Moshfique Uddin, Ashraful Alam, Hassan Yazdifar and Moade Shubita
This paper aims to examine the relationship between terrorism and innovation and the moderating role of venture capital.
Abstract
Purpose
This paper aims to examine the relationship between terrorism and innovation and the moderating role of venture capital.
Design/methodology/approach
The paper has used panel data from 140 countries covering the period of 2007–2016 and has analysed the data by using generalised method of moments instrumental variables (GMM-IV) estimation method to control for unobserved endogeneity among the variables.
Findings
The authors find that terrorism has negative impact on innovation. Interesting results emerge when we separated the developed countries from others. The results show that the impact of terrorism on innovation is lower in developed countries. This is due to the fact that strong institutional settings in developed countries make the investors confident by providing support and incentives. Better institutional settings in developed countries also help to reduce uncertainty, which maximise innovation and minimise terrorism risk. The authors also find that venture capital positively moderates the terrorism and innovation relationship. This implies that by providing sufficient fund for technological development, venture capital may help to reduce terrorism risk.
Practical implications
These results may guide the policy makers to find a business solution instead of lengthy political solution to mitigate terrorism risk in emerging countries. Overall, this paper will provide the basis for improving the counter-terrorism approaches from an innovation perspective.
Originality/value
The paper has used terrorism and venture capital data from 140 countries and finds interesting results that may help the policy makers to reduce the effect and intensity of terrorism in emerging countries.
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Albert Danso, Theophilus Lartey, Samuel Fosu, Samuel Owusu-Agyei and Moshfique Uddin
This paper aims to demonstrate how financial leverage impacts firm investment and the extent to which this relationship is conditional on the level of information asymmetry as…
Abstract
Purpose
This paper aims to demonstrate how financial leverage impacts firm investment and the extent to which this relationship is conditional on the level of information asymmetry as well as growth.
Design/methodology/approach
The paper relies on data from 2,403 Indian firms during the period 1995-2014, generating a total of 19,544 firm-year observations. Analysis is conducted by using various panel econometric techniques.
Findings
Drawing insights from agency theories, the paper uncovers that financial leverage is negatively and significantly related to firm investment. It is also observed that the impact of financial leverage on firm investment is significant for high information asymmetric firms. Finally, the paper shows that the relationship between leverage and firm investment is significant for low-growth firms. However, no significant relationship is found between leverage and investment for high-growth firms.
Originality/value
This paper provides fresh evidence on the leverage–investment nexus and, to the authors’ knowledge, it the first paper to examine the extent to which this leverage–investment relationship is driven by the level of information asymmetry.
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Mahfuzur Rahman, Moshfique Uddin and George Lodorfos
Foreign market entry is considered as a key strategy to grow and survive over longer period of time for small and medium enterprises (SMEs). The decision to enter a foreign market…
Abstract
Purpose
Foreign market entry is considered as a key strategy to grow and survive over longer period of time for small and medium enterprises (SMEs). The decision to enter a foreign market is not a straightforward story. Considering resource limitation, SMEs need to analyse the key barriers to entry in foreign markets very carefully. The purpose of this paper is to identify these barriers for the SMEs in a developing country.
Design/methodology/approach
This study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. A mixed method data analysis technique is used to analyse the firms both from micro- and macro-levels. Following the running example-based case study approach, this study has developed and validated a partial least square-based structural model to assess the key barriers to entry in foreign markets.
Findings
This study has identified the key socio-economic barriers faced by the SMEs in a developing country to enter in foreign markets. It has successfully framed the socio-economic barriers to enter in foreign markets for Bangladeshi SMEs as a second-order hierarchical model.
Originality/value
It is often believed that foreign market entry is more affected by social barriers as explained by the existing theories including the Uppsala model. This study, however, revealed that the international market expansions of SMEs in developing countries are more sensitive to the economic barriers.
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Moshfique Uddin and Agyenim Boateng
The aim of this paper is to consider the short‐run performance of UK firms acquiring foreign target firms over a period of 1994‐2003 and to explore the impact of deal size and…
Abstract
Purpose
The aim of this paper is to consider the short‐run performance of UK firms acquiring foreign target firms over a period of 1994‐2003 and to explore the impact of deal size and other firm‐specific factors on performance. Cross‐border mergers and acquisitions have witnessed a substantial growth worldwide, with the UK being one of the top acquiring nations in the global market for corporate control.
Design/methodology/approach
The paper first uses event study methodology to analyse short‐run share price performance. Then a univariate analysis to examine the factors influencing the short‐run performance based on a sample of 373 acquisitions over the period of 1994 to 2003.
Findings
The study finds that the UK acquirers do not earn statistically significant positive abnormal returns in the short‐run. Univariate analysis shows that short‐run performance of UK acquirers is influenced by the form of target, acquisition strategy, geographical origin of target firm and the payment methods. However, the study finds no support for size of acquisition deal as a determinant of performance of acquiring firm.
Originality/value
The paper attempts to shed more light and extend existing research in cross‐border mergers and acquisitions by examining short‐run performance and factors influencing performance.
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Samuel Adomako, Albert Danso, Moshfique Uddin and John Ofori Damoah
– The purpose of this paper is to examine the moderating effects of cognitive style dimensions on the relationship between entrepreneurs’ optimism and persistence.
Abstract
Purpose
The purpose of this paper is to examine the moderating effects of cognitive style dimensions on the relationship between entrepreneurs’ optimism and persistence.
Design/methodology/approach
This theoretically derived research model is empirically validated using survey data from 198 small and medium-sized enterprises in Ghana.
Findings
The study’s empirical findings are that the relationship between entrepreneurs’ optimism and entrepreneurial persistence is enhanced at higher levels of cognitive planning and creating styles. Somewhat interestingly, cognitive knowing style negatively moderates the relationship between optimism and entrepreneurial persistence.
Research limitations/implications
The cross-sectional design of the study does not permit causal inferences to be made regarding the variables examined. Future studies may use longitudinal design to examine the causal links of the variables.
Practical implications
The results of this paper can assist entrepreneurs and policy-makers in understanding the dynamics and processes involved in entrepreneurial decision making. The understanding of this issue can promote the development and maintenance of entrepreneurial ventures.
Originality/value
The paper has a strong theoretical value as it relies on cognitive explanations of human behaviour, and seeks to advance the theoretical field by demonstrating the value of cognitive style within the domain of entrepreneurship.
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Mohammed Mohi Uddin, Mohammad Tazul Islam and Omar Al Farooque
In this study, the authors explore the effects of politically controlled boards on bank loan performance in both state-owned commercial banks (SCBs) and private sector commercial…
Abstract
Purpose
In this study, the authors explore the effects of politically controlled boards on bank loan performance in both state-owned commercial banks (SCBs) and private sector commercial banks (PCBs) in Bangladesh.
Design/methodology/approach
The data consist of 409 bank-year observations from 46 sample SCBs and PCBs of Bangladesh for the period 2008–17. The authors apply ordinary least squares pooled regression with year fixed effect for baseline econometric analyses and generalized method of moments regression for robustness tests after addressing the endogeneity issue.
Findings
The regression results reveal that the presence of bank “boards controlled by politically affiliated directors” (PA) have significant positive effects on non-performing loans (NPLs). Similarly, the presence of “boards controlled by politically affiliated directors without substantial ownership interests” (PAWOI) show positive association with NPLs. In contrast, the presence of “boards controlled by politically affiliated directors with substantial ownership interests” (PAOI) exhibit an inverse relationship with NPLs. These findings support ‘agency conflict’ arguments and document that both PA and PAWOI are detrimental to bank loan performance in Bangladesh, while PAOI do not have significant effect on increasing NPLs.
Originality/value
This study contributes to the existing bank governance literature by providing evidence from an emerging economy perspective, where politically affiliated directors (PADs) exploit their positions for personal and/or political gain at the cost of other stakeholders by taking advantage of relaxed regulatory oversights and investor protections.
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Muhammad Tahir and Md Badrul Alam
This paper empirically examines the perceived relationship between banking sector performance and FDI inflows, thereby highlighting an underexplored area in the existing…
Abstract
Purpose
This paper empirically examines the perceived relationship between banking sector performance and FDI inflows, thereby highlighting an underexplored area in the existing literature.
Design/methodology/approach
To provide evidence from the South Asian context, this study selected five economies of the same region based on the data availability. A panel dataset, collected from the internationally reliable sources for the period 1998–2017, is analyzed with the help of different econometric techniques, including pooled least squares, fixed effects, generalized least square and two stages least squares.
Findings
The results indicate a significant negative relationship between banking sector performance and FDI inflows while demonstrating a significant positive association of inflation and trade openness with FDI inflows Moreover, higher per capita income, which is one of the indicators of a growing economy, exerts a statistically significant positive impact on FDI inflows. Finally, institutional factors have not played a significant role in attracting FDI in the sampled countries.
Practical implications
The results demonstrate a unique outcome from the perspective of the relationship between banking sector performance and FDI inflows, and hence policymakers of the developing countries in general and South Asian countries in particular would benefit from the current study significantly.
Originality/value
The obtained results are original as we have provided comprehensive evidence on the relationship between FDI and banking sector performance in the SAARC context for the first time.
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Navendu Prakash, Shveta Singh and Seema Sharma
The purpose of this study is to explore and evaluate potential nonmonotonicity in the determinants of profit efficiency, specifically IT and R&D investments in the Indian…
Abstract
Purpose
The purpose of this study is to explore and evaluate potential nonmonotonicity in the determinants of profit efficiency, specifically IT and R&D investments in the Indian commercial banking sector.
Design/methodology/approach
The study employs an alternative stochastic profit efficiency framework and introduces nonmonotonic effects by parameterizing the location and scale parameters of the inefficiency component on an unbalanced panel data set of 72 commercial banks in the 2008–2019 period. Marginal effects across quartiles are calculated using a bias-corrected and accelerated bootstrap procedure of 500 simulations. The study disaggregates across ownership and size for gauging the impact of structure on the associations between determinants of profit efficiency.
Findings
The study partially rejects the productivity paradox as it discovers a negative association of IT and R&D with profit inefficiency. However, the observed nonmonotonicity of IT is of significance for bank managers, as the study concludes that overinvestment in IT is detrimental to a bank’s profit-maximizing interests. Further, bank size, loan default and credit risk depict a nonmonotonic relationship across the sample with large banks, high NPAs and high credit risk associated with reducing profit efficiency. In addition, higher margins and greater diversification are related positively to efficiency, and banks with cost-heavy structures or having high liquidity risk associated negatively with efficiency.
Originality/value
To the best knowledge of the authors, the study is perhaps the first to acknowledge and incorporate nonmonotonic associations of IT investments amidst other exogenous determinants under a stochastic profit efficiency framework.