Open Access Data Article

Foreign Direct Investment and the Effect on a Developing Economy

Sydney Ozuzu, Araniyar Isukul

Asian Journal of Economics, Business and Accounting, Page 43-55
DOI: 10.9734/ajeba/2021/v21i330360

This study examined the effect of foreign direct investment on a developing economy. The study employed multiple regression models to estimate the relationship that exists between sectorial inflow of foreign direct investment and Nigeria economic growth. Augmented Dickey Fuller Test, Johansen Co-integration test, normalized co-integrating equations, parsimonious vector error correction model and pair-wise causality tests were used to conduct the investigations and analysis. The findings of the result reveal that foreign direct investment in the agricultural sector have positive but no significant effect, foreign direct investment in the manufacturing sector have positive and significant effect, foreign direct investment in the mining and querying sector have negative but no significant effect, foreign direct investment in the transport and communication sector have positive and  significant effect while  foreign direct investment in the oil and gas sector have positive and significant effect on Nigeria real gross domestic products. The study concludes that the oil and gas sector have the greatest impact on Nigeria economic growth followed by manufacturing, agricultural, transport and communication sectors while mining and quarrying reduces gross domestic product. Nigerian policy makers should design sectoral policy reforms with the intention of creating an enabling business environment, improve infrastructure, address issues of insecurity in the north and south that hinder foreign direct investment in mining and quarrying sectors. Furthermore, there is the need to strengthen policy cohesion with regards to foreign direct investments to ensure that mining and quarrying sectors perform as well as the oil and gas sector.

Open Access Original Research Article

Determinants of Carbon Emission Disclosure in Indonesia Manufacturing Company

Erwin Saraswati, `, Ridha Sinta Amalia, Tubandryah Herawati

Asian Journal of Economics, Business and Accounting, Page 1-9
DOI: 10.9734/ajeba/2021/v21i330356

Climate change is caused by increasing carbon emissions and this become a global concern. Indonesia, as a significant carbon emitter, is expected to reduce carbon emissions. This study examines the factors that cause companies to disclose carbon emissions, with a sample of manufacturing companies in Indonesia, for 2016-2018. The number of samples obtained was 108 firm years. The results showed that the determinants for companies to disclose carbon emissions were profitability, type of industry and company size. This means that the higher the profitability and size of the company, the wider the disclosure of carbon emissions. Industry types are classified as high profile and low profile, in relation to contributors to carbon emissions. The higher the profile, the wider the disclosure will be, due to pressure from stakeholders. This supports the legitimacy theory. The leverage factor does not cause the company to make disclosures. This is because companies with high leverage tend to lower costs. In addition, the carbon emission disclosure report is still voluntary, so the company only discloses what is mandatory. The banking industry is required to prepare a sustainability report for 2019, so further research can use banking industry objects.

Open Access Original Research Article

Impact of Non-Performing Loans on Credit Growth in the Banking Industry in Tanzania: 2009 – 2018

John P. Lihawa, Deus D. Ngaruko

Asian Journal of Economics, Business and Accounting, Page 10-18
DOI: 10.9734/ajeba/2021/v21i330357

This study adopted descriptive statistics and multiple regression analysis in investigating the impact of Non-Performing Loans (NPL) on credit growth to private sector in Tanzania, apart from NPL. The study also investigated the influence of interest rates, inflation rates and GDP on credit advancement to private sector in Tanzania. Using multiple linear regression analysis the study found that both NPL and interest rates have negative impact on the credit growth to private sector in Tanzania, with coefficient values of -0.323 and -0.263 for NPL and interest rate respectively. Furthermore, the study also found that Inflation rate and GDP growth rate have positive impact on the credit growth to private sector in Tanzania with coefficients of 0.247and 0.156 for inflation rate and GDP growth rate respectively. The study found that NPL has a significant negative impact on the credit growth by commercial bank to private sector in Tanzania. These results suggest that the central bank should continue to closely monitor and control the level of NPL in the economy and confine it below the threshold of 5% as stipulated by the BOT and IMF. The study also recommends that commercial banks should ensure that a thorough credit risk assessment is conducted when advancing loans to private sector.

Open Access Original Research Article

Governance Theories and Socio-Political Realities of the States in Africa: Case of Benin

Kokou Charlemagne N’djibio, Karima Doucouré Sylla

Asian Journal of Economics, Business and Accounting, Page 19-29
DOI: 10.9734/ajeba/2021/v21i330358

Political guidance, the political system and the state organs are come from the governance theories. Our aim is to investigate on these theoretical frameworks in order to apprehend the laws and norms which frame the governance with regard to the socio-political realities in Africa, especially in Benin. The basic theoretical framework binding performance and governance of the firm, takes back the terms of the problem as posed by [1]: conceive the regulation systems of the leader’s behavior allowing preserving the shareholders interests (here the peoples). Qualitatively, the political governance in Benin is significantly influenced by the practices come from the shareholder, partnership and cognitive approaches of the governance. The political system and the organs of the State are influenced by the reforms resulting from the New Public Management. The Socio-political realities in Benin founded on the regionalism negatively impact the political governance.

Open Access Original Research Article

Good Corporate Governance, Capital Adequacy, Financing Risk, Profitability and Islamic Social Reporting (ISR) of Sharia Commercial Banks in Indonesia

Dwi Indriani Fidiastutik Wijaya, Agung Budi Sulistyo, Ahmad Roziq

Asian Journal of Economics, Business and Accounting, Page 30-42
DOI: 10.9734/ajeba/2021/v21i330359

Aims: To empirically evaluate Sharia commercial banks in Indonesia for good corporate governance, capital adequacy, financing risk, profitability, and Islamic Social Reporting (ISR).

Study Design: Explanatory research with a quantitative approach and using secondary data.

Place and Duration of Study: Sharia commercial banks registered with the Financial Services Authority in the period 2015-2019.

Methodology: The sample selection used a purposive sampling technique and resulted in 7 Sharia commercial banks. Data analyzed using path analysis with SmartPLS 3.0. The analysis only uses the inner model evaluation because each variable in this study only uses one proxy or one indicator.

Results: Good corporate governance and capital adequacy affects financing risk, good corporate governance, capital adequacy, and financing risk affects profitability, financing risk affects Islamic Social Reporting (ISR), while good corporate governance, capital adequacy, and profitability do not affect Islamic Social Reporting (ISR).

Conclusions: Management should be able to create good corporate governance, manage capital adequacy to mitigate financing risk so that it can generate optimal profits for conducting sharia-based social activities and express it using the Islamic Social Reporting (ISR) as business transparency for stakeholders, thus increasing stakeholder confidence in the existence of Islamic commercial banks.

Open Access Original Research Article

An Analysis on the Impact of Firm Size on Profitability of Listed Deposit Money Banks in Nigeria

Aminu Abubakar

Asian Journal of Economics, Business and Accounting, Page 72-84
DOI: 10.9734/ajeba/2021/v21i330361

This paper examines the impact of firm size on the profitability of listed Deposit Money Banks (DMBs) in Nigeria, carried out based on the historical panel data analysis. To achieve this objective; an ex-post factor research design was employed. Data were generated from the annual reports and accounts of the sampled quoted Deposit Money Banks (DMBs) from 2005 – 2014. Fixed-effect and random-effect Generalized Least Square (GLS) regression technique was used as tool of data analysis. The findings establish that the independent variable (firm size) has insignificant positive effect on the DMBs’ profitability proxies represented by ROA and ROE. It was concluded that Firm Size does not have significant impact on the profitability of the listed DMBs in Nigeria. The paper recommends that DMBs should maintain optimum firm size through effective management of service operations which is crucial for controlling labor cost by using the smallest possible amount of inputs which include labor and other operating cost to bring out maximum result toward improving the corporate profitability significantly.

Open Access Original Research Article

Financial Capital Inflows, Manufacturing Exports and Economic Growth in Palestine: A Threshold Regression Analysis

Nemer Badwan, Mohammed Atta

Asian Journal of Economics, Business and Accounting, Page 56-71
DOI: 10.9734/ajeba/2021/v21i330362

Aims: The study examined the Optimal Level of the Financial Capital Inflows and Manufacturing Exports, Economic Growth in Palestine. Annual data from the (2000-2018) to Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), cross-border borrowing from the World Bank (Components Of Financial Capital Inflows) Financial Sector Development (FSD) real GDP (RGDP) and Manufacturing Exports (MEX) were no different from other Production Sources, Palestinian Monetary Authority (PMA) and Ministry of National Economy (MONE), Ministry of Finance and Planning (MOFP), Palestinian Central Bureau of Statistics (PCBS), Statistical Bulletin while data on Gross Capital Formation (GCF) and Human Capital (HC) was the source of the World Bank also curvature.

Study Design: Cross-Sectional Survey Research (Qualitative & Quantitative).

Place and Duration of the Study: Various Governmental Organizations in Palestine, between the periods (2000-2018).

Methodology: Quantitative and Qualitative specification model, the equations used to examine the Optimal Level, impact and the relationship of Financial Capital Inflows and Manufacturing Exports on Palestinian Economic Growth, Threshold Regression Analysis was used to detect and verify the Optimal Level of Financial Capital Inflows by analyzing the data that have been collected from the Electronic Sources which available on the official websites of Governmental Organizations for the period (2000-2018). The methodology of the study revealed the relationship of the Optimal Level of Financial Capital Inflows with Manufacturing Exports on Economic Growth in Palestine. Data collection process and data analysis techniques employed to achieve the current study objective.

Results: The study found that the optimization results showed that the Financial Capital Inflows of (CINF) Threshold value (21.77%) with a coefficient of (7.74) per year is the Optimal Level of Financial Capital Inflows in Palestine the Threshold Point Manufacturing Exports to any Financial Capital Inflows (CINF) of the Threshold value of Manufacturing Exports in Palestine. The study concludes that the Optimal Level for Financial Capital Inflows to Economic Growth is (21.77%); any Threshold Level above the sustainable level of Economic Growth will be adversely affected in Palestine.

Conclusion: Findings of the study found that the Flow of Financial Capital Threshold exists for the Manufacture of Exports, and therefore recommends that excessive Financial Capital Inflows should be avoided in the country so that it does not make the conduct of Monetary Policy difficult, while the need of Financial Capital Inflows must be monitored well and directed to sectors (such as Industry, Agriculture, Mining and Quarrying) that have the absorptive capacity for them.

Open Access Original Research Article

Impact of National Debt on Economic Growth in Tanzania: 1980-2019

Lemada Lesamana Lelya, Deus D. Ngaruko

Asian Journal of Economics, Business and Accounting, Page 85-96
DOI: 10.9734/ajeba/2021/v21i330363

This paper is based on the study that examined the impact of external and domestic debt on economic growth of Tanzania over the period 1980-2019. The study’s specific objectives were; to examine trends of external and domestic debts from 1980 to 2019, to determine long run relationship between external debt stock and economic growth in Tanzania from 1980 to 2019, and to examine the long run relationship between domestic debt and economic growth in Tanzania from 1980 to 2019. The study used time series data of Tanzania collected from the Bank of Tanzania (BOT), National Bureau of Statistics (NBS) and the World Bank indicators. The study used Vector error correction model (VECM) for estimation of the time series since all the variables’ data were stationary in first difference I (1), and there was cointegration within the variables. To ensure the validity and reliability of the data; the study carried out normality test, multicollinearity, heteroscedasticity, and unit root tests. The empirical findings reveal that both   external and domestic debt significantly affects the economic growth of Tanzania.  The study recommends that the government should promote moderate levels of domestic borrowing which can be sustained as it promotes economic growth if used in productive and efficient avenues. The study further recommends that policymakers should efficiently allocate and develop constraints that will ensure the external borrowing is utilized on more productive and  development expenditures, so that the finance is a source of increase in net investment in the country.

Open Access Original Research Article

Organizational Performance and its Effects to Employee Recognition and Job Satisfaction in Some Selected Public Universities in the South East, Nigeria

Ugochukwu Paul Orajaka

Asian Journal of Economics, Business and Accounting, Page 97-106
DOI: 10.9734/ajeba/2021/v21i330364

The study expressed the effect of job satisfaction and employee recognition to the reward of Management performance in some selected organizations in south East Nigeria. The application of descriptive statistics, correlation tools and mean likert was employed to evaluate the significant relationship and coefficient of determination of the variables. However, the tools show that there is a strong positive relationship association between the job satisfaction and employee recognition in public university. The correlation shows that there is a significant values of 0.000 with relationship of 0.942. This explained that there is a strong positive significant relationship in the system. These results conclude that job satisfaction and employee recognition has a strong positive effect to organizational performance in the study areas selected.

Open Access Original Research Article

Fraudulent Financial Statements Detection in Indonesian Shariah Bank

Edy Anan

Asian Journal of Economics, Business and Accounting, Page 107-115
DOI: 10.9734/ajeba/2021/v21i330365

This study aims to detect fraudulent financial statements using the S.C.O.R.E. model in Indonesian Sharia Commercial Banks. This research uses quantitative research methods—hypothesis testing using a logistic regression analysis model. The research sample is 11 Shariah commercial banks registered with the Indonesian Financial Services Authority. These research results are financial targets, financial stability, external pressures, changes in directors, ineffective monitoring, and external auditors' changes who cannot detect fraudulent financial statements. However, the number of CEO pictures engraved in the annual report can detect fraudulent financial statements. The results of this study again show inconsistencies with the results of various previous studies. The research results confirm that the most common driving factors in cheating are feelings of rights and a desire for power/ego.