Asian Economic and Financial Review

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Online ISSN: 2222-6737
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Total Citation: 1219

No.4

Intellectual Capital and Firm Performance of Commercial Banks in Malaysia


Pages: 577-590
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Intellectual Capital and Firm Performance of Commercial Banks in Malaysia

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Malina Hanum Mohd Kamal, Rosfatihah Che Mat, Najihah Abdul Rahim, Norhusniyati Husin, Irwan Ismail 
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Malina Hanum Mohd Kamal, Rosfatihah Che Mat, Najihah Abdul Rahim, Norhusniyati Husin, Irwan Ismail  (2012). Intellectual Capital and Firm Performance of Commercial Banks in Malaysia. Asian Economic and Financial Review, 2(4): 577-590. DOI:
Intellectual capital is an important element of the theory explaining firm performance. The purpose of this paper is to determine the relationship between the level of intellectual capital efficiency in terms of Human Capital, Capital Employed and Structural Capital (VAIC) with the commercial banks performance in Malaysia from the traditional accounting based perspective that comprises of ROA and ROE. Overall results revealed the relationship between intellectual capitals with performance of 18 commercial banks in Malaysia. Additionally, the results showed significance impact of intellectual capital variables namely Value Added Capital Employed (VACA), Value Added Human Capital (VAHU) towards bank performance. It is suggested that intellectual capital do matters and should be linked to firm productivity. The study implies that the importance of intellectual capital should be emphasized not only to the commercial banks but also to the emerging market of Islamic banks in Malaysia or any other industries for future research.

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Funding Crisis in Higher Education Institutions: Rationale for Change


Pages: 562-576
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Funding Crisis in Higher Education Institutions: Rationale for Change

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Abd Rahman Ahmad, Alan Farley, Moonsamy Naidoo 
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Abd Rahman Ahmad, Alan Farley, Moonsamy Naidoo  (2012). Funding Crisis in Higher Education Institutions: Rationale for Change. Asian Economic and Financial Review, 2(4): 562-576. DOI:
An important priority of public policy is to ensure that higher education institutions contribute to economic growth and social progress as a whole, especially in the context of today???s globalised markets and knowledge economy. It is crucial for any nation to have a good education system and strategic planning to improve learning outcomes, access to facilities, and efficient use of resources. This paper explained the rationale for changein funding higher education with comparison made based on previous literature in developed and developing countries.

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Economic Analysis Of Input Trend In Cotton Production Process In Pakistan


Pages: 553-561
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Economic Analysis Of Input Trend In Cotton Production Process In Pakistan

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Hina Ali, Muhammad Aslam, Huma Ali 
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Hina Ali, Muhammad Aslam, Huma Ali  (2012). Economic Analysis Of Input Trend In Cotton Production Process In Pakistan. Asian Economic and Financial Review, 2(4): 553-561. DOI:
Cotton is essential crop for Pakistan economy. The Cotton production process involves various inputs from land preparation to picking and marketing. The inputs involved are cost intensive and overtime the cost of production has increased.  The highest share in the total cost was that of land rent (28.536 percent) and the lowest of seed (21.336 percent).  Over the time, the maximum increase in input cost growth rate have been noticed in pesticide (8.98 percent). However the minimum input cost growth rate was observed in seed (4.26 percent). The increased in input cost have also resulted in overall negative return during 2002, 2002, 2006 and 2007.

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On the Determinants of Derivative Hedging By Insurance Companies: Evidence from Taiwan


Pages: 538-552
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On the Determinants of Derivative Hedging By Insurance Companies: Evidence from Taiwan

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Yung-Ming Shiu, Chi- Feng Wang, Andrew Adams, Yi-Cheng Shin 
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Yung-Ming Shiu, Chi- Feng Wang, Andrew Adams, Yi-Cheng Shin  (2012). On the Determinants of Derivative Hedging By Insurance Companies: Evidence from Taiwan. Asian Economic and Financial Review, 2(4): 538-552. DOI:
There has been considerable growth in the derivatives holdings of Taiwanese insurance companies in recent years and this study examines the determinants of derivative use for both life and non-life companies. The determinants are different in the two insurance sectors. For the life sector, we find that large firms and firms exposed to either foreign exchange risk or interest rate risk (due to the duration of liabilities being greater than that of the assets) are more likely to participate in derivative hedging activities. In the case of foreign exchange risk, the greater the exposure, the greater the derivative holdings (as a proportion of the total assets of the firm). For the non-life sector, exposure to interest rate risk (as measured by net interest margin) and foreign exchange risk have a significant influence on the derivative participation decision. The level of derivative holdings is then positively related to foreign exchange exposure and negatively related to the level of reinsurance. 

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Saudi Arabian Commercial Banks’ Market-Risk Sensitivity: A View Through Rolling Sub- Samples


Pages: 523-537
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Saudi Arabian Commercial Banks’ Market-Risk Sensitivity: A View Through Rolling Sub- Samples

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Bruce Q. Budd, Firas Ali Al-Sugair, Abdulmalik Ibrahim Al-Salloum 
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Bruce Q. Budd, Firas Ali Al-Sugair, Abdulmalik Ibrahim Al-Salloum  (2012). Saudi Arabian Commercial Banks’ Market-Risk Sensitivity: A View Through Rolling Sub- Samples. Asian Economic and Financial Review, 2(4): 523-537. DOI:
Using data collected from the Saudi Arabian TadawulStock Exchange, this paper analyses 11 publically listed bank risk-return relationships during 2008-2011.  The contribution of this paper provides a more refined technique, a rolling beta, to accurately capture daily valuation swings caused by market-moving events over time.   Alpha values are calculated using the CAPM enabling more dynamic risk-return valuations to emerge.  These valuations identified three key phases of varying bank stock market activity and sector market valuations previously unrecognized when using the single linear beta value.These results suggest that in general, despite the relative instability within and between Saudi banks during the turbulent GFC, the contribution of SAMA strict regulations (and the banks themselves) ensured a less tempestuous performance within the Saudi banking sector overall, compared to the devastating impact that shook, and continues to shake, the banking sectors of the industrialized countries today.  In addition, this analysis surprisingly reveals thatinvestment opportunities are presently re-emerging in the Saudi banks contrary to present global banking happenings and international contagion amongst other foreign countries??? banking sectors.

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The Testing of Hall’s Permanent Income Hypothesis: A Case Study of Pakistan


Pages: 518-522
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The Testing of Hall’s Permanent Income Hypothesis: A Case Study of Pakistan

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Khalid Khan, Manzoor H Memon Che 
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Khalid Khan, Manzoor H Memon Che  (2012). The Testing of Hall’s Permanent Income Hypothesis: A Case Study of Pakistan. Asian Economic and Financial Review, 2(4): 518-522. DOI:
The objective of this study is to test the Hall???s permanent income hypothesis for Pakistan using annual data from 1992 to 2010. The basic model of permanent income hypothesis (PIH) showed the validity of absolute income hypothesis (AIH) while the Campbell and Mankiw (1990) consumption model suggested that the proportion of forward looking consumers in total population is 32 percent and the remaining consumers are backward looking. Therefore in Pakistan, there is larger fluctuation in per capita income and small opportunity for consumption smoothing.

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