International Research Journal of Finance and Economics
 Issue 138
 August, 2015
Econometric Analysis of the Efficiency’s Determinants of the Public Expenditure: Case of Morocco
Saâd Benbachir, El Haddad Mohamed and Abouzaid Aziza

This paper is devoted to the econometric evaluation of the effectiveness of the public expenditure in the Moroc can public contracts frame work in order to determine the relationship between public expenditure and economic growth, explaining thus the apparently low rate of public investment in Moroccan economy. To study the determinants of the effectiveness of public expenditure and the assessment of their contribution to the improvement of economic growth, we propose in this paper two econometric models. The first one addresses the impact of aggregate public expenditure on economic growth. The second one focuses on the impact of disaggregated public expenditure on economic growth.
Keywords: Public expenditure, Aggregate expenditure, disaggregated expenditure, Growth, Efficiency
Industrial Diversification, Global Diversification, and Quality of Accounting Information
Jeng-Nien Yuan

This study examines the accruals quality and excess values of single- and multi-segment firms, as well as domestic and global firms. Using a sample of 39,595 firm-years in the U.S. between 2000 and 2012, we find that the accruals quality is lower by 4.2 to 4.7% for multi-segment firms than for single-segment firms and by 2.1 to 3.4% for global firms than for domestic firms. We also find that the accruals quality is related to the excess values. For multi-segment and global firms, poor accruals quality causes excess values to be lower by 4.7 to 5.2% and 4.1 to 4.3%, respectively, than for single-segment and domestic firms. These findings suggest that corporate structure plays a major role in a firm’s accruals quality, which, in turn, affects the excess value; and multi-segment or global firms suffered more agency problems have lower accruals quality, which leads to lower excess values. Overall, our results support the managerial objectives theory (Jensen and Meckling, 1976) and informational asymmetry hypothesis.
Keywords: Industrial Diversification, Global Diversification, Accruals Quality, Excess Value
JEL Classification: G32, M41
The Impact of Liquidity on Jordanian Islamic banks Profitability
Maysa’a Munir Milhem

The purpose of this paper is to examine the impact of liquidity on Jordanian Islamic bank profitability. We conduct an empirical analysis over Islamic banks in Jordan; Data has been compiled from annual reports the period between 2009-2014. The proxies for liquidity are cash deposit ratio (CDR), loan deposit ratio (LDR), and current ratio (CR). While Return on assets (ROA) and Earning Per share (EPS) was the proxy for profitability.
Functional models were used in this study to determine the relationship between liquidity and profitability. Regression, t-test and f-test were used to test the hypothesis. The results show that there is negative but not significant relationship between liquidity ratios (CDR, LDR, and CR) and profitability ratio (ROA). The analysis also show that there is negative and not significant relationship between liquidity ratios (CDR, LDR) and profitability ratio (EPS) but there is negative and significant relationship between liquidity ratio (CR) and profitability ratio (EPS).
Keywords:Liquidity, Profitability, Islamic Banks, Jordan.
JEL: G21
Deterrents to the Housing Microfinance: Evidence from a Study of the Bankers to ‘Bhavanashree’ in Kerala, India
Manoj P K

It is widely recognized that Housing Micro Finance (HMF) has tremendous potential to solve the housing problem of India as it can mitigate the ‘Real housing problem in India’ i.e. the housing problem of the poor in India. As high as 99.84 percent of the total housing shortage in India relates to the poor viz. those in the Economically Weaker Section (EWS) and Low Income Group (LIG) categories. In spite of the vast potential of HMF in addressing the real housing problem, it is yet to pick up momentum in India. In this context, this paper looks into the deterrents to the healthy growth of HMF based on the feedback from the bankers of ‘Bhavanashree’ (BS), which is the HMF initiative of the poverty alleviation programme of the Government of Kerala viz. ‘Kudumbashree’ (KS). Taking cues from the experience of BS, which is being taken over by the Government since June 2010, the paper makes suggestions for effective HMF implementation.
Keywords: Real Housing Problem, Housing Micro Finance, Land Tenure, Cost Efficiency.
IPO Advertising: A Possible Cause of Short-term Overvaluation
Konpanas Dumrongwong

This research investigated the market conditions caused by IPO advertising by examining the impact of IPO advertising, based on the US stock market from 1986 to 2009. The relationship between advertising intensity in the IPO year and the degree of IPO underpricing was examined. It was found that an increase in advertising intensity around an IPO event increases the initial returns. Simultaneously, however, advertising intensity around an IPO event also increases the degree of overvaluation, which raises the question as to whether advertising serves primarily as a mechanism to convey a firm's true value to investors. The theoretical valuation of IPO and the relation between IPO advertising and the degree of stock overvaluation are discussed. Based on the Peasnell (1982)'s residual income valuation framework (henceforth RIV), IPO advertising was proved to cause stock price to be more overvalued in the secondary market: a positive relationship was found between advertising and the degree of stock overvaluation relative to its theoretical value. Accordingly, an alternative hypothesis, that advertising inflates the short-run stock price, was proposed. The results of this study are consistent with the view of Purnanandam and Swaminathan (2004), namely that the stock price of newly listed firms can be overvalued.
Keywords:Asset Pricing, IPO, Information and Market Efficiency, Event Studies, Financial Forecasting
JEL Classification Code:G12, G14, G17, G24
An Analysis of the Management Efficiency of Taiwanese PCB Industry – Using the 2-Stage Malmquist Index
Y. C. Lee and Y. H. Yang

This study was conducted on 24 PCB firms between 2007 and 2011, using the Malmquist Productivity Index (MPI) to analyze cross-period efficiency. By showing the relative positions and competitive profiles of the DMUs in a management matrix, the leading group with high efficiency and trailing group with low efficiency were indicated. The outcome showed H&T, KIN, WUS, CAD, and BOA were leading in performance with high efficiency while APCB, FHT and others were trailing with low efficiency.
Keywords: PCB business, management efficiency, Malmquist, management matrix
Evaluation of Graduates in the Vocational Training of Mahabad based on the Entrepreneurial Components
Leila Mohammad Aminzadeh, Mohammad Seifi and Alireza Faghihi

Present research aims to study and evaluate vocational high school period based on the entrepreneurship features. The research method is descriptive-survey and population statistics of the study were 1207 graduates’ vocational high school period in Mahabad. Research sample volumes from the graduates were included 291 who were selected randomly according to the Moragan's table. The research data gathering tool was questionnaires which assessing personality features of Iranian entrepreneurship (2007) for graduates in order to gather required data. In order to analyze data one sample T-test calculated for the graduates were 2.59. Since this amounts is lower thane the critical value ±1.96. Considering the results, equity assumption of society mean in the test was not supported in significance level of 0.05. It could be said there is a significance difference between test results and variable mean in society. In other words, graduates are in lower position regarding entrepreneurship features.
Keywords: entrepreneurship, vocational(Kardanesh),graduates, Mahabad
Asymmetric Effects between Financing Surpluses and Deficits on Corporate Pecking Order Behavior
Min-Shik Shin, Soo-Eun Kim and Jae-Ik Lee

This study examines the asymmetric effects between financing surpluses and deficits on corporate pecking order behavior using panel data of firms listed on the Korea Exchange from 2000 to 2014. We find that the original test model of Shyam-Sunder and Myers (1999) is not the best descriptor of corporate financing behavior in the Korean capital market. Specifically, financially constrained non-chaebol small firms with large deficits do not engage in pecking order behavior even though they have the highest potential for information asymmetry. We provide a solution to the pecking order puzzle by separating financing deficits from financing surpluses. According to our results, the test model provides an excellent fit for financing surpluses and a reasonable fit for small financing deficits, butan extremely poor fit for large financing deficits. Moreover, our findings demonstrate that the frequencies of large deficits and financial constraints are higher in non-chaebol small firms. Even though non-chaebol small firms have a higher occurrence of large deficits and greater exposure to financial constraints, they do not engage in pecking order behavior.
Keywords: financing surpluses, financing deficits, pecking order behavior, information asymmetry, financial constraints
JEL Classification code:G30
Impact of Some Selected Macroeconomic Variables on Stock Market Returns in Nigeria
Nwanne, T. F. I.

There has been a growing concern on the role of macroeconomic variables on stock market return in Nigeria, despite the fact that the monetary authorities had embarked on several policies aimed at improving the growth of Nigerian stock market and ensuring stable growth in the economy. The aim of this study is to examine the effect of some selected macroeconomic variables such as gross domestic product (GDP), inflation rate and monetary policy rate on stock market returns in Nigeria. Empirical evidence from the developed and developing economies has shown that a country’s macroeconomic variables have the capacity to influence the entire economy through stock market. An ex-post facto design (quantitative research design) was used to carry out this study by employing regression analysis. The results of the study indicate that the level of economic growth over the years have significant positive impact on the stock market return. While, inflation rate and monetary policy rate shows negative significant impact on stock market returns in Nigeria. The implication of this finding is that a decrease in inflation and monetary policy will improve the performance of Nigerian stock market in both long and short run. It is the recommendation of researcher that the Nigerian stock market should be made more attractive to a potential large number of small investors who wish to depend on long term investment during retirement because at the same time, it would enhance the growth of gross domestic product coupled with the implementation of appropriate monetary and fiscal policies that will invigorate long term securities investment in Nigeria.
Keywords: Capital Market, Inflation, GDP, Monetary Policy Rate, Error Correction Model.
GCC Currency Harmonization and Economic Integration
Lina W. Tabbara

The study investigates the feasibility of proceeding with the proposed common currency in the Gulf Cooperation Council Countries, namely Bahrain, Kuwait, Oman, Qatar, United Arab Emirates and Kingdom of Saudi Arabia. By relying on the multivariate Structural Vector Autoregressive approach (SVAR), Basic Vector Auto-Regression, Granger Causality and Impulse Function Response analysis. The study focuses on the symmetry, magnitude and variance decompositions of underlying structural as a precondition for forming an optimal currency area. The research emphasizes on the latest progress toward economic and financial integration in the GCC Region. Furthermore, it reflects on the lessons from the experience of chosen currency and monetary unions, and finally it analyses the inherent costs and benefits of a unified currency for GCC countries.
Keywords: Monetary Transmission Mechanism (MTM), Optimum Currency Area (OCA), Harmonization, SVAR Model, Integration, Viability, GCC. .