An Empirical Analysis of Cash Flow and Investment Fluctuations Using Firm-Level Panel Data

Since the pioneering work of Gurley and Shaw (1955), the attempt has been done to justify money as a primary focal point of macroeconomic theorizing. However, other researchers argue that variables such as financial development and indicators are also important to be linked with macroeconomic performance. Here, if money can be thought as means of production and consumer goods as the ultimate end toward which production is directed, and then capital also occupies a position that is both logically and temporarily intermediate between original means and ultimate ends. This temporarily intermediate status of capital is not in serious dispute, but its significance for macroeconomic theorizing is rarely recognized. The firms’ decision to acquire funds through debt and equity financings affects the capital structure, and, in the firm’s balance sheet, the impact of capital appears to influence the inventory investment. Hence, the significance of capital structure –induced inventory distortions in the context of firm-level is the basis for our article. The sample for our analysis is compiled from the balance sheets of listed syaria firms in the Kuala Lumpur Stock Exchange for the period 1995-2000

An Analysis of Determination for Life Insurance Premiums: The Concept and Practice of Conventional and Islamic Life Insurance (Family Takaful)

This paper aims to analyze the distinction of premium setting rates by taking into account the risk taken by conventional and Family Takaful. This study employed the Net Single and Annual Level Premium formula, and the data were analyzed using a numerical simulation. We found that the conventional and Takaful insurance systems utilize similar methods in the calculation of insurance premium when considering pure risk faced by the participant or insured. However, both systems have their own unique characteristics. The conventional and Family Takaful utilize historical data, such as mortality rate, expected return rate, expected costs and expected amount of claims. The conventional insurance is calculated to mitigate or minimize the risk of the insurance company against an amount of claim faced in the future as long as the insurance is enforced until the contract ends. On the other hand, the Family Takaful is intended to share fair value among participants in determining benevolence through Tabarru premium. Every participant must pay for Tabarru premium to support one another so that there is sufficient amount to cover unexpected claims among them and to uphold mutual fund as evidence for the sense of mutual co-operation and brotherhood among participants..Keywords: Conventional and Islamic life insurance (Family Takaful); premium; rate making; Tabarru and Mudaraba

Assessing the effect of public social expenditure and human capital development on Malaysian economic growth: A bound testing approach

Government expenditure on social services is essential to the development of the economy. This fact also applies to Malaysia, a developing country that aspires to become a developed nation in few years to come. As Malaysian government plays a dominant role in financing public education and health services, an analysis on its investment in these areas, if made available, would be able to assist policymakers in generating a strategic plan to enhance human capital development and economic growth. Hence, the aims of this study are to investigate the long run and short run relationships between economic growth and public social expenditure with human capital indicators in Malaysia, using annual data from 1975 to 2008. The cointegration technique - bound testing approach developed within the autoregressive distribution lag (ARDL) framework is utilized.The finding shows that there is a cointegration between economic growth and the explanatory variables

Gelagat kepatuhan pembayaran zakat pendapatan : Kajian kes UUM

Berdasarkan kepada asas zakat dikenakan ke atas harta yang berkembang, maka berlaku perluasan kewajipan ruang berzakat kepada harta-harta berkembang yang lain selain daripada lima jenis harta yang diamalkan oleh Rasulullah saw. Rentetan dari itu kebanyakan negeri telah mewartakan zakat pendapatan sebagai zakat yang wajib dikeluarkan oleh individu Islam. Lebih menarik lagi, bukan sahaja jumlah kutipan bagi negeri malahan jumlah kutipan zakat pendapatan di daerah-daerah kecil juga mencatatkan peningkatan. Sebagai contoh, kutipan zakat pendapatan di daerah Kubang Pasu telah meningkat dari RM35,450.41 pada tahun 1990 kepada RM1,760,925.40 pada tahun 2003 iaitu berlaku peningkatan sebanyak 48.67 kali ganda berbanding tahun 1990. Daripada jumlah tersebut, sebanyak RM918,478 merupakan kutipan zakat pendapatan daripada kakitangan UUM melalui skim potongan gaji. Namun sehingga April 2004 peratus kakitangan UUM yang membayar zakat pendapatan melalui skim potongan gaji hanyalah sekitar 28.57 peratus sahaja. Adakah selebihnya tidak mengeluarkan zakat pendapatan? Atau mungkinkah mereka menyalurkan zakat tersebut terus kepada asnaf tertentu? Bertitik tolak dari persoalan ini, maka adalah suatu yang menarik untuk mengkaji gelagat individu (kakitangan UUM) mengeluarkan zakat pendapatan. Dengan menggunakan teknik penganggaran maximum likelihood dalam pengujian hipotesis berarah, beberapa pembolehubah bebas telah dikenalpasti sebagai faktor yang signifkan mempengaruhi gelagat individu mengeluarkan zakat

An understanding the determination of life insurance premium: Shariah compliant in the Islamic insurance concept and practice

The main objective of the insurance is to uphold a sense of solidarities among the parties involved, shared responsibility on the basis of mutual cooperation in protecting the individual against unexpected risk.Insurance is one of tools to minimize or transfer risk which has existed for individuals to the insurance company against future loss faced by the policyholder or insured. The Islamic insurance based on the concept of Ta’awun that means mutual assistance to eliminate forbidden elements accordance with the teachings of Islam such as riba, gharar and maysir.The determination of life insurance premium, such as stated by (Bacinello, et al., 2009) that risk is extremely important and crucial role in life insurance policy.This paper aims to investigate the distinction of setting rates taking into account risk which applied by conventional and Islamic insurance (Takaful).This paper employs using the net single and Annual Level premium formula, the data analysis using numerical example.We found that between conventional and Takaful insurance systems utilize similar methods in the calculation of insurance premium whereas they consider the pure risks faced by participant or insured.It means that conventional and Islamic insurance utilizing historical data, such as mortality rate, expected return rate, expected costs and expected amount of claims.Even though both systems look like apply a similar approach, but the conventional insurance, it is calculated to mitigate or minimize risk of the insurance company against an amount of claim faced in the future as long as insurance enforced until the contract ends.In simple terms it can be called to avoid insolvency of the insurance company. Conversely, Takaful insurance intended to share fair value among participant in determining benevolence through tabarru fund.This means that every participant must pay a premium tabarru to support one another which contributed sufficient amount to cover unexpected claims among them and to uphold mutual fund as evidence the sense of mutual cooperation and brotherhood among participant

The estimation of equilibrium exchange rates in Malaysia: evidence using FEER model

The study of exchange rate behavior is important to identify the currency either experiencing an overvaluation or undervaluation. The traditional theory to estimate exchange rates behavior is the Law of One Price (henceforth LOP). This theory suggests that the price levels would be the same between two countries after converting their price into a common currency. However, the LOP does not take into account the real macroeconomic fundamentals factors. Hence, this model is seen missing to explain the possible a particular exchange rate is influenced by macroeconomics fundamentals. Therefore, this study is aim to investigates the behavior of exchange rate movement and identify the determinants of macroeconomics fundamentals on the exchange rates in Malaysia. By using fundamental equilibrium exchange rates (FEER) model, this study adopts the bound testing popularized by Pesaran et al., and autoregressive distributed lag (ARDL) to examine the long run relationships (or cointegration) among the variables and the dynamic effect within variables in the short run

The misalignment of exchange rates in Malaysia: Evidence using FEERs model

The misalignment of exchange rate is the normal phenomenon in currency’s behaviour for a country. The traditional theory of exchange rates in determining the misalignment of the currency is the Law of One Price (henceforth LOP), where the price levels would be the same between two countries after converting their price into a common currency.However, this model does not take into account the economically interesting question of whether a particular exchange rate is driven by macroeconomics fundamentals.Therefore, the aim of this paper is to investigates the behaviour of exchange rate movement in Malaysia and identify the determinants of macroeconomics fundamentals on the exchange rates for this country.By using fundamental equilibrium exchange rates (FEERs) model, this study adopts the autoregressive distributed lag (ARDL) to examine the long run relationships (or cointegration) among the variables and the dynamic effect within variables in the short run

Neksus antara indeks syariah dan fundamental makroekonomi

Kajian ini mengukur indeks Syariah berdasarkan Indeks Financial Times Stock Exchange (FTSE) Bursa Malaysia Emas Syariah dan Indeks FTSE Bursa Malaysia Hijrah Syariah. Manakala pemboleh ubah fundamental makroekonomi pula adalah penawaran wang, kadar faedah, kadar pembiayaan dan pulangan kepada pendeposit, dan indeks konvensional. Neksus dinamik antara indeks Syariah dan pemboleh ubah fundamental makroekonomi diuji berdasarkan kointegrasi antara pemboleh ubah bagi tempoh Julai 1999 hingga Disember 2017. Dapatan kajian menunjukkan terdapat kointegrasi antara FTSE Bursa Malaysia Emas Syariah dengan pemboleh ubah makroekonomi. Namun dapatan sebaliknya bagi FTSE Bursa Malaysia Hijrah Syariah. Pemboleh ubah yang mempengaruhi Indeks FTSE Bursa Malaysia Emas Syariah dalam jangka panjang dan jangka pendek adalah pemboleh ubah makroekonomi yang sama iaitu kadar pembiayaan dan pulangan kepada pendeposit dan indeks konvensional. Implikasi kajian menunjukkan pemboleh ubah Sistem Perbankan Islam yang dikaji, iaitu kadar pembiayaan dan pulangan kepada pendeposit mampu memainkan peranan sebagai penyuntik modal kepada pasaran modal Islam dalam jangka panjang dan jangka pendek. Ini menunjukkan indeks Syariah memerlukan polisi dan dasar yang sama dalam jangka panjang dan dalam jangka pendek bagi menjamin kekukuhannya dalam pasaran

THE ROLE OF CORPORATE ZAKAT ON OPTIMAL CAPITAL STRUCTURE POLICY: EVIDENCE FROM MALAYSIAN FIRMS

In the finance literature, the relationship between capital structure and firm value has been extensively investigated, both theoretically and empirically. The main issue on corporate finance is how firms dealing with the important decision of capital structure. In this study, a model of capital structure is formulated in which corporate tax and zakat payment exist by firms into the consideration of combination of debt and equity. The theoretical model as shown by comparative statics prove the implication which is negatively relationship between leverage of the firm and the corporate zakat payment. Meanwhile, the empirical evidence reveals several implication as follows, (1) tax deduction reduces the current liability item relative to the firms that prefer equity financing, (2) the significant of zakat is consistent with the theoretical model that zakat would encourage firm to issue more equity than debt, (3) the strong significant relationship between return on assets with the leverage are the leading indicator of capital structure in all models