DLSU Business & Economics Review Vol 27 No.1

Sebastian Auguste
Torcuato Di Tella University, Argentina
National University of the Center of the Buenos Aires Province (UNICEN), Argentina
[email protected]

Alejandro Bricker
National University of the Center of the Buenos Aires Province (UNICEN), Argentina

Year: July 2017
Volume: 27 No. 1
Pages: 1–27

Abstract:
We investigate which factors affect the gender gap in entrepreneurship using evidence from CBMS Argentina and the Oaxaca-Blinder decomposition for nonlinear models. The dataset allows us to construct a series of personality variables (risk aversion, social aversion, outgoing attitude, flexibility desire, and effort aversion) which are usually missing in standard household surveys. In addition, we can measure current entrepreneurial activity as well as failure from the past. We find that there is no evidence of discrimination in the event of starting up, since the small gap between women and men can be fully explained once the new personality variables are taken into account. There is, however, a higher rate of failure for women that cannot be explained with the observed individual characteristics. As a consequence, it is a gender gap in attrition and not at the event of starting up what explains the current gap in entrepreneurship.

Christopher James R. Cabuay
De La Salle University, Manila, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 28–58

Abstract:
International migration has been a significant avenue for many Filipinos to make use of interspatial differences in purchasing power, to send home remittances, and to maximize household income. However, migration has had a stigma of being disruptive to children’s educational outcomes, and remittances have been noted to cause dependence among working age members. This study estimates the impact of remittances on the human resource development, employment, and entrepreneurial outcomes and choices of the Philippine youth, individuals aged fifteen to thirty, using CBMS data census of selected De La Salle school communities. I employ an instrumental variable multinomial logistic regression to look at the impact of remittances on human resource development outcomes, that is, whether a young person is working, studying, both, or neither, and find that those in households receiving remittances are more likely to end up studying than working or being idle. This serves as evidence against the stigma that remittances cause dependency or idleness. I employ the same empirical strategy to look at the impact of remittances on employment outcomes, that is, whether a young person is working in a private household, a public/private establishment, self-employed, working in a family-run business, or not working. I find that they are most likely to work for a private household or a public/private establishment rather than be self-employed, which paints a sad picture for entrepreneurship. I calculate the average treatment effect on the treated (ATT) of remittances on households’ propensity to be engaged in entrepreneurial activity, and find that remittances have little to no impact (and at times negative) on the likelihood of households and individuals being engaged in entrepreneurship. Overall, though the impact of remittances may be lackluster for employment and entrepreneurship, it encourages the accumulation of human capital.

Mitzie Irene P. Conchada, Marites M. Tiongco, Paulynne J. Castillo, and Divina E. Edralin
De La Salle University, Manila, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 59-71

Abstract:
The Bureau of Labor and Employment Survey data on youth employment reveal that the Filipino youth are predominant in entrepreneurial activities in the country. The youth is defined by the Youth in Nation Building Act of 1994 (RA 8044) as individuals between the age of 15 and 30 years old. Unfortunately, the youth also experience the highest level of unemployment, where 49 percent of the unemployed belong to the age bracket of 15 to 24 years old. To immediately address this problem of youth unemployment, the government encourages the youth to go to into business. Two of the programs of the government, specifically that of Department of Labor and Employment (DOLE), aimed at reducing the number of unemployed as well as addressing the education for employment needs of the youth are the Youth Education-Youth Employability (YE-YE) Project and Youth Entrepreneurship Support (YES) Project. Applying the propensity score matching (PSM) method on the Community-Based Monitoring System (CBMS) data, the study focused on assessing the impact of government programs—such as the YE-YE and YES projects—in improving the welfare of the Filipino youth. Results show that the youth who availed of one or two of the entrepreneurial programs received higher incomes and wages of around three thousand pesos and two thousand pesos per year, respectively. Despite this favorable results, however, only a small proportion of the youth avail of government-sponsored training and education programs. Hence, there is a need to promote the entrepreneurial programs among the youth and to monitor their progress and continually support their efforts in sustaining entrepreneurial endeavors.

Mitzie Irene P. Conchada, Marites M. Tiongco, Paulynne J. Castillo, and Divina E. Edralin
De La Salle University, Manila, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 59-71

Abstract:
The Bureau of Labor and Employment Survey data on youth employment reveal that the Filipino youth are predominant in entrepreneurial activities in the country. The youth is defined by the Youth in Nation Building Act of 1994 (RA 8044) as individuals between the age of 15 and 30 years old. Unfortunately, the youth also experience the highest level of unemployment, where 49 percent of the unemployed belong to the age bracket of 15 to 24 years old. To immediately address this problem of youth unemployment, the government encourages the youth to go to into business. Two of the programs of the government, specifically that of Department of Labor and Employment (DOLE), aimed at reducing the number of unemployed as well as addressing the education for employment needs of the youth are the Youth Education-Youth Employability (YE-YE) Project and Youth Entrepreneurship Support (YES) Project. Applying the propensity score matching (PSM) method on the Community-Based Monitoring System (CBMS) data, the study focused on assessing the impact of government programs—such as the YE-YE and YES projects—in improving the welfare of the Filipino youth. Results show that the youth who availed of one or two of the entrepreneurial programs received higher incomes and wages of around three thousand pesos and two thousand pesos per year, respectively. Despite this favorable results, however, only a small proportion of the youth avail of government-sponsored training and education programs. Hence, there is a need to promote the entrepreneurial programs among the youth and to monitor their progress and continually support their efforts in sustaining entrepreneurial endeavors.

Brian C. Gozun
De La Salle University, Manila, Philippines
[email protected]

John Paolo R. Rivera
Asian Institute of Management, Makati City, Philippines

Year: July 2017
Volume: 27 No. 1
Pages: 72–88

Abstract:
More than half of the Philippines’ jobless sector is comprised of the youth. This warrants the need to identify the constructs and create policy frameworks that would facilitate employability and entrepreneurship among the Filipino youth. Using the Community Based Monitor System (CBMS) survey on Accelerated Poverty Profiling among member schools of De La Salle Philippines, we estimate a multinomial logistic regression that highlights how demographic characteristics and level of education influence a youth’s likelihood to be employed or to be entrepreneurial. Our results provide a framework for policymakers in improving program design and policy implementation targeted towards youth employment and support for youth entrepreneurial undertakings.

Junette A. Perez, Denmark C. Alarcon & Mar Andriel S. Umali
De La Salle University, Manila, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 89–96

Abstract:
Access to debt financing can be explained by the capability to pay of the borrower. The idea is that the better the capability to pay of a borrower, the wider his option to access debt financing and secure bank capital. As a derivative function of the individual and business characteristics of the borrower, the credit risk factors among others include housing type, education, share of income, total sales and total expenses, business and unemployment and economic skills. Using the Community Based Monitoring(CBMS) data, a three stage methodology has been implemented. Regression results show that having business capital is positively affected by the total sales and total expenses of the household entrepreneur and the presence of a pregnant woman in the household. Meanwhile, the probability of accessing bank loans is anchored on the collateral of the borrower, such that if the borrower has appliances, has business assets and shows capability to pay through rent payment and has a disabled individual in the household, his chances to source bank capital is better as compared to those without. Access to debt financing has also improved total sales performance, total family income and business assets of the entrepreneurs. As such, the paper calls for examining alternative sources of collateral and guarantees for micro and small medium enterprises (MSME)’s debt financing; empowering resource stewardship and risk management skills at the household level and championing a need for a credible source of information through a credit exchange bureau or comprehensive database center solely for MSME’s.

Esso-Hanam Atake and Akoété Ega Agbodji
University of Lomé, Togo
[email protected]
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 97-106

Abstract:
In Togo, the informal sector accounts for 84% of the workforce with an annual growth rate of 5%. Despite the importance of the informal sector workers in the Togolese productive activity, they do not benefit from social protection. To address this situation, Act No. 2011-006 was adopted by the Togolese National Assembly in 2011 to provide social security to informal sector workers. However, this was not applied, which means they are still not covered by social protection. This paper seeks to estimate the willingness-to-pay (WTP) of informal workers to have access to social protection services offered by National Social Security Fund (CNSS) and to analyse determinants of WTP. Data was obtained from a cross-sectional representative households’ survey involving 7,346 households in rural and urban CBMS sites in Togo. We used contingent valuation (CV) method in order to estimate the WTP. A logistic regression was used to analyse determinants of WTP. The results indicate that 84.5% of jobs in the areas studied were informal. It reveals that a significant proportion of women were engaged in informal employment wherein 88.7% were in urban areas and 94.2% were in rural areas. Also, it was interesting to note that 90.9% of informal sector workers were willing to subscribe to social protection services. Though many were willing, about 49.8% mentioned that they were only interested if the fee is below USD 2.55 per month. Moreover, it was observed that men were willing to pay for higher contribution than women. Further, more than half of the informal sector workers were interested to have occupational disease insurance while 81.9% were interested in accident work insurance. Meanwhile, a logit regression was used to estimate the relationship between the individual’s WTP and the explanatory variables, which include income, household size, age, education, gender, location, and health status. Overall, the results indicate that income and education were the key determinants of households’ WTP.

Mitzie Irene P. Conchada and Marites M. Tiongco
De La Salle University, Manila, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 107–123

Abstract:
In the Angelo King Institute annual report of Monitoring the Philippine Economy, the Philippines maintained its growth momentum in 2014, besting other Asian economies. Given this backdrop, it is interesting to find out whether various sectors have benefited from this growth, particularly the informal sector which includes bulk of the poor who are self-employed and are mostly engaged in the services sector. The intention of this study is aimed to determine the effect of social protection, particularly social health insurance program (known as PhilHealth Insurance) and the micro-savings scheme (known as AlkanSSSya) on informal sector especially those who are poor and self-employed. By the end of 2014, total benefit payment for all sectors amounted to PhP78.2 billion (PhP19.2 billion for the informal sector). Since the government spends so much on PhilHealth, especially with its expansion of the indigent program, there is a need to investigate the effectiveness of the program especially on the poor. Utilizing data from the Community Based Monitoring Survey (CBMS) collected in 2015 from selected provinces in the Philippines, the propensity score matching method showed that those who availed of PhilHealth Insurance (both individual paying and sponsored member) have a higher total income and income in cash compared to those who did not avail (PhP288 and PhP595 respectively). PhilHealth Insurance beneficiaries are also more likely to have higher total sales from entrepreneurial activities in the informal sector (PhP69) than non-beneficiaries. On the other hand, AlkanSSSya beneficiaries also had higher annual income, higher total sales from entrepreneurial activities, and higher expenditure than non-beneficiaries (PhP986, PhP18, and PhP304 respectively). The results support the claim that social protection is indeed effective in improving the income of the poor, especially those who are dependent on the informal sector. Expanding the coverage of the programs for the informal sector, thus, will aid in increasing social inclusion and in reducing poverty levels.

Atif Awad
University of Sharjah, Sharjah, United Arab Emirates
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 124–144

Abstract:
The present study seeks to examine empirically whether exposure to international trade creates or destroys jobs for a sample of eight ASEAN+3 countries (APT). The findings of the PMG technique shows that trade liberalization policies have a negative influence on unemployment rate in the long run. Since medium and unskilled workers are the majority of the workforce, a reduction in trade barriers is likely to expand the trading sector. For the APT countries to compete globally, the trading sector is likely to shift to a more efficient production mode by using intensive capital and high skilled labor, leaving unskilled workers unemployed. The findings are robust since we use various proxies for the trade liberalization policies.

Mohammed Yasin Ghadi
Mu’tah University, Karak, Jordan
[email protected]; [email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 145–164

Abstract:
This study aims to determine the indirect impact of transformational leadership on two job related outcomes: general job satisfaction and intention to quit, by integrating sequential mediating mechanisms of employees’ perceptions toward the job (i.e., the experience of meaningful work) and employees’ perceptions toward own self (i.e., employee engagement) as underlying mechanisms to understand transformational leadership impact in the Australian context. The proposed model was tested using a heterogeneous sample of employees working in various Australian sectors. The study sample consisted of 530 full-time employees working in Australia. This was done by applying structural equation modelling and MEDTHREE technique. The results of structural equation modeling and MEDTHREE analyses imply that transformational leadership influences both job satisfaction and intention to quit directly, as well as indirectly. Further results of sequential mediation analysis revealed that meaningful work and employee engagement carry a reasonable amount of mediational effect between transformational leadership and related outcomes with a higher percentage for meaningful work. Future research could develop the model by clarifying whether other possible variables influence the relationship between transformational leadership, meaningful work, and employee engagement. Moreover, a comparative cross-cultural study is needed. Finally, future research could test the direct effect of the four dimensions of transformational leadership using the MLQ on the three attributes of employee engagement. Implication and limitations of research are discussed in the study.

Mehir Baidya, Bipasha Maity
Mu’tah University, Karak, Jordan
[email protected]; [email protected]

Kamal Ghose
Kaplan Business School, Adelaide, Australia

Year: July 2017
Volume: 27 No. 1
Pages: 165–174

Abstract:
Understanding the contributions of brand and marketing activities to sales is vital to make smart decisions. This study attempts to investigate this issue empirically. Data were gathered from two brands in frequently purchase packaged goods category. Two double-log regression models were fitted to data. We find that brand and marketing activities contribute to sales significantly. Managers may find our findings useful to allocate fund between short-term and long-term marketing actions. As far as our knowledge is concerned, this constitutes the first empirical work of economics of branding for regional brands in India.

Gita Sugiyarti
University of 17 August 1945, Semarang, Indonesia
[email protected]

Elia Ardyan
Surakarta Economics College, Indonesia

Year: July 2017
Volume: 27 No. 1
Pages: 175-189

Abstract:
The purpose of this study is to test the effect of market sensing capabilities and product innovation advantage on market entry quality and marketing performance in emerging markets. The samples of this research are 122 respondents. The analysis used in this study is structural equation modeling (SEM). To process the data, AMOS version 21 is employed. The results show that (1) the product innovation advantage can improve market entry quality and market performance, (2) the quality of market entry has significant and positive effect on marketing performance, and (3) the capability to market sense positively and significantly affect the quality of market entry, but there is no significant effect on marketing performance.

Elvira P. de Lara-Tuprio, Ramil T. Bataller, Allen Dominique D. Torres, Emmanuel A. Cabral and Proceso L. Fernandez Jr.
Ateneo de Manila University, Quezon City, Philippines
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 190-200

Abstract:
The three-factor Nelson-Siegel model is a widely used model for forecasting the term structure of interest rates. Several extensions have recently been proposed. Even for the original model, different methods of treating the parameters have been shown. Ultimately, what works best depends on the data used to estimate the parameters. In this paper, the original three-factor model with fixed shape parameter was applied to forecast the term structure using market data from the Philippines. Instead of giving a pre-determined model for the latent factors, the best time series model for them was searched using standard statistical tools. Based on the historical data, the best model for each latent factor is of the form ARMA(p,q)+eGARCH(1,1). The dependence structure of these parameters was considered in generating their future values. This was carried out by finding the joint distribution of the residuals via appropriate copula. Results show that forecast of interest rates for different tenors is reliable up to the near future. For an active market, this is good enough since the models for the parameters can be adjusted as new information comes in.

Tai Wei Lim
UniSIM College, Singapore
[email protected]

Year: July 2017
Volume: 27 No. 1
Pages: 201-209

Abstract:
This writing is about studying political motivations for and against the Trans-Pacific Partnership (TPP) through interpretive work based on analyses of Chinese state media articles. My criteria for article selection centers on the use of Google index search for such articles drawn from three newspapers: China Daily, People’s Daily, and Global Times. From receiving the call for paper by this journal on 6 January 2016 to the submission deadline for the call for paper on 15 April 2016, a period of about three months, I downloaded articles from these three dailies for analysis. The motivation for the selection of these three dailies are the following. First, they represented the major media outlets in China that are internationally circulated and available online. Second, as state-owned media operating at a national level, they are often perceived to represent the voices of the state, its leaders, or the Chinese Communist Party (CCP). This has the added advantage for scholarly work to understand and analyse the official narratives behind the pronouncements and ideological inclinations of the Party. It provides an additional layer of cognitive and emotive understanding beyond just bland un-contextualized official statements released by the government, especially when these official contents are editorialized or grafted onto major arguments put forward by the authorities. This study is not meant to be comprehensive in surveying all TPP articles but provides a selective glance at media news reporting on TPP in the official media platforms in China.