European Journal of Economics, Finance and Administrative Sciences

Issue 76
June, 2015

The Influence of Managerial Factors on Financial Decision Making and their Implication on Financial Performance and Firm Value (Study in the Golf Course Industry in JABODETABEK)
7-19
Masno Marjohan and SE. M.M

Abstract:
This study examines the phenomenon identifying several weaknesses of managerial factors which influence financial decision making, and their implications on the financial performance of the company in the golf course industry in JABODETABEK (Greater Jakarta). The variables of this study consist of the role of leadership, entrepreneurial spirit, competence and partnerships, financial decision making, financial performance and company value of golf industry. The method used in this study is a survey method with quantitative approach. The technique used in this study is a population study conducted at certain times (January 2014 - June 2014), with 120 respondents from 40 golf industry around JABODETABEK. The research method is tabulation analysis used to test the research model with Path Analysis. Data instruments used are Validity, Reliability and Normality Test. Model test feasibility for this research is theoretically plausible, Parameter Estimation Accuracy, Explanation Ability and Forecasting Capabilities. The results show that (1) entrepreneurship spirit is good, competence is good, leadership role is good and partnership is good. (2) Financial decision-making is good (3) financial performance is good (4) company value is good (5) the influence of entrepreneurship, competence, leadership and partnership on financial decision-making is significant (6) the influence of company value on financial performance is significant (7) the influence of financial performance on company value is significant.
Keywords: entrepreneurial spirit, competence, leadership, partnership, financial decision making, financial performance, company value.


The Impact of Competitive Intelligence on Effectiveness of Marketing through IT (Case Study: Small- and Medium-Sized Enterprises of Lorestan Province)
20-28
Mohammad Hakkak, Hojatollah Vahdati and Farzaneh Souri

Abstract:
The present research aims at surveying the impact of competitive intelligence on the effectiveness of marketing through information technology (IT).It is a descriptive research of survey type. It is an applied research and the nature of data is qualitative. The data were collected using the effectiveness of marketing standard questionnaire developed by Cutler (1997) and competitive intelligence model developed by Fahey (2007). The research population consists of all small- and medium-sized enterprises (SMEs) of Lorestan Province (totally 1842 companies). The sample size was determined 318 on the basis of Cochran formula and the sampling method was stratified simple random sampling. Cronbach's alpha coefficient was used to determine the reliability of questionnaires and PLS software was used for data analysis. The results show that the competitive intelligence does not affect the effectiveness of marketing through IT.
Keywords: competitive intelligence, effectiveness of marketing, information technology (IT), small- and medium-sized enterprise (SME).


The Impact of Islamic Banking Challenges and Opportunities on the Market Share: Evidence from Oman
29-38
Badreldin F. Salim and Mawih K. Al Ani

Abstract:
This study examines the effect of Islamic Banking Challenges and Opportunities on the market share of those Islamic Banks working in Sultanate of Oman. This study discussed the economic diversification strategy of the sultanate of Oman and its current position as well as to survey the viewpoints of the Islamic Banks employees in Dhofar Region (Salalah) to review their perceptions towards Islamic Banking Challenges, Opportunities and its relationship to the market share. The study tested two hypotheses concerning with the impact of Islamic Banking Challenges and Opportunities on the market share. The data collected by s structured questionnaire involving a sample of 77 respondents. The survey employs an exploratory factor analysis to examine respondents’ perception of the subject, Islamic Banking challenges and opportunities and Market share. The regression test showed that only the opportunities of Islamic Banking in Oman have a positive impact on the market share of the Islamic banks. The study concluded that the association between Islamic Banking challenges and market share.
Keywords: Islamic Banking, Challenges, Opportunities, Market Share.
JEL Classification Code: G24, F65

An Insurance Model for the Protection of Corporations Against the Bankruptcy of Suppliers
39-59
Raul Valverde

Abstract:
Many banks provide supply-chain finance solutions that might include insurance services that further mitigate trade risk such as the default of suppliers. This study proposes the development of an insurance model that uses the Black-Scholes-Merton (BSM) Model for default prediction and risk pooling management techniques as a way to reduce the risk due to supplier bankruptcy and estimate an insurance premium that banks can use to charge this service to their customers. In order to demonstrate the use of the proposed insurance model, a sample of companies is selected from the New York Stock exchange and data for historical stock prices from the Center for Research in Security Prices database is collected in order to calculate the probability of bankruptcy of a sample of suppliers from different industries by using the BSM model. A Monte Carlo simulation to simulate the impact on risk and expected losses on the number of insurance policies sold is implemented with the use of simulation software. The results show that the simulation is useful to estimate the number of sold policies required in order to reduce the risk to a minimum level and predict with a high level of certainty the losses due to bankruptcy of suppliers.
Keywords: Black-Scholes-Merton, Supply Chain Finance, Supply Chain Insurance, Supply Chain Risk Management, Monte Carlo Simulation for Supply Chain

Electoral Rules and Economic Growth: Is Corruption a Relevant Channel?
60-81
Mona Fayed and Asmaa Ezzat

Abstract:
The underlying study empirically examines whether corruption is a significant channel through which electoral rules affect economic growth. Furthermore, it estimates the direct impact of these electoral rules on growth. This is done by employing (3SLS) estimation on a system of two equations, where both corruption and GDP growth are determined jointly by a set of control variables and electoral rules. Using panel data for a sample of 113 democratic countries over the period (1995-2012), the results suggest that electoral rules are important determinants of economic growth. On one hand, it was shown that mixed electoral rules only have a direct significant positive impact on growth compared to proportional representation. On the other hand, plurality electoral rules are accompanied by higher growth rates – compared to proportional representation- only indirectly through lowering the level of corruption. Moreover, the findings of this study support what is known as "sanding the wheels" hypothesis which presumes a negative effect of corruption on growth. However, this result was not robust to using different measures of corruption and estimation techniques.
Keywords: Electoral Rules, Constitutional Rules, Economic Growth, Corruption, Three Stages Least Squares (3SLS).
JEL Classification: D73, E02, K10, O43, O50

The Relationship Between Psychological Contract (Staff Image) and Staff Attitude Towards Chang
82-88
Leila Mehrabi and Akbar Etebarian

Abstract:
The purpose of this study is the relationship between psychological contract (staff image) and staff attitude toward change among the employees of Ayande Bank. The variables included in the study were psychological contract and attitude to change. The question was whether there was any relationship between the psychological contract and the attitude of staff toward the change or not? The research was descriptive. The population of the study included the staff of Ayande bank of Isfahan in 2014 that were reported as 107 staffs. Considering the limited number of study population, study was conducted based on census. The psychological PCQ questionnaires of Millward and Hopkins (1998) Robinson and Rousseau (1994) and the attitude toward change questionnaire by Danham (1989) were used in order to collect data. Cronbach's alpha was used to determine the reliability. Reliability of the psychological contract questionnaires was 0.87 and attitudes to change questionnaire had the reliability of 0.86. Data analysis of the research was done on two levels of descriptive and analytical with correlation coefficient of 95 percent (Pearson correlation, regression analysis, analysis of variance one-way ANOVA test). The statistical results showed that the commitment / loyalty aspects and psychological contract had no significant relationship with the staff attitude toward change. The relationship between employees and employers in other dimensions of psychological contract showed a significant relationship with staffs’ attitude towards change.
Keywords: psychological contract, attitude toward change, Ayandeh Bank.

The Relative Contribution of Micro and Macroeconomic Determinants of Bank Profitability: Empirical Study on MENA and EU
89-110
Tarek Eldomiaty, Ahmed Fikri and Diaa El-Shater

Abstract:
The objective of this study is to examinethe relative importance of bank-specific and macroeconomic factors to bank profitability in the MENA and EU regions. The panel data cover the years 2006-2012 for 945 commercial banks. The discriminant analysis is used for estimating Z-scores that discriminate between below-median and above-median return on equity for banks operating in the MENA and EU. The results indicate that the effects of some variables are consistent across both regions, namely: the net interest margin and the risk provision ratio. Operating Expenses are positively associated with bank profitability in the MENA region while the financial leverage is negatively associated with bank profitability. In the EU region both Bank Equity and the ratio of liabilities to assets are negatively associated with profitability. In the EU region, GDP growth rate is negatively associated with profitability while the unemployment is positively associated with bank profitability. Nevertheless, in the MENA region, all macroeconomic factors are statistically insignificant. These findings provide insights into a collective road map to improve bank profitability in both regions. This study contributes to the literature in terms of being the first study that investigates the relative contribution of bank-specific and macroeconomic factors on bank profitability. The majority of other related studies in the literature examine the effects of bank-specific, or macroeconomic, or both factors on bank profitability without a focus of the relative contribution of each factor.
Keywords: Bank profitability, Return on Equity, Macroeconomic factors, MENA, EU, Discriminant analysis
JEL Classification Code: E66, G21

Survey of Opportunities for Entrepreneurship (Case Study: Rural of Alborz City, Qazvin)
111-129
Mahshid Shafaei, Masoud Mahdavi Hajiloei and Parviz Kardavani

Abstract:
Economic development is based on creativity and innovation and entrepreneurship; So that every day, the firms, enterprises and small and medium businesses are being established in the country; Because the entrepreneurs by using the power of innovation, use of opportunities, creativity and the maintain the of relation between factors and the risk can identify the new opportunities and manage the process of economic in the aspects of production and marketing, distribution and consumption These individuals and firms can increase the local economy of activity and contribute to national prosperity and economic growth due to their ability and creativity and innovation that the job creation, increase of productivity levels of income and the wealth in society are the results of it. For this reason, the rural society is not exceptions in this regard because the villages can be effective in the formation of entrepreneurial opportunities in villages by the national resources; One of these opportunities include the services economic, agricultural, industrial aspect. Especially in rural areas with potential for entrepreneurship are located in the city of Qazvin, Therefore, in order to take advantage of these opportunities, In the this study we attempted to assess the opportunities for entrepreneurship in the region and the offer a model contributed to the development of entrepreneurship in the rural areas with the modern structure.


Strategic Management of Higher Education in Developing Countries: A Prescriptive Approach
130-136
Muhammad Zafar Yaqub and Ali Alqahtani

Abstract:
It is of general interest to understand why and how educational institutions become successful and or high performing. Effective strategic management has become more important than ever at colleges and universities today. Adapted from the fields of business and nonprofit management, strategic management approaches have evolved distinctive and important elements in order to function successfully in higher education. The authors in this paper have endeavored to offer some useful insights on some efficient and effective means of strategically managing the higher education institutions. They have highlighted the importance and means of instituting strategic-orientation, strategic planning, management the resources, leadership, control, communication and networking while managing the higher education institutions with a strategic intent.
In a knowledge-driven age, the role of educational institutions (especially those imparting higher education) is becoming increasingly pivotal for the development of countries. The difference in performance of educational institutions is one of the most crucial factors that differentiate developed countries from the developing ones. Consequently, there exists a profound realization among the strategists in the developing countries that they need to bridge this gap if they aspire to catch up with the developed countries. That is why the developing countries are investing a lot in education (especially higher education) to improve upon the human capital formation. The change in strategic-orientation and a commitment to higher education has for sure yielded significant results as could be glimpsified by the improved ranking of the universities from the developing countries and the human capital index in the last few years. However, the results are not as they should ideally have been showing that the educational institutions need to improve upon their strategic effort. Therefore it is highly pertinent to debate what really contributes to the strategic performance of educational institutes. With a prescriptive approach, the following sections present a detailed discussion on key instruments of strategic management effort undertaken by the higher education institutions.


The Role of Human Capital in Building a Competitive Advantagein Private Hospitals
137-150
Omar Durrah

Abstract:
The research aims to identify the components of human capital in private hospitals and their role in building competitive advantages. Questionnaire has been used as a tool. Sample has been distributed for doctors, nurses, administrators and technicians in these hospitals. By research, researcher has found that human capital components are aware moderate degree with the presence of significant differences between the categories of staff from where the degree of awareness of human capital in private hospitals, as research showed that the degree of availability of competitive advantage dimensions in private hospitals exceed middle degree with a significant differences between these hospitals. The research also showed the existence of directly effect to learning in response dimension and directly effect to training of the dimensions of quality response and directly effect to turnover in all the competitive advantage dimensions and adverse effect to belonging in Price dimension. Research was presented a set of recommendations that would activate the role of human capital components in building competitive advantage in private hospitals.
Keywords: Human Capital, Learning, Training, Belonging, Turnover, Competitive Advantage, Price, Quality, Response Private Hospitals.