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Article
Publication date: 1 January 1995

R. Boffey and G.N. Robson

Bank management, from a finance theory perspective, is generally acknowledged to involve the management of four major balance sheet risks: liquidity risk, interest rate risk…

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Abstract

Bank management, from a finance theory perspective, is generally acknowledged to involve the management of four major balance sheet risks: liquidity risk, interest rate risk, capital risk and credit risk (Hempel et al, 1989). Of these, credit risk has commonly been identified as the key risk in terms of its influence on bank performance (Sinkey, 1992, p.279) and bank failure (Spadaford, 1988).

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Managerial Finance, vol. 21 no. 1
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 8 July 2019

Apriani Dorkas Rambu Atahau and Tom Cronje

The purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship…

509

Abstract

Purpose

The purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship between concentration and returns.

Design/methodology/approach

This research uses heuristic measures of concentration: The Hirschman–Herfindahl index and Deviation from Aggregated Averages are applied to Indonesian banks across all sectors. The data covers the pre and post global financial crises periods from 2003-2011 for 109 commercial banks in Indonesia. Panel feasible generalised least squares analysis was applied.

Findings

The findings show that loan concentration increases bank returns. The positive effect of concentration on returns tends to be more significant for domestic-owned banks. In addition, the interaction effect shows that the positive effect of concentration on returns is less for foreign-owned banks.

Research limitations/implications

The Indonesian central bank changes to the reporting format of sectoral loan allocation by banks since 2012 in terms of the Indonesian Banking Statistics Details of Enhancement matrix requires separate data analysis for 2012 onwards. The findings of this paper could be enhanced by more detailed data like interest rate expenses and bank level sectoral non-performing loans data.

Practical implications

The findings suggest that a focus strategy provides better returns. Moreover, bank ownership types is an important factor to consider when setting a bank lending policy.

Originality/value

This paper is among the few studies where different measures of loan concentration in combination with measures of return are applied in Indonesia as an emerging Asian country. The research also provides evidence of the impact of concentration on the interest earnings of the loan portfolios of banks in addition to return on assets and return on equity that are generally applied as measures of return in previous research.

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Journal of Asia Business Studies, vol. 13 no. 3
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 10 July 2020

Azira Abdul Adzis, Hock Eam Lim, Siew Goh Yeok and Asish Saha

This study investigates factors contributing to residential mortgage loans default by utilizing a unique dataset of borrowers' default data from one of the pioneer lending…

654

Abstract

Purpose

This study investigates factors contributing to residential mortgage loans default by utilizing a unique dataset of borrowers' default data from one of the pioneer lending institutions in Malaysia that provides home financing to the public. Studies on mortgage loan default have been extensively examined, but limited studies utilize the individual borrower's data, as financial institutions generally hesitant to reveal their customers' data due to confidentiality issue.

Design/methodology/approach

This study uses logistic regression model to analyze 47,158 housing loan borrowers' data for the year 2016.

Findings

The findings suggest that male borrowers, Malay and other type of ethnicity, guarantor availability, loan original balance, loan tenure, loan interest rate and loan-to-value (LTV) ratio are the significant factors that influence mortgage loans default in Malaysia.

Research limitations/implications

Future studies may expand the sample by employing data from other types of financial institutions that would give greater insights as findings might vary due to differences in objectives, functions and regulations. In addition, the findings are subjected to the censoring bias where future studies could perform the survival analysis to control for censoring bias and re-validating the findings of the present study.

Practical implications

The findings provide valuable insights for lending institutions and the government to formulate housing loan policy in Malaysia.

Originality/value

To the best of the authors' knowledge, this is the first study in the context of emerging economies that uses financial institution's internal data to investigate factors of mortgage loan default.

Details

Review of Behavioral Finance, vol. 13 no. 5
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 1 March 2006

Hemant Deo and Helen Irvine

This paper aims to expose the gap between rationalist banking theory and actual practice within the Agricultural Lending Division of the Fiji Development Bank (FDB) by focusing on…

657

Abstract

Purpose

This paper aims to expose the gap between rationalist banking theory and actual practice within the Agricultural Lending Division of the Fiji Development Bank (FDB) by focusing on the inter‐relationship between power and knowledge.

Design/methodology/approach

Data for this qualitative research project were gathered from archived documents, interviews, observation and reflection. A Foucauldian theoretical framework was used, which acknowledged the impact of social, economic and political factors within the bank's historical context.

Findings

In practice non‐rationalist factors play a vital role in decision making and the development of mechanisms of accountability within the FDB. The bank's policies and procedures have ultimately had to strike a delicate balance between the Fijian government's development goals, profitability requirements and the formal rationalities of new public management, and the cultural realities of agricultural lending in Fiji's traditional community‐oriented society.

Research limitations/implications

This study refutes a merely technocratic approach to banking research, opening up possibilities for further studies which focus on power within a socio‐historic context.

Practical implications

The findings of this study challenge banks to acknowledge the subjectivity of their lending processes and to improve the accountability of lending officers.

Originality/value

This paper demonstrates the credibility and usefulness of a theoretically driven qualitative research study in making visible issues that would otherwise be hidden.

Details

Asian Review of Accounting, vol. 14 no. 1/2
Type: Research Article
ISSN: 1321-7348

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Publication date: 22 July 2014

Elizabeth Popp Berman

Field theory is one of the most visible approaches in the new political sociology of science, and Fligstein & McAdam’s (F&M) Theory of Fields is the most visible recent attempt to…

Abstract

Field theory is one of the most visible approaches in the new political sociology of science, and Fligstein & McAdam’s (F&M) Theory of Fields is the most visible recent attempt to further it. This paper evaluates F&M’s theory of field transformation by comparing it with Berman’s (2012a) field-based explanation of the changes in the field of US academic science. While F&M’s general framework is quite useful, their explanation, which focuses on struggles between incumbents and challengers over whose conception of the field should dominate, does not map neatly onto the changes in academic science, which saw no such field-level struggles. This suggests that tools are also needed for explaining new settlements that do not result from intentional efforts to establish them. In particular, the case of US academic science shows that local innovations with practices based on alternative conceptions of the field can lead to field-level change. Attention to the interaction between local practice innovations and larger environments provides insights into how change ripples across fields, as well as the ongoing contention and dynamism within even relatively stable fields.

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Fields of Knowledge: Science, Politics and Publics in the Neoliberal Age
Type: Book
ISBN: 978-1-78350-668-2

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Article
Publication date: 23 November 2019

Arlyana Abubakar, Agung Bayu Purwoko, Hesti Werdaningtyas, Sulistiyo Kadam Ardiyono and Frida Yunita Sinurat

This study aims to examine how crude palm oil (CPO) price impacts corporate default risk (CDR) of agricultural firms in Indonesia’s palm oil industry.

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Abstract

Purpose

This study aims to examine how crude palm oil (CPO) price impacts corporate default risk (CDR) of agricultural firms in Indonesia’s palm oil industry.

Design/methodology/approach

By applying a dynamic panel regression on listed CPO-based firms, the authors find that CPO price fluctuations are insignificant in explaining CDR.

Findings

The main determinants of CDR are internal factors, namely, excess stock market returns and return on assets. External factors do not play any role in influencing the CDR in the case of Indonesia. The results highlight the importance of completing risk analysis at the macro level with firm-specific factors.

Research limitations/implications

The contributions aside, an important limitation of this study is that there is a small sample of listed firms. Most of these firms have the ability to mitigate risks. Therefore, further studies are needed to identify the default predictions for non-listed firms.

Practical implications

In the context of macro prudential policy in Indonesia, the findings imply that financial stability surveillance needs to be carried out in two areas: macroeconomic indicators and firm-specific indicators. Given the lack of listed CPO firms in Indonesia, the object of surveillance should focus on not only listed firms but also non-listed firms with large bank loans.

Originality/value

This study highlights the importance of completing risk analysis at the macro level with firm-specific factors in Indonesia as commodity exporting country.

Details

Studies in Economics and Finance, vol. 38 no. 2
Type: Research Article
ISSN: 1086-7376

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Book part
Publication date: 21 February 2025

Buddhi Rajini Munasinghe, Abdul Ali, Farooq Habib and Murtaza Farooq Khan

This study aims to investigate how the supply chain (SC) experts from the UK manufacturing organisations (MO) interpret the drivers and barriers to adopting Industry 4.0…

Abstract

Purpose/Aim

This study aims to investigate how the supply chain (SC) experts from the UK manufacturing organisations (MO) interpret the drivers and barriers to adopting Industry 4.0 technologies from a technological, organisational and environmental (TOE) point of view. Furthermore, this study evaluates how adoption drivers and barriers influence innovative practices that support Industry 4.0 adoption.

Methodology

A qualitative narrative inquiry strategy, involving nine semi-structured interviews with leading SC experts including group executives, global directors and vice presidents was adopted.

Key Findings

The people factor across the SC is found critical for successful Industry 4.0 adoption. It was also found that the firm size is an insignificant factor; rather, Industry 4.0 readiness in small and medium enterprises (SMEs) is driven by flexibility and agility, while larger organisations are driven by resource availability and scalability. Evidently, the culture and attitude of the MO tend to facilitate or hinder the Industry 4.0 adoption, therefore, innovative practices in building an expert team, establishing a systematic change management process, actively involving suppliers in the adoption process and continuously monitoring the adoption process were introduced.

Novelty

By addressing the relationships between the drivers, barriers and innovative practices from a business perspective, a detailed Industry 4.0 adoption framework for the UK Manufacturing Supply Chains (MSC) was developed as a unique theoretical and practical contribution. This study also highlights the lessons learnt from applying Industry 4.0 in the UK context. The findings can also be informed in applying Industry 4.0 technologies in emerging market contexts.

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Digital Transformation for Business Sustainability and Growth in Emerging Markets
Type: Book
ISBN: 978-1-83549-109-6

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Article
Publication date: 1 January 1995

D.E. Allen

This edition of managerial finance is concerned with various aspects of risk considered in terms of the manner in which it affects investors in companies, the companies…

5723

Abstract

This edition of managerial finance is concerned with various aspects of risk considered in terms of the manner in which it affects investors in companies, the companies themselves, and financial institutions which lend funds to companies. Risk is usually interpreted as referring to the fact that events may turn out differently from prior expectations. Risk cannot be divorced from business life but some of the consequences of risk can be anticipated and either avoided, limited or insured against in various ways. The identification, assessment and management of risk is the subject of this set of papers.

Details

Managerial Finance, vol. 21 no. 1
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 16 May 2024

Jacqueline Mees-Buss

An in-depth analysis of how senior managers in a large multinational corporation interpret their social and environmental responsibilities revealed that, notwithstanding formal…

Abstract

An in-depth analysis of how senior managers in a large multinational corporation interpret their social and environmental responsibilities revealed that, notwithstanding formal corporate interpretations, discrepancies persisted in their interpretation of what was expected of them and how to implement it. Two fault lines emerged: (1) an instrumental versus a normative interpretation of corporate societal responsibilities, and (2) a focus on ‘doing less/no harm’ versus ‘doing more good’. This chapter introduces a theoretical framework that combines these fault lines to form four quadrants that each represent a different set of challenges managers face as they commit to improving their organisation’s impact on society. Rather than adjudicate between them, a holistic interpretation of corporate social responsibility (CSR) takes all four types into account. But the four types of challenges differ considerably in nature and thus in the strategic approach that is necessary to deal with them. In this chapter, each quadrant is discussed in detail. What characterises the issues in this quadrant, what mindset, and what strategy are necessary to address them? The chapter concludes with the observation that the framework, and the taxonomy of types of CSR challenges that it brings to the fore, creates greater awareness of how industries are confronted with different sets of challenges and thus need different strategic approaches. A better understanding of these differences may lead to more support, in particular for those managers who work in industries that face a disproportionate share of one particular type of challenges, the ‘nasty trade-offs’.

Details

Walking the Talk? MNEs Transitioning Towards a Sustainable World
Type: Book
ISBN: 978-1-83549-117-1

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Article
Publication date: 4 May 2010

Cheng‐Hsien Chen, Yuan Kang, Ding‐Wen Yang, Ren‐Ming Hwang and Shyh‐Shyong Shyr

The purpose of this paper is to study the influence of number of feeding holes on the performance of aerostatic bearings with spindle rotation. In traditional design of aerostatic…

562

Abstract

Purpose

The purpose of this paper is to study the influence of number of feeding holes on the performance of aerostatic bearings with spindle rotation. In traditional design of aerostatic bearings, the selection of hole numbers is dependent only on spindle size. However, when the hole numbers of air feeding are enough, the performance of the aerostatic bearing cannot be enhanced by increasing the hole numbers.

Design/methodology/approach

The Reynolds equation is utilized to model the air film within bearing clearance at constant temperature and the state equation of adiabatic process is for air feeding within bearing clearance. The finite difference method with relaxation algorithm is utilized to determine the pressure distributions from discretized and coupled equations of flow continuity. The eccentricity, spindle speed, and the number and arrangement of feeding holes are considered in the analyses to determine the load capacity, attitude angle, and flow rate for the comparisons between various designs of aerostatic bearings.

Findings

It is seen from the simulation results that the aerostatic bearing designed with a small number of feeding holes and without locating at bearing bottom is most suitable for the spindle operating at high speed, while the bearing designed with a large number of feeding holes is suitable for the spindle operating at low speed, and the load capacity is increased with the increasing number of feeding holes for low journal speed.

Originality/value

The paper proposes an extensive database as a critical requirement in the design for number and arrangement of feeding holes of aerostatic bearings for the spindle operating at low or high speed.

Details

Industrial Lubrication and Tribology, vol. 62 no. 3
Type: Research Article
ISSN: 0036-8792

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