Mediation Effects of Firm Leverage in Malaysia: Partial Least Squares –Structural Equation Modelling (PLS-SEM)

In theory, capital structure determinant is a cause-effect model. We investigate the simultaneously of cause-effect framework on the impact of specific attributes on firm's financial performance through leverage which acts as a mediation variable. We use the PLS-SEM that capable of providing a greater understanding of the prediction for the construct relationship among each other with simultaneous techniques with only one time process (Chin, 1998). We endeavour to examine in a complex model that consists with 14 construct (LVs) and 33 indicators in Malaysia for the period from 1990 to 2010. The implication is that the Malaysian firms could attempt to choose less risky route, as Malaysia is recognised as a “market-based oriented”. In addition, we find that some attributes could influence the relationship to firm's financial performance by indirect effect (leverage). Thus, firms tend to act with partial action on their capital structure, which believe to attain a sustainable performance. Keywords: Capital structure, Partial Least Squares, Structural Equation Modelling, mediation effects JEL Classifications: G32; F6

The determinants of capital structure: an empirical investigation of Malaysian listed government linked companies

In this study, we explore how the debt equity choices of Listed Malaysian Government linked Companies (GLCs) are influenced by the firm specific characteristics and macroeconomic variables using a sample of 13 GLCs from 1997 to 2009. Two elements of leverage, book value of total debt ratio (BVTDR) and long term debt ratio (BVLTDR), were used to check for any significant changes in corporate financing and found mixed results. Tangibility and firm size are the most significant variables to determine the corporate financing of GLCs. Liquidity and interest rate are negatively significant with BVTDR and BVLTDR, respectively.The study concluded that profitability is inconsequential in determining corporate financing; inconsistent with the findings of previous Malaysian studies. With the proper design of capital structure and intervention from the government, the study also concludes that GLCs are rely less on leverage to support their investment activities

Board of Directors’ Effectiveness and Firm Performance: Evidence from Jordan

This paper aims to examine the relationship between the board of director’s effectiveness and firm performance in Jordanian listed firms. The study used panel data approach over a period of five years from 2009 to 2013, with a sample of 120 non-financial firms listed on Amman Stock Exchange, these firms represents around 56% of Jordanian listed firms. In terms of the effect of board of directors on firm performance, five characteristics of the board of directors are identified: board of directors’ independence, board size, board meetings, leadership structure and board of directors' ownership. The firm performance was assessed by (ROA) as an accounting-based performance measure and Tobin’s Q (TQ) as a market-based indicator. The findings indicate that the independence of board of directors and board of directors' ownership have a positive impact on firm performance. The results also find that the smaller board size enhances the firm performance. Further analysis shows that the findings fail to reveal any significant impact for the frequency of board meetings and leadership structure on firm performance. The study contributes to the literature on board of directors’ effectiveness and firm performance in developing countries especially in Jordan. This study provides useful information that is of great value to policy makers, academics and other stakeholders. Keywords: Corporate governance, board of directors’ effectiveness, firm performance, Jordan

Determinants and stability of dividend payment: the case of Malaysian public-listed Shariah-compliant firms

The purpose of this paper was to examine the determinants and stability of dividend payments in Malaysia from 2007 to 2016. The purposes of this research were (1) to analyse the stability of dividend per share, (2) to examine the determinants of dividend yield, and (3) to examine the effect of dividend per share on the sustainable growth rate of Shariah-compliant firms in Malaysia. Static model and dynamic model estimated using Generalised Method of Moment were used in this research. The results indicated that the stable earnings per share can afford the firms to pay a larger dividend. Futhermore, the higher dividend from the previous year with the lower speed adjustment indicated high smoothing and stability of dividend payment. The results on determinants of the dividend yield revealed the five factors that are lagged dividend yield, firm size, sales growth, leverage, and market value to book value have a significant impact on dividend yield, with lagged dividend yield and firm size showing a significant positive effect, while sales growth, leverage, and market value to book value have a significant negative impact. In addition, the results indicated that dividend per share had a significantly positive impact on the sustainable growth rate. The results of this study are important for the management team of companies to decide an appropriate dividend policy for the company to maintain a stable dividend payment and have the financial health of a company, These results also provided the understanding of dividend policy behaviour in Malaysia, particularly on Malaysian public-listed Shariah-compliant firms

The mediation effects of capital structure: Evidence from Malaysian and Indonesian economic sectors

We study the comprehensive, simultaneous interrelationships between countries, economic sectors (i.e., primary, secondary, and tertiary sector), capital structure and firm financial performance, especially involving the mediation effects in different sectors. We find that some determinants of capital structure do not only directly enhance firm financial performance. Firm financial performance is also influenced by how capital structure from the product category in the economic sectors have been financed. We find a significant relationship between capital structure and firm financial performance in the secondary and tertiary sectors but not for the primary sector. We find that the secondary sector tends to use internal financing while the tertiary sector tends to use external financing to enhance firm financial performance. Our results also reveal that the effect of capital structure on firm financial performance tends to be mediated by firm- and country specific attributes, as well as by the sector in which they operate. A closer examination of the data showed that in the economic sectors, we find robust results that there are not just positive direct and indirect effects, but also negative direct and indirect effects. It should be well understood by financial managers that secondary and tertiary sectors plays an important role in the mediation effect. The contribution of this study is to help the firm manager to make a good decision on the proportions of their capital structure

The Impact of Bank Size on Pre- and Post- Merger and Acquisition Performance and Stability: New Evidence from GCC and Pakistan

Purpose: This study contributes to the existing literature by providing a comprehensive overview of the complex relationship between level of bank sizes, factors, M&A performance, and stability for banking sectors, Islamic vs conventional banks, and by highlighting the importance of considering the specific characteristics of the banking industry in GCC and Pakistan.   Theoretical framework: The conceptual framework is developed and designed based on the theory and in line with the literature review. The theories are resource dependency theory and efficiency theory   Design/Methodology/Approach: This paper employs an unbalanced panel data of 24 banks consisting of 10 Islamic banks and 14 conventional banks from GCC and Pakistan, 2004Q1 to 2020Q4. Data is collected from several secondary sources, namely Bloomberg, FitchConnect database, Bank’s financial statement, IMF, and World Bank database.   Findings: Our results revealed that bank size has a significant impact on the M&A performance and stability of banks. However, there is no significant difference between pre- and post- M&A performance. Interestingly, smaller banks outperformed larger and medium-sized banks in terms of M&A performance, while larger and medium-sized banks exhibited better bank stability than smaller banks. Interestingly, while looking at Islamic vs conventional banks point of view results show that operational performance of Islamic is better than conventional banks. On the other hand, stability of conventional bank is better than Islamic banks.   Research, Practical, & Social implications: The limitations of this research should also be acknowledged and future research should expand the number of observations and including more Islamic banks is essential. Moreover, exploring the impact of cultural and regulatory differences on M&A activities is also an interesting avenue for further research. Additionally, future research should investigate the impact of M&A activities on other performance measures, such as efficiency, productivity, and profitability.   Originality/Value: This study aims to fill the theoretical and empirical research gap by examining the impact of level of bank size on pre- and post - M&A activities in the GCC and Pakistan for banking sectors, Islamic banks vs conventional bank

Solution for nonlinear Duffing oscillator using variable order variable stepsize block method

Real life phenomena found in various fields such as engineering, physics, biology and communication theory can be modeled as nonlinear higher order ordinary differential equations, particularly the Duffing oscillator. Analytical solutions for these differential equations can be time consuming whereas, conventional numerical solutions may lack accuracy. This research propose a block multistep method integrated with a variable order step size (VOS) algorithm for solving these Duffing oscillators directly. The proposed VOS Block method provides an alternative numerical solution by reducing computational cost (time) but without loss of accuracy. Numerical simulations are compared with known exact solutions for proof of accuracy and against current numerical methods for proof of efficiency (steps taken)

Mergers and Acquisitions in Islamic Banking Sector: An Empirical Analysis on Size Effect, Market Structure, and Operational

The corporate expansion approach is mergers and acquisitions. The paper aims to analyze the impact of mergers and acquisitions on the Islamic banking sector's operational performance. This study uses empirical research methodologies, such as panel data regression, to examine samples of 10 Islamic banks involved in M&A from 6 countries, gathered from the International Monetary Fund, World Bank, FicthConnect, and Bloomberg from 2004Q1 to 2020Q4. Accounting-based measurements are used to quantify operational success, whereas the Herfindahl-Hirschman Index and the concentration ratio are used to signify market structure. To estimate M&A results, Stata package 14.2 is used (5 years pre and 5 years post). According to the findings, M&A improve the operational performance of Islamic banks. In addition, small-sized banks outperform large and medium-sized banks, market structure (LHHI) degrades M&A performance. Therefore, the paper suggests that Islamic banks should be involved in M&A deals and remove the constraints of size

Correlation assessment between working and academic performance

Working while studying is common, with at least half of all students taking a paid job at some point throughout their studies. By combining working and studying simultaneously will impact the academic performance of students. The main issues are the consequences of working while studying, which results in declining academic performance. This study aimed to identify possible reasons that cause students to work and study simultaneously, assess the correlation between work and academic performance, and determine the main barriers students face as they work and study. Using quantitative method, data was collected from 218 students from undergraduate and postgraduate, who have experienced study while working. Results show that most students agreed that working while studying correlates with academic performance. Furthermore, it is necessary to learn about the positive and negative effects of their efforts that distract them all this time. Having known all, these factors helped this study develop a good strategy for maintaining a better life while working and studying simultaneously

Price efficiency on Islamic banks vs. conventional banks in Bahrain, UAE, Kuwait, Oman, Qatar and Saudi Arabia: impact of country governance

This research investigate the impact of six dimensions of country governance to the price efficiency of Islamic and conventional banks. The empirical analysis is focused on the Islamic and conventional banks operating in the Bahrain, UAE, Kuwait, Oman, Qatar and Saudi Arabia countries. The data envelopment analysis (DEA) method applied to compute the revenue efficiency of Islamic and conventional banks. Then used the Multivariate Panel Regression Analysis with the Ordinary Least Square as an estimation method to investigate the potential determinants and the effect of country governance on the revenue efficiency. The empirical findings indicate that greater voice and accountability, political stability, regulatory quality, rule of law and control of corruption enhance the revenue efficiency of both Islamic and conventional banks. The dimension of government effectiveness exerts positive sign relationship with the banks revenue efficiency only on conventional banks