The Impact Of Thin Trading Adjustments On Exchange Rate Exposure

This study investigates the multiple exchange rate exposure of large non-financial firms in Asia and emerging countries using the unadjusted and adjusted two-factor exchange rate exposure model. The autoregressive-distributed lag (ARDL) method was applied to investigate the existence of exchange rate exposure. The Dimson-Fowler-Rorke (DFR) adjustment method was applied to adjust the ordinary least squares (OLS) market risk estimator for the thin trading phenomenon. The study’s findings indicate that exchange rate exposure does affect firm value. Incorporating the DFR market beta in the exchange rate exposure model indicates two important findings. Firstly, there is a significant increase in the number of firms exposed to exchange rate movements, especially in Indonesia, Thailand, Sri Lanka, and Vietnam. Secondly, there are more firms that will be exposed to multi bilateral exchange rate exposure across the sample countries. The findings imply that market characteristics such as thin trading could be an alternative explanation of the exchange rate exposure puzzle. Furthermore, future research should include asymmetric analysis as an alternative explanation for exchange rate exposure

Examining the mediating effect of attitude towards electronic Words-of Mouth (eWOM) on the relation between the trust in eWOM source and intention to follow eWOM among Malaysian travellers

This study aims to investigate the influence of trusting electronic word-of-mouth (eWOM) sources available online and attitude on intention to follow eWOM among travellers in Malaysia. A total of 280 questionnaires were collected from respondents via an online survey. The findings indicate that trust in the honesty, competence and benevolence of eWOM sources has a significant impact on attitude towards eWOM as well as the intention to follow it. However, the results also indicate that attitude partially mediates the relationship between trust in eWOM source and intention to follow it. The findings of this study can have significant implications for the tourism industry

¿Es suficiente el crecimiento económico para paliar la pobreza?: Experiencia en Malasia

Malaysia’s success story has been highlighted by the remarkable social transformation and poverty reduction accompanying rapid economic growth. Some three decades ago, more than half of the population was poor, the number of illiterates was high, and the average person could only hope to live until the age of 48. The proportion of poor people is currently down to 5.6 percent, 90 percent of adults are literate, and life expectancy is up to 68 years. Although Malaysia’s population has increased from approximately 10 million in the 1960s to about 28 million in 2010, the number of poor people has dropped significantly during this period. This paper attempts to determine the empirical relationship and importance of growth for poverty reduction in Malaysia. The results show that growth explains much, but not all, about the evolution of poverty. Economic growth is necessary but not sufficient for poverty reduction, especially if the objective is rapid and sustained poverty reduction. This study proposes that if a policy’s objective is focused on poverty alleviation, poverty reduction as well as economic growth should be simultaneously taken into account as the final targetLa historia del éxito de Malasia se ha visto evidenciada por la sorprendente transformación social y la disminución de la pobreza que han acompañado al rápido crecimiento económico. Hace unos treinta años, más de la mitad de la población era pobre, las tasas de analfabetismo elevadas y el ciudadano medio sólo podía esperar llegar a los 48 años. La proporción de población pobre actualmente se ha reducido al 5,6 por ciento, el 90 por ciento de los adultos cuenta con una educación y la esperanza de vida alcanza los 68 años. Aunque la población de Malasia se ha visto aumentada de los aproximadamente 10 millones en los años 60 a los 28 millones registrados en 2010, el número de ciudadanos pobres ha decaído de forma significativa durante este periodo. Este artículo pretende determinar la relación empírica y la importancia del crecimiento en la mitigación de la pobreza en Malasia. Los resultados demuestran que el crecimiento tiene mucho que decir, aunque no todo, en la evolución de la pobreza. El crecimiento económico resulta necesario, aunque no suficiente, para paliar la pobreza, sobre todo si el objetivo es una reducción rápida y sostenida. Este estudio propone que, si el objetivo de una política se centra en paliar la pobreza, tanto la reducción de la misma como el crecimiento económico acabarán siendo parte simultáneamente del objetivo fina

Multi-Factor Crime in Malaysia, 1980 – 2013: Bounds Testing of Level Relationships and Granger Non-Causality Analysis

This study examines the relationship between criminal activities and the multi-macroeconomic factors of economic growth, unemployment, poverty, population and inflation in Malaysia from 1980 to 2013. The ARDL bounds testing of the level relationship was used to establish the long-run relation, and the Toda-Yamamoto Augmented VAR approach was used to test the short-run impact based on partial Granger non-causality analysis. Empirical results suggest that economic growth, inflation, poverty and population are significant factors affecting criminal activities in Malaysia with economic growth and poverty recording positive effects, whereas negative effects were recorded for inflation and population in the long-term. Further investigation using Granger non-causality analysis revealed that only population does Granger caused the criminal activities in the short-run. The findings provide useful information for policymakers to strengthen the existing crime-related policies in order to improve safety and security while maintaining economic sustainability in Malaysia

Multi-Factor Crime in Malaysia, 1980 – 2013: Bounds Testing of Level Relationships and Granger Non-Causality Analysis

This study examines the relationship between criminal activities and the multi-macroeconomic factors of economic growth, unemployment, poverty, population and inflation in Malaysia from 1980 to 2013. The ARDL bounds testing of the level relationship was used to establish the long-run relation, and the Toda-Yamamoto Augmented VAR approach was used to test the short-run impact based on partial Granger non-causality analysis. Empirical results suggest that economic growth, inflation, poverty and population are significant factors affecting criminal activities in Malaysia with economic growth and poverty recording positive effects, whereas negative effects were recorded for inflation and population in the long-term. Further investigation using Granger non-causality analysis revealed that only population does Granger caused the criminal activities in the short-run. The findings provide useful information for policymakers to strengthen the existing crime-related policies in order to improve safety and security while maintaining economic sustainability in Malaysia

Asymmetric effect of real exchange rate risk on foreign direct investment: Empirical evidence in ASEAN-4

This study investigates the asymmetric effect of exchange rate risk (volatility) on the real foreign direct investment (FDI) inflows in Malaysia, the Philippines, Singapore, and Thailand (ASEAN-4) using the Nonlinear Autoregressive Distributed Lag (NARDL) model. The results revealed the occurrence of a long-run asymmetric cointegration between real FDI inflows and real exchange rate risk in the Philippines, Singapore, and Thailand, but not in Malaysia. For the Philippines and Singapore, there is evidence of long-run asymmetry whereas short-run asymmetry exists for the case of Thailand. These findings imply that the asymmetric effects prove to be useful in providing essential information to the related parties on how FDI inflows react to exchange rate risks differently. Therefore, policymakers in ASEAN countries should be concerned about the asymmetric effect of the exchange rate volatility to mitigate the stylized effects of exchange rate movements on FDI inflows

The effects of destination image and perceived risk on revisit intention: a study in the south eastern coast of Sabah, Malaysia

This study investigated the effects of destination image and perceived risk on revisit intention in the South Eastern Coast of Sabah, Malaysia. A total of 171 questionnaires were collected from international tourists through a self-administered questionnaire. The result of this study identified that three dimensions of destination image (travel environment, natural attraction, entertainment, and events) had significant effects on revisit intention. However, perceived risk was not important to the tourists’ revisit intention. The findings have implications on the tourism industry, especially for key players such as the tourism board and travel companies. It also serves as a reference to destinations with a similar risk background

Foreign direct investment: is being foreign really a liability?

Liability of foreignness (LOF) is the disadvantage that firms faced when they operate in foreign countries. These foreign firms may have to incur extra costs which would make them less competitive in the host country environment. This study examines the extent to which foreign firms in Malaysia encountered LOF and the strategies they used to mitigate LOF. Potential respondents for the study were obtained from a sample of foreign-owned companies listed in the Malaysian International Chamber of Commerce and Industry (MICCI) directory. A cross-sectional survey was conducted using self­administered questionnaires. Based on a small sample of 13 respondents, a descriptive analysis of the data was performed to obtain some preliminary findings. The results show that the LOF faced by foreign firms in Malaysia was perceived to be low. This may be due to the firm-specific advantages which the ·companies already have in the form of superior products and adaptability to the host environment. Strategies used to mitigate LOF were mainly in the form of HR-, learning-, network-, and product-related strategies. Government-related strategies were perceived to be less important in reducing LOF. Another aspect of LOF is to examine the expatriates, who are foreigners wofking in foreign countries. This study examines the extent to which being a foreigner poses a disadvantage to the expatriates working in Malaysia. Unlike their local counterparts, these expatriates face new challenges and uncertainties in their new local environments thus their ability to adjust and perform at their workplace will depend on their level of LOF. Based on a sample of 102 expatriates employed in Malaysia, the influences of expatriates' adjustment, age, gender, country of origin and length of working in Malaysia, on LOF were examined. The study findings from a multiple regression results showed that the level of LOF among expatriates tended to be influenced by their adjustment and country of origin. LOF was found to be negatively related to expatriate adjustment. The influence of gender, length of working in Malaysia and age on LOF was found to be not significant. The study on expatriates was extended further by separating the expatriates into two groups: company-assigned expatriates and self-initiated expatriates. In recent years, the trend on mobility of labor has begun to see the emergence of expatriates who, unlike the assigned expatriates, voluntarily seek jobs in foreign countries. These expatriates are known as self-initiated expatriates. Therefore, in this study, the extent to which company-assigned and self-initiated expatriates differ in terms of expatriate adjustment and their perceptions on the liabilities of being a foreigner was examined. Using a sample of 35 expatriates employed in Malaysian subsidiaries of foreign companies to represent company-assigned expatriates and a sample of 73 academic expatriates employed in Malaysian public universities to represent self-initiated expatriates, results from t-tests showed that no significant differences in terms of expatriate adjustment between the assigned expatriates and the self-initiated expatriates. However, perceptions on liability of foreignness were relatively higher among the self-initiated expatriates than the assigned expatriates. Limitations of the study are highlighted, implications of the findings are discussed, and suggestions for future research are also provided

The impact of thin trading adjustments on exchange rate exposure

This study investigates the multiple exchange rate exposure of large non-financial firms in Asia and emerging countries using the unadjusted and adjusted two-factor exchange rate exposure model. The autoregressive-distributed lag (ARDL) method was applied to investigate the existence of exchange rate exposure. The Dimson-Fowler-Rorke (DFR) adjustment method was applied to adjust the ordinary least squares (OLS) market risk estimator for the thin trading phenomenon. The study’s findings indicate that exchange rate exposure does affect firm value. Incorporating the DFR market beta in the exchange rate exposure model indicates two important findings. Firstly, there is a significant increase in the number of firms exposed to exchange rate movements, especially in Indonesia, Thailand, Sri Lanka, and Vietnam. Secondly, there are more firms that will be exposed to multi bilateral exchange rate exposure across the sample countries. The findings imply that market characteristics such as thin trading could be an alternative explanation of the exchange rate exposure puzzle. Furthermore, future research should include asymmetric analysis as an alternative explanation for exchange rate exposure

Stock Market Development and Economic Growth in Malaysia: A Revisit from 1982 to 2014

The study examines the relationship between the development of the stock market and economic growth in Malaysia using annual data from 1982 to 2014. The development of the stock market represented three indicators, namely the turnover ratio, the shares value traded ratio and the market capitalization ratio. Augmented Dickey-Fuller stationarity test was carried out prior to the use of a bound test approach for co-integration and causality testing. The findings of the co-integration analysis showed that there is evidence of a long-run relationship between economic growth and the development of the stock market. Further examination of the causal relationship showed proof of the shortrun interaction between economic growth and the development of the stock market. These findings may be of importance to policymakers in formulating growth policy and financial decision-making by investors