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No.10

Incorporating the Credit Ranking Measure to Evaluate the Operating Efficiency of Financial Holding Companies in Taiwan


Pages: 1386-1404
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Incorporating the Credit Ranking Measure to Evaluate the Operating Efficiency of Financial Holding Companies in Taiwan

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Hsiang-Hsi Liu, Tser-Yieth Chen, Jia-Wen Chen
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Hsiang-Hsi Liu, Tser-Yieth Chen, Jia-Wen Chen (2013). Incorporating the Credit Ranking Measure to Evaluate the Operating Efficiency of Financial Holding Companies in Taiwan. Asian Economic and Financial Review, 3(10): 1386-1404. DOI:
One hears that the credit ranking score has increased technical efficiency in financial holding companies, when a data envelopment analysis (DEA) is employed. Our empirical results show that the credit ranking scores will obviously affect the estimated results of efficiency measurement in Taiwan’s financial holding companies. Additionally, the effects on technical inefficiency could be attributed to the under-utilization of inputs, rather than the inappropriate returns of scale, or the selection of incorrect input combinations. It shows that the pure technical efficiency change index number and the scale efficiency change index number are still improvement. Especially, when credit ranking score is incorporated as an important factor for efficiency measure, the credit ranking measure can be viewed as a discretionary variable for inputs.

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Effects of Focus of Accounting Research on the Quality of Accounting Education in Malaysian Universities


Pages: 1371-1385
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Effects of Focus of Accounting Research on the Quality of Accounting Education in Malaysian Universities

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Kabiru Isa Dandago, Nor Azlina Binti Shaari
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Kabiru Isa Dandago, Nor Azlina Binti Shaari (2013). Effects of Focus of Accounting Research on the Quality of Accounting Education in Malaysian Universities. Asian Economic and Financial Review, 3(10): 1371-1385. DOI:
This paper reviews the impact of focus of research in accounting on the quality of accounting education in Malaysian Universities.  Research in accounting is very important in Malaysian Universities, in particular, and the Malaysian tertiary educational institutions, in general, and it is expected that academic research in accounting would improve the quality of accounting education in the country. The study is mainly a literature review type, with some informal interviews conducted for confirmation of some issues noticed from the literature. The paper reveals a lot of information on the effects of focus of accounting research in Malaysian Universities on the quality of accounting education. It is established that there is no appreciable mutual working relationship between academic accountants (who are know with research and teaching) and accounting professionals in the industry, a relationship that is necessary for ensuring the production of high quality accounting graduates that could become real assets to the economy. It is, therefore, recommended that academic accounting researches aimed at improving the quality of accounting knowledge to be imparted to the students, and for satisfying the needs of the economy, should be emphasized by Malaysian Universities so as to enhance the quality of accounting education in the country.

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An Empirical Investigation into the Relationship between Financial Sector Development and Unemployment in Nigeria


Pages: 1361-1370
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An Empirical Investigation into the Relationship between Financial Sector Development and Unemployment in Nigeria

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Haruna Mohammed Aliero, Saifullahi Sani Ibrahim, Mukhtar Shuaibu
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Haruna Mohammed Aliero, Saifullahi Sani Ibrahim, Mukhtar Shuaibu (2013). An Empirical Investigation into the Relationship between Financial Sector Development and Unemployment in Nigeria. Asian Economic and Financial Review, 3(10): 1361-1370. DOI:
Financial sector development has been identified by financial economists as a veritable way of empowering the poor thereby paving the way for enabling them to become employed and possibly serve as economic agents of change. This study empirically investigates the relationship between financial sector development and unemployment in Nigeria.  A time series data was generated from 1980 to 2011 period. Auto Regressive Distributed Lag (ARDL) Bound Testing technique for cointegration was applied to estimate the long run relationship. The study found that there has been persistent unemployment in Nigeria, while formal credit allocation in rural areas has both short run and long run effect of reducing unemployment. Also found in this study is that expansionary monetary measures did not fuel inflation significantly.  The study therefore recommends that monetary authority should strengthen and deepen financial services industry, particularly, Deposit Money Banks, to provide necessary financial support to the teeming unemployed youth in the country.

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The Capital Investment Decision under Inflation in Vietnam: A Case Study


Pages: 1337-1360
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The Capital Investment Decision under Inflation in Vietnam: A Case Study

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Chen-Chang Lo, Yaling Lin, Tsung-Li Chi, Hong Nhung Vo
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Chen-Chang Lo, Yaling Lin, Tsung-Li Chi, Hong Nhung Vo (2013). The Capital Investment Decision under Inflation in Vietnam: A Case Study. Asian Economic and Financial Review, 3(10): 1337-1360. DOI:
Inflation and its adverse impacts on the economy are attacking Vietnamese enterprises at two-digit level at present. The managers need the effective foreseeing tools to prepare their budget to be suit to the complex evolvement of market economy and wait in front of the possible risks in future. A Cash Budget model which contains the trends of changes in variables under the impact of inflation will help Vietnamese soldering sticks manufacturers to control operational capital sources and forecast on the necessary borrowings as well as the payments in the near future better. ANOVA F-test experiments give the company more alternative choices between different types of machines and outline the initial investment costs of project. Finally, Capital Budgeting methods will assist to check the effectiveness in long-term of the investment.  The theories on relationship between normal interest rate, real interest rate and inflation rate such as the Fisher equation, the discount rate of Cash flows therefore are studied carefully to discuss, argue and give out the deep understanding and new perceptions.

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Does Trade With Labour Sending Countries Reduce Demand for Migrant Workers: A Lesson from Malaysia


Pages: 1325-1336
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Does Trade With Labour Sending Countries Reduce Demand for Migrant Workers: A Lesson from Malaysia

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Fariastuti Djafar, Mohd Khairul Hisyam Hassan
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Fariastuti Djafar, Mohd Khairul Hisyam Hassan (2013). Does Trade With Labour Sending Countries Reduce Demand for Migrant Workers: A Lesson from Malaysia. Asian Economic and Financial Review, 3(10): 1325-1336. DOI:
This paper has three objectives. The first objective is to examine the long-run relationships among exports, imports, income and demand for migrant workers. This is followed by a causality test between these variables as the second objective. Finally, the third objective is to examine the extent to which exports, imports and income affect the demand for migrant workers. The study utilizes time series data and a Vector Auto Regressive (VAR) framework while examining two models, namely, Malaysia and Malaysia-Indonesia (Malindo). The findings show that all variables in the models are cointegrated. Generally, there is no short-run causality between variables in the models. In the long-run, causality runs from exports, imports and income to demand for migrant workers for the Malaysia model. There is bi-directional causality in the long-run between exports and imports, respectively, and demand for migrant workers in the Malindo model. Exports and demand for migrant workers in the Malaysia model, and exports and imports, respectively, and demand for migrant workers from Indonesia in the Malindo model are substitutes. Moreover, the income per capita for Malaysia has a non-significant negative effect on the demand for total migrant workers and a significant positive effect on the demand for migrant workers from Indonesia. The study suggests that trade can be a necessary instrument, but not a sufficient instrument for reducing the demand for migrant workers.

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Finance-Growth Nexus in Africa: A Panel Generalized Method of Moments (GMM) Analysis


Pages: 1314-1324
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Finance-Growth Nexus in Africa: A Panel Generalized Method of Moments (GMM) Analysis

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Michael Adusei
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Michael Adusei (2013). Finance-Growth Nexus in Africa: A Panel Generalized Method of Moments (GMM) Analysis. Asian Economic and Financial Review, 3(10): 1314-1324. DOI:
The paper uses the dynamic GMM Model to examine the finance-growth nexus with panel data (1981-2010) from 24 African countries. Evidence suggests that there is a positive relationship between finance and economic growth and that there is a bi-directional causal relationship between finance and economic growth. To the extent that financial development and economic growth Granger-cause each other, we assert  that policies directed at any of the two , if efficiently and vigorously pursued, could be beneficial to the study countries. 

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Returns on Investments and Volatility Rate in the Nigerian Banking Industry


Pages: 1298-1313
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Returns on Investments and Volatility Rate in the Nigerian Banking Industry

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LAWAL A. I., OLOYE M. I., OTEKUNRIN A. O., AJAYI S. A.
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LAWAL A. I., OLOYE M. I., OTEKUNRIN A. O., AJAYI S. A. (2013). Returns on Investments and Volatility Rate in the Nigerian Banking Industry. Asian Economic and Financial Review, 3(10): 1298-1313. DOI:
Most investment decisions focus on a forecast of future events that is either explicit or implicit. Generally asset pricing models postulate a positive relationship between a stock portfolio’s expected returns and risk, which is often modelled by the variance of the asset price. The essence of this paper is to use GARCH in mean and EGARCH to examine the relationship between mean returns on the Nigeria commercial banks portfolio investments and its conditional variance or standard deviation. After estimating a variety of models from Central Bank of Nigeria Statistical Bulletin 2010 data, we found out that using the GARCH in mean a positive and significant relationship exist between commercial bank portfolio return and volatility, while the EGARCH model gives a negative relationship. We suggest that market operators should try as much as possible to prevent avoidable bad news.

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Determinants of Savings and Capital Formation among Rural Farmers in Isoko North Local Government Area of Delta State, Nigeria


Pages: 1289-1297
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Determinants of Savings and Capital Formation among Rural Farmers in Isoko North Local Government Area of Delta State, Nigeria

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P.C. IKE, D.E. UMUEDAFE
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P.C. IKE, D.E. UMUEDAFE (2013). Determinants of Savings and Capital Formation among Rural Farmers in Isoko North Local Government Area of Delta State, Nigeria. Asian Economic and Financial Review, 3(10): 1289-1297. DOI:
This study examined the determinants of savings and capital accumulation in Isoko north local government area of Delta state, Nigeria. It specifically sought to identify the socioeconomic/demographic variables of the rural dwellers that affect their savings and capital accumulation. It also examined the strategies and motives for saving and the various constraints to savings and capital accumulation in the study area. A total of 150 households were randomly sampled from seven communities out of the 13 that make up the local government area. Data for the study were collected using structured questionnaire and analysed through the use of descriptive statistics such as means, percentages and frequency distribution as well as inferential statistics such as multiple regression analysis. Results from findings revealed that volume of savings is based on the rural farmers’ farm income, nonfarm income, years of experience in a saving programme, age of the farmers and the distance to formal financial institution. The result also showed that majority of the rural farmers save or accumulate capital in non-monetary form as a strategy of saving and are motivated to save in order to increase production. The main constraints to accumulation of savings were low productivity and lack of access to financial credit. It is therefore the recommendation of the study that to further improve on rural farmers savings in the study area, the government should make credit available by empowering formal and informal financial institutions activities in rural areas.    

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Does the Burden of Corporate Income Tax Borne By Labour Through Reduced Wage Rates or Labour Hours, Resulting in a Lower Cost of Labour to the Firm?


Pages: 1281-1288
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Does the Burden of Corporate Income Tax Borne By Labour Through Reduced Wage Rates or Labour Hours, Resulting in a Lower Cost of Labour to the Firm?

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Desmond Tutu Ayentimi, Frank Osei-Yaw
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Desmond Tutu Ayentimi, Frank Osei-Yaw (2013). Does the Burden of Corporate Income Tax Borne By Labour Through Reduced Wage Rates or Labour Hours, Resulting in a Lower Cost of Labour to the Firm?. Asian Economic and Financial Review, 3(10): 1281-1288. DOI:
Shareholders ability to shift the burden of the tax to the consumer or labour depends largely on the mobility of capital. If the investor can move from the corporate sector into the non corporate sector, the laws of supply and demand will cause some of the burden of the corporate income tax to be borne by others. The aim of this paper is to find out whether the burden of the corporate income tax may be borne by labour through reduced wage rates or labour hours, resulting in a lower cost of labour to the firm,using ten (10) years financial data from ten firms listed on the Ghana Stock Exchange. The result provides evidence that part of the tax burden is shifted backwards to labour. Both the actual and adjusted data used in the model confirmed the alternate hypothesis. The result also demonstrated that a 1% increment in the corporate tax would result in 11% fall in the burden of the tax on labour.

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Exchange Rate Uncertainty and Import Demand of Thailand


Pages: 1269-1280
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Exchange Rate Uncertainty and Import Demand of Thailand

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Komain Jiranyakul
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Komain Jiranyakul (2013). Exchange Rate Uncertainty and Import Demand of Thailand. Asian Economic and Financial Review, 3(10): 1269-1280. DOI:
The impact of exchange rate uncertainty on imports is still controversial because there is no consensus on whether the impact is negative or positive as evidenced from the results of previous studies for both developed and emerging market economies. The present study investigates the impact of real exchange rate uncertainty on import demand of Thailand. The period of study is from July 1997 to December 2011. Exchange rate uncertainty is measured by an AR(1)-EGARCH(1,1) process. In addition, bounds testing for cointeration is employed and the short-run dynamics are analyzed. The results show that all variables are cointegrated. The negative impact of exchange rate uncertainty on Thailand’s imports is found. The results also indicate that the presence of higher uncertainty in real effective exchange rate in the short run cannot induce a large number of manufacturing firms to increase or decrease their imports of capital equipment and raw materials so as to hedge against real depreciation in the near future. Even though there is no short-run impact, but the long-run negative impact of real exchange rate uncertainty on real imports is large and highly significant under the floating exchange rate regime. In the long run, a decline in real exchange rate uncertainty can worsen the country’s trade balance by slightly causing the demand for aggregate imports to fall, which can harm industrial production in the future. Therefore, stabilization of real effective exchange rate via major nominal exchange rates may deem necessary.

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