International Research Journal of Finance and Economics
 Issue 133  April, 2015
 
The Effect of Board Monitoring Role on the integration of Corporate Social Responsibility into Corporate Governance: A Qualitative Investigation
7-25
Mohammed Naif Z Alshareef and Kamaljeet Sandhu

Abstract:
This study aims to explore the board monitoring roles in Corporate Social Responsibility (CSR) context and provide better understanding of how directors perform their monitoring role in order to facilitate the integration of CSR into the Corporate Governance (CG) structure. To achieve these objectives, this study adopted a qualitative case study, by conducting in-depth interviews with participants at various levels of board and management in the two Saudi companies. The findings revealed that there six board monitoring roles are crucial to improve the integration of CSR into governance structure. Based on the findings, theoretical proposition have been developed to direct further research on the CG and CSR topics. With growing of board of directors’ role in protecting stakeholders, the study’s findings are important to be considered in the reforming CG Codes, particularly in the context of protecting stakeholders’ interests. This practical implication is useful to alert the policy makers to reform CG codes regulatory and judicial systems in order to protect stakeholders’ interests and meet their expectations from the organization.
Keywords: Board monitoring role, corporate social responsibility, corporate governanceandstakeholder-agency theory
 
 
Measuring the Adoption of Corporate Social Responsibility Practices and Financial Performance
26-46
Mohammed Naif Z Alshareef and Kamaljeet Sandhu

Abstract:
This study aims to develop and validate an original construct and scale measurement of adoption Corporate Social Responsibility (CSR) practices that reflect the business roles towards different stakeholders with respect to economic performance. This objective can be achieved by extensively reviewing the existing body of literature on CSR measurement arena. Mixed methods of qualitative case studies and quantitative survey were adopted to develop, validate and provide more exploration and interruption of the adoption of CSR partices constructs and its relation to financial performance (FP). Tow Saudi companies was investigated in case study context. Case studies were conducted based on in-depth interviews with 19 participants at various board and management levels in order to develop the adoption of CSR practices construct and provide further confirmation for quantitative findings. 460 survey questionnaires were analysed for assessing the validity and reliability adoption of CSR practices. The research findings developed and validated the new construct and its scale for measuring the adoption of CSR practices. The new construct and scale were developed by six-dimensional structure of CSR practices, measuring the companies’ community, environment, shareholders, employees, customers, and supplier practices. This study builds important theoretical contribution to CSR literature by developing and validating a new construct and scale of adoption of CSR practices. This construct was developed based on the finding of qualitative case studies, in order to provide empirical evaluation of the adoption level of CSR practices companies. This study also can improve board members and managers’ awareness in how to evaluate CSR contributions within their organizations. A newly developed scale for the adoption of CSR practices can be considered as broad self-constructed indexes consisting of six main stakeholders were engaged through 17 CSR practices. The implication of CSR self-constructed index has two practical contributions at organizational and national levels. At the organizational level, it helps directors and executives in Saudi companies listed in industrial sectors that have high sensitivity to CSR issues within their operational activities, in managing and rating the adoption level of CSR practices within their organization. Additionally, the developed self-constructed index generates significant CSR guidelines for those companies to formulate effective corporate practices on CSR issues.
Keywords: Corporate Social Responsibility, Financial Performance and Construct Development and Scale Creation
 
 
Governance Role of External Auditorsin Managing Banking Risks Empirical Study-Egypt
47-58
Dalia Adel Abbass Elsayed Nasser

Abstract:
The serious economic conditions that Egypt is suffering from encouraged the Central Bank of Egyptto issue the corporate governance guidelines for banks in July 2011 after decreasing the credit rating of the country.This revealed weaknesses in risk management and governance processes at banks and highlighted the need to improve the quality of external audits of banks thatcan play an important role in contributing to financial stability when they deliver quality bank audits (BCBS, 2014). The paper presents an integrated framework for the role of the external audit in managing banking risks in the Egyptian banking sector.
Keywords: corporate governance, banks, risk management, external auditor, Central Bank of Egypt.
 
 
Exports and Economic Growth in Nigeria: An Application of ARDL Bounds Testing and Toda-Yamamoto Causality Approaches
59-75
Uche M. Ozughalu

Abstract:
The exact causal relationship between exports and economic growth has been an issue that has generated heated debate, over the years, among economists and policy makers. The debate has highlighted four possible outcomes namely: unidirectional causality from exports to Gross Domestic Product; unidirectional causality from Gross Domestic Product to exports; bidirectional or feedback causal relationship between exports and Gross Domestic Product; and non-causality or neutral causality between exports and Gross Domestic Product. This study utilises modern econometric methodology of Autoregressive Distributed Lag (ARDL) bounds testing technique for co integration and Toda-Yamamoto Augmented Granger causality test to analyse the causal relationship between exports and economic growth in Nigeria, based on annual time series data from 1960-2011 obtained from the Central Bank of Nigeria (CBN) and the World Bank. The study finds, among other things, that exports-led growth hypothesis is valid for Nigeria for total exports and oil exports but not for non-oil exports. Therefore, efforts should be made to adequately energise the non-oil sector so that it can optimally propel economic growth in Nigeria.
Keywords: The exact causal relationship between exports and economic growth has been an issue that has generated heated debate, over the years, among economists and policy makers. The debate has highlighted four possible outcomes namely: unidirectional causality from exports to Gross Domestic Product; unidirectional causality from Gross Domestic Product to exports; bidirectional or feedback causal relationship between exports and Gross Domestic Product; and non-causality or neutral causality between exports and Gross Domestic Product. This study utilises modern econometric methodology of Autoregressive Distributed Lag (ARDL) bounds testing technique for co integration and Toda-Yamamoto Augmented Granger causality test to analyse the causal relationship between exports and economic growth in Nigeria, based on annual time series data from 1960-2011 obtained from the Central Bank of Nigeria (CBN) and the World Bank. The study finds, among other things, that exports-led growth hypothesis is valid for Nigeria for total exports and oil exports but not for non-oil exports. Therefore, efforts should be made to adequately energise the non-oil sector so that it can optimally propel economic growth in Nigeria.
JEL Classification Codes: C22, F19, F41, F43
 
 
The Impact of Team Characteristics on the Individual Performances of Real Estate Brokers as Determined by Hierarchical Linear Modeling
76-91
Chun-Chang Lee and Lu-Chang Lee

Abstract:
The purpose of this study was to understand the factors which affect the job performance of real estate brokers. We adopted hierarchical linear modeling to analyze the data from a questionnaire survey conducted with housing brokers in Kaohsiung City. The questionnaires were collected from Oct 1st, 2011, to Nov 30th, 2011. A total of 776 responses were retrieved, of which 518 were effective samples, for a valid return rate of 66.7%. The results suggest that 5.53% of the variance in performance was the result of differences at the branch level. This finding further suggests that individual performances vary across branches. The most important factors impacting individual performances are individual-level factors. The branch-level characteristic variables (such as required working hours, group bonuses, and base salary levels) impact individual performance to a lesser degree but also cannot be ignored.
Keywords: Real estate brokers, Individual performances, Team characteristics, Group bonus, Hierarchical linear modeling
 
 
Evaluation of the Computerized Accounting Information System in the Finance Unit at Mutah University
92-107
Ghada Awad Altarawneh

Abstract:
An accounting information system is considered a vital tool for any organization as it enables institutions to improve their efficiency and capabilities. Mutah University, in common with other organizations, needs an effective accounting information system that can provide reliable, timely and relevant information. Therefore, the aim of this study is to evaluate the computerized accounting information system that has been implemented in the Finance Unit at Mutah University, in order to provide a complete picture of the system and highlight any deficiencies, thereafter rectifying any difficulties. The key result of this study is that Mutah University has a moderately effective accounting information system.
Keywords: System evaluation, Accounting, Accounting Information System, AIS, Database
 
 
A Study of Multiple Work-life Balance Initiatives in Banking Industry in Nigeria
108-125
OlumuyiwaAkinrole, Oludayo, Daniel Eseme, Gberevbie, DejiPopoola and Dare Ojo, Omonijo

Abstract:
This study examines the effect of a time usage policy on employee’s work-life conflict and the impact of leave programmes on employes’ attitude using five selected banks in Nigeria. A sample of N=386 respondents were randomly selected from these banks to participate in the study. Questionnaire was used to collect information from respondents. The standard multiple regression was used to generate results that indicate how well the set of variables representing work-life initiatives on time usage is able to predict work-life conflict. In order to find the relationship between the work-life initiatives on time usage and work-life conflict, the Pearson’s product-moment correlation coefficient was used. The result also showed that the correlations between the dependent variable-job-related attitude and independent variable-Leave initiatives to determine the level of relationship the work-life balance initiative bears on job-related attitude. The finding shows that a relationship exists between job related attitude and leave initiatives; however they are not statistically significant @ .05 level.
Keywords: Multiple, work-life, balance, banking, industry.
 
 
Measuring Cost Efficiency in the Jordanian Banks: A Comparison of SFA and DEA Methods
126-140
Ammar Jreisat, Sameer Al Barghouthi and Mohammad Othman

Abstract:
This paper aims to measure and evaluate the cost efficiency for 17 Jordanian banks (2 large, 8 medium, 4 small and 3 foreign) for the period 1996-2007 covering the deregulation era. We investigate the consistency of efficiency scores derived with two competing frontier methods. To present a comparative analysis of the frontier cost efficiency methodology by using econometric method based on the Stochastic Frontier Approach (SFA) and mathematical programming techniques based on Data Envelopment Analysis (DEA). The empirical result for the cost efficiency are obtained by running an input-oriented SFA model using the computer program, FRONTIER Version 4.1., developed by Coelli (1996),And cost efficiency scores are computed using an input-oriented data envelopment analysis (DEA). The paper findings suggest that both the domestic and foreign banks using both methodologies have shown over the years of deregulation era slight improvements and this led to improvement in the efficiency of the Jordanian banking sector.
Keywords: Cost Efficiency, Banks, Stochastic Frontier Approach, Data Envelopment Analysis.
JEL:D24, G21, L25
 
A Macroeconomic Balance Approach to Estimating Egypt’s Equilibrium Exchange Rate
158-171
Rana Hosni

Abstract:
This paper estimates the equilibrium real effective exchange rate for the Egyptian economy during the period (1980-2012). It reviews the evolution of Egypt’s exchange rate policy and the most significant developments of its real effective exchange rate during the same period. Using a macroeconomic balancemodel, it calculates the extent of real effective exchange rate misalignments in Egypt. This model is chiefly based on a number of elasticity parameters that describe the responsiveness of Egypt’s exports and imports to other variables. There is evidence that the actual real effective exchange rate has deviated from the equilibrium real effective rate with various degrees during the estimation period. The Egyptian pound was overvalued before the launch of the ERSAP. The latter marked an undervaluation period that lasted till 1993. The floatation of the pound in 2003 caused an undervaluation of the pound’s real effective exchange rate till 2005. The findings indicate that the pound approached to its equilibrium level thereafter. However, the eruption of the global financial crisis in 2008 interrupted the trend of declining misalignment causing a divergence between the actual real effective rate and its fair value. The model was parameterized twice to investigate the sensitivity of its conclusions to the assumptions used.
Keywords: Egypt, real effective exchange rate, MB approach, exchange rate misalignment.
JEL Classification:C23, F31, F41, O55.
 
The Analysis of Oil Income Revenues Impact on Iran Income Distribution with Emphasis on Resource Curse Phenomenon
172-180
Mohammad Ali Shabani and Mohammad Hossein Mahdavi Adeli

Abstract:
Equitable distribution of income is one of important economic and social issues of governments in countries.In this study, the Gini coefficient which is one of indicators for measuring the distribution of income has been studied in Iran between 1966 to 2010, and illustrates that although the Gini coefficient decreased in comparisonwith the early 1970s, in other words move towards equal distribution of income,in the past few years it has been approximately constantfluctuating around 0.4.The main research question is that despite the country's rich natural resources and revenues from oil exports, and spending by the government to pay for the development and current expenses, why not move towards income distribution equity.For this purpose, the impact of oil revenues on the income distribution during the mentioned period was estimated using ARDL model.In this study, an analytical framework for the income distribution and resourcesdisaster phenomenon is presented, thenGini coefficient as an income inequality indicator as the dependent variable and oil revenues as an resource abundance indicator together with other economic variables as explanatory variable are used.Regression results show that oil revenues increaseincome inequality in a short and long term, but noted that oil revenues has a positive impact on equitable income distribution on a hiatus and error correction coefficient indicates 51% in each of the Gini coefficient (income distribution) were adjusted and approached its long-term trend.
Keywords: Fair Income Distribution, Natural Resources, Oil Revenues, Resources Disaster.
JEL Classification:Q3, D72, C22, E52
 
Effect of Trade Openness and Foreign Direct Investment on Economic Growth:An Empirical Research of the Three Baltic Countries
181-191
Chaido Dritsaki

Abstract:
This paper examines the effect of trade openness and foreign direct investment to economic growth over the period 1993-2011 inthree Baltic countries. The impact of variables to economic growth is estimated using three panel estimation models which are called pooled model (pooled), fixed effects model (FEM) and random effects model (REM). The results of pooled regression show that there is significant effect of trade openness and foreign direct investment on economic growth while random effect model, which is selected for conducting the panel data analysis,suggests that trade openness has significant impact on economic growth in the Baltic countries.
Keywords: Trade Openness, Foreign Direct Investment, Economic Growth, Panel Data, Three Baltic Countries.
 
The Impact of Capital Structure on Profitability of Jordanian Industrial Companies
200-209
Ahmad Abdul-Rahman Makhadmeh and Mohammad Abdalraheem AlMahasneh

Abstract:
This study attempts to investigate the influence of capital structure on profitability in industrial firms. The study used short-term debt (STD), long-term debt (LTD) and total debt (TD),to measure the capital structure while for profitability it used earnings per share (EPS), DPS, return on asset (ROA) and return on equity (ROE). The study has covered 59 industrial firms in Amman Stock Market during the period of 2001 to 2010. The study found out that total debt has positive impact on all variables of profitability, and long term debt has significant impact with EPS and DPS while ROA and ROE have a weak impact. The short term debt has a negative impact with all dependent variables (EPS, DPS, ROA, ROE). The study assumes that this impact becomes stronger or weaker based on kind of debt classification.
Keywords: Capital structure, Firms performance.