Selma Izadi, Mamunur Rashid and Parviz Izadi
Extending on the resource-seeking foreign direct investment (FDI) hypothesis, this paper aims to uncover the potential relationship between financial and non-financial channels…
Abstract
Purpose
Extending on the resource-seeking foreign direct investment (FDI) hypothesis, this paper aims to uncover the potential relationship between financial and non-financial channels and inward FDI before and after the global financial crisis.
Design/methodology/approach
The sample includes 561 year-country observations on 33 developed and developing countries during 2001 and 2017. This study investigates several determinants such as inflation, gross domestic product growth, exchange rate, trade openness, financial openness, Sharpe ratio and country market capitalization, using ordinary least squares, fixed effects and system generalized method of moments.
Findings
The results indicate a negative relationship between inflation and financial openness with FDI inflow while market capitalization and exchange rate were positively connected to FDI inflow. All three financial channels of FDI inflow: financial market size, financial openness and Sharpe ratio significantly influenced FDI inflow. Moreover, inflation, financial openness and Sharpe ratio imply a meaningful impact on the FDI inflow of developed and developing countries, with a relatively stronger influence during the post-crisis periods. Asymmetric impact tests also revealed similar results.
Research limitations/implications
These findings offer an impression that financial market development channels may significantly boost FDIs in developing and, as well as developed countries. With special reference to the developing countries, a disciplined financial market and financial openness may help attract more FDIs.
Originality/value
Impact of the financial crisis on FDI inflows while observing the impact of the financing channels in developing and developed countries is rare in the academic domain. This study forwards that a structured and open financial market may help in recovering from the financial crisis.
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Jayalakshmy Ramachandran, Joan Hidajat, Selma Izadi and Andrew Saw Tek Wei
This study investigates the influence of corporate income tax on two corporate financial decisions — dividend and capital structure policies, particularly for Shariah compliant…
Abstract
Purpose
This study investigates the influence of corporate income tax on two corporate financial decisions — dividend and capital structure policies, particularly for Shariah compliant companies in Malaysia.
Design/methodology/approach
The study considered data from a sample of 529 Malaysian listed companies from four industrial sectors from 2007–2021 (6,746 company-year observations, before eliminating outliers). Panel models such as Fixed Effect and Random effect models were used. The study specifically tested the effect of corporate income tax on dividend and capital structure policies for Shariah compliant companies (3,148 observations) and controlled for industrial sectors.
Findings
(1) Firms are mostly Shariah-compliant, less liquid, less profitable and smaller in size, (2) Broadly when analysed together, tax has no impact on debt-equity ratio while it has an impact on dividend per share, (3) However, when tested separately for Shariah compliant companies, the influence of effective tax on capital structure is very evident but not for dividend and (4) influence of industrial sector on the relationship between corporate tax and capital structure and dividend policy is significant. Results indicate that Shariah firms might be raising debt to gain tax advantage. Companies in general pay dividends to avoid reputational damage.
Research limitations/implications
This study assumes that leverage and dividend policy decisions are the main outcomes of the changing tax policies, while it seems that there could be other important outcomes that can be tested in future research. The study also shows the changing tax regimes of different ASEAN countries but they have not been tested to see the differences between countries. It will be indeed interesting for future researchers to focus on this aspect.
Originality/value
The findings contribute to the literature on tax planning of the Shariah-compliant firms, a high growth business segment in the Asian context. The study discussed potential tax-based Islamic market product development.
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Harit Satt, Sarah Nechbaoui, M. Kabir Hassan and Selma Izadi
This paper aims to document the impact of Ramadan on the optimism of analysts’ recommendations taking as a sample the countries of the MENA region during the period between 2004…
Abstract
Purpose
This paper aims to document the impact of Ramadan on the optimism of analysts’ recommendations taking as a sample the countries of the MENA region during the period between 2004 and 2015. The choice of these countries can be explained by the fact that their population is predominantly of a Muslim faith (The Future of World Religions: Population Growth Projections, 2010-2050, 2015).
Design/methodology/approach
The authors used univariate and multivariate regression models to highlight the existence of the Ramadan effect on the optimism of analysts. They have found that pre-holiday optimism is significantly lower than post-holiday optimism.
Findings
This paper also documented the effect of analysts’ experience and information uncertainty on the analysts’ optimism level that allowed us to infer that low experience enhances optimism, while environment with low information uncertainty tends to decrease the level of optimism.
Originality/value
Previous research on this topic has investigated the effect of months of the year, turns of the month and days-of-the-week on the behavior of stock exchanges. Another strand of the literature also analyzed the effect of holidays on the latter. However, this is the first attempt to investigate this effect on analysts’ recommendations optimism when the holiday period is related to Islam.
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Selma Izadi and Abdullah Noman
The existence of the weekend effect has been reported from the 1950s to 1970s in the US stock markets. Recently, Robins and Smith (2016, Critical Finance Review, 5: 417-424) have…
Abstract
Purpose
The existence of the weekend effect has been reported from the 1950s to 1970s in the US stock markets. Recently, Robins and Smith (2016, Critical Finance Review, 5: 417-424) have argued that the weekend effect has disappeared after 1975. Using data on the market portfolio, they document existence of structural break before 1975 and absence of any weekend effects after that date. The purpose of this study is to contribute some new empirical evidences on the weekend effect for the industry-style portfolios in the US stock market using data over 90 years.
Design/methodology/approach
The authors re-examine persistence or reversal of the weekend effect in the industry portfolios consisting of The New York Stock Exchange (NYSE), The American Stock Exchange (AMEX) and The National Association of Securities Dealers Automated Quotations exchange (NASDAQ) stocks using daily returns from 1926 to 2017. Our results confirm varying dates for structural breaks across industrial portfolios.
Findings
As for the existence of weekend effects, the authors get mixed results for different portfolios. However, the overall findings provide broad support for the absence of weekend effects in most of the industrial portfolios as reported in Robins and Smith (2016). In addition, structural breaks for other weekdays and days of the week effects for other days have also been documented in the paper.
Originality/value
As far as the authors are aware, this paper is the first research that analyzes weekend effect for the industry-style portfolios in the US stock market using data over 90 years.
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Amel Ibrahim, Sameh Awad and Mahmoud El-Sayed
The effect of pomegranate whole and inside peels before and after extraction of the tannic acid have been carried out in stimulated media and in gastrointestinal conditions
Abstract
Purpose
The effect of pomegranate whole and inside peels before and after extraction of the tannic acid have been carried out in stimulated media and in gastrointestinal conditions
Design/methodology/approach
Adding pomegranate peels with and without tannins at different levels to bio-stirred yoghurt to study its effect as prebiotic, in addition to evaluating the effect on physiochemical, sensorial and rheological properties
Findings
The results reveal that pomegranate peels before and after removing tannins had no effect on the viability of a single strain of Lb. acidophilus in stimulated media, while the growth of mixed probiotic culture (Lb.acidophilus and Bifidobacterium bifidum) was enhanced when pomegranate peels (whole and inside part) free from tannins were used. Tannin-free pomegranate peels enhanced the viability of probiotic culture under gastrointestinal conditions. In this study, all probiotic cultures were maintained counts around log 8 cfu /g in stirred bio-yoghurt supplements with pomegranate peels after 21days. Bio-yoghurt supplemented with pomegranate peels at 0.5% gained high scores for overall acceptability.
Originality/value
Pomegranate has been recognized as a good source of antioxidant and antimicrobial activities. Some researchers have utilized pomegranate peel in fermented milk, but most of the studies have found that tannins inhibit the bacterial culture. This study recommended that the supplementation of low-fat bio-yoghurt with tannin-free pomegranate peels enhanced the texture properties, viscosity of the product, as well as the viability of probiotic culture during shelf life. Therefore, the tannin-free pomegranate peel could be used as a prebiotic in functional fermented dairy products.