International Research Journal of Finance and Economics
 Issue 164
 November, 2017
Monetary Versus Fiscal Policy Effects on SMEs Growth in Africa: Evidence from Ghana
Opuni Augustine and Edward Asiedu

The operations of Small Medium Enterprises have contributed immensely to the development of the economy of Ghana. The effectiveness of their operations depends highly on the economic environment they find themselves. Owners of SMEs rely hugely on capital raised from family members, personal savings or from financial institutions other than the government. The means of raising capital and other income to facilitate their operations especially, from the financial institutions comes with a cost.
This study focused its assessment on the impact of loan interest rates and tax pressures on SMEs’ performance and growth in Ghana. Data for the study was collected randomly from 153 respondents (SMEs) using structured questionnaire. Both qualitative and quantitative methods were used to analyse the data. A multiple regression model was constructed with dependent variables being employment growth, and independent variables being lending rates, power supply, duration of business, type of business, tax pressures, gender and educational levels of owners. The study found a strong effect of monetary policy on firm performance in terms of employment growth. Thus, even though interest rates are generally high in Ghana, firms that manage to get slightly reduced lending rates have higher growth in terms of employment. Fiscal policy in terms of tax perceptions or pressures is less correlated with firm performance. Policy makers should continuously supervise the financial system in order to minimize huge spreads in lending rate in an environment of high rates, to enhance firms and economic growth.
Keywords: Lending rate, Tax pressures, Employment, SME Growth, Ghana.
JEL Classification: O12, O16, H26
The Economic Impact of Marketing Campaigns on the Lebanese Consumer: Implications for the Pharmaceutical Industry
Bassam Hamdar, Robert Gharios, Antoine Awad and Kazem H. El-Husseini

Pharmaceutical companies in Lebanon are implementing marketing activities for their “Over The Counter” (OTC) pharmaceutical products in the pharmacy channel, within promotional regulations posed by the Lebanese Ministry of Health. These activities are intended to have an influence on consumers’ behavior towards OTC products, and to increase sales volume.
This paper highlights the behavior of the Lebanese consumers towards marketing activities inside the pharmacy, and attempts to evaluate the effectiveness of marketing efforts associated with Pharmaceutical products. It also reflects the in-pharmacy marketing trends carried out today to affect consumer’s perception, beliefs, attitudes and buying decisions, by utilizing merchandising and promotional techniques followed in retail stores.
The pharmacy channel is the only legal place to find, purchase and promote over the counter pharmaceutical products that are available to all consumers in Lebanon.
The effect of promotion on consumers’ behavior is a key determinant for the success of promotional campaigns at pharmacies; promotional specifications include the product promotional displays and location of the product, the pharmacist recommendation, price, word of mouth and emotional attachment to the product. This combination of promotional elements will allow the development of new marketing strategies that can best achieve planned objectives.
The study of consumer behavior depends on quantitative research tools, mainly regression analysis; utilized to affect consumer choice. The results indicated that 74.7 % of the respondents have noticed OTC products promotion inside the pharmacy. Moreover, OTC product posters at the entrance or inside the pharmacy were the most attention grabbing for 55.45% of the consumers.
The results also showed that 70.43% of the consumers will include an OTC medicine in their Top Of Mind (TOM) choices when comprehending the message of the related poster.
Keywords: Marketing campaigns, Lebanese consumers, pharmaceutical industry, Over the Counter (OTC), economic impact
JEL Classification: M1; M2; M3, C1, C5
Linkage between Public (State Sector) Investment, Private Investment and Economic Growth: Evidence from Vietnam
Nguyen Thi Canh and Nguyen Anh Phong

This study is to assess the impact of public (state sector) investment on private investment and economic growth in Vietnam based on data from 22 economic industries over a 27-year period (1990-2016) by applying PVAR model combined with GMM. The results show that public (state sector) investment (including public investment and state-owned enterprise investment for production and business activities) has a positive impact economic growth in most economic industries in the short and medium term. Public (state-sector) investment has increased the private capital stock in the short term, but crowds out private capital stock in the medium term, it also crowds out domestic private and FDI investments in the short term, incentives them in the mid-term.
Keywords: Public Investment, State Sector Investment, Private Investment, Economic Growth.
JEL Classification: O00
The Impact of Female Board of Directors on Firm Performance and Dividend Payout Policies. Evidence from Vietnam
Nguyen Thi Cam Tu

This research aims to explore the impact of female board of directors on firm performance which are ROA, ROE and Tobin's Q as well as dividend payout policy of listed corporates in Vietnam. Fixed Effects and Random Effects methods are applied to test our suppositions on the dataset of 647 listed companies in Vietnam from 2010 to 2015. The result of this paper displays positive influence of the ratio of female directors and over-retirement age female directors and the negative effect of the ratio of independent female directors on firm performance but fail to confirm the statistically significant impact of these groups on dividend payout policy. The finding from this work could be scientific basic for Vietnamese enterprises to build and form the most proper board for themselves and contributes to the existing literature through the empirical evidence with more insight into the effect of corporate governance, particularly female directors on firm outcomes from a typical developing country, Vietnam.
Keywords: board of directors, female directors, firm performance, dividend payouts, Vietnam.
JEL Classification: D2, L25
The Impact of Equitization on Firm Performance: The Case of Vietnam
Duong Nhu Hung, Nguyen Dinh Thien, Nguyen Thanh Liem

Privatization has been implemented across the globe as a pill to cure the weakness and inefficiency of state-owned firms. Numerous studies have conducted tests in a bid to examine whether privatization can help improve firm performance. The findings so far are inconclusive, with some indicating a significant benefit for firms in terms of efficiency gain and some arguing that privatization is a worthless economic reform. The equitization (known as partial privatization in other countries) has been part of Vietnamese economic reform since 1992, and is well-nurtured into the short-term future, at least. This paper characterizes the equitization of state-owned firms in Vietnam, and its impact on the stock market and firm performance. Our findings show that the equitization has several merits towards the stock market development, and that firms with state origin have better earnings, profitability and total asset turnover, compared to other firms. However, state-owned firms are valued lower in terms of market value.
Keywords: IPO, firm performance, privatization.
JEL Classification: G34
Equitization and Operating and Financial Performance: Empirical Evidence from Vietnamese Companies
Nguyen Ton Nhan and Tran Hung Son

The paper evaluates the impacts of equitization on firm performance. Besides pre- and postprivatization comparison method of Megginson (1994), this study uses propensity score matching and difference-in-difference methods in order to overcome the selection bias and the inadequateness to pick out the equitization effect from the coexisting effects of other economic factors. We find that equitization can consistently enhance the firm performance in terms of profitability and sales efficiency in exchange for employment security. This strong evidence of profitability and sales efficiency increase is also found in our subsamples of equitized SMEs and large businesses despite some dissimilarities in net income efficiency and output. Our findings imply that equitization plays a vital role in enhancing the performance of Vietnamese state-owned enterprises.
Keywords: Equitization, firm performance, propensity score matching, difference-in-difference, selection bias.
JEL Classification: L25
Time-series and Cross-sectional Momentum in the Saudi Arabia Stock Market Returns
Shah Saeed Hassan Chowdhury

This paper investigates the presence of time-series and cross-sectional momentum profits and the relationship between these two types of profits in the Saudi Arabia stock market. Results confirm that both time-series momentum and cross-sectional contrarian profits are present in this market. The presence of cross-sectional contrarian profits is stronger than that of time-series momentum profits. Cross-sectional profits are so strong that it remains even after time-series momentum and other market risk factors are considered. An observation period of three months gives the best opportunity to provide cross-sectional contrarian profits. Finally, there is a relationship between these two types of momentum profits in the short holding period, but as the holding period increases the relationship fades away.
Keywords: Time-series momentum; Cross-sectional momentum; Behavioral finance; Saudi stock market; Emerging markets; Frontier markets.
JEL Classification: G11, G12, G15
The Impact of Oil Price Shocks on the Moroccan Financial Market (From 1994 to 2010): Composite and Sectorial Level
Abdelmounaim Lahrech, Sami Alabdulwahab and Assya Chraibi

This study investigates the association between oil price shocks and stock returns in Morocco. More precisely, it determines whether there is a statistically significant impact of oil shocks on MASI returns as well as on different economic sectors listed in the Moroccan stock market. The data will be analyzed in a (DCC MGARCH) model developed by Engel in 2002. This model enables forecasting and analyzing volatility of time series. As Morocco subsidizes fuel, an increase in oil price is absorbed by the government’s investment budget causing a balance of trade deficit that negatively affects the growth of the country. This fund could be used in improving infrastructure and creating jobs. A slowdown in the economy negatively affects the stock market and companies’ earnings. Thus, the results of this paper have many implications on policy makers as well as private and institutional investors. In addition, the findings of this study indicate an existence of a significant correlation between oil, MASI index and the Moroccan economic sectors, and these correlations fluctuate during events that trigger oil price shocks. Moreover, this study shows a spillover effect between the volatility of the Moroccan market and the oil market.
Keywords: GDP Growth, Stock Returns, GARCH.
JEL Classification: E31, O16
Socio-Economic Determinants of Rural Non-Farm Households Income Diversification in Southeast Nigeria
Odoh N. E. and Nwibo, S.U.

The pervading rate of rural poverty in South-East Nigeria has become a source of concern to many rural households and non - farm income diversification options seem not to be well documented. The study therefore analyzed the socioeconomic determinants of rural non –farm households’ income diversification in South – East Nigeria. A combination of purposive and multi-stage random sampling techniques were adopted in the collection of data from three hundred and sixty (360) rural farm households using structured questionnaire administered as interview schedule. Both descriptive and inferential statistics were employed to realise the objectives of the study. The result of the analysis showed that majority of the rural farm households whose mean age was 51 years (76.1%) with an average household size of 8 persons. Though, majority of the household heads completed primary school education, they earned an average annual income of five hundred and one thousand naira (N501,000) which two hundred and fifty thousand, three hundred and forty-seven naira (N250,347) came from diversified non-farm activities. The study revealed that 82.5% of the farm households diversified their income, 17.5% solely depended on income from farming activities. The identified factors influencing rural households’ diversification portfolio included poor returns to agricultural activities, small farm size, risk and uncertainties that characterized agriculture, membership of social organizations, poor household earnings from farming, limited access to credit facilities and profit motive. With the coefficient of multiple determinations (R2) of 0.657.The study recommended that government should increase adult learning education outreach centres in the rural areas in order to eradicate the low level of education among rural people in the study area. It was also recommended that skill acquisition centres should be adequately provided through the private-public partnership development scheme to reduce the high level of unskilled labour available in the area.
Keywords: Socioeconomic, rural, non-farm income, households, diversification.
JEL Classification: D31, D33, Z13
Accumulated Performance and its Effect on Islamic Bank's Leverage: Case in Jordan
Lina H. Warrad

Islamic Banks in Jordan considered being the most required modern achievement in the Jordanian economy field because of their contribution in solving some Islamic countries’ banking dealing problems they sever. Also this kind of business tries to survive and compete with others in order to achieve competitive advantage in the Jordanian market.
From these points of views the important of this study arise and try to highlight the effect of some factors express the performance such as Earnings to Total Asset (RETA) and Return on Equity (ROE) on the leverage of listed Jordanian Islamic Banks.
The results of the statistics techniques that one employed in this investigation shows that the accumulated performance index that one measured by Retained Earnings to Total Assets (RETA), and performance index that one measured by Return on Equity (ROE) have a significant effect on Islamic Bank’s leverage in Jordan that one quantifying by Debt Ratio, those conclusions are agreed whether the affect taken individually or in combination. The analysis covered the period from 2010 to 2015, and used some statistical techniques to examine its hypotheses.
Keywords: Retained Earnings to Total Asset (RETA), Return on Equity (ROE), Debt Ratio, Amman Stock Exchange (ASE)
JEL Classification: A20