DLSU Business & Economics Review Vol 25 No.2

Jesson A. Pagaduan
Ruperto P. Majuca
De La Salle University, Manila, Philippines
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 1-23

Abstract:
We develop a small open economy New Keynesian DSGE model of financial-real linkages with banking intermediation and macroprudential regulation. The study has two main objectives: (i) understand the role of banking intermediation and financial frictions in the transmission of monetary policy; and (ii) examine the implications of macroprudential regulation of the banking system to the real economy. The results of our research suggest that although the macroprudential tools used by central banks may achieve the goal of safeguarding financial stability of the banking system, it is important to watch out for their effects to the short-run business cycle fluctuations of the real economy.

Abdul Rafay
University of Management & Technology (UMT), Pakistan
[email protected], [email protected]

Usman Javed Gilani
University of Management & Technology (UMT), Pakistan

Year: January 2016
Volume: 25 No. 2
Pages: 24-40

Abstract:
In this paper partial adjustment process to Panzar and Rosse’s (1987) H-Statistics is introduced. The basic aim is to estimate the speed at which the EU, US, and ANZ banking markets adjust to their long-run equilibrium levels. Normally, banking markets adjust towards long-run equilibrium in a non-instantaneous manner. Moreover, while estimating the market structure, the speed of adjustment process is taken into account. We introduced an empirical model based on Nerlove’s (1956) partial adjustment model to capture the speed of convergence of transition in the EU, US and ANZ banking market. Empirical results suggest that the transition and speed of adjustment
towards long-run equilibrium varies from market to market depending on the profit deviation from average market profits.

Cesar C. Rufino and Neriza M. Delfino
De La Salle University, Manila Philippines
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 41-52

Abstract:
Calendar seasonality in returns of financial markets represents interesting departure from their informational efficiency. This is especially true for the popular “day-of-the-week” effect often seen in the stock markets of even the most developed economies, when in certain days of the week, particularly Mondays, returns of equity assets appear to be lower as compared to other days of the week. As this anomaly presents a distinct challenge to the Efficient Market Hypothesis (EMH), which has been demonstrated in the Philippine Stock Exchange during its still ongoing modernization period, the present study attempts to determine if this challenge exists in the PSE through this period. Employing cutting-edge non-parametric statistical procedures, including a level of significance correction to obviate the possibility of “false positive” outcomes in the pair-wise multiple comparison tests of trading day effects, the study is able to reach a conclusion that the Philippine Stock Exchange, including its six sectoral submarkets are free from the “day-of-the-week” effect. Hence, the potential challenge to the weak form market efficiency of the local stock market posed by this anomaly does not exist during the modern contemporary period.

Mazrah Malek
Universiti Utara Malaysia, Kedah, Malaysia
[email protected]

Saidatunur Fauzi Saidin
Mohammad Noor Hisham Osman
Universiti Putra Malaysia, Selangor, Malaysia

Year: January 2016
Volume: 25 No. 2
Pages: 53-62

Abstract:
The production of quarterly accounts has become a mandatory requirement for listed companies in many countries. However, these accounts are not required to be audited in many jurisdictions, which expose these accounts to the risk of errors and manipulations. The purpose of this study is to examine the investors’ response towards auditor’s involvement in quarterly accounts. Analysis is based on matched pair sample of 60 listed companies in Bursa Malaysia in the year 2012. The result of the OLS regression shows that the earnings response coefficients of quarterly accounts that have been audited are statistically higher than those not audited. The result provides support for the contention that investors place greater reliability on quarterly accounts that have auditor’s involvement. The finding provides support for the need of auditor’s involvement in the quarterly accounts. However, additional costs associated with auditing the quarterly accounts should also be considered.

Senen Machmud
STIE Pasundan Bandung, Indonesia
[email protected]

Iwan Sidharta
STIE Pasundan Bandung, Indonesia
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 63-78

Abstract:
There is a gap in entrepreneurial motivation between psychological and external environment approach. In order to assess the relative importance of that gap, this study examined the entrepreneurial motivation, which defines both psychological variable and external environment, by measuring business performance level in Suci clothing center, Bandung. This study is valuable considering the limited number of empirical works previously done on the topic in question. Research method being used was multiple regression analysis. Purposive sampling was performed to 94 respondents which are owners of the small and medium-sized enterprises (SMEs) in Suci clothing center, Bandung. The findings of this research show that entrepreneurial motivation potential simultaneously and partially have a significant influence to SMEs’ business performance and the most dominant influential effect is self-efficacy while achievement has the least dominant influential effect.

Elia Ardyan
STIE Surakarta, Surakarta, Middle Java, Indonesia.
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 79-97

Abstract:
The purposes of this study are: (1) to test the effect of market sensing capability on SMEs performance, both directly and indirectly (product innovativeness success as intervening variable); (2) to test the effect of entrepreneurial orientation on SMEs performance, both directly and indirectly (product innovativeness success as intervening variable); (3) to test the effect of market sensing capability on speed to market; and (4) to test the effect of speed to market on SMEs performance. This research sampled 168 SME owners or managers. This study uses Structural Equation Model to test the hypothesis and uses AMOS 21 in data analysis. The result of this study shows that entrepreneurial orientation and product innovativeness have positive and significant effect on SMEs performance but market sensing capability and speed to market have no significant effect. Market sensing capability has significant effect on speed to market and product innovativeness success but entrepreneurial orientation has no significant effect on product innovativeness success. Product innovation success becomes the best mediating variable of markets sensing capability on SMEs performance than entrepreneurial orientation on SMEs performance. The findings of this study provide two contributions to the entrepreneurship research. First, in the leather and furniture industry, the most important factor in achieving performance of SMEs is product innovation success. Second, entrepreneurial orientation is still predictive in improving performance.

Rajib Roy and Niladri Das
Indian School of Mines, Dhanbad
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 98-114

Abstract:
This paper, through literary assessment on evidence-based entrepreneurship (EBE), has categorized how systematic examination of phenomena puts a major barrier to the advancement of evidencebased entrepreneurship education (EBEE). The study being theoretical in nature, portraying an integrated conceptual framework on EBEE, we tried to explain a unique set of empirical phenomena
containing factors necessary for promoting evidence-based practice in entrepreneurship education in a broader domain of management studies. Through qualitative analysis, we reviewed 89 articles on the current literature in the theme of EBE, EBEE, EBMgt, Entrepreneurial Intentions, Entrepreneurial Orientations and others. A generic description of the phenomenon—evidencedbased
approach for entrepreneurship and entrepreneurship education drawn from the variety of literature reviewed— does not devalue the findings and legitimize EBEE to conclude it only as a research setting. We make an attempt to identify a series of congregating forces crafting entrepreneurial ecosystem for aspiring entrepreneurs and detecting trigger points to understand the complexities behind new venture creation. Given the importance of new venture formation in an economy, the findings provide an assessment from the public policymakers’ perspective for students dreaming about new venture and small business formation. Linking the findings in practical implication, we focus on public policy institutions to practice EBEE as a tool to design programs for entrepreneurship teaching
practice that will score in dispensing evidence-based entrepreneurship knowledge (EBEK). Through a real life approach, considering “de novo” nature of entrepreneurship theory, we argue that practice in evidence-based modeling in entrepreneurship needs to be contextually embedded in the scholar-practitioner’s environment. By elucidating the scope of this field, the paper complements
reasonable body of earlier research, adding more valuable points to the literature.

Paz Esperanza T. Poblador
De La Salle University, Manila, Philippines
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 115-128

Abstract:
While developing the operations manual of three eco-laundry shops established by a Smokey Mountain cooperative, I discovered an alarming disparity in salary schemes among the social enterprises. Cooperatives in the Philippines embody the values of stakeholdership in that they balance the needs of all stakeholders to increase social performance. But in this case, principal-agent compensation practices were implemented towards increasing profitability. A discussion on compensation and organizational rewards allows for further understanding of the process in which these compensation packages were developed by the decision-makers. After using the survey method, measurable business indicators were evaluated to distinguish the effects of profitability, productivity, customer loyalty, and service quality on compensation. This study will show that leaders in this case did not uphold stakeholder values congruent with cooperatives, but instead implemented performance controls at the expense of more hardworking employees. A proposed compensation scheme which could be seen as more equitable by all employees is then discussed.

Alma Maria Jennifer A. Gutierrez and Rosemary R. Seva
De La Salle University, Manila, Philippines
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 129-146

Abstract:
This study aims to investigate the affective attachment of consumers to ecological products. It also aims to determine the type of emotions elicited by these kinds of consumer products. It was hypothesized that buying eco products can elicit different kinds of emotions in consumers. These emotions are usually positive that cause attraction to consumers and eventually the actual purchase of the product. An exploratory pre-purchase affect survey was conducted through field and online survey to determine what shoppers feel while looking for eco products to buy. Results revealed that participants significantly experience more positive feelings/emotions than negative feelings/emotions when buying eco-products while participants are indifferent in experiencing positive and negative feelings/emotions when buying non-eco products. This study provided information on the importance of incorporating ecological attributes to the design of consumer products. As of now, not all companies offer eco-friendly products because it is not known if consumers are willing to pay more for the “environment friendly” attribute. This study hopes to shift the paradigm of companies as it will try to establish the emotional attachment of consumers to product attributes related to the environment

Eko Suyono
Jenderal Soedirman University, Indonesia
[email protected]

Omar Al Farooque
University of New England, Australia

Riswan Riswan
Jenderal Soedirman University, Indonesia

Year: January 2016
Volume: 25 No. 2
Pages:147-165

Abstract:
With the rapid expansion of modern markets (i.e., supermarkets and minimarkets), traditional retail businesses are facing huge challenges in the Banyumas region, Central Java, Indonesia to survive and continue doing businesses. While modern markets are supported by huge number of resources, including unlimited funding, modern infrastructures, professional human resources, global networking, and so forth, traditional retailers and sellers lack these resources to compete with the new supermarkets and minimarkets. To promote populist economic system, the government’s role in terms of policies, education and training, and funding assistance are very important in supporting the sustainable development of these traditional businesses. The aim of this research is to develop a model on traditional retailers and sellers’ empowerment to improve their competitiveness against modern markets in Banyumas region. Implementing a mix method of qualitative and quantitative approaches, this study is conducted through questionnaire survey, observation, in depth interview, and focus group discussion. The findings of this research have identified the problems of traditional retailers and sellers’ competitiveness against the modern markets, which are expected to be overcome through government, trade association, and community supports. The study also provides an alternative model to optimize the potential of traditional retailers and sellers in the face of competition with modern markets. The outcome of this research will help us develop a software—System Development Life Cycles (SDLC) approach—to help all traditional retailers and sellers in improving their professionalism and competitiveness in the business.

Richard C. Li, Jazmin C. Tangsoc, Solomon L. See, Victor John M. Cantor,
Martha Lauren L. Tan, and Rachelle Joy S. Yu
De La Salle University, Manila, Philippines
[email protected]

Year: January 2016
Volume: 25 No. 2
Pages: 166-196

Abstract:
Evaluation of performance is an important activity in identifying shortcomings in managerial efficiency and devising goals for improvement. However, measuring performance is not an easy task; more so in making sure that it captures a holistic view of performance. This study identified four existing performance measurement issues that organizations face often. These issues were
(a) existence of missing data during data collection, (b) accounting undesirable or non-value adding outputs as opposed to desirable or marketable outputs, (c) inclusion of exogenous or environmental factors that affects the organization performance, and (d) arriving with resource allocation decisions that will help improve organizational performance. Linear Programming (LP) and Data Envelopment Analysis (DEA) were used to develop a performance measurement tool that addresses the aforementioned issues. Subsequently, this tool was used to develop the DEA-based performance measurement and reallocation software to aid managers in analyzing organizational performance. A case study on 14 NCR public hospitals was conducted to validate the logic and usefulness of the software. Software results showed that there were two inefficient hospitals and corresponding decisions to increase performance were identified in terms of inputs and outputs. An economic interpretation was then provided to realize the significance of the performance
measurement results.