) and Granger Causality Wald Test.

Results: Shows that a percentage increase in privatization proceed increases Nigeria’s fiscal responsibility significantly by 13.49% but a percentage increase in the lag of privatization proceed decreases current government expenditure by about 6.3%, though this is not significant. Privatization proceed leads to growth in government expenditure, per capita expenditure, unemployment rate, exchange rate, and GDP with a feedback effect from unemployment rate and GDP. Government expenditure responds to self- produced shocks and transmits positive shock on privatization proceed, but privatization does not produce significant responses and/or shocks to government expenditure. It also does not produce/transmit positive shocks to per capita expenditure, unemployment rate and on itself.

Conclusion: Our findings in this study revealed that privatization impacted significantly on government expenditure. There is also a healthy interrelationship with privatization and other macro-economic aggregates in the areas of causality and shock responses. Therefore we conclude given the obtained results, that the intensification of privatization of public enterprises should make the country better off.

Open Access Policy Article

Impact of Trade Openness on the Output Growth in the Nigerian Economy

Christopher Ehinomen, Damilola Da’silva

Journal of Economics, Management and Trade, Page 755-768
DOI: 10.9734/BJEMT/2014/6682

This study examined the relationship between trade openness and output growth in Nigeria. The aim of this is to enable us suggest ways to raise productivity and wealth of the country. And thus, increase the standard of living in the country. Econometric techniques of the Non-Monotonic modelling was adopted. And the Ordinary Least Square (OLS) is used as the estimation technique. Unit root test and co-integration test were carried out as part of the estimation process. The data used was basically secondary (from 1970 to 2010). The variables used were real gross domestic product (RGDP) as the dependent variable, degree of openness, squared term of the degree of openness to capture the long run effect, real exchange rate, real interest rate and unemployment rate as the independent variables. The result shows that there is positive relationship between trade openness and output growth in Nigeria. The implication is that the Nigerian economy will grow more rapidly when she is opened to international competition. With this, it could be said that trade openness is very important and vital to the Nigerian economy. It is recommended that the government should focus on the other sectors in Nigeria such as the agricultural and manufacturing sectors other than petroleum. Secondary, the revenue generated from the export of crude oil can be used to develop the basic infrastructural facilities and essential social amenities needed in the country. The government should promote import liberalisation through the reduction of tariffs. The import of consumable and intermediate goods should be reduced and the local industries should be encouraged to produce such goods. The government needs to reduce import tariffs in other to prevent or discourage smuggling activities. Finally, government should re-orient its policies towards the external sector and make export more favourable.