Open Access Short Research Article

Stochastic Dominance, Dynamic Programming and Bayes Filtering: Applications in NPV and NPVaR

Reza Habibi

Asian Journal of Economics, Business and Accounting, Page 1-7
DOI: 10.9734/AJEBA/2017/29173

Applications of three computational methods in the evaluation of NPV and NPV at risk (NPVaR) of a project are studied. These methods are stochastic dominance, dynamic programming and Bayes filtering. First, the definition of NPVaR is related to the stochastic dominance as a maximization problem, then the dynamic programming method is used to solve the maximization in the presence of an investor belief parameter. To enter this parameter to the problem, the Bayes filter method is applied. Literatures is reviewed about these three methods. The sensitivity analysis of the results to the different utility functions as well as to the continuous compounding methods are also studied. A real data set is presented. Finally, a conclusion section is also given.

Open Access Policy Article

Do Integrated Traceability Methods Cause Conflict of Interest in the Farm-raised Atlantic salmon Industry?

Morteza Haghiri

Asian Journal of Economics, Business and Accounting, Page 1-11
DOI: 10.9734/AJEBA/2017/30800

Farm-raised Atlantic salmon is the most important finfish species produced by the Canadian aquaculture industry, which has been facing drastic reduction in its demand since the food incidence of polychlorinated biphenyls occurred. Different policies at various stages of production, processing, distribution and marketing channels have been proposed to assure consumers that farm-raised Atlantic salmon is safe. Amongst the suggested policies, the integrated traceability methods and quality control system may be the right policy that benefits both consumers and producers. It consists of different methods applied to the food chain, such as the Global GAP and Quality Management Program, the Hazard Analysis and Critical Control Points, and the radio frequency identification and quick response code-systems. The implementation of traceability system, however, imposes additional cost to the industry that may neither be absorbed by producers nor be paid by consumers. As a result, conflicting interests between producers and consumers may arise. In addition, consumers’ decisions may be affected by their lack of knowledge about different stages of aquaculture production processes. A traceability system can help consumers make informed decisions in purchasing certified farm-raised Atlantic salmon. Reviewing the existing literature, this article examines the impact on producers and consumers of implementing the integrated traceability methods on the farm-raised Atlantic salmon industry in the province of Newfoundland and Labrador, Canada. The article concludes by suggesting the use of intermediary firms to facilitate the implementation of integrated traceability systems in the industry.

Open Access Policy Article

Alternatives for Financing Waste Management: Implications for Ghana’s Growing Electronic and Electrical Equipment Waste

Daniel Agyapong

Asian Journal of Economics, Business and Accounting, Page 1-14
DOI: 10.9734/AJEBA/2017/31409

The waste of electrical and electronic equipment pose an environmental and human health challenge for some developing countries, including Ghana. Despite such challenges, it contributes to job creation and income generation if properly collected and processed. This type of waste may contain precious minerals including gold and mercury. However, the processing of such waste is dominated by the informal sector. Due to the availability of finance, they resort to unhealthy such as burning and crushing as a means of processing this waste, thereby, exposing themselves and the environment to poisonous metals and substances. To curtail the problems created by this waste, the government proposed the establishment of a fund to enable the country secure the needed capital to deal with this waste problem. The paper uses documentary review to assess the proposed government approach to funding of this waste. It proposes an alternative model of financing of this waste. It recommends, among other things, the need to promote the sector as a business venture and encourage the participation of private, public, foreign and domestic investment. The said investment is expected to promote the acquisition of the needed technology to manage e-waste.

Open Access Original Research Article

Applications of Vose ModelRisk Software in Simulated Data

Reza Habibi

Asian Journal of Economics, Business and Accounting, Page 1-10
DOI: 10.9734/AJEBA/2017/29139

Statistical simulation is used in cases which there is not enough theoretical background about the method in hand. It is used to derive the performances of inferential methods like empirical estimation of sampling distributions, the power of statistical tests or robustness of methods. Simulation methods specially Monte Carlo methods are used frequently, in finance and in risk management. There are many powerful software to run the simulation in financial problems, like @Risk or ModelRisk. However, this software (ModelRisk) is applicable in many other statistical fields. The current paper is concerned with application of ModelRisk software in ten simulation cases. Applications are presented in the format of different examples, including change point analysis, rolling analysis, bootstrapping, Bayesian inference, numerical analysis and extreme value problems. Finally, a conclusion section is given.

Open Access Original Research Article

Financial Innovation and Efficiency on the Banking Sub-sector: The Case of Deposit Money Banks and Selected Instruments of Electronic Banking (2006 - 2014)

Ibenta Steve Nkem, Anyanwu Felicia Akujinma

Asian Journal of Economics, Business and Accounting, Page 1-12
DOI: 10.9734/AJEBA/2017/29981

This study evaluates the relationship between financial innovation and bank efficiency as well as the impact of financial innovation on efficiency ratio of deposit money banks in Nigeria from 2006 to 2014. The secondary data covering the period of the study were sourced from the Central Bank of Nigeria statistical bulletin. The unit root test was performed to ensure that the variables were free from stationarity defect linked with almost all time series data due to the nature they were generated. A multiple regression model was developed and estimated to evaluate the relationship among the variables concerned. The finding reveals that the value of transaction on Automated Teller Machine (ATM) and Point of Sale (POS) are negatively related with efficiency ratio while web/internet and mobile banking are positively related but only that of web/internet was significantly related. The granger impact assessment depicts that financial innovation products reflected by value of transaction on ATMs, web/internet, POS and mobile banking has no significant impact on efficiency ratio of deposit money banks in Nigeria. However, we found evidence that banks efficiency ratio exerted statistically significant impact on value of transactions on ATMs. In view of the findings, banks should invest more in ATMs and POS platforms as it reduces the operating expenses to net income ratio while ensuring effective utilization of existing web/internet and mobile banking infrastructure rather than acquiring new ones that will gulp a large fraction of their net operating income. Web/internet and mobile banking should be redesigned in such a way that customization will enable customers access all the banking services which would indeed reduce its transaction costs. This calls for dialogue and negotiation with mobile service providers operating in Nigeria.