Size effect, financial characteristics and insolvency profiles among the SMEs in Malaysia / Maran Marimuthu and Indraah Kolandaisamy

This study makes an attempt to analyze the effect of size on financial characteristics and insolvency of small medium enterprises. The conceptual framework is designed using the right measures, variables, concepts and models. A total sample of 229 businesses is considered consisting of small (57), medium (111) and large (61) SMEs. Non-parametric statistical techniques are used for empirical testing. The results indicate that size effect is significant only on profitability measures. There are no significant differences among the small, medium and large SMEs with regard to insolvency scores. In general, about 55 per cent of the large SMEs fall under the bankruptcy category, as compared to 39 per cent of the small SMEs and about 47 per cent of the medium SMEs. Large SMEs face greater financial risk and thus, face greater insolvency

Determining Oil-Macro-Financial Linkages and Feedback Loop Effects: Evidence from Malaysia

The correlation between declined oil prices versus bank stability has widely drawn researchers’ attention and has set the stage for vicious feedback loops. This paper further explores the oil-macro-financial linkages and its intensity of the feedback loop between declined oil prices and macroeconomic-financial development in Malaysia. To gain further insights into this issue, we discuss the development of oil-macro-financial linkages that can propagate through the domestic financial system and reverberate to the real economy. The empirical results reveal that oil price shocks have a significant impact on banking performance, channelling through microeconomic banking-specific and macroeconomic country-specific variables which influence Malaysia’s banking stability and create a ripple effect onto its real economy. In addition, this paper applies Granger causality, impulse response, and variance decompositions evaluation to assess the existence of a feedback loop effect within the oil-macro-financial linkages by using the VAR setting. In conclusion, oil-macro-financial linkages were empirically evaluated and had a more adverse effect than macro-financial factors alone could have explained within the Malaysian economy. Hence, a comprehensive understanding and extensive knowledge of the potent form of oil price volatility are significantly crucial in guiding bank operators and government regulators to mitigate risks with increasing control measurement, particularly in terms of the heterogeneous impact across the banking system and real economy. Keywords: Oil-Macro-Financial Linkages, Feedback Loop Effects, Oil Price Shock

Country-Specific Factors and Capital Structure of the Oil and Gas Industry: A Review

Determinants of the capital structure still confusing among scholars. While numerous studies have been conducted, these are often limited to firm-specific factors such as profitability, asset tangibility, growth opportunities, liquidity, size, and non-debt tax shield. However, the literature clearly points out that there are important country-specific factors that determine capital structure decisions. Arguably, studies on determinants of capital structure focusing on country-specific factors for the oil and gas industry are still missing in the literature. As such, this study serves to review the determinants of capital structure with a specific focus on country-specific factors for the oil and gas industry. This study is to provide potential avenues for future researchers specifically in the oil and gas industry. &nbsp

Human capital development and its impact on firm performance: Evidence from developmental economics

Human capital is getting wider attention with increasing globalization and also the saturation of the job market due to the recent downturn in the various economies of the world. Developed and developing countries put emphases on a more human capital development towards accelerating the economic growth by devoting necessary time and efforts. Thus human capital development is one of the fundamental solutions to enter the international arena. Specifically, firms must invest necessary resources in developing human capital which tend to have a great impact on performance. This paper examines the extent to which human capitals have direct impacts on firm performance from various critical perspectives. Firm performance is viewed in terms of financial and non-financial performance. Finally, this paper develops a model that explains the relationship between human capital and firm performance

A Conceptual Framework for Assessment of Moderating Role of Organizational Culture in the Relationship Between Workplace Bullying and Organizational Performance

Workplace bullying has a significant impact on employee and organizational performance. Organizational culture also plays a crucial role in influencing employee performance and can help mitigate workplace bullying. This study aims to propose a conceptual framework to assess the relationship between workplace bullying and organizational performance, taking into account the moderating role of organizational culture. Data for this study will be collected using stratified random sampling from academic staff at 20 public sector universities in Malaysia. The Structural Equation Modeling (SEM) technique through SmartPLS will be employed to test the hypotheses. The study will analyze the significance of the interrelation between workplace bullying, organizational performance, and organizational culture using SEM with SmartPLS. The moderating role of organizational culture in the relationship between workplace bullying and organizational performance will also be examined. It is worth noting that the framework in this paper does not include specific dimensions of organizational culture. To enhance the scope of future research, additional dimensions should be added. Furthermore, this study is limited to exploring the moderating role of organizational culture; including the mediating role could further enrich the research. The findings of this research will be valuable for university and organizational management in creating a bullying-free work environment. Eliminating workplace bullying can lead to improved organizational performance and foster a progressive culture within the organization. By investigating the moderating role of organizational culture, this paper offers a comprehensive approach to understanding the impact of workplace bullying on organizational performance. The unique focus on organizational culture as a moderating factor makes this study a valuable addition to the existing body of knowledge in this area. Keywords: workplace bullying, organizational performance, organizational culture, organizational behavior, conceptual framewor

Bankruptcy Profile of Foreign vs. Domestic Islamic Banks of Malaysia: A Post Crisis Period Analysis

After the (2007-2008) subprime financial crisis considering bankruptcy evaluation for the banking industry becomes a paramount. In line of that, this study aims to analyze the bankruptcy profile of foreign vs. domestic Islamic banks in Malaysia. This study predicted 40 percent and 75 percent bankruptcy in the subjected samples of foreign and domestic Islamic banks of Malaysia respectively. However, the specific reason behind this variation in their bankruptcy rates is tagged with the significant difference in liquidity ratio i.e. (1.59) by foreign and (0.41) by the domestic Islamic banks sample. The ANOVA results revealed that, the sample of foreign and domestic Islamic banks of Malaysia do differ significantly on bankruptcy rates as well as on the top bankruptcy's predictors namely liquidity, profitability, and insolvency. However, the sample does not vary on productivity with regards to bankruptcy exposure. Furthermore, the regression results revealed that, liquidity, profitability, and insolvency ratios in the sample of domestic Islamic banks, while only insolvency ratio in the sample of foreign Islamic banks have a significant positive relationship with bankruptcy in Islamic banking industry of Malaysia. Moreover, in the context of identified bankruptcy rates, the analysis here is viable to witness the sustainability ratings possessed by the sample of foreign and domestic Islamic banks of Malaysia. Keywords: Bankruptcy, Sustainability, Foreign Islamic Banks, Domestic Islamic Banks, Financial Characteristics JEL Classifications: A10, C01, C12, C33, C50, C5

ESG Strategy Through the Integrated Business Model in Congruence with Circular Economy: Does Independent Board Members Matter?

The purpose of this study is to examine the impact of the integrated Business Model disclosures on the financial performance of the top 30 Malaysian PLCs, moderated by a 50% presence of Independent Board of Directors as proposed by the Malaysian Code of Corporate Governance 2017 (MCCG 2017). The paper’s design will adhere to the purposive sampling methodology, utilizing descriptive statistics, multiple regression analysis, and quantitative content analysis derived from the International Integrated Reporting Council (IIRC)’s Integrated Report, along with previous studies. This approach aims to analyze the annual reports and integrated reports, aiming to explore the Integrated Business Model disclosures within the top 30 Malaysian PLCs. The originality of this paper lies in the design of the new Independent Board of Directors Scoring Index, which aims to identify the best disclosures among the top 30 Malaysian PLCs. This scoring index could prove beneficial to both academicians and practitioners, extending its utility beyond the Top 30 PLCs. The study serves as a systematic review of recent research developments in Integrated Business Model disclosures within the Integrated Report and the Annual Reports of the top 30 Malaysian PLCs. Keywords: ESG, Circular Economy, Governance, Integrated Report, Business Model, Independent Board of Director

RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION: A STUDY OF MALAYSIAN BANKING INDUSTRY

This paper is conducted to find out the relationship between service quality and customer satisfaction in the Malaysian banking industry. This paper uses SERVQUAL instrument questionnaire. The variables include in this paper are Service Quality as independent variable and Customer Satisfaction as dependent variable. The questionnaire includes 22 items of service expectations, 22 items of service performance perceptions, two different single items of service quality and customer satisfaction. A sample size of 200 respondents is conducted in Klang Valley Cities, Malaysia. A multivariate regression analysis is performed to study the impact of banking service quality on customer satisfaction in Malaysian banking industry. The results reveal that the expectations of Malaysian banks are higher than perceptions in terms of service quality. Their expectations are not met and that the largest gap is found in Reliability dimension. The findings from regression analysis suggest that banking service quality significantly influenced by customer satisfaction. In addition, the results from multiple regressions analysis show that the Tangible dimension has the largest influence on customer satisfaction. The findings provide several implications for bank managers and service organizations on the utilization of service quality evaluation to influence customer satisfaction. Also, limitations of the research are provided and the direction for future research is suggested for further study in the area of banking service quality and customer satisfaction. Implications of this paper are provided to both academic researchers and managerial practitioners

Comparative Study on Lower-Middle-, Upper-Middle-, and Higher-Income Economies of ASEAN for Fiscal and Current Account Deficits: A Panel Econometric Analysis

For the last three decades, ASEAN has been facing a persistent fiscal deficit. However, the impact of fiscal deficit on the current account deficit in the sub-groups of ASEAN is still unknown. This study aims to investigate the impact of fiscal deficit on current account deficit and their relationship among the three sub-groups of ASEAN which are based on gross national income (GNI), i.e., lower-middle-, upper-middle-, and higher-income countries. The analysis covers the panel data collected over the span of the last three decades (1990–2020) for ten Southeast Asian nations (ASEAN). The analyses incorporate the panel methodology for data analysis such as panel unit root for checking data stationarity, cointegration testing, panel autoregressive distributed lag (PARDL) for short- and long-run analysis, cointegration regression (fully modified and dynamic ordinary least squares) for significance, the panel Dumitrescu and Hurlin Granger causality test for examining causal relationships in tested variables, and stability diagnostics and CUMSUM and CUSUMSQ techniques for structural breaks and coefficient stability in the model. In lower-middle-income economies (LMIE), results indicate the existence of a unidirectional causal relationship from the current account deficit (CAD) to the fiscal deficit (FD), suggesting a reverse causal relationship from CAD to FD. In the long run, FD does not significantly induce CAD, while real interest rate (RIR) and exchange rate (EXC) influence CAD. In upper-middle-income economies (UMIE), results specify that there is no causality between FD and CAD. The RIR, EXC, and FD are significant to CAD in the long run. In higher-income economies (HIE), RIR and FD have an influence on CAD in the long run period. Moreover, from CAD to FD, a unidirectional causal association exists, and likewise for LMIE. This is a reverse causal relationship from CAD to the FD, supporting the current account targeting hypothesis (CATH) in both the LMIE and HIE groups. This study recommends that the LMIE and HIE groups can use the fiscal deficit as a tool to eliminate the unfavorable current account position. Policymakers can target EXC and RIR to stabilize CAD in long run. In UMIE and HIE, policymakers must consider FD alarming, as it can induce CAD in the long run. The RIR can be the targeted factor in the sub-groups of ASEAN