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Cost Efficiency, Market Power, Solvency Risk, and Capital Adequacy for Listed Banks in Egypt
Issue:
Volume 8, Issue 3, May 2020
Pages:
107-114
Received:
26 March 2020
Accepted:
26 April 2020
Published:
14 May 2020
Abstract: This research aims to investigate the stability of Egyptian banks’ performance by measuring causal interrelation measurements between efficiency, market power, banks risk-taking, and capital adequacy variables, which might help decision-makers in banking system to direct their efforts in handling them. The data are collected from Egyptian Information Dissemination for the period from 2013 to 2017 for both income statement and balance sheet. These data are utilized to estimate cost efficiency, market power and calculate the banks risk-taking by using Front 4.1 package and multi-regressions have been applied to measure the causal interrelation between the above-mentioned variables. The results show that Union National Bank Egypt and Export Development Bank have the highest cost efficiency. And, Union National Bank Egypt and Egyptian Gulf Bank have the highest market power, while Suez Canal Bank and Qatar National Bank Alahly have the lowest market power. But low standard deviation range show that there is no significant effort for enhancing neither cost efficiency nor market power. The regression analysis of causal interrelation shows that capital adequacy ratio significantly responds positively to market power and negatively to cost efficiency, as such risk-taking significantly responds positively to both cost efficiency and market power, while both capital adequacy ratio and risk-taking are not responding significantly to each other. And, cost efficiency significantly responds negatively to capital adequacy and positively to both market power and bank risk-taking, moreover market power significantly responds positively to capital adequacy and negatively to both cost efficiency and bank risk-taking. Most results are consistent with literature review except capital adequacy ratio and risk- taking is not responding significantly to each other this may be addressed by some of activated acts of law 88 year 2003 that limit risk-taking for many risk types.
Abstract: This research aims to investigate the stability of Egyptian banks’ performance by measuring causal interrelation measurements between efficiency, market power, banks risk-taking, and capital adequacy variables, which might help decision-makers in banking system to direct their efforts in handling them. The data are collected from Egyptian Informati...
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Central Environmental Supervisors and Departure Audits of Outgoing Local Government Officials’ Environmental Accountability: An Analysis Based on Game Theory
Rubing Liu,
Yuyu Zhang,
Teng Lin
Issue:
Volume 8, Issue 3, May 2020
Pages:
115-124
Received:
1 April 2020
Accepted:
23 April 2020
Published:
14 May 2020
Abstract: The establishment of central environmental supervision system (CESS) and the departure audits of outgoing local government officials are major environmental initiatives established by the Chinese government during the 18th National Congress of the Communist Party of China in 2012. Their aim is to separate the different environmental responsibilities of the local and central governments. In just one year, central environmental supervisors inspected 30 provinces’ and cities’ environmental performance and punished many local officials for their failures to fulfil their environmental responsibility as part of a national pollution crackdown. Inspired by the significant and profound effects of the environmental audits, we construct a tripartite game model involving the central auditors, environmental whistle-blowers and local government officials. We show that local government officials are more likely to act responsibly and that auditors adopt more detailed auditing procedures due to the involvement of whistle-blowers. This suggests that the central environmental supervision system must be institutionalised, legalised, normalised and focus on protections for whistle-blowers. Environmental audits are useful for focusing on departing officials’ accountability for environmental protection. We urge the government to strengthen the transparency of audit and to distribute environmental audit information on social media.
Abstract: The establishment of central environmental supervision system (CESS) and the departure audits of outgoing local government officials are major environmental initiatives established by the Chinese government during the 18th National Congress of the Communist Party of China in 2012. Their aim is to separate the different environmental responsibilitie...
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Capital Market and Fiscal Policy Shocks in Nigeria
Ejem Chukwu Agwu,
Ogbonna Udochukwu Godfrey
Issue:
Volume 8, Issue 3, May 2020
Pages:
125-135
Received:
7 May 2020
Accepted:
25 May 2020
Published:
3 June 2020
Abstract: This study dissected fiscal policy from monetary policy to unravel its impact on Capital market performance in Nigeria and how capital market responds to fiscal policy measures. The empirical analysis came up with the following major findings; the Error Correction Model revealed that market Capitalization as a performance index in this study is autoregressive, implying that previous market capitalization can predict investors’ perception of the market in the futures, also the model’s results show that recurrent expenditure and Non-Oil Revenue have negative and significant relationship with capital market performance in Nigeria. And Domestic debt was found to have a positive and significant relationship with capital market performance, validating the Keynes’s postulations reviewed in this study that government should adopt fiscal policy through deficit financing to put an end to further economic depression and related issues. Pairwise Granger Causality Test Results found bi-directional effect between domestic debt and market capitalization, implying that the duo drive each other or have feedback effect. Also VEC Granger Causality/Block Exogeneity Wald Test revealed that fiscal policy variables jointly cause capital market performance in the long run. The impulse responses revealed that shock market capitalization (own shock) exerted huge influence in the cause of variations on capital market performance followed by shocks from government expenditures. It is in light of the findings the researchers among others; advise the regulatory authorities in Nigeria that government revenues and expenditure be adequately orchestrated as main drivers to correct disequilibria in the Nigeria.
Abstract: This study dissected fiscal policy from monetary policy to unravel its impact on Capital market performance in Nigeria and how capital market responds to fiscal policy measures. The empirical analysis came up with the following major findings; the Error Correction Model revealed that market Capitalization as a performance index in this study is aut...
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Auditing as a Vital Component to the Financial Management of Local Councils in Cameroon; the Case of Buea Rural Council
Issue:
Volume 8, Issue 3, May 2020
Pages:
136-142
Received:
29 April 2020
Accepted:
21 May 2020
Published:
4 June 2020
Abstract: The lack of efficient and effective utilization of financial resources could destroy a municipal council. Proper auditing standards could help the city councils avert financial mismanagement from some unscrupulous individuals who are out to damage the reputation of the leaders and make their hard work unnoticed. This qualitative case study was on the premise that proper auditing could help reduce or eradicate financial mismanagement and consequently aid in the improvement of the business portfolio of the municipality for the benefit of all. A qualitative descriptive method was used, and twelve executives interviewed within the four local councils' financial management structure. This article addressed two specific arguments: The first argument challenges the contention that the council must be managed according to the political party ideology to achieve goals and objectives. The second refutes the assertion that the council’s management, in line with the party’s ideology will enhance efficiency and productivity. The following research questions were addressed: RQ1: Who do you think is responsible for the financial management of councils? RQ2: What are the auditing structures and procedures in place within your council for proper transparency in the usability of finances? RQ3: What do you think; should we change or maintain the current system in place for the financial management within the council? RQ4: How can we address the issues of financial fraud within councils? RQ5: Who should we hold accountable for poor financial performance within the councils? Addressing those concerns and from the data gathered, it suffices to conclude that Georgopoulos pathway theory which is a bad managerial instrument practiced by some council staff should be avoided by management because it sees favoritism as path to success. Eroding dissatisfaction (Hygiene) and replacing it with satisfaction (motivation), Herzberg’s two factor theory will guide the management towards financial success.
Abstract: The lack of efficient and effective utilization of financial resources could destroy a municipal council. Proper auditing standards could help the city councils avert financial mismanagement from some unscrupulous individuals who are out to damage the reputation of the leaders and make their hard work unnoticed. This qualitative case study was on t...
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Pricing of the Quanto Game Option with Asian Feature
Issue:
Volume 8, Issue 3, May 2020
Pages:
143-147
Received:
20 April 2020
Accepted:
Published:
8 June 2020
Abstract: The game option, which is also known as Israel option, is a new type of American option to give the option writer the right to cancel the contract before the maturity. This article studies the pricing behaviors of the quanto game option with Asian features based on partial differential equation and the stochastic analysis. The Asian feature in an option model refers to the payoff of the option depends on both the average asset price over the life of the option. The quanto options (currency-translated foreign equity options) are contingent claims where the payoff depends on exchange rate level at the option exercise time. The Asian quanto game options can be regarded as double-barrier European options for the features that both the holder and the writer can exercises the options contract at any time over the life of the option. We derive the pricing equation and provide the integral expression of pricing formula for the option. The option price is decomposed into the corresponding European option price and the penalty paid by the option writer for an early callable and the penalty paid by the option holder for early exercise of the option. In addition, we discuss optimal exercise strategies and continuation regions of the option.
Abstract: The game option, which is also known as Israel option, is a new type of American option to give the option writer the right to cancel the contract before the maturity. This article studies the pricing behaviors of the quanto game option with Asian features based on partial differential equation and the stochastic analysis. The Asian feature in an o...
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Tax Planning Strategies and Profitability of Quoted Manufacturing Companies in Nigeria
Ishola Rufus Akintoye,
Folajimi Festus Adegbie,
Chimeruo Victory Onyeka-Iheme
Issue:
Volume 8, Issue 3, May 2020
Pages:
148-157
Received:
6 May 2020
Accepted:
25 May 2020
Published:
17 June 2020
Abstract: Profitability has been the aim of every commercial enterprise but are often not actualized due to high costs and high Effective Tax Rates (ETR). In order to manage the effects of taxes on the profitability of firms, strategies are employed to plan the taxes. This research work focused on effect of Tax Planning Strategies on Profitability of manufacturing firms in Nigeria. Ex-post facto research design was adopted for the study. The main objective of the study was to examine the effect of Tax Planning Strategies on Profitability of Quoted Manufacturing Companies in Nigeria. The population of the Study comprised of 52 manufacturing companies quoted on the Nigeria Stock Exchange as at 17th December, 2018 with 46 as the sample size calculated using Taro Yamani’s formula. Data were collected from the audited annual reports of the sampled companies for a period of 10 years (2008 – 2017). The validity and reliability were based on the statutory audit of the financial statements. Descriptive and inferential statistics were used to analyze the data. The result revealed that there is no significant effect of TP on Return On Assets (ROA) of Quoted Manufacturing Companies in Nigeria. This is evidenced by the results of the test, Adj.R2 = -0.000527 and F-Statistics = 0.919439 and P-value of 0.431292. The Study concluded that tax planning strategies have both negative and positive effects on profitability of Quoted Manufacturing Companies in Nigeria. The study recommended that Tax Managers and Finance Officers should reduce thin capitalization and Capital Intensity to balance the source of income of manufacturing firms, while Research and Development costs should be properly managed to increase their contributions to profitability. Professional Tax Practioners should also be consulted for maximum benefit from tax planning.
Abstract: Profitability has been the aim of every commercial enterprise but are often not actualized due to high costs and high Effective Tax Rates (ETR). In order to manage the effects of taxes on the profitability of firms, strategies are employed to plan the taxes. This research work focused on effect of Tax Planning Strategies on Profitability of manufac...
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Economic Performance and Financial Conditions Index Nexus: Evidence from Selected Sub-Saharan African Countries
Ogbonna Udochukwu Godfrey,
Ejem Chukwu Agwu
Issue:
Volume 8, Issue 3, May 2020
Pages:
158-164
Received:
7 May 2020
Accepted:
25 May 2020
Published:
17 June 2020
Abstract: The purpose this study is to construct a financial conditions index for six sub-Saharan African Countries; namely, Nigeria, South Africa, Namibia, Mauritius, Kenya and Ghana, within the dynamic panel data framework using annual data covering from 2009 to 2018. The variables included in the construction of the index are treasury bills rate, real effective exchange rate, interest rate spread, credit to private sector ratio to Gross Domestic Product and value of stocks traded. The weights attached to these variables in the construction of the financial conditions index are estimated using the dynamic fixed effects coefficients, while the predictive power of the constructed index is evaluated within the dynamic panel General Method Moment framework. The output of analysis found that while real GDP per capita growth is not significantly related to real effective exchange rate, interest rate spread and credit to private sector ratio to Gross Domestic Product, it is significantly related to treasury bills rate and value of stocks traded. Thus, the effectiveness of monetary policy in the selected sub-Saharan countries depends only on money market and capital market conditions. Also results show that in Namibia, Ghana, Kenya and Nigeria, the financial conditions have been tighter than the prevailing macroeconomic conditions, while South Africa’s financial conditions have been looser than its prevailing macroeconomic conditions. However, Mauritius’ financial conditions have been neither tighter nor looser than its prevailing macroeconomic conditions. In the light of the above, the researchers suggest that the focus of monetary policy in the selected sub-Saharan countries has been to reduce inflation.
Abstract: The purpose this study is to construct a financial conditions index for six sub-Saharan African Countries; namely, Nigeria, South Africa, Namibia, Mauritius, Kenya and Ghana, within the dynamic panel data framework using annual data covering from 2009 to 2018. The variables included in the construction of the index are treasury bills rate, real eff...
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