Open Access Original Research Article

On the Effect of Technological Gap on International Patenting: A Multi-Criteria Approach

George Geronikolaou, Ioannis Mourmouris

Journal of Economics, Management and Trade, Page 256-261
DOI: 10.9734/BJEMT/2015/15670

This paper tests the effect of technological distance (the difference in technological progress between two countries) on the bilateral technology diffusion, measured by the flow of patent applications. To do so, the PROMETHEE II method is applied in order to construct an annual technological ranking of 18 OECD countries based on a number of technology variables. Then, the normalized estimated scores are used to show empirically that the effect of technological distance on technology diffusion cannot be unambiguously determined and it depends on whether the source country is a low or a high ranking country. High ranking countries export patent applications to high ranking countries, unlike low ranking countries which do not seem to follow this pattern.


Open Access Original Research Article

Mining Companies and Corruption Behavior: A Local Analysis in Burkina Faso

Janvier Kini

Journal of Economics, Management and Trade, Page 262-275
DOI: 10.9734/BJEMT/2015/15647

Mining sector is one of key economic sectors in Burkina Faso. Its contribution to gross domestic product (GDP) and its leadership in the country’s export earnings make it the most attractive sector both inside and outside the country. However, this fancy for mining activities remains smeared by a strong presumption of corruption. Through the current research, we analyze factors that explain the corrupt behavior from mining enterprises in their location areas. This local level analysis based on behavioral approach has identified some significant local factors that stimulate corruption in situ. So, using data on corruption presumption, we reached to key results that negative effects of mining activities on local communities’ wellbeing can lead these enterprises to corrupt local leaders, religious leaders, civil society organizations leaders, etc. 


Open Access Original Research Article

Effect of Transformational Leadership on Employee Organizational Commitment: Moderating Role of Emotional Intelligence

Imran Saeed, Munir Khan, Arif Ullah, Sana Ibrahim, Ponam Irshad, Safia Bashir, Amjad Ali

Journal of Economics, Management and Trade, Page 276-283
DOI: 10.9734/BJEMT/2015/15273

This study examines the relevance of different approaches related to non-pecuniary factors by distinguishing positive from negative work attitudes (e.g., effort and shirking). Using survey data, we quantify the relative importance of several human resource management practices. Results show that the social esteem approach, including pride and shame, is more prevalent than the social preference approach, including reciprocity and fairness, with respect to effort. However, the latter approach is as important as the former approach with respect to shirking. These results are robust, irrespective of gender. Distinguishing the context of work incentives, either effort or shirking, is crucially important when discussing the effects of non-pecuniary factors.


Open Access Original Research Article

Effects of Reputation and Economic Dependence on Auditor Strategic Interactions

Yee- Chy Tseng, Ruey- Dang Chang, Hao- Yun Liao

Journal of Economics, Management and Trade, Page 284-299
DOI: 10.9734/BJEMT/2015/8639

Aims: To investigate the influence of reputation loss and economic dependence on auditor strategic interactions.

Study Design: We consider two risk neutral parties, an enterprise and an auditor, and sort the auditors as high-quality (Big 4) and low-quality (non-Big 4) to match actual situations. Then, a game model is established. We assemble the two new parameters of economic dependence and reputation loss into the model and wish to understand whether different types of auditors would adopt different stratagems if their concerns of economic dependence and reputation are different.

Methodology: A basic model for the backward induction of the Game Theory is established. We assume that an auditor is risk-neutral and that he seeks to maximize his profit. We set three decision points for an audit. First, we decide the input level of screening; second, we decide whether to accept the assignment; and third, we decide the level of audit effort. Four strategic interactions are derived and payoff of each strategic interaction is computed from the preliminary analysis. Finally, an equilibrium analysis between Big 4 firms and non-big 4 firms is performed.

Results: Big 4 firms would choose a strong-screening and low-audit-effort strategy to avoid high-risk clients because they risk larger reputation loss than non-Big 4 firms. However, non-Big 4 firms would choose a weak-screening and high-audit-effort strategy since economic dependence is a high priority for them.

Conclusion: Based on the results of the modeling, in the current environment, Big 4 firms face litigation risks after increased legal liabilities of audit failure, so they must bear the litigation cost and reputation loss and may even go out of business. Likewise, non-Big 4 firms not only face more litigation risks due to increased liabilities of audit failure but also are confronted by low-balling competition.


Open Access Original Research Article

The Effect of Financial Wealth on Private Consumption: Evidence from Nigeria

Joseph Chukwudi Odionye, Ugochukwu Sebastine Ugwuebe, N. O. Ibeleme Sylvester

Journal of Economics, Management and Trade, Page 300-307
DOI: 10.9734/BJEMT/2015/13289

The study investigated the effect of financial wealth on private consumption in Nigeria using Modigliani-Brumberg’s [1] life cycle hypothesis and permanent income hypothesis of Freidman [2] as theoretical basis for the empirics. The data were collected from Central Bank of Nigeria (CBN) statistical bulletin [3]. To analyze the effect of financial wealth proxied by average real market capitalization on real per capita private consumption spending, the study employed the Ordinary least square (OLS) technique as well as an error correction model in a multivariate framework. The empirical findings suggest that both disposable income and financial wealth have positive effect on private consumption in Nigeria. While both effects (disposable income and financial wealth) are positive on private consumption, the effect of financial wealth is infinitesimal relative to that of disposable income corroborating the findings of Ozer and Tang [4] for Turkey. The result further shows a long run relationship between private consumption and financial wealth in Nigeria.


Open Access Original Research Article

Is Tax Amnesty Good for the Tax Evader?

Yu- kun Wang, Wen- jen Hsieh

Journal of Economics, Management and Trade, Page 308-322
DOI: 10.9734/BJEMT/2015/15345

Whether or not tax evaders join tax amnesty programs, an important indicator is the influence of tax amnesty programs on compliance. To study this question, the paper sheds light on a relatively neglected but important area of prevailing tax amnesty literature in the economic analysis of tax evaders’ secondary tax evasion. Considering that people who participate in tax amnesty programs may not honestly report the whole amounts of evaded taxes, it leads to a secondary tax evasion. It is shown that even considering the risk of abstaining from tax amnesty program and incurring possible uncertainty of tax evasion penalties, participating in a tax amnesty program provides a higher level of utility for a tax evader. This result reflects the observation that many tax evaders are willing to pay taxes even when expected penalty rate and the probability of being caught evading taxes are extremely low. Also, because the secondary tax evasion is accompanied by tax amnesty, thereby it suggests that during the initial assessment period of the tax amnesty plan, tax revenue drastically increases, and then when the assessment period ends, tax revenue stably declines and ultimately converges on a fixed magnitude.

Open Access Original Research Article

Improved Electricity Supply: What Factors Determine How Much Domestic Customers are willing to Pay in Tamale Urban and Peri-Urban Areas?

Dennis Sedem Ehiakpor, Franklin Nantui Mabe, Delight Tendeku

Journal of Economics, Management and Trade, Page 323-334
DOI: 10.9734/BJEMT/2015/15560

The paper estimates households’ willingness to pay (WTP) for improved supply of electricity in Tamale Urban and Peri-Urban Communities. A contingent valuation method (CVM) was used to determine the stated WTP amount and its determinants. The results from the CVM indicate that households are willing to pay an additional amount of Ghȼ0.2232 (US$0.0698) for 1kWh of improved electricity.  From the double-logarithmic econometric model results, education, residential ownership status, age of household head, household size, household’s monthly income, monthly blackout duration and monthly electricity bill are factors that significantly influence the WTP amount for uninterrupted supply of electricity. It is therefore important for the electricity service providers in the study area to improve their services and increase the electricity tariff by Ghȼ0.2232 (US$0.0698) per kWh since domestic customers are willing to pay such amount for quality services. Private organisations which have the capacity to provide reliable supply of electricity should capitalise on the poor services provided by Volta River Authority of Northern Electricity Department Corporation (VRA-NEDCo) and supply reliable electricity so as to enjoy the higher tariff that households are willing to pay. Also, it is recommended that social intervention programmes which aim at increasing the level of household incomes should be implemented to help them increase their WTP amount.