DLSU Business & Economics Review Vol 26 No.1

Divina M. Edralin
De La Salle University, Manila Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 1-16

Abstract:
This paper aims to describe the good work, through the decent work practices of 16 unionized firms, in the hotel, banking, airline, and broadcast industries in the Philippines, as stipulated in their Collective Bargaining Agreements (CBAs), and based on five Decent Work Agenda dimensions. This study is primarily founded on the Social Doctrine of the Church on Human Work; the ILO’s Decent Work Agenda as incorporated in Ghai’s (2006) model; and the theory of Collective Bargaining of Edralin (2003). Results showed that there are many good work, through decent work practices of unionized firms, in the aspects of opportunities for work, productive work, equity in work, security at work, and representation at work, as provided in their CBAs. Findings also revealed that collective bargaining is a powerful vehicle that can help ensure that the implementation of the five dimensions of decent work in the workplace can lead to the securing of just wages, strengthening of unions, inclusion of the poor working people in society, and workers having a chance to a life of human dignity. A union is strong primarily because of its membership’s solidarity, vigilance, and capacity to mobilize, which together with the protection afforded by legislation to workers, help persuade, if not pressure employers to manage their firms diligently and in good faith. At the policy level, it is recommend that the labor relations framework currently used by the DOLE be amended to more effectively implement decent work practices and promote collective bargaining.

Leahlizbeth Angbetic Sia and Tiffany Adelaine G. Tan
University of the Philippines, Cebu City, Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 17-29

Abstract:
Perceived organizational justice in the workplace is a primary factor affecting employee job satisfaction and tenure. This paper examined the relationship between organizational justice and job satisfaction of managers, supervisors, and staff in a hotel setting situated in one of the major cities outside Metro Manila, Philippines, namely Metropolitan Cebu. Specifically, it looked into the influence of the three dimensions of organizational justice (distributive, procedural, and interactional) on the hotel employees’ level of job satisfaction with regards to fairness of manager/supervisor to staff relationships, pay, and schedule (among others). A Likert scale survey instrument was administered to select respondents from 13 departments of nine hotels in Metropolitan Cebu, Philippines: Front Office, Food & Beverage, Housekeeping, Sales & Marketing, Human Resources, Maintenance, Kitchen, Finance, Butchery, Engineering, Administration, Security, and the Executive Office. Structural Equation Modeling (SEM) was applied for data analysis. The results revealed that distributive and interactional justice positively affects employees’ job satisfaction, while procedural justice does not have a significant impact.

Joy Mari S. Bautista and Jazmin C. Tangsoc
De La Salle University, Manila, Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 30-49

Abstract:
Hospital service is critical to analyze because several stakeholders are essential to the inputs, processes and outputs of the entire service system. These stakeholders include patients (service recipients), health professionals (direct service providers), and hospital management (indirect service providers). Since the core of hospital service encompasses the welfare of humans, it is crucial to uphold and continuously improve service quality not just for the service recipients, as traditional service quality measurements do, but also for the service providers through a multi-perspective framework integrating significant factors for all key stakeholders in the assessment.
Given this objective, we have initially developed a framework using the basic structure-process-outcome service components. The proposed dimensions were statistically validated through structural equation modeling and furthermore through qualitative data gathering, resulting to a streamlined framework with specific dimensions that are significant across all stakeholders. After an application to a private hospital, the integration of all stakeholders’ perspectives became advantageous in exposing alarming dimensions that need improvement and dissatisfied stakeholders who need further attention. As such, the multi-perspective assessment proved to be a holistic approach in promoting overall satisfaction for not just the patients towards their service experience but also the service providers towards their service performance.

Cesar C. Rufino
De La Salle University, Manila, Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 50-69

Abstract:
Despite the economic and commercial importance of food consumption away from home, very limited attempt has been made to investigate the evolution and economics of this type of food consumption among Filipinos over time. This study hopes to set the pace among local researchers in taking advantage of the availability of high quality primary data of nationwide household surveys to generate useful insights on the “eating out” behavior of modern Filipinos. The study will endeavour to establish the linkage between food demand behaviours and socioeconomic and demographic characteristics of households, highlighting on the difference between wealthy/not wealthy consumers and the increasing role of time constraint on the part of household members in their decision to “eat out”. To supply the dynamic content of the analysis, public use raw data files of several rounds of the Family Income and Expenditure Survey (FIES) are used. Relevant microeconometric models which address censoring, truncation and sample selectivity issues as well as the complex nature of the survey are also implemented. Results of the study confirm the empirical ascendancy of the Heckit model and the significant co-variation of FAFH consumption of Filipino households with its postulated determinants. Also established is the relevance of Engel’s Law to FAFH consumption and the establishment of FAFH as a necessity during the modern era.

Anand Thakur and Rupinderdeep Kaur
Lovely Professional University, Phagwara (Punjab)
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages:70-80

Abstract:
The consumer feels more loyal to product he or she feels associated with, linked to, and loves. The emotional attachment has significant influence on attitudinal loyalty. Measuring attitudinal brand loyalty can recognize potential users who are susceptible in varying scenarios. The economic conditions of India are experiencing a positive change. The number of high net worth individuals (individuals with investable assets of $1 million or more) in India has shown a noticeable growth in past few years, according to the Asia-Pacific Wealth Report by Merril Lynch Global Wealth Management and Capgemini. Asia-Pacific’s high net worth individuals’ population in 2010 has exceeded that of Europe, making it the second largest market after North America. The media has played a vital role in positioning luxury in the public eye. India is likely to become a US$4 billion luxury market industry by 2020, according to new estimates (2015) by Luxury Society. This study aims to examine the empirical relationship of emotional attachment and attitudinal brand loyalty in the perspective of female consumer towards luxury fashion brands. A cross sectional survey of 240 female customers of five global brands, namely, Zara, Armani, Guess, Versace, and Calvin-Klein from four major cities of Punjab (India) was conducted. Regression and Z-Test were used to analyze the data. The perceived significance of emotional attachment and attitudinal brand loyalty is high in luxury fashion purchase. The emotional attachment positively enhances female consumers’ attitudinal brand loyalty. Marketing strategy formulation needs special emphasis towards dimensions of emotional attachment, namely, referral influence, connect with brand, pleasure, and tenderness. Further, they need to strengthen brand reputation, performance and feature upgradation, purchase intention, and brand synchronization to win attitudinal loyalty in luxury fashion.

Muhammad Adam
Syiah Kuala University, Banda Aceh, Indonesia.
[email protected]
[email protected]

Hendra Syahputra
Knowledge Management in Da’wah and Communication Faculty of Islamic University of Ar-Raniry,
Banda Aceh, Indonesia

Year: July 2016
Volume: 26 No. 1
Pages: 81-91

Abstract:
Market orientation is a business culture in which all employees are committed to continue the creation of superior value for customers, though only little attention is given to this issue. The purposes of the study is to investigate several contextual factors such as: market orientation, business culture, business commitment, and business performance in case of SMEs practices in Aceh Province of Indonesia. This research used quantitative method with 200 questionnaires that was spread to 200 managers as respondents, which represent a wide variety of SMEs (53% products, 47% service sectors) and the data was analyzed using Structural Equation Modeling (SEM). Concerning the market orientation consequences, the result showed that market orientation has a positive correlation with business commitment and business performance, and business culture also has a significant influence on business performance. However, business culture insignificantly influences business commitment, and business commitment insignificantly influences business performance as well for the case of SMEs in Aceh Province of Indonesia.

M. Shabri Abd. Majid
Syiah Kuala University, Indonesia
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 92-100

Abstract:
This study empirically explores the dynamic interaction between Islamic stock prices and some selected macroeconomic variables in the Malaysian economy. It also attempts to investigate the interactions between the Islamic stock and Islamic bank financing in the country. A monthly data from the period 1999 to 2013 were analysed using the standardised time series techniques, including the cointegration, Granger causality, and impulse response function. The study found that there was a long-run relationship among the variables. Meanwhile, in the short-run, the study found that the development of economy and Islamic banking industry have contributed to the growth of Islamic stock prices, and vice versa. This implies that the developments of Islamic stocks, Islamic banking industry, and national economy would promote and strengthen the Malaysian position as a viable international hub for the Islamic finance industries in the globe.

Abdul Ghofar and Rizqi Alfi Aunilah
Brawijaya University
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 101-121

Abstract:
This research aims to investigate the existence of two market anomalies—accrual anomaly and winner-loser anomaly—and compare whether these two anomalies significantly affect the abnormal return in Indonesia Stock Exchange (IDX). This research was designed into three steps: (1) Portfolios formation; (2) Test of Existence; and (3) Regression analysis, using the observation period of six years starting from 2002 to 2007. We found that winner-loser anomaly has been more significant in affecting abnormal return for the period of 2002–2007, despite that both accrual and winner-loser anomalies were indicated to exist in the period of observation. The test of accrual anomaly existence during six-year observation period has revealed that in 2003, low accrual firms had generated higher abnormal returns compared to the high accrual firms, for which it indicates the existence of accrual anomaly. The existence of winner-loser anomaly is justified by the significant effect of overreaction on the price reversal phenomena. This research contributes to the study regarding accrual and winner-loser anomalies, attributed by the comparison between these two anomalies based on the statistical measurement analysis according to historical data. The results could be useful for investors to understand the characteristics of Indonesian capital market, in which the efficient market hypothesis is verified not to work properly, hence the publicly-available information should not be the sole information used to formulate their investment strategy.

Salau Abdulmalik O and Ayoib Che Ahmad
Universiti Utara Malaysia
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 122-135

Abstract:
This study examines whether audit fees impair the independence of auditors in Nigeria and also examines the effects of independent non-executive foreign directors, foreign institutional ownership, and local institutional ownership on the quality of financial reporting. This study employs the Generalized Methods of Moment (GMM) estimation to control the presence of unobserved heterogeneity effects and endogeneity issues in our auditors’ independent model. The data was obtained from the annual reports of 89 listed companies in the Nigerian Stock Exchange (NSE) for the years 2008 to 2013. Our findings revealed that abnormal audit fees charged by Nigerian auditors do not impair their independence, but rather they might reflect additional efforts undertaken during the course of the audit. Likewise, the study found that the presence of independent non-executive foreign directors on a board improved the quality of financial reporting and an increased in the percentage of share ownership of foreign institutional shareholders also improved the quality of financial reports. However, percentage of local institutional ownership is not significant. The first limitation of this study is that audit fees and non-audit fees were lumped together as auditor remuneration in the annual reports. Thus, this summation did not permit the testing of individual components of auditor remuneration, as had been done in several previous studies. The second limitation is that accrual earnings management was used as the metric for financial reporting quality. Due to data limitations, real earning management, which is another proxy of earning management, was not tested. The study’s findings provide significant implications for auditors, regulators, and preparers. First, any attempt to reduce the remuneration of auditors in Nigeria might also result in the reduction of the quality of financial reporting; however, regulators must redouble their efforts to regulate audit fees. Second, evidence of weak monitoring by local institutional investors suggests a possible weakness in shareholder activism. This paper provides additional insights into the quality of financial reporting, the impairment of auditor’s independence, and the expropriation of minority shareholders’ interests from a less-studied environment characterized by a weak institutional framework. Our findings are robust with respect to the issues of unobserved heterogeneity and endogeneity, which previous studies had failed to consider.

Caesar B. Cororaton, Arlene B. Inocencio, Marites M. Tiongco and Anna Bella S. Manalang
De La Salle University, Manila, Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages:136-157

Abstract:
Over the years, deforestation in the Philippines resulted in significant reduction in forest cover. Between 1990 and 2013, the Philippines has lost 3.8 million hectares of its forest. This study carries out a quantitative assessment of the potential economic and poverty impacts of the NGP using a computable general equilibrium (CGE) model. In the assessment, a CGE model is specified, calibrated and used to simulate three scenarios: (i) a baseline or a business-as-usual scenario that incorporates the current forest deterioration in the Philippines; (ii) a full NGP scenario which implements a reforestation program that halts and reverses the reduction in the country’s forest cover; and (iii) a partial NGP scenario where only half of the 1.5 million hectare target reforestation is achieved. The assessment indicates that the NGP will result in an improvement in the overall output of the economy. The production of agricultural crops (palay, coconut, sugar, and other agriculture) improves, as well as the processing of these crops into food. Reforestation increases the effective supply of productive land in the country. The factor markets for labor, capital, and land are affected favorably as the overall output of the economy improves. The improvement in factor efficiency decreases the cost of production, which lowers the consumer price of commodities. Food prices decline as agricultural production improves. Lower income groups benefit from declining consumer food prices as their food consumption share in their total expenditure is larger compared to households in higher income groups. Higher household incomes and lower consumer prices lead to reduced poverty. Also, those in extreme poverty benefit the most. Income distribution also improves over time as indicated by a declining GINI coefficient.

Mc Reynald S. Banderlipe II
De La Salle University, Manila, Philippines
[email protected]

Year: July 2016
Volume: 26 No. 1
Pages: 158-164

Abstract:
This paper presents an overview of the recent developments in the financial regulation system that relates to the management of banks identified as “too big to fail” such that government response is needed to address the eventual failure of these institutions. First appeared in an announcement in the United States, the “too big to fail” clause is linked to the measures undertaken by the government to save large companies from apparent letdown, since their failure would result to economic fallout due to their interconnectedness with other entities for goods and services. The paper also provides an overview of the causes and implications of this clause such as the exposure of financial institutions to systemic risk and the moral hazard problem. In addition, the discourse sheds light on how global response takes action towards creating resolutions on these systemically important financial institutions, particularly in the Philippines, whose counterpart of “too big to fail” entities are identified as Domestic Systemically Important Banks (D-SIBs). Lastly, it presents alternative options that can contribute towards improving financial regulation without experiencing the trade-offs as a result of these actions.