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Article
Publication date: 11 July 2024

Sattar Khan, Naimat Ullah Khan and Yasir Kamal

This paper aims to examine the role of corporate governance (CG) in the earnings management (EM) of affiliated companies in family business groups (FBGs) listed on the Pakistan…

194

Abstract

Purpose

This paper aims to examine the role of corporate governance (CG) in the earnings management (EM) of affiliated companies in family business groups (FBGs) listed on the Pakistan Stock Exchange (PSX), using principal–principal agency theory.

Design/methodology/approach

The sample of 327 nonfinancial firms of the PSX, consisting of 187 group-affiliated firms and 140 nonaffiliated firms has been used in this study for the period of 2010 to 2019. The study uses different regression models for analysis, with robustness tests of various alternative measures of EM and FBG affiliation. In addition, endogeneity is controlled with the propensity score matching method.

Findings

The findings show that EM is less prevalent in affiliated firms compared to nonaffiliated companies. The results show a negative and significant relationship between FBGs affiliated firms and EM. Moreover, the results also show a positive relationship between EM and the interaction term of the CG index and group affiliation. It refers to the fact that effective governance cannot reduce EM in affiliated companies of FBGs as well as in the nonfinancial companies of the PSX. In addition, the quality of CG is higher in affiliated companies compared to its counterpart in nonaffiliated firms. The findings support the principal–principal agency theory that CG cannot mitigate the expropriating behavior of controlling shareholders against minority shareholders by reducing EM in emerging markets due to the ownership concentration phenomenon.

Research limitations/implications

This research study has implications for small investors, government agencies and regulators. The findings of the study show that CG code should make it mandatory for companies to reveal information about their complex ownership structure and ownership information about affiliated companies and directors. Furthermore, it is suggested to revisit the code of CG in the Pakistani context of principal–principal conflict instead of the agent–principal explanation of agency theory based on Anglo–Saxon countries.

Originality/value

This research study has contributed to the CG and FBG literature in relation to EM in idiosyncratic settings of Pakistan. One of the prime contributions of the paper is the development of a comprehensive CG index. This research study used detailed, manually collected novel data on affiliated firms of FBGs in Pakistan.

Details

Corporate Governance: The International Journal of Business in Society, vol. 25 no. 2
Type: Research Article
ISSN: 1472-0701

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Publication date: 6 November 2017

Umair Riaz, Musafar Khan and Naimat Khan

The aim of this study is to examine the perceptions of consumers on Islamic banking and finance in Pakistan. Islamic finance is an emerging phenomenon, and its survival depends on…

2220

Abstract

Purpose

The aim of this study is to examine the perceptions of consumers on Islamic banking and finance in Pakistan. Islamic finance is an emerging phenomenon, and its survival depends on the availability, affordability and awareness. This paper attempts to fill the gap in the literature by exploring the perceptions of consumers and bankers in an attempt to gain insights so that the availability of products and awareness can be increased.

Design/methodology/approach

The study uses a regression model by using perception as a dependent variable and awareness, knowledge and religious motivation as independent variables. Primary data is collected using 150 questionnaires distributed amongst finance students in several universities and employees of Islamic banks in the Khyber Pakhtunkhwa (KPK) Province of Pakistan.

Findings

The findings reveal that overall consumers’ perception is positive about Islamic banking and finance in Pakistan. Statistical analysis shows that awareness, knowledge and religiosity level have a positive influence on the perception of consumers about Islamic financing products and services in Pakistan. To improve the awareness and understanding, Islamic banks could make better marketing strategies and could increase their presence by mosque visits and conferences. Cooperation between the industry and scholars could help in providing more innovative products to the consumers.

Research limitations/implications

There has been a limited amount of work carried out on the perceptions of consumers about Islamic banking in Pakistan. The present study represents the start of a larger context for examining Islamic banking practices in Pakistan. The findings of the study can be used as a reference in future research projects in the areas of perceptions and awareness.

Originality/value

Little research has been conducted to study this problem from the perspectives of consumers and Islamic banking employees. Most of the research associated with Islamic banks fails to pay attention to these stakeholder groups in one study.

Details

Qualitative Research in Financial Markets, vol. 9 no. 4
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 1 August 2016

Shahan Akhtar and Naimat U. Khan

The current paper aims to fill a gap in the literature by analyzing the nature of volatility on the Karachi Stock Exchange (KSE) 100 index of the KSE, and develop an understanding…

644

Abstract

Purpose

The current paper aims to fill a gap in the literature by analyzing the nature of volatility on the Karachi Stock Exchange (KSE) 100 index of the KSE, and develop an understanding as to which model is most suitable for measuring volatility among those used. The study contributes significantly to the literature as, compared with the limited previous studies of Pakistan undertaken in the past, it covers three types of data (i.e. daily, weekly and monthly) for the whole period from the introduction of the KSE 100 index on November 2, 1991 to December 31, 2013. In addition, to analyze the impact of global financial crises upon volatility, the data have been divided into pre-crisis (1991-2007) and post-crisis (2008-2013) periods.

Design/methodology/approach

This study has used an advanced set of volatility models such as autoregressive conditional heteroskedasticity [ARCH (1)], generalized autoregressive conditional heteroskedasticity [GARCH (1, 1)], GARCH in mean [GARCH-M (1, 1)], exponential GARCH [E-GARCH (1, 1)], threshold GARCH [T-GARCH (1, 1)], power GARCH [P-GARCH (1, 1)] and also a simple exponentially weighted moving average (EWMA) model.

Findings

The results reveal that daily, weekly and monthly return series show non-normal distribution, stationarity and volatility clustering. However, the heteroskedasticity is absent only in the monthly returns making only the EWMA model usable to measure the volatility level in the monthly series. The P-GARCH (1, 1) model proved to be a better model for modeling volatility in the case of daily returns, while the GARCH (1, 1) model proved to be the most appropriate for weekly data based on the Schwarz information criterion (SIC) and log likelihood (LL) functionality. The study shows high persistence of volatility, a mean reverting process and an absence of a risk premium in the KSE market with an insignificant leverage effect only in the case of weekly returns. However, a significant leverage effect is reported regarding the daily series of the KSE 100 index. In addition, to analyze the impact of global financial crises upon volatility, the findings show that the subperiods demonstrated a slightly low volatility and the global economic crisis did not cause a rise in volatility levels.

Originality/value

Previously, the literature about volatility modeling in Pakistan’s markets has been limited to a few models of relatively small sample size. The current thesis has attempted to overcome these limitations and used diverse models for three types of data series (daily, weekly and monthly). In addition, the Pakistani economy has been beset by turmoil throughout its history, experiencing a range of shocks from the mild to the extreme. This paper has measured the impact of those shocks upon the volatility levels of the KSE.

Details

Journal of Asia Business Studies, vol. 10 no. 3
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 11 June 2024

Mohay Ud Din Shah, Ikram Ullah Khan and Naimat U. Khan

The paper examines how individuals can be susceptible to payment biases in the context of digital payment behavior by utilizing the concept of mental accounting. Furthermore, the…

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Abstract

Purpose

The paper examines how individuals can be susceptible to payment biases in the context of digital payment behavior by utilizing the concept of mental accounting. Furthermore, the paper investigates the moderating effects of Digital Financial Literacy (DFL) on the relationship between payment methods and spending behavior.

Design/methodology/approach

The study employs a survey-based approach to collect data from 503 individuals who use digital payment methods, utilizing purposive sampling from Pakistan. The collected data is analyzed using Smart-PLS 4 software to assess the direct impact of payment methods on spending behavior and the moderating influence of DFL.

Findings

The research findings demonstrate that both digital and cash payments significantly affect spending behavior. However, digital payments have a more substantial impact on spending behavior compared to cash payments. The findings also show that DFL significantly positively moderates individual spending. The study validates the mental accounting perspective by evaluating the direct impact of payment methods on consumers' spending behavior.

Practical implications

The findings have practical implications for policymakers, financial institutions, and educators. Policymakers can leverage the insights to design effective strategies that promote responsible spending behavior and enhance the adoption of digital payment methods. Financial institutions can design user-friendly platforms that cater to users' spending preferences, while educators can develop programs to enhance Digital Financial Literacy (DFL) among the public.

Social implications

This study’s social implications lie in its potential to contribute to individuals' financial well-being by promoting responsible spending through digital payment methods. Enhanced financial literacy and informed spending decisions can lead to better financial management and ultimately contribute to societal financial stability.

Originality/value

The study enriches the understanding of mental accounting, shedding light on how overspending behavior can manifest through digital payment channels. In addition, this research practically provides valuable insights into enhancing the adoption and financial literacy of digital payments among the public.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 17 July 2023

Shabeer Khan, Mohd Ziaur Rehman, Mohammad Rahim Shahzad, Naimat U Khan and Lutfi Abdul Razak

There has been a burgeoning interest in exploring the impact of uncertainty factors on share returns. However, studies on the influence of global financial uncertainties on…

257

Abstract

Purpose

There has been a burgeoning interest in exploring the impact of uncertainty factors on share returns. However, studies on the influence of global financial uncertainties on emerging market sectoral indices are scarce. Thus, there is a need to have a thorough investigation of the connection between global financial uncertainties and emerging market sectoral indices. To fill this gap, using the theoretical framework of international portfolio diversification (IPD) and utilizing data from 2008 to 2021, this study examines the spillover connection between global uncertainty indices (GUIs) and leading sectoral indices of 28 emerging markets.

Design/methodology/approach

The authors employ the quantile spillover-based connectedness approach and minimum connectedness portfolio approach to explore the dynamic connectedness among sectoral indices and global uncertainty indices (GUIs) as well as portfolio implication.

Findings

The study found high connectedness among all indices, especially at higher and lower quantiles. Among GUIs, the authors find that stock market volatility (VIX) and oil volatility index (OVX) are strongly interconnected with all leading emerging markets' sectoral indices. Among sectoral indices, the linkage between the financial (F-Index), information technology (IT-Index), and consumer discretionary (CD-Index) sectors shows moderate interconnectedness. In contrast, the communication services (CS-Index) sector has low interconnectedness with the system. In terms of spillover effects, the authors find EVZ, OVX, and the IT sectors to be net recipients for the entire period. The authors also explored portfolio diversification benefits by employing a minimum connectedness portfolio approach. The cumulative returns' findings show a slight decline in the portfolio's value after 2010; during 2012, the pattern remained stable; from 2014 to 2020, the portfolio performed negatively, that is, underperformance due to different events in that period, including COVID-19. The Consumer Discretionary sector is found to be significant because of having the largest weight, 51%, in the portfolio during the study period.

Practical implications

The study suggests that investors should invest in the communication services sector as it is the least connected. However, the connectedness increases during COVID-19, which implies that it may be difficult for investors to benefit from IPD in a crisis period. Hence, to obtain the benefits from IPD, the evidence suggests that investors need to consider Consumer Discretionary sector while considering assets for investment.

Originality/value

The study's uniqueness is that the authors have investigated spillover between GUIs and 28 emerging markets sectoral indices by employing a quantile spillover-based connectedness approach and minimum connectedness portfolio approach with a special focus on portfolio implication.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 14 September 2023

Mohamad Handi Khalifah, Fatih Savaşan, Naimat U. Khan and Shabeer Khan

This paper aims to trace the contours of Islamic political economy (IPE) for last four decades with the help of bibliometric analysis. This method does not focus on in-depth…

166

Abstract

Purpose

This paper aims to trace the contours of Islamic political economy (IPE) for last four decades with the help of bibliometric analysis. This method does not focus on in-depth literature. However, it reviews more material content of the published papers in the field, generally including the number of publications, authors, title, H-Index and authors’ affiliation.

Design/methodology/approach

The authors use biblioshiny by R in conducting bibliometric analysis. Based on the results of analysis, the authors only found 39 relevant documents to the topic with the help of keyword of “Islamic political economy”. The authors analyse the data and visualize it into bibliometric images for the convenience of the readers.

Findings

There are 39 documents on IPE in the annual scientific production. The year 1980 had the lowest productivity at 3% while the year 2007 showed an increase in scientific productivity by 13%. The most significant increase in production occurred between 2014 and 2015 by 8%, while the most significant decline occurred between 2007 and 2008 by 10%. The most significant contributors are Akan, T., Choudhury, M.A. and Asutay, M. According to the Corresponding Author’s Country, the UK has eight articles on IPE. Humanomics is the most influential Journal, with six documents.

Research limitations/implications

This research only examines documents sourced from Web of Science and Scopus under the title “Islamic political economy” and does not include articles from other sources. This research has implications for future researchers and suggests a shift in recent research on IPE towards exploring current realities and expanding beyond traditional economic and political aspects. The goal is to gain a comprehensive understanding of Islam’s role in shaping economic and political systems, promoting inclusive sustainable development and social justice, and exploring its relationship with broader political and economic systems.

Originality/value

IPE has become a trendy topic in the early days, the second half of the 20th century, during the revival of the Islamic mode of finance and development. However, with time, the discussion on this topic appeared less in scientific and academic publications; this issue needs an overview of how far this discipline has evolved. This work aims to identify future research trends in this area. Scholars should investigate articles by author, institution, country, databases, data sources with high-impact factors and objective metrics to get new perspectives.

Details

Qualitative Research in Financial Markets, vol. 16 no. 3
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 14 September 2022

Mohamed Jasir, Naimat U. Khan and Yasser Barghathi

This paper aims to explore corporate governance (CG) and succession planning in family-owned businesses in the United Arab Emirates (UAE).

1311

Abstract

Purpose

This paper aims to explore corporate governance (CG) and succession planning in family-owned businesses in the United Arab Emirates (UAE).

Design/methodology/approach

Semi-structured interviews are conducted with 16 owners and heirs of UAE family businesses. The interviews – face-to-face and asynchronous electronic – are conducted instead of a questionnaire to get an in-depth analysis of the topic in the context of both medium- and large-sized family businesses.

Findings

The responses are mixed with regard to governance challenges (duality, gender, internal control, transparency, etc.). The majority of the interviewees indicate that succession planning remains one of the biggest challenges for family businesses in the UAE. Fifteen of the sixteen interviewees document that a sound succession strategy must be in place to ensure the continuity of the business and prevent future disputes among potential successors. Similarly, the respondents also emphasise the importance of transparency and accountability for the sustainability of family businesses. The sustainability of family businesses relies on many aspects, such as national regulations, corporate systems and the succession process. Finally, most of the respondents from medium-sized companies opined that incorporating CG is a time-consuming and expensive process.

Practical implications

The interviewees supported stewardship theory in case family members are occupying positions on the board as they have more long-term commitment and a greater sense of belonging to the business (socio-emotional wealth) compared to non-family members. The interviewees acknowledge that the lack of professionalism and conflicts of interest among family members can be offset by recruiting non-family members.

Originality/value

Family businesses are particularly significant in the Arab world as they account for over 60% of gross domestic product (GDP) and use above 80% of the workforce which make them interesting research subject. In addition, this paper explores the CG challenges faced by both large- and medium-sized family businesses in the UAE within the theoretical framework of stewardship theory.

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Article
Publication date: 20 April 2022

Muhammad Rashid, Naimat U. Khan, Umair Riaz and Bruce Burton

Financial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour…

934

Abstract

Purpose

Financial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour emerging in the context of a desire to deceive the users of financial reports. In this context, research has illustrated how investors can find themselves impacted by such behaviour, with incorrect decision-making around investment decisions being a major issue. However, auditors' perspectives, of obvious importance in such scenarios, given these individuals' role in attesting to the veracity of financial disclosures, have not been investigated. The aim of this study is to address this gap by seeking the experiences of auditors in the developing nation of Pakistan, an environment in which the significant impact of financial improprieties is well-documented.

Design/methodology/approach

Interviews with 50 Pakistani-based auditors were conducted to gather perceptions about the nature and prevalence of financial shenanigans. The questions posed were structured to address issues relating to both the drivers of and methods used to operationalise financial malfeasance.

Findings

The views expressed by the participants suggest that this type of malpractice is common, with a variety of forms employed and a level of audacity and shamelessness is striking. The results indicate the absence of the three institutional pillars conventionally associated with motivating organisational attempts to legitimise behaviour and maintain social contracts. When considered alongside recent findings that the audit profession in Pakistan may not always play an effective monitoring role, we argue that the evidence suggests the existence of motivations for legitimising strategies are not yet fully understood.

Research limitations/implications

This contention helps address recent calls for investigation of issues around legitimising tendencies where theoretical understanding is incomplete. A full understanding of the embedded practices will provide capital providers with the opportunity to make more informed decisions regarding their investments in Pakistani firms by highlighting the financial shenanigans involved, including the sheer audacity apparently associated with the observed behaviour.

Originality/value

Earnings management and auditing have not been studied widely in Pakistan despite the abundant and persistent nature of corporate scandals across the nation for many decades. Whilst implementation (and enforcement) of some accounting and auditing standards have taken place recently, the financial collapses continue, and understanding regarding the on-going fraud is urgently needed. The extent and shameless nature of the perceived behaviour are striking, suggesting that those closest to financial reporting in Pakistan see fraudulent financial reporting as being close to, if not yet fully representative of, normal practice.

Details

Journal of Accounting in Emerging Economies, vol. 13 no. 1
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 22 February 2013

Naimat Khan, Bruce Burton and David Power

The purpose of this paper is to investigate the views of company executives and investors regarding the signalling impact of dividends in Pakistan. Quantitative research in the…

1067

Abstract

Purpose

The purpose of this paper is to investigate the views of company executives and investors regarding the signalling impact of dividends in Pakistan. Quantitative research in the area has been scant, but recent large sample evidence suggests a number of noteworthy idiosyncrasies exist in terms of the market reaction and these require further analysis.

Design/methodology/approach

The study involves interviews with 16 financial analysts and 23 company officials regarding the impact of dividends on share prices in Pakistan. Recent work in the nation suggests that the market reaction to dividends in Pakistan is characterised by pre‐announcement leakage and interaction with the attendant earnings signal – these issues were thus central to the discussions.

Findings

The results suggest that individual perceptions both support and contradict the earlier quantitative findings in specific ways. The interviewees, particularly the company executives, were sceptical about the scope for information leakage to occur in Pakistan. In contrast, the interaction between earnings and dividend numbers was acknowledged, with – as in the earlier quantitative studies – the former figure dominating.

Originality/value

This is the first detailed study of perspectives about the impact of dividends on share prices in Pakistan; for reasons outlined above, this represents a major gap in the literature regarding firm‐market communication. The work follows the publication of the first large‐sample study of share price movements in Pakistan; it thereby allows a pervasive conclusion to be drawn about the over‐riding importance of earnings figures in the nation's markets and in the attitudes of the firms listed on them. The study demonstrates the importance of mixed methods research in a developing market context.

Details

Journal of Accounting in Emerging Economies, vol. 3 no. 1
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 21 October 2024

Naimat Ullah Shah, Salman Bin Naeem, Rubina Bhatti, Amjid Khan and Xia Wang

The purpose of this study is to determine the level of awareness among library and information science (LIS) professionals regarding the perceived utility of big data (BD) and…

137

Abstract

Purpose

The purpose of this study is to determine the level of awareness among library and information science (LIS) professionals regarding the perceived utility of big data (BD) and data analytics (DA) in academic libraries, as well as their influence on the provision of data services (DSs).

Design/methodology/approach

A cross-sectional survey was carried out to collect the data for this study. The population of this study comprised LIS professionals working in public sector university libraries. A four-factor measurement model estimating the influence of BD and DA on the provision of DSs in academic libraries was tested using the structural equation modelling.

Findings

The findings revealed that awareness (AW) (β = 0.141, CR = 2.534, p = 0.011) demonstrated a significant positive influence on the provision of DSs. The perceived utility of BD (β = 0.058, CR = 0.582, p = 0.561), and perceived utility of DA (β = 0.141, CR = 2.534, p = 0.905) exhibits a positive but statistically non-significant impact on the provision of DSs (β = 0.010, CR = 0.120, p = 0.905). The goodness of fit indices suggest a favourable fit for the model, as evidenced by the following values: χ2 = 1.400, DF = 164; p = 0.001; IFI = 0.954; TLI = 0.946; CFI = 0.953; GFI = 0.906; and RMSEA = 0.043.

Originality/value

A new perspective on the use of BD and DA in academic libraries is presented in this study. It presents a four-factor measurement model on the influence of BD and DA on the provision of DSs in university libraries.

Details

The Electronic Library , vol. 42 no. 6
Type: Research Article
ISSN: 0264-0473

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