Eurasian Journal of Business and Economics

The Impact of Working Capital Management on Investment Efficiency: Evidence from Emerging Countries

2024-08-19T13:15:53+03:00

This article aims to investigate the impact of the firm’s working capital management policies and practices on the efficiency of their investments. The sample consists of 6016 non-financial firms and the data have been collected for the period from 2009 to 2021. We conducted pooled ordinary least squares (OLS) regression, and panel regression and employed the generalized method of moments to explore the dynamic nature of the relationship. The results revealed that, in static models, pooled OLS regression showed a positive relationship between CCC and investment efficiency, whereas panel regression reported a negative relationship. A similar case is confirmed by the dynamic models. The non-linear models which include the square of CCC confirmed an inverted U-shape relationship, implying an optimal level of CCC. The findings of the study are expected to have implications for corporate managers, the users of financial statements, as well as policymakers and regulatory bodies. To the best of our knowledge, this is the first empirical study investigating the impact of
working capital on investment efficiency. It makes an original contribution to the literature by presenting novel empirical evidence on the topic from emerging countries in a multi-country and multi-industry context.

Resilience in Crisis: The Impact of HRM Practices on Job Performance and Emotional Exhaustion Among University Employees

2024-07-03T13:18:08+03:00

Organizations worldwide, including universities, have been significantly impacted by the COVID-19 pandemic, which required swift adaptations in human resource management practices to maintain employee performance. This research examined the relationships between HRM practices, job performance, and the mediation of emotional exhaustion among university employees in the Western Balkans, reflecting on COVID-19 experiences. An online survey was conducted across public and private universities in the region, collecting 1,020 responses. The results showed a significant positive relationship between HRM practices and job performance. Furthermore, a significant negative relationship was found between HRM practices and emotional exhaustion. Despite predictions, the study did not confirm that emotional exhaustion mediates the relationship between HRM practices and job performance. This study emphasized how important HRM practices are to preserving job performance and reducing emotional exhaustion among university staff members during the COVID19 epidemic. The results highlighted the necessity of specialized HRM approaches that tackle the difficulties encountered by university staff, guaranteeing their welfare and continued productivity in times of emergency.

Analyzing the Effects of Bank Digitalization on Bank Competition and Profitability in Central Asia: Insights from Kyrgyzstan and Kazakhstan

2024-07-04T11:45:38+03:00

This research investigates how bank digitalization influences competition and profitability within the banking industries of Kyrgyzstan and Kazakhstan over the period from 2012 to 2023. The bank digitalization index is estimated following the System Dynamics Approach. The assessment of banking competition is conducted using the Lerner Index and the Boone Indicator. The relationships between bank digitalization, competition, and profitability are analyzed through a two-step Generalized Method of Moments analysis. Findings reveal that in Kyrgyzstan, digital transformation enhances bank competition and efficiency, advocating local banks to accelerate digital adoption to leverage favorable market conditions. Conversely, in
Kazakhstan, despite higher levels of digitalization, the impact on competition and profitability remains insignificant. This highlights the need for banks to persistently expand their digital capabilities beyond current innovations to stay competitive and improve financial results. The study recommends that policymakers foster an environment that nurtures innovation and sustains competitive equilibrium in the banking industry

Performance Analysis of the Indian IT & ITeS Sector: An Application of Additive-DEA and G2SLS

2024-06-21T11:05:59+03:00

This study uses an integrated balanced scorecard-based Additive-DEA framework to identify proxy variables for the inputs and outputs for a sample of firms in India’s information technology and information technology-enabled services sector to identify and analyse these firms’ inefficiencies. The additive-DEA model is used because it is invariant to data translation, in addition to being non-radial and nonoriented, and hence can deal with negative values of variables that are critical to analyse in(efficiency). This is the first such study in the Indian context that focuses on dealing with negative values for earnings as one of the output variables. The results show that high-performing firms, as calculated by the Additive-DEA method, have higher financial gains in terms of revenue, earnings, and return on equity. Further, the study also attempts to explain the factors influencing the firms’ performance
using a regression framework for which a generalised two-stage least square method is used. The regression results show that firm characteristics like age, industry specialisation, and business type have no influence on firm performance, while factors like exports, exchange rate changes, and market focus impact its performance. These results have critical policy implications for this sector to reduce inefficiency by controlling costs and increasing spending on research and development.

Trends and Financial Variations in Executive Confidence: A Decade-Long Analysis

2024-07-25T17:10:55+03:00

The present research is an endeavour to measure the extent of overconfidence bias among Chief Executive Officers (CEOs) in India. Additionally, this investigation seeks to examine the financial disparities among firms led by CEOs exhibiting different levels of overconfidence. This study is based on a sample of 500 large Indian companies listed on the Bombay Stock Exchange over a period of twelve years starting from 2009-2010 to 2020-2021. The findings reveal a downward trend in the overconfident behaviour of CEOs over the specified period, with notable exceptions during key corporate events like the introduction of the Companies Act in 2014 and the COVID-19 pandemic. Moreover, the t-test and ANOVA estimation results unveil that firms led by CEOs with different overconfidence levels have significant variations
in their returns, size, age, liquidity, and growth. The study offers valuable insights into behavioural finance literature and serves board members, investors, and policymakers by expanding the understanding of executive psychology within the Indian context. Additionally, to the best of the authors’ knowledge, this present study is the first to analyse the decade-long trends and financial implications of cognitive attributes of top executives in the Indian corporate sector.

Strategic Signaling and Sustainable Consumer Purchase Behavior: The Case of Fast Fashion Supply Chains

2024-11-25T17:45:16+03:00

In response to growing consumer demand for sustainability, the objective of this study is to investigate the impact of strategic sustainability signaling on consumer purchasing behavior, assess consumer perceptions, and identify key factors that enhance the effectiveness of these signals in promoting sustainable purchasing practices in the fast fashion industry in Albania. It adopts a quantitative research approach with an experimental setup featuring two surveys: one for a control group and one for a treatment group. Participants completed surveys distributed digitally, yielding 416 responses. Data was analyzed using Ordinal Logistic Regression and Structural Equation Modeling (SEM) to evaluate relationships between demographic factors, purchase preferences, perceived product attributes, and other relevant factors. Findings highlight the significant role of factors like sustainable packaging, perceived product attributes, sustainability awareness, social influence, brand loyalty, and exposure to sustainability signals in positively influencing sustainable consumer purchasing behavior. This study provides novel insights into how fast fashion brands can enhance sustainability initiatives. The application of signaling theory to sustainable packaging and its impact on purchase intentions offers a unique perspective, emphasizing the importance of credible and effective sustainability communication.

Country governance nexus with the financial stability of banks: The moderating effect of country’s income level

2024-07-23T07:30:26+03:00

This study examines the relationships between a country’s governance indicators and bank financial stability and the moderating effect of a country’s income level on those relationships. This study uses unbalanced country-level panel data of 110 countries from the World Bank from 2010 to 2021. Ordinary least squares (OLS) estimation fails to pass heteroskedasticity, first-order autocorrelation, and cross-sectional dependence tests. To ensure robustness in the estimation, this study uses panel corrected standard error (PCSE) estimation model for the direct and moderating effect analysis. The findings show that banks’ financial stability mostly depends on bank-specific factors, and better country governance enhances bank financial stability. This study also finds that a country’s high-income, upper-middle-income, and lower-middle-income moderate the relationships between a country’s governance indicators and the bank’s financial stability. This finding will help bankers, regulators, and policymakers adopt effective governance policies to strengthen the financial stability of the banking sector. Unlike previous studies, this study overcomes the limited regional context and scope of measuring the relationships between a country’s governance indicators and a bank’s financial stability and also measures the moderating effect of the country’s income level on the same.

Regulatory and Institutional Factors Driving Small Firms’ Growth in Central Asia

2024-10-22T16:50:15+03:00

The purpose of this study is to investigate how the institutional environment and governance affect the growth of small firms, in terms of employment, in Central Asian economies, particularly Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. For this study, different data sources, including EBRD-EIB-WB Enterprise Surveys, World Development Indicators, and World Governance Indicators, were employed, and to compare and contrast business governance indicators across countries descriptive analyses were performed, and the outcome of regression analysis was provided. Despite the recent improvements in the legal, administrative, and regulatory environment for business, according to the findings of this study, in Central Asian economies, there are obstacles to the growth of firms in the private sector. Small firms perceive tax (14.22% of firms in the sample, 27.78% of firms in Tajikistan), and competition in the informal sector (11.75% of firms in the sample, 21.58% in Kyrgyzstan) as the biggest obstacle to growth. In countries, where control of corruption, and the rule of law are strong, governance and private sector regulations are effective, the political situation is stable, and small firms report growth.