Year 2015 , Volume 4, Issue 1, Part 3 Year 2015 , Volume  4, Issue 1, Part 3
1Valuation and Timing of Corporate Acquisitions: Do Real Options Perform Better Than Net Present Value?
INES BEN FLAH
Pages: 257-276
Details (1311)
This article is a case study analyzing the valuation process and the timing choice of a corporate acquisition project using a comparison between the net present value rule and the real option method. It seems that when a corporate acquisition project is done under the right circumstances and well executed, this could mean a huge profits and a win-win for shareholders of both the acquiring and the target company. However, in many cases the results of acquisitions turn out to be negative for one, or both of the parties. Actually, this type of investment is characterized by the risk of paying sunk costs especially for the acquirer. For reaching a win-win result from corporate acquisitions, valuation issues and the optimal timing choice play a major role. In this article, the net present value criterion and real options were used to calculate the project's value and optimal timing of investment. We started by calculating the average and the simulated net present value. Then, we used real options approach. The acquisition option was evaluated with the Black and Scholes model (1973). The timing option was evaluated with the binomial model of Cox, Ross and Rubinstein (1979). Our case study suggested that real options can produce more sensible recommendations regarding the acquisition project value and the investment timing than the traditional net present value rule. It also showed the benefits of real options beyond valuation aspects. In particular, the optional way of thinking can help structure discussions between the managers of the targets companies and the acquirers to establish a roll-out plan of the closing process. Key Words: Real Options, Corporate Acquisition, Net Present Value, Acquisition Option, Timing Option, Case Study.
2The Impact of Countrys Credit Ratings on the Cost of the Capital
PATRYCJA CHODNICKA, PIOTR JAWORSKI and KATARZYNA NIEWINSKA
Pages: 277-285
Details (1255)
The purpose of the paper was to analyse the impact of the country’s credit ratings on the cost of the capital. It was made an analysis of existing research on the presented topics. We use static panel data methods for 135 countries between 2002 – 2012 years. As independent variables we take account long and short term country credit ratings granted by Standard and Poor and Moody’s Investor Services. Credit ratings are converted linearly into numeric variables. We analyze how credit ratings and the history of defaults influence on interest and maturity on new external debt commitments (official and private), deposit and lending interest rates, interest rate spread, real interest rate and risk premium on lending. Key Words: Interest Rate, Credit Risk, Cost Of The Capital, External Debt, Risk Premium On Lending.
3The Practices of Islamic Finance in Upholding the Islamic Values and the Maqasid Shariah
MOHAMAD YAZID, I, ASMADI, M.N and MOHD LIKI, H
Pages: 286-294
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This paper aims to analyse the views of Shariah scholars regarding Islamic values and objectives of Shariah (Maqasid Shariah) and to examine whether they are implemented in the construction of Islamic finance products. This paper employs written and face-to-face interviews using open-ended questionnaires to study the understanding of our respondents on the discussed matters. Questionnaires were distributed to several respondents from various Islamic financial institutions and universities in Malaysia. This study found that our respondents agreed on the importance of fairness, transparency and Maqasid Shariah in Islamic finance. However with respect to current Islamic finance practices, they opined that some banks did not uphold these values in their products and operations. Key Words: Islamic Finance, Islamic Banking, Values, Maqasid Shariah.
4Recognition of Non-formal and Informal Learning Outcomes: The Use of an Organizational Model in Practice of Universities in Poland
RAFAL DREWNIAK and GRAZYNA VOSS
Pages: 295-306
Details (1188)
Recognition of the knowledge gained through informal and non-formal education is one of the key aspects of higher education in Poland. This issue is of interest to the European institutions for many years. There are no procedures, and legal developments in this field in Poland. Although non-formal education is largely autonomous matter of each country, it also has its European level. European institutions are actively working to develop transnational standards of conduct in education, which could stimulate sectors of formal and informal learning. The purpose of this article is to present the organizational model of informal and non-formal recognition of learning outcomes. The research project was carried out two empirical studies to determine the needs and possibilities of implementation in Poland recognition of learning outcomes of non-formal and informal learning in higher education. The first one was a survey conducted among students of management, and the other one was the focus group interview conducted among candidates for higher education. The study also extended interviews with experts and employers. The main objective of this study was to develop and implement a comprehensive model of the recognition of the effects of non-formal and informal learning in higher education, including the legal, organizational and tool model. Organizational model provides a description of the procedure of recognition of learning outcomes for university candidates on the basis of the available and documented learning outcomes (in the case of non-formal) and/or declared/notified (in the case of non-formal education). The description of the organizational procedure of recognition presented in the article attempts the necessary sequence of actions under this procedure. This characteristic allows to arranging the whole process and an indication of the organizational units responsible for the implementation of the various stages in the model. There are also presented a proposal documents that should be developed, made or issued at different stages of the process. Key Words: Knowledge Recognition, Learning Outcomes, Organizational Model, Non-Formal and Informal Learning.
5Local Autonomy in Indonesia, Fall Short: Case Study East Java Province
MASTA BORU MANURUNG, SOEDJONO ABIPRAJA and SITI UMAJAH MASJKURI
Pages: 307-321
Details (1248)
Not until 2001 the government of Indonesia introduced local autonomy to the level of regional governance. This national policy aims to increase the alignment and relevance of government programmes with regional needs and encourage significant participation of community on regional development. Local autonomy is considered as an enabler for regional government to improve regional welfare, which at the end believes to be factor that improves national welfare. Local autonomy has been interpreted as encouraging local governance to allocate more significant percentage of budget for capital expenditures, which is believed to be the key to boost economic growth and employment. These two factors have been acknowledged as the variables that influence welfare. This explanatory research aims to evaluate the implementation of local autonomy and indicate whether the implementation served its purpose as indicated by previous studies. It applied structural path analysis to evaluate relations between aforementioned variables. The sample for this study was taken from 38 regencies and cities in East Java over the period from 2006 until 2011. The result shows that although local autonomy has significant and positive influence on capital expenditure, but at the end it fails to positively influence economic growth. Furthermore, it also shows that the increase of employment does not positively influence the public welfare. Key Words: Capital Expenditure, Economic Growth, Employment, Explanatory Research, Local Autonomy, Welfare.
6Directors Multiple Directorships and their Appointment to Board Committees: Evidence From France
SAMIR BACCOUCHE
Pages: 322-335
Details (1291)
This paper investigated the relationship between multiple directorships of directors and their appointment to various board committees. Precisely, using a Poisson model, we empirically examined the effect of the accumulation of outside directorships by a director on the number of board committees he served on. Our study has achieved on a sample of 1044 observations from 89 non-financial French listed companies, for the financial year 2009. The results suggested that directors who hold too many outside directorships serve on more internal board committees. So, our findings indicated that, due to their reputation and expertise, directors holding multiple directorships are more likely to serve on a larger number of internal board committees. Key Words: Multiple Directorships, Committees Membership, Agency Theory, Busyness Hypothesis, Expertise Hypothesis.
7Firm Specific Determinants of Under-Pricing on the Ghana Stock Market
SAMPSON VIVIAN ESUMANBA, ADDY FRANK KPANIE and BAWUAH BENARD
Pages: 336-342
Details (1264)
The study provides empirical analysis of the initial and after-market short-run IPO returns over the period 1990-2009. The results show that firms on the Ghanaian stock market on average are under-priced on the initial trading day by 8.43%. The regression analysis also reveals that age, cost of debt, hot market, leverage and industry are the main determinant of under-pricing on the Ghanaian stock market. Key Words: IPO, Determinants, Ghana, Stock Market, Under-Pricing.
8Religious Capital Impact on Economic Growth in Iran in the Period of (1986-2011)
AMIR KHADEM ALIZADEH, MOHAMMADREZA MONJAZEB and MOHAMMAD HOSSEIN BABAEI PILEHROOD
Pages: 343-351
Details (1624)
There are different viewpoints about the direction and types of Religious effects on economic growth and development. This study has examined the effects of Islamic religious capital on economic growth in Iran in the period of 1365-1390. Therefore, after explanation of religious capital concept and collection of standard and efficient indexes achieved from Islamic doctrines, in order to evaluate this type of capital, the effect of religious capital on Iran economic growth is estimated by using the OLS method and doing regression on the selected growth model. The results show that there is no reason to reject having significant positive or negative effect of religious capital on economic growth in Iran. Another result of this study is to confirm that human force capital has positive effect on economic growth, it is not proved that physical investment positively affect the economic growth in the mentioned period. The reasons which do not confirm the positive effect of physical investment on economic growth are inefficient allocation of resources in the projects and plans, prolongation of projects implementation and instability of economic sphere in Iran. One of the policy recommendation of this study is to extend economic studies in recognition major aspects of Islamic religious capitals and their effects on economic growth in order to increase the utilization capacity from different religious capitals for achieving the goals of Iran economic system. Key Words: Economic Growth, Religious Capital, Islamic Economy.
9Factors Affecting Intention to Consume Organic Food Products: A Study Among Chinese College Students in Malaysia
TAN POH LEONG and LAILY PAIM
Pages: 352-360
Details (1331)
This study is focused on the analysis of the factors that affect Chinese college students’ intention to consume organic food, namely, environmental concerns, subjective norms, and media and advertising. A systematic random sampling was employed. The population consisted of college students. An online questionnaire was adopted and adapted from previous researches cited in the literature. Information was gathered using online questionnaires mailed to 500 respondents. The data was analysed using the AMOS software. The results from the Structural Equation Modeling (SEM) analysis proved that environmental concerns do not show any significant effects on the intention to consume organic food products. Furthermore, the subjective norms variable was also identified as a non-significant predictor of the intention variable. However, only one exogenous variable, media and advertising was tested to be a significant predictor of the intention variable in this analysis. The primary contribution of this study is that the research model is relevant for implementation among the Malaysian Chinese college students. The findings would assist the Ministry of Agriculture and marketing managers in increasing the availability of local organic food products in Malaysia. Key Words: College student, Consumer Behaviour, Intention, Organic Food.
10Empowering Small Farmers through Cooperative: The Success Story of Subasta Integrated Farmers Multi-Purpose Cooperative
KAREN P. QUILLOY
Pages: 361-375
Details (1895)
This paper aims to demonstrate the important role and contribution of cooperatives in empowering small farmers in the Philippines. It presents evidences from the case study of Subasta Integrated Farmers Multipurpose Cooperative (SIFMPC), a micro cooperative of small cacao farmers in Davao City, Philippines that has successfully created opportunities and provided benefits to its farmer-members to improve the quality of their lives. The success story shows how SIFMPC has effectively empowered small and weak farmers, particularly in terms of increasing their participation in the supply and value chain and expanding their market reach, promoting their rights and improving their access to adequate human and physical resources and business development services, strengthening their voice and representation at various levels through democratic control and social equity, and building their identity as a partner in agricultural development. SIFMPC’s practices are highly coherent with the empowerment process of small farmers, although the cooperative still needs to strengthen its efforts towards environmental protection. Overall, SIFMPC validates that a cooperative can be a key driver for empowering small farmers, especially in terms of improving their farm productivity and economic opportunities. Key Words: Small Farmers, Cooperatives, Empowerment, Cooperative Marketing, Cacao.

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