Genanew Bekele, Reza H. Chowdhury and Ananth Rao
The purpose of this paper is to consider borrower-specific characteristics to understand the factors affecting both the probability and quantum of loan default by individual…
Abstract
Purpose
The purpose of this paper is to consider borrower-specific characteristics to understand the factors affecting both the probability and quantum of loan default by individual borrowers under Islamic and conventional banking.
Design/methodology/approach
Borrower-specific characteristics that explain the probability of default may not necessarily be similar factors that determine the quantum of default. The authors therefore apply a Box-Cox double hurdle model to treat both the probability and quantum of default in a two-step approach. The authors also explain the differences in default risk and quantum of default between Islamic and conventional banking borrowers from their behavioral perspectives following the Sharia principles in financial transactions between lenders and borrowers. The authors use borrower-specific information of two separate bank branches of the United Arab Emirates that solely deal with either Islamic or conventional banking products.
Findings
The paper demonstrates that the probability of default and the quantum of default appear to be influenced by different set of client-specific factors. The results suggest that the probability of default does not vary significantly between Islamic and conventional banking borrowers. The evidence also shows that Islamic banking defaulters, compared to those in conventional banking, repay a large quantum of overdue when their financial leverage improves. However, they do not tend to reduce their outstanding quantum of overdue faster than conventional banking defaulters.
Research limitations/implications
Availability of data from only two bank branches may limit the explanatory power of empirical findings.
Practical implications
The study findings will enable the Islamic and conventional banks to appropriately address Basel Capital requirements based on the borrowers’ behavior.
Social implications
The study findings have the potential for Islamic and conventional financing institutions to be more flexible with equity in their lending practices.
Originality/value
Religious beliefs are crucial in borrower’s default behavior in Islamic banking.
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Sanjay Tolani, Ananth Rao, Genanew B. Worku and Mohamed Osman
The purpose of this paper is to analyze significant determinants to assess the probability of insureds’ intent to buy (ITB) insurance and willingness to pay (WTP) quantum of…
Abstract
Purpose
The purpose of this paper is to analyze significant determinants to assess the probability of insureds’ intent to buy (ITB) insurance and willingness to pay (WTP) quantum of dollars for security benefits.
Design/methodology/approach
The authors use the Double Hurdle Model (DHM) and Neural Network (NN) architecture to analyze the insureds’ behavior for ITB and WTP. The authors apply these frameworks to all the 503 insureds of a branch of a leading insurer in the United Arab Emirates.
Findings
The DHM identified age, loans & liabilities, body mass index, travel outside the UAE, salary and country of origin (Middle Eastern and African) as significant determinants to predict WTP for social security benefits. In addition to these determinants, NN architecture identified insurance replacement, holding multiple citizenship, age of parents, mortgages, country of origin: Americas, length of travel, income of previous year and medical conditions of insured as additional important determinants to predict WTP for social security benefits; thus, NN is found to be superior to DHM due to its lowest RMSE and AIC in the holdout sample and also its flexibility and no assumptions unlike econometric models.
Research limitations/implications
Insureds’ data used from one UAE Branch limit the generalizability of empirical findings.
Practical implications
The study findings will enable the insurers to appropriately design the insurance products that match the insurers’ behavior of ITB and WTP for social security benefits.
Social implications
The study findings have the potential for insurance institutions to be more flexible in their insurance practices through public–private partnerships.
Originality/value
This is the authors’ original research work.
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Ananth Rao, Hossein Kashani and Attiea Marie
This study sets out to analyze the efficiency and productivity issues of the insurance sector from both the policymakers' and investors' points of view to insulate the business…
Abstract
Purpose
This study sets out to analyze the efficiency and productivity issues of the insurance sector from both the policymakers' and investors' points of view to insulate the business and financial risks of UAE corporate houses.
Design/methodology/approach
The paper uses two inputs of “administrative and general expenses”, and “equity and change in legal reserves”, versus two outputs of rate of “return on investments” and “liquid asset to total liabilities ratio” to assess the allocative efficiency of the companies using DEA. Using the the Malmquist productivity index the efficiency is broken down into technical and scale efficiency to evaluate the performance of the insurers.
Findings
While the scale of operation of insurers is, by and large, acceptable, there is a considerable degree of managerial inefficiency among the insurers, with the least efficiency in 2000, and higher efficiency in 2004. Further, the insurers on average achieved a mere 0.8 percent annual gain in total factor productivity over the period in question.
Research limitations/implications
The data set is narrow with 19 insurers in the region, which is the limitation.
Practical implications
The results have policy implications for the regulators and managerial implications for the existing insurers to face the growing competition in the region.
Originality/value
This is the first study to investigate the productivity changes of insurance sector operations in a developing economy: the UAE in the Middle‐East region. The study findings help the insurers to take appropriate managerial steps to improve the efficiency of their operations.
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Ehab Zaki, Rahim Bah and Ananth Rao
Commercial and Islamic banks are important players in the UAE financial market. However, little is known about their financial distress because these financial institutions…
Abstract
Purpose
Commercial and Islamic banks are important players in the UAE financial market. However, little is known about their financial distress because these financial institutions usually resolve financial distress within their own organisations, which means that outsiders cannot explicitly observe distress. The purpose of the research is therefore to identify the main drivers of financial institutions' financial distress.
Design/methodology/approach
The paper estimates a probability distress prediction model using the BankScope Database and the annual reports of UAE financial institutions submitted to UAE Security Exchange Authority. The paper also analyses the impact of macroeconomic information for forecasting financial institutions' financial distress.
Findings
The fundamentals of financial institutions in terms of cost income ratio, equity to total assets, total asset growth and ratio of loan loss reserve to gross loans (all these variables with a lag of one year) positively impacted the probability of financial distress in the next year. Recent findings for emerging economies have cast some doubt on the usefulness of macroeconomic information for financial institutions' risk assessment. Similar results are found for UAE financial institutions in predicting the probability of financial distress.
Originality/value
This is the first study to provide empirical evidence on the drivers of financial distress of commercial and Islamic banks in UAE during 2000‐2008, and to examine the extent of the financial distress that can be can be attributed to internal bank‐specific fundamental factors and external factors in the economy.
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There is growing demand for research approaches that consider the functioning of financial markets in the emerging economy. The current paper aims to examine cointegration and…
Abstract
Purpose
There is growing demand for research approaches that consider the functioning of financial markets in the emerging economy. The current paper aims to examine cointegration and volatility persistence of six Middle East emerging Arabian Gulf Cooperation council (AGCC) equity markets with developed markets.
Design/methodology/approach
The study uses the MGARCH and VAR methodology to analyze the cointegration and volatility spillover across emerging AGCC markets and developed markets. Time series stock return data for six AGCC countries from February 2003 to January 2006 are used from Shuaa Capital Market together with MSCI world developed market index.
Findings
The study shows that AGCC markets exhibit significant own and cross spillover of innovations and volatility spillover and persistence in these markets. Emerging markets in AGCC derive relatively more of their innovations and volatility persistence from within the domestic market.
Practical implications
The results imply that, emerging AGCC markets are susceptible to conditions within the AGCC region. This increases potential benefits of international diversification for international investors. The study findings have implications for security pricing within AGCC markets, for hedging and other trading strategies, and for regulatory polices conducted within financial markets.
Originality/value
The paper provides empirical evidence and justification for investors, both individual and foreign institutional, to adjust their portfolios through diversification.
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Paul R. Carlile, Steven H. Davidson, Kenneth W. Freeman, Howard Thomas and N. Venkatraman
Santosh Kumar, Pradeep Kumar Tarei and Vikas Swarnakar
In the recent post-pandemic era, the globe has been anxious for the sustainable disposal of healthcare waste to protect public health, protect the environment and enhance future…
Abstract
Purpose
In the recent post-pandemic era, the globe has been anxious for the sustainable disposal of healthcare waste to protect public health, protect the environment and enhance future preparedness. Developing countries, in particular, have struggled to dispose of healthcare waste (HCW) to eradicate the hazardous effects of medical waste generated during and after the deadly COVID-19 pandemic. Hence the purpose of the research paper is to develop a hybrid decision-making framework to identify various barriers for sustainable disposal of healthcare waste use of Grey-Decision Making Trial and Evaluation Laboratory (G-DEMATEL) and Analytical Network Process (ANP).
Design/methodology/approach
A hybrid framework of Grey-Decision Making Trial and Evaluation Laboratory (G-DEMATEL) and Analytical Network Process (ANP) has been used to rank barriers and sub-barriers in the disposal of healthcare waste.
Findings
The study’s findings suggest that lack of segregation practices, absence of green procurement policy, obsolete technologies and resistance to adopting change management are the topmost causal barriers influencing the remaining barriers. Lack of commitment among healthcare administrations, lack of standard performance measures and resistance to adopting change appear to be the topmost crucial barriers.
Practical implications
The study’s finding enables all stakeholders to prioritize the barriers systematically for better performance and save resources during the process. The policymakers can use the results to design a clear regulatory framework.
Originality/value
The literature has highlighted the factors and their association with the disposal of healthcare waste mainly in isolation. The results are validated against the Grey-Analytical Hierarchy Process (G-AHP) to ensure the robustness of the proposed framework. This paper is one of the preliminary attempts to propose a framework of the interrelationships of the factors that have a direct role in survival for management education.
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Anantha Kumar K., Ramana Reddy J.V., Sugunamma V. and N. Sandeep
The purpose of this paper is to propose the knowledge of thermal transport of magneto hydrodynamic non-Newtonian fluid flow over a melting sheet in the presence of exponential…
Abstract
Purpose
The purpose of this paper is to propose the knowledge of thermal transport of magneto hydrodynamic non-Newtonian fluid flow over a melting sheet in the presence of exponential heat source.
Design/methodology/approach
The group of PDE is mutated as dimension free with the assistance of similarity transformations and these are highly nonlinear and coupled. The authors solved the coupled ODE’s with the help of fourth-order Runge–Kutta based shooting technique. The impact of dimensionless sundry parameters on three usual distributions of the flow was analyzed and bestowed graphically. Along with them friction factor, heat and mass transfer rates have been assessed and represented with the aid of table.
Findings
Results exhibited that all the flow fields (velocity, concentration and temperature) are decreasing functions of melting parameter. Also the presence of cross-diffusion highly affects the heat and mass transfer performance.
Originality/value
Present paper deals with the heat and mass transfer characteristics of magnetohydrodynamics flow of non-Newtonian fluids past a melting surface. The effect of exponential heat source is also considered. Moreover this is a new work in the field of heat transfer in non-Newtonian fluid flows.
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Kristian J. Sund and Philipp Boksberger
The purpose of this paper is to test a number of hypotheses concerning the differences between senior and non‐senior travelers in the particular context of holiday rentals. A…
Abstract
Purpose
The purpose of this paper is to test a number of hypotheses concerning the differences between senior and non‐senior travelers in the particular context of holiday rentals. A further aim is to provide exploratory evidence for these differences.
Design/methodology/approach
A brief review of the extant literature leads into the formulation of some hypotheses. The hypotheses are tested using survey data. Data from the same survey are used to explore further data.
Findings
It was possible not only to find some evidence to support the hypotheses, but also to find significant differences between the preferences of seniors and non‐seniors, as well as between pre‐seniors and seniors. Thus, pre‐seniors exhibit a higher willingness to pay for holiday rentals than seniors, whereas seniors have a higher preference for domestic travel. Seniors are less interested in technology than other age groups. Originality/value –This paper reports on survey findings for a segment of the tourism market that has received practically no attention in the literature – the holiday rental market. The results pave the way for further investigations within this segment.