International Research Journal of Finance and Economics
 Issue 112
 Aug, 2013
Customer Psychological Perspectives and Corporate Image as Predictors of Customer Loyalty in the Mobile Service Industry
Yenhui Ouyang
This study examines the relationships among customer psychological perspectives, corporate image, customer satisfaction, and customer loyalty to find out which dimensions of customer psychological perspectives are significantly correlated with customer satisfaction and customer loyalty. The direct effects and a mediation model were evaluated through structural equation modeling analyses and Sobel tests. The results of the structural equation model yielded insights into the influence of these dimensions on customer satisfaction and loyalty, while the Sobel tests further confirmed that corporate image is a significant mediator between customer psychological perspectives and customer satisfaction. These results can serve as a valuable reference for mobile service providers to better manage their corporate image and enhance customers’ loyalty.
Keywords: Customer psychological perspectives, Consumer value consciousness, Perceived quality variation, Corporate image, Customer satisfaction, Customer loyalty.
JEL Classifications Codes: C12, M31.
Causal Relationship between Trade, Foreign Direct Investment and Economic Growth for Lebanon
Wadad Saad
This study empirically investigates the causal relationship between trade services (export and import), foreign direct investment inflows (FDI) and economic growth of Lebanon over the period 1971-2011. To do so, Johansen cointegration procedure and Granger causality test are used. The cointegration analysis suggests that there is a long equilibrium relationship between foreign direct investment and economic growth. The results of Granger causality test show that there are bidirectional causal relationships among export, import, and economic growth. However, there is no causal relationship between foreign direct investment and any other variable in the short term.
Keywords: Gross domestic product, foreign direct investment, trade, Johansen procedure, Granger causality.
JEL Classification Codes: F21, F23, F36, F43
The Relationships among Service Quality, Brand Image, Customer Satisfaction and Re-Interaction Intention of Cable Television Consumer
Ying-Shao Chang
Change and competition caused by the pace of digitization and the convergence of digital media industries are placing pressure on cable companies. To retain customers, cable television operators should provide high service quality, as service quality is the main factor that affects customer satisfaction, which, in turn, directly affects customers’ willingness to renew services in the future. Thus, high service quality can establish customer loyalty and a sense of dependence, allowing a firm to avoid potential negative impacts caused by competition from new market entrants. Customer satisfaction with the substantive interactions that occur with cable television providers has been relatively difficult to determine. This study examined face-to-face interactions between customers and representatives of one such company to not only determine customers’ opinions regarding the service quality and corporate image of this system but also assess customers’ service satisfaction and the re-interaction intentions of these consumers with respect to the examined provider. Through this analysis, the interactions that had been established between the examined cable television provider and its consumers were reviewed.
Keywords: Cable television provider, digitalization trends, service quality, corporate image, service satisfaction, re-interaction intention.
Impact of Information and Communication Technology on Economic Growth in Newly Industrialized Countries
Karnjana Sanglimsuwan
Information and communications technology (ICT) is one of the key factors explaining growth differentials across countries. Basically, ICT is hypothesized to have positive effects on productivity, and therefore helps raise economic growth. The objective of this study is to analyze the impact of ICT on economic growth by using data of 9 newly industrialized countries (NICs) over the period 1994-2011. Panel data analysis is carried out to examine the factors affecting economic growth of 9 NICs. The regression model is modified to measure factors that influence economic growth which is represented by per capita gross domestic product (GDP). Internet user is used to represent the current state of ICT; while other macroeconomics factors such as gross capital formation, household consumption, government consumption and trade ratio are also used to estimate economic growth. Three specification; pooled-OLS, fixed effects, and random effects specifications are estimated and tested for the most appropriate model. Hausman test shows that fixed effects specification is the most appropriate model. Internet has positive and significant effect on economic growth as expected. Moreover, gross capital formation, household consumption and trade ratio have significant positive effect on economic growth. However, government expenditure has not shown significant impact on economic growth.
Keywords: Economic Growth, Information and Communication Technology, Internet User, Panel Data.
The Debt and Fiscal Nexus in Barbados: A Fiscal Policy Reaction Analysis
Jason LaCorbiniere and Roland Craigwell
The sustainability of public debt in Barbados has received significant and increasing attention over the past decade. Most of the research in this area has focused on Central Government debt as indicated by various thresholds and co-integration analyses of revenue and expenditure. These papers have found, in general, that Central Government debt is on a sustainable path. However, much less empirical investigation has been applied to the explicit fiscal policy responses to rising debt. This study therefore tests government’s fiscal policy reactions to changes in the level of central government debt. Furthermore, given the unique risks associated with contingent liabilities, whether Barbados’ fiscal policy systematically responds to adjustments in total Government debt is assessed. Using dynamic co-integration and state space modeling frameworks, support is found for the notion that Barbados has pursued sustainable fiscal policy since 1975. However, the declining strength of the fiscal response suggests that the authorities need to focus on raising the non-interest budget balance if the level of debt is to be sustainable in a practical sense.
Keywords: Fiscal policies, Public Debt, Dynamic OLS, State space models.
JEL Classification Codes:H30, H63, C22.
Empirical Determinants of Consumer Spending in an Open Economy Setting: Panel Data Evidence from the Caribbean
Richard Sutherland and Roland Craigwell
A substantial increase in the degree of openness across the Caribbean region has been observed in recent times. In generating a better understanding of this process and how it might affect consumer welfare, this paper presents a model that explicitly accounts for the effects of openness to international trade and the real exchange rate in the determination of real private consumption expenditure for thirteen Caribbean countries. By employing Pesaran, Shin and Smith’s (2001) ARDL single equation co-integration approach in a panel framework, this paper finds that in the short-run, real private consumption growth is significantly affected by changes in income, wealth, the real interest rate, the real exchange rate and the degree of openness to international trade. In the steady state, the income and interest rate variables are the only important determinants of long-run consumption. Moreover, results of the sensitivity analysis indicate that import penetration and export intensity are individually critical in influencing private spending both contemporaneously and in the long term. Private expenditure in the Caribbean adjusts to equilibrium levels in just about three years.
Keywords: Consumption Function, Panel Data Econometrics, Openness to International Trade.
Health Care Status and Demands of Cancer Survivors and Parental Stress in Mothers’ of Children with Cancer
K. Kalaivani and R. Shanmugalakshmi
In this study we examine relationships between a mother’s stress-related conditions and parenting attitudes (study I) and the status and demands of the cancer survivors and their impact on the family (study II & III). The aim was to increase our understanding of the determinants of south Indian parental reactions and needs and the survivors quality of life. This facilitates the development of the care and follow-up routines for families, paying attention to both individual risk and resilience factors and to ways in which limitations related to treatment centre and organizational characteristics could be compensated. Nearly 1070 mothers of a cancer affected children of 0 to 14 years old, completed a questionnaire including questions about their stress / coping behaviors, parenting attitudes and their family impact. Nearly 95% of mothers responded to the follow-up survey. Different types of parental stress/coping behaviors and parenting styles may differently predict their children’s status, and such associations may change as children grow. Also a study on the health status and demands of adult survivors is conducted among >7000 patients in 4 years period (2007 – 2011). Survivors rate their physical and mental health similarly to those in the general population, apart from bone and central nervous system tumour survivors who rate their physical health below population norms.
Keywords: Stress / Coping, Parenting Attitudes, Family Impact, Psychosocial Stress, Health care Demands, Health Status, Survivors.
Economic Development in the Light of Islamic Investment Funds
NaderaNofan Mryan
The importance of the financial system has occupied economists and policymakers since the beginning of financial history. The primary purpose of financial institutions is to mobilize otherwise idle resources for use in productive investment. A wide array of theoretical models has appeared in the growth and development literature in the past decade to formalize the link between financial-system functions and their role in financing development of real economy . The efficiency of financial intermediaries can effect economic growth. Financial institutions, on the same regard influence the accumulation of physical capital by “directing funds” to entrepreneurs who wish to invest (Ross,1997). Such capital mobilization proceeds in two stages: Capital collection through deposit-taking and fund dispersal through loans. By repeating this process, the financial system multiplier expands the money supply and redistributes the economy’s capital. These financial intermediaries functions increase the share of resources targeted to productive investment (Pango,1993). It is worth emphasizing that Islamic financial institutions added one important element to what has been said so far that is “ role of Islamic financial intermediaries cannot be only tied to the role of mobilizing capital, rather their role can be extended through decisions about how to lend and invest fund (i.e., the quality of investment). Thus, Islamic financial institutions can influence the quality of capital formation”.
Twin Deficits Analysis for the Central and Eastern European Countries
Çigdem Boz
In open economy macroeconomics, the positive relationship between budget deficit and current account deficit is known as twin deficits hypothesis. According to this hypothesis, a government budget deficit leads to a current account deficit. Although Keynes talked about it early on, this relationship has been significant for the literature since 1980s with the increase of both deficits in the USA. However, this close relationship has also been experienced by many European countries. Moreover, emerging markets often encountered the same problem in the recent liquidity abundant period. There are several studies analyzing this relationship however there is no consensus for the existence of twin deficits. Hence, this paper aims to analyze this hypothesis for a group of Central Eastern European (CEE) countries using quarterly data between 1998 and 2009. Differing from traditional ones we employ panel data analysis through panel unit roots and panel cointegration tests to the CEE countries. Our preliminary empirical results show that unlike studies employing traditional methods twin deficit hypothesis is supported using these techniques.
Keywords: Twin Deficit, Budget Deficit, Trade Deficit, Panel Cointegration Analysis.
An Applied Monetary Analysis for the Turkish Economy: Some Time Series Evidence
Levent Korap
The Turkish economy witnessed many different stabilization attempts especially to fight inflation within the last three decades. In this paper, I aimed to examine determination of monetary policy by way of using identification schemes derived from contemporaneous times series analyses. To briefly summarize, my results yielded evidence in favor of a macro model using a learning from the data approach in the sense that the investigation period indicated concurrently a money demand model, an inflation – output long run trade off relation and also an interest rate determination equation.
Keywords: Monetary Policy, Cointegration, Identification, SVEC Modeling
The Effect of Corporate Governance on Financial Reporting Quality: The Case of Jordanian firms
Muath B. Abdel Qader, Rami M. Alzebdieh and Ahmad H. Daher
This study draws upon prior research on corporate governance and examines the effect of some of the governance mechanisms on the financial reporting quality for a sample of Jordanian firms. Specifically, we focus on the characteristics of the board of directors and the ownership structure of 69 industrial and services firms listed on the Amman Stock Exchange during the period from 2005–2010. The results revealed that some governance mechanisms affect financial information quality of the Jordanian companies. Particularly, audit quality increases the reporting quality, while the control by institutions is associated with a bad quality of financial disclosure. Finally, data analysis extracted that earnings informativeness is not related to board independence, CEO duality and the board size.
Keywords: Corporate Governance, Board of Directors, Financial Reporting Quality.
Educational Expenditure and Economic Growth: Evidence from Saudi
Mwafaq M. Dandan
The current paper is an attempt to investigate the impact of public educational expenditures by level of education on economic growth in Saudi Arabia during the period (1994-2011), where different statistical techniques were used for this purpose. The present study examined the relationship between public expenditures on level two levels of education school and higher education, and economic growth (where non-oil GDP is taken as an indicator to economic growth) the impact has been tested through OLS method. The results show that there is positive significant relationship between the response and stimulus variables. The unit root of the series has tested through the utilization of Phillips-perron and dickey-fuller unit root tests, the results shows that the series are found to be non-stationary at the school level expenditures are stationary at first difference while the non-oil GDP and higher education expenditures are found to be stationary at second difference. The long run association ship among variables is tested through johansen test of cointegration, the results show that there is cointegration among variables or alternatively there is long run relationship among dependent and independent variables.
Keywords: GDP growth, Education Expenditures, Education in Saudi Arabia.
Trade between the U.S. and the GCC Countries: Evidence from Causality and Cointegration Analysis
Imad Bou-Hamad, Mahmoud Mourad and Pierre Duchesne
The economic relationship between the GCC (Gulf Cooperation Council) countries and the U.S. has commonly has been viewed as that of one trading block. This view had been cemented since the GCC currencies were pegged to the U.S dollar. The targeted goal of this study conducted is to essentially investigate this assertion by analyzing annual trade data between the GCC countries and the U.S. The time period investigated is from 1985 to 2009. For each of the six GCC countries, two imperative trade ratios are effectively reckoned: (1) the ratio of its total exports to the United States to its global exports to the world, and (2) the ratio of its overall imports from the United States to its global imports around the world. The diagnostic tests conducted for cointergration used in this study showed no long-run equilibrium relationship between the two trade ratios of any GCC members. Furthermore, a detailed bivariate Granger causality analysis was perpetrated for each country and different bivariate vectorial autoregressive (VAR) models were estimated. The bivariate models obtained disclosed different behaviors of both ratios over time. Thus, the GCC countries exhibit heterogeneities in their trade pattern with the U.S.
Keywords: Cointegration, Causality, Vectorial Autoregressive Models, Forecasting, Trade Ratios, Exports, Imports.
The Dynamics of Financial Depth, Trade Openness and Economic Growth: Empirical Evidence from Middle East and North African Countries
Rudra P. Pradhan, Ayan Khasnabis, Samadhan Bele, Sasikanta Tripathy and Shashikant Pandey
Economists, researchers and policy analysts have given considerable attention to the relationship between financial development and economic growth, especially in the developing countries. Unlike earlier work, this paper gives attention to the nature of causal relations between financial depth, trade openness and economic growth using a panel vector autoregressive (VAR) on a sample of seven MENA (Middle East and North African) countries- United Arab Emirates, Egypt, Lebanon, Qatar, Bahrain, Oman and Jordan- over the period 1960-2011. The results show that there is a long- run stable equilibrium relationship between financial depth, trade openness and economic growth. The Granger causality tests further claims that there is a presence of unidirectional causality from financial depth to both trade openness and economic growth.
Keywords: Financial depth, MENA, Panel VAR
Efficiency, Determinants and Investor Participation in Different Issue Mechanisms: Evidence from India
Biwesh Neupane and Suman Neupane
Using a sample of 371 IPOs listed on Bombay Stock Exchange and/or National Stock Exchange during period of January 2001 and December 2010, the paper examines the efficiency of different pricing mechanisms, determinants of choice of pricing mechanism and investor’s participation. Consistent with similar other studies carried out in other countries we find that IPOs issued under the auction mechanism are least underpriced while those issued with fixed price mechanism are most underpriced. We also find that firms with higher levels of information asymmetry are less likely to use bookbuilding/auction mechsnism and that more risky firms are more likely to use the less complicated fixed price mechanism. However, we also find that firms with a greater concern for accurate pricing are more inclined to use auction and bookbuilding mechanism rather than fixed price IPOs. Likewise, while examining the pattern of investors’ participation, we find that the recent return on the market appears to influence the participation of all the three investor categories (retail, institutional and non-institutional investors) but recent IPO return appears to influence the participation of retail and non-institutional investors only, which reveals that there is return chasing behavior on the part of less informed investors.
Keywords: Initial Public Offerings, Fixed Price Offers, Bookbuilding, Auction, Investor Participation, Underpricing.