Mohammed Mohammed Elgammal, Fatma Ehab Ahmed and David Gordon McMillan
This paper aims to ask whether a range of stock market factors contain information that is useful to investors by generating a trading rule based on one-step-ahead forecasts from…
Abstract
Purpose
This paper aims to ask whether a range of stock market factors contain information that is useful to investors by generating a trading rule based on one-step-ahead forecasts from rolling and recursive regressions.
Design/methodology/approach
Using USA data across 3,256 firms, the authors estimate stock returns on a range of factors using both fixed-effects panel and individual regressions. The authors use rolling and recursive approaches to generate time-varying coefficients. Subsequently, the authors generate one-step-ahead forecasts for expected returns, simulate a trading strategy and compare its performance with realised returns.
Findings
Results from the panel and individual firm regressions show that an extended Fama-French five-factor model that includes momentum, reversal and quality factors outperform other models. Moreover, rolling based regressions outperform recursive ones in forecasting returns.
Research limitations/implications
The results support notable time-variation in the coefficients on each factor, whilst suggesting that more distant observations, inherent in recursive regressions, do not improve predictive power over more recent observations. Results support the ability of market factors to improve forecast performance over a buy-and-hold strategy.
Practical implications
The results presented here will be of interest to both academics in understanding the dynamics of expected stock returns and investors who seek to improve portfolio performance through highlighting which factors determine stock return movement.
Originality/value
The authors investigate the ability of risk factors to provide accurate forecasts and thus have economic value to investors. The authors conducted a series of moving and expanding window regressions to trace the dynamic movements of the stock returns average response to explanatory factors. The authors use the time-varying parameters to generate one-step-ahead forecasts of expected returns and simulate a trading strategy.
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Toka S. Mohamed and Mohammed M. Elgammal
This study aims to compare the nexus between donations to Islamic and conventional microfinance institutions (MFIs) and their credit risk, financial performance and social…
Abstract
Purpose
This study aims to compare the nexus between donations to Islamic and conventional microfinance institutions (MFIs) and their credit risk, financial performance and social outreach.
Design/methodology/approach
The authors use fixed effects and two-step system generalized methods of moments models with internal instrumentation. The analysis is conducted on an international sample of 1,519 MFIs in 55 countries during 1999–2019.
Findings
Islamic MFIs receiving greater donations experience an increase in credit risk, whereas the opposite occurs among their conventional counterparts. Donations are associated with an improvement in the depth of outreach of Islamic MFIs, allowing them to serve a poorer client base, despite a simultaneous decline in the breadth of their outreach. On the other hand, donations improve both the depth and breadth of conventional MFIs outreach. Donations also exhibit a positive relation with productivity, efficiency and sustainability in conventional MFIs.
Practical implications
This paper addresses a gap in the literature on Islamic MFIs and their use of donor funds by examining how donations contribute to the quality of their credit portfolios, financial performance and social outreach. This study used Ahmed’s (2012, 2017, 2020, 2021) total factor productivity model to capture the impact of donations on the performance of MFIs.
Social implications
Donations are found to contribute to positive financial inclusion outcomes for both Islamic and conventional MFIs, a promising implication for society and donors alike.
Originality/value
This paper addresses a gap in the academic literature on Islamic MFIs and their use of donor funds by examining how donations contribute to the quality of their credit portfolios, financial performance and social outreach.
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Mohammed M. Elgammal, Khaled Hussainey and Fatma Ahmed
The purpose of this paper is to examine the impact of corporate governance on risk and forward-looking disclosures in Qatar.
Abstract
Purpose
The purpose of this paper is to examine the impact of corporate governance on risk and forward-looking disclosures in Qatar.
Design/methodology/approach
The authors automatically measure levels of risk and forward-looking disclosures in the annual reports of Qatari firms for the period 2008–2014. The authors also use two ways clustered error pooled panel regressions to examine the determinants of these disclosures.
Findings
The authors find that firms with a higher percentage of foreign ownership disclose more forward-looking information; conversely, board size has a negative impact on the forward-looking disclosure. Financial firms tend to disclose less forward-looking information, however, they tend to disclose more forward-looking information after the 2008 global financial crisis. The authors also find negative relationships between the risk disclosure and both the number of non-executive members of the board of directors and duality role of the CEO.
Research limitations/implications
The study uses the quantity of disclosure as a proxy for the quality of disclosure.
Practical implications
The findings should help the users of corporate annual reports in Qatar to understand managerial incentives for reporting risk and forward-looking information. This should help regulators to set a proper set of disclosure rules. Moreover, this study increases our understanding of the behavior of international investors and the board characteristics (i.e. board size) in motivating risk and forward-looking disclosures in Qatari firms.
Originality/value
The authors provide the original empirical evidence on the impact of corporate ownership and board characteristics on risk and forward-looking disclosures for Qatari firms using two ways clustered error pooled panel regressions.
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Mohammed M. Elgammal, Fatma Ehab Ahmed and David G. McMillan
The purpose of this paper is to consider the economic information content within several popular stock market factors and to the extent to which their movements are both explained…
Abstract
Purpose
The purpose of this paper is to consider the economic information content within several popular stock market factors and to the extent to which their movements are both explained by economic variables and can explain future output growth.
Design/methodology/approach
Using US stock portfolios from 1964 to 2019, the authors undertake three related exercises: whether a set of common factors contain independent predictive ability for stock returns, what economic and market variables explain movements in the factors and whether stock market factors have predictive power for future output growth.
Findings
The results show that several of the considered factors do not contain independent information for stock returns. Further, most of these factors are neither explained by economic conditions nor they provide any predictive power for future output growth. Thus, they appear to contain very little economic content. However, the results suggest that the impact of these factors is more prominent with higher macroeconomic risk (contractionary regime).
Research limitations/implications
The stock market factors are more likely to reflect existing market conditions and exhibit a weaker relation with economic conditions and do not act as a window on future behavior.
Practical implications
Fama and French three-factor model still have better explanations for stock returns and economic information more than any other models.
Originality/value
This paper contributes to the literature by examining whether a selection of factors provides unique information when modelling stock returns data. It also investigates what variables can predict movements in the stock market factors. Third, it examines whether the factors exhibit a link with subsequent economic output. This should establish whether the stock market factors contain useful information for stock returns and the macroeconomy or whether the significance of the factor is a result of chance. The results in this paper should advance our understanding of asset price movement and the links between the macroeconomy and financial markets and, thus, be of interest to academics, investors and policy-makers.
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Islam Elgammal, Ghada Talat Alhothali and Annarita Sorrentino
Umrah is a religious ritual that takes place inside the Holy Mosque in Makkah. Umrah can be performed any time during the year; however, performing Umrah in the month of Ramadan…
Abstract
Purpose
Umrah is a religious ritual that takes place inside the Holy Mosque in Makkah. Umrah can be performed any time during the year; however, performing Umrah in the month of Ramadan is much rewarded. Although the kingdom of Saudi Arabia is hosting this event each year, studies that focus on exploring the Holy Mosque visitor segments are scarce. This study aims to explore and describe the marketing segments of Umrah performers relative to their Umrah experience inside the Holy Mosque of Makkah. Most specifically, this study aims to explore segments of Umrah performers based on their perception of servicescape, hedonic and convenience value and the visitors’ outcome behaviors [i.e. intention to revisit and positive word of mouth (PWOM)].
Design/methodology/approach
Mixed-method techniques of data collection [i.e. self-administered questionnaires (n = 278) and short discussions (n = 10)] were used.
Findings
Cluster analysis is used for data analysis. The findings revealed four clusters of Umrah performers: real, occasional, rational and passionate performers.
Research limitations/implications
This study is a first attempt to target pilgrims based on their experience with the servicescape during the organized religious event; despite its exploratory nature, it reveals interesting insights that will be useful for managers and scholars. Although the study helps to enrich the existing knowledge on visitors’ experience and proposes some implications for practitioners, it does have some limitations. First, convenience sampling was used, and hence the findings cannot be generalized. Second, the limited period of observation did not allow the authors to provide a complete picture of the pilgrims’ behavior; for this reason, the study findings partially describe the phenomenon. Another limitation is related to the difficulty of approaching respondents from Asia or South East Asia although they constitute a significant percentage of the total Umrah performers every year; this is because of the language barrier as data was collected from only English and Arabic speakers. Hence, to overcome these limitations, it is suggested that future studies could be expanded to target Asian respondents and perhaps other nationalities; and could be undertaken in other religious contexts. Moreover, an interesting future study could be carried out to compare the same model during other religious events. Added to that, another growing area of research could be approached by researchers, such as the impact of pilgrims sharing their experiences on influencing E-PWOM.
Practical implications
The findings reveal several implications for policymakers and stakeholders. The segmentation of Umrah performers assists destination managers, policymakers and local firms involved in managing this mass event to identify effective marketing decision-makers, business strategies and policymakers to satisfy the needs of these visitors (Disegna et al., 2011). Particularly, the identification of the key characteristics of these visitors can help destination marketers to develop a marketing mix that suits the needs of each cluster (Smith et al., 2014). Despite that the performers’ main motivation is the religious purpose, marketing strategists can attract the attention of these visitors to visit other religious, cultural and heritage sites in the country.
Social implications
Encouraging the visit to other tourist spots in Saudi has several impacts on nourishing the economy and the community. Tourism in Saudi could encourage entrepreneurs to start new ventures to satisfy the need of visitors to the country. Small-medium enterprises could benefit from tourism as they could target market niches in which leader companies are not serving. For instance, hand-made souvenirs are one of these industries that could grow to satisfy the need of visitors.
Originality/value
The results contribute to the literature of event segmentation by identifying visitors’ profiles to rarely investigated destinations. The findings reveal several implications for policymakers and stakeholders.
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Ghada Talat Alhothali, Felix Mavondo and Islam Elgammal
In recent days, there has been an increasing interest towards achieving sustainable tourism objectives globally and specifically in Saudi Arabia. The benefits can be maximized if…
Abstract
Purpose
In recent days, there has been an increasing interest towards achieving sustainable tourism objectives globally and specifically in Saudi Arabia. The benefits can be maximized if the government is successful in attracting current pilgrims and influence their future intention to revisit the country as tourists. Hence, the purpose of this paper is to measure pilgrims’ revisit intentions to understand more about the possibility of their potential contribution towards the Saudi tourism and hospitality industry in the evolving circumstances.
Design/methodology/approach
This paper uses configuration theory to identify the “ideal” type of the pilgrims and compares this to the rest to establish if they differ and if that difference matters. Data were collected from 278 visitors to the Holy Mosque in Makkah, Saudi Arabia, to perform Umrah.
Findings
The findings show that a large deviation from the “ideal pilgrim” is negatively related to revisiting intentions and dissemination of positive word of mouth (PWOM).
Research limitations/implications
The development of profiles gives a better understanding of organizations or people across several dimensions looked at holistically. Fundamental to the theory is that there are only a limited number of configurations that achieve optimal performance (however defined).
Originality/value
The analytical approach adopted in this paper leads to achieving verbal and statistical correspondence in tests of “gestalts”. The interest is in establishing whether this difference matters to intentions to revisit and providing PWOM.
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Abdulrahman Alhassan, Lakshmi Kalyanaraman and Hanan Mohammed Alhussayen
This study aims to evaluate the resource curse hypothesis in an oil-dependent economy, Saudi Arabia, through examining the impact of oil price volatility on foreign ownership…
Abstract
Purpose
This study aims to evaluate the resource curse hypothesis in an oil-dependent economy, Saudi Arabia, through examining the impact of oil price volatility on foreign ownership among Saudi listed firms.
Design/methodology/approach
The study analyzes a unique data set of firm-level data on foreign ownership for the period 2009–2015. A multivariate regression model was applied to analyze the relationships under study.
Findings
The analysis reveals a negative association between oil price volatility and foreign ownership in firms with high leverage and low stock volatility.
Research limitations/implications
Policymakers are encouraged to develop policies to control shocks in the supply and demand of oil and enforce economic diversification. Investors can better understand the dynamics of an oil-based economy stock market based on the investment behavior of foreign investors and their response to oil price shocks.
Originality/value
This study adds to the literature by analyzing the relationship understudy in an oil-rich and oil-dependent emerging economy, where its critical economic parameters are influenced by oil price volatility and it has the largest and the most liquid stock exchange in the MENA region.
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Rajesh Kumar Singh, Saurabh Agrawal, Abhishek Sahu and Yigit Kazancoglu
The proposed article is aimed at exploring the opportunities, challenges and possible outcomes of incorporating big data analytics (BDA) into health-care sector. The purpose of…
Abstract
Purpose
The proposed article is aimed at exploring the opportunities, challenges and possible outcomes of incorporating big data analytics (BDA) into health-care sector. The purpose of this study is to find the research gaps in the literature and to investigate the scope of incorporating new strategies in the health-care sector for increasing the efficiency of the system.
Design/methodology/approach
Fora state-of-the-art literature review, a systematic literature review has been carried out to find out research gaps in the field of healthcare using big data (BD) applications. A detailed research methodology including material collection, descriptive analysis and categorization is utilized to carry out the literature review.
Findings
BD analysis is rapidly being adopted in health-care sector for utilizing precious information available in terms of BD. However, it puts forth certain challenges that need to be focused upon. The article identifies and explains the challenges thoroughly.
Research limitations/implications
The proposed study will provide useful guidance to the health-care sector professionals for managing health-care system. It will help academicians and physicians for evaluating, improving and benchmarking the health-care strategies through BDA in the health-care sector. One of the limitations of the study is that it is based on literature review and more in-depth studies may be carried out for the generalization of results.
Originality/value
There are certain effective tools available in the market today that are currently being used by both small and large businesses and corporations. One of them is BD, which may be very useful for health-care sector. A comprehensive literature review is carried out for research papers published between 1974 and 2021.
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Tamer Elswah, Eid Abozaid and Ahmed Diab
The various factors influencing audit fees are still unclear, which may undermine the possibility of attaining fair audit pricing. Against this concern, this study aims to…
Abstract
Purpose
The various factors influencing audit fees are still unclear, which may undermine the possibility of attaining fair audit pricing. Against this concern, this study aims to investigate the relationship between the auditee’s corporate characteristics and audit fees. In addition, it reveals if accounting comparability, as a proxy for financial reporting quality, mediates such a relationship by bringing evidence from an emerging market.
Design/methodology/approach
This study depends on data from nonfinancial companies listed on the Egyptian stock exchange from 2016 to 2019. It adopts multiple regression models to test the impact of corporate characteristics and accounting comparability on audit fees and uses path analysis to test the indirect effect of the audit clients’ characteristics on audit fees through accounting comparability.
Findings
The authors found a significant positive (negative) effect of firm profitability on audit fees (accounting comparability). Further, accounting comparability has a significant negative effect on audit fees. The authors also found that accounting comparability partially mediates the significant relationship between profitability and audit fees. However, the authors found no significant association between leverage and audit fees. Finally, the authors found that accounting comparability does not mediate the relationship between leverage and audit fees.
Practical implications
This study’s findings can benefit audit practitioners in Egypt by showing the main factors affecting audit fees, especially audit clients’ attributes. The current findings also guide professional bodies responsible for issuing accounting and audit standards regarding the importance of financial reporting quality for audit pricing decisions.
Originality/value
This study contributes to the literature by examining the mediating effect of accounting comparability concerning the corporate characteristics-audit fees relationship in developing African countries such as Egypt. This study’s findings can benefit audit practitioners in Egypt by showing the main factors affecting audit fees, especially audit clients’ attributes. The current findings also guide professional bodies responsible for issuing accounting and audit standards regarding the importance of financial reporting quality for audit pricing decisions.
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Classical assumptions of agency theory (AT) fall short of providing satisfactory answers to modern management and organizational knowledge (MOK) problems, and there is a need for…
Abstract
Purpose
Classical assumptions of agency theory (AT) fall short of providing satisfactory answers to modern management and organizational knowledge (MOK) problems, and there is a need for extending the scope of the field. This article aims to compare modern AT assumptions with the agency perspective of Islamic historical political treatises (namely, siyasetnamas) and point out how AT can be furthered.
Design/methodology/approach
This article applies content analysis method to find out agency perspectives in Islamic political treatises and then compare them with those of the basic AT assumptions to find out similarities and differences between them in explaining agency problems.
Findings
The agency perspective in siyasetnamas are based on the following assumptions which could contribute to the development of AT with their emphasis on (1) responsibilities beyond contracts, (2) entrustment rather than ownership, (3) shared societal responsibility rather than conflicting individual interests, (4) importance of self-control for both principals and agents and (5) trust discourse which emphasizes inner virtues rather than control discourse.
Originality/value
Agency perspectives cannot be considered independent of cultural imprints. By introducing siyasetnamas' agency perspective, this article makes an effort to suggest implications for how to further modern MOK based overwhelmingly on individualistic cultural assumptions to rediscuss agency problems from the viewpoint of specifically the emerging markets in which collectivist culture plays an important role in social and economic life. In this respect, siyasetnamas' agency perspective based on the notion of entrustment seems, arguably, to be a better fit to the contextual realities and managerial practices of emerging markets.