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Book part
Publication date: 2 September 2019

B. Janakiraman

Low interest rates around the world due to adaptive monetary policy regulations for some time a source of concern for the banking sector and depositors of the bank. In this…

Abstract

Low interest rates around the world due to adaptive monetary policy regulations for some time a source of concern for the banking sector and depositors of the bank. In this environment, interest rates have raised concerns about nominal deposit interest rates which cannot be lowered below zero without destroying bank customers. Bank loans are becoming less vulnerable to lower interest rates on deposits approaching zero, indicating that the financial channel is weakened when interest rates are close to zero. Demographic pressures associated with longer life expectancy, China's gradual integration into global financial markets and changes in supply and asset requirements are attributed as reasons for low interest rates. Volatility of CPI inflation, interest rates on bank deposits attracting income tax and discontented depositors due to lower rates are cited as reasons for the suffering of bank depositors. This chapter thus discusses the impact of negative rate on economic growth and bank customers besides discussing the future trends of negative interest rates.

Details

The Impacts of Monetary Policy in the 21st Century: Perspectives from Emerging Economies
Type: Book
ISBN: 978-1-78973-319-8

Keywords

Article
Publication date: 23 May 2024

Mohamed Hessian, Alaa Mansour Zalata and Khaled Hussainey

This study examines the effect of non-audit fees (NAF) provisions on interest payments classification shifting. In addition, we investigate to what extent the NAF economic bonding…

Abstract

Purpose

This study examines the effect of non-audit fees (NAF) provisions on interest payments classification shifting. In addition, we investigate to what extent the NAF economic bonding and interest payments classification shifting is contingent on internal governance and firm financial well-being.

Design/methodology/approach

This study employed probit regression using a sample of UK non-financial firms indexed in FT UK (500) over the period from 2009 to 2017.

Findings

We find evidence that the economic bonding of NAF between external auditors and their clients is more likely to encourage managers in UK firms to manipulate operating cash flows through interest payment classification shifting. In addition, and interestingly, our results evince that classification-shifting may be the less costly and soft choice of managers in firms with strong governance and charging higher NAF. Furthermore, we show that financially distressed firms associated with their auditors in purchasing non-audit services are more prone to attempting to manipulate and engage in interest payments classification-shifting. Our result did not provide a significant effect of external auditor tenure on the interest payments classification shifting.

Research limitations/implications

Our findings are subject to the following limitations: First, this study uses a composite index to measure the quality of internal corporate governance. It focuses only on the board of directors, but this index does not reflect other internal governance mechanisms. Second, this study is subject to limited study time due to the implementation of key IFRS standards (IFRS 9 Financial Instruments and IFRS 15 Revenue from Contract with Customers) from 2018–2019.

Practical implications

This study was motivated by the UK’s Financial Reporting Council regulators' pressure on the Big 4 audit firms to move more audit time into main auditing activities, reduce cross-selling to audit clients and separate their audit practices by 2024. Overall, we provide new evidence that directs a close spotlight on the threats of NAF that are potentially useful to regulators, shareholders and investors.

Originality/value

It is motivated by the UK’s Financial Reporting Council regulators' pressure on the Big 4 to move more audit firm time into main auditing activities, reduce cross-selling to audit clients and separate their audit practices by 2024. Overall, we provide new evidence that directs a close spotlight on the threats of NAS that are potentially useful to regulators, shareholders and investors.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 28 May 2024

Sylvia Nabila Azwa Ambad and Ahmad Rafiki

This study aims to investigate the impact of Holland’s theory of career choice (RIASEC [realistic, investigative, artistic, social, enterprising and conventional]) on the…

Abstract

Purpose

This study aims to investigate the impact of Holland’s theory of career choice (RIASEC [realistic, investigative, artistic, social, enterprising and conventional]) on the entrepreneurial event model (EEM) and the agropreneurial intention among university students.

Design/methodology/approach

This study is quantitative research, and 772 undergraduate students from public and private universities in Malaysia participated. The data were then analysed using SmartPLS 4.

Findings

The statistical analysis revealed that the realistic, artistic, enterprising and conventional in Holland’s theory of career choice (RIASEC) are antecedents of perceived desirability and feasibility, which has an indirect effect on agropreneurial intention. Additionally, all dimensions of EEM have a direct effect on agropreneurial intention.

Originality/value

Despite the importance of agriculture in providing food security and reducing poverty, especially in rural areas, there is very limited empirical research in this area. Notably, most of the research on the intention to become an entrepreneur is general entrepreneurship. This study, therefore, undertakes an interventionist role to investigate the factors influencing agropreneurial intention among youth.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 31 May 2024

Mouldi Djelassi and Jamel Boukhatem

The purpose of this paper was to explore the impact of interest rate shocks on the deposits and financing of Islamic and conventional banks in Saudi Arabia.

Abstract

Purpose

The purpose of this paper was to explore the impact of interest rate shocks on the deposits and financing of Islamic and conventional banks in Saudi Arabia.

Design/methodology/approach

The authors use impulse response functions (IRFs) and variance decomposition (VDC) analyses over the period 2008Q1–2020Q2.

Findings

The IRFs showed that increasing interest rates reduce loans and conventional deposits. For Islamic banks, the deposits are more affected by interest rate changes than the financing. The VDC analysis found that deposits contribute up to 61% of Islamic financing variations, compared to only 25% in conventional lending ones.

Originality/value

This research contributes to the field of Islamic economics and finance by providing empirical evidence on how interest rates likely impact Islamic and conventional deposits and financing in Saudi banking system.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 9 May 2024

Yunshil Cha, Catherine Plante and Linda Ragland

In this study, we examine regulated public accessibility to municipalities’ financial reports and bond interest cost. In particular, we examine whether there is information…

Abstract

Purpose

In this study, we examine regulated public accessibility to municipalities’ financial reports and bond interest cost. In particular, we examine whether there is information content in a component of a constrained filing period that is useful to municipal bond market participants. The component of a filing period that we focus on is the period of time between an audit report date and a regulated public accessibility date.

Design/methodology/approach

To explore our research question, we collect a sample of observations from municipalities that: (1) are required to post annual/audit financial reports on a centralized state-level repository that includes a “transparent” date stamp on when reports are made publicly available and (2) have issued general obligation bonds. Our sample is limited to one observation per municipality. The sample period is 2006–2019. In terms of approach, we use an ordinary least square (OLS) regression model to empirically test whether the time period between municipalities’ audit report date and state-required repository filing date is associated with general obligation bond interest cost.

Findings

We find support for the idea that there is information content in a component of a constrained filing period. In particular, we hypothesize and find a positive association between the time period between an audit report date and a state filing date and general obligation bond interest cost. Seemingly, this component of time may provide something unique or not available in other components of a constrained filing period (e.g. the fiscal year-end date to the audit report date). In post hoc analyses, we also find that both components of the constrained filing period in our setting (i.e. the audit report date to state filing date and the fiscal year-end date to audit report date) need to be considered for either of the components to be significant. Moreover, although both components are necessary, the audit report date to state filing date component appears to have a slightly stronger association (in terms of statistical significance) with general obligation bond interest costs.

Research limitations/implications

To our knowledge, Illinois is the only state that provides a date stamp on when municipalities’ financial information is made publicly available on a centralized repository. As such we focus on municipalities in Illinois. While this increases the internal validity of our research, it potentially limits generalizability across other states. Also, as a reflection of the sample constraint, the number of observations in our study is relatively small. As part of post hoc analyses, we take a closer look at our sample, model and variables used to test our hypothesis.

Practical implications

For stakeholders, each component of a constrained filing period may provide unique information. For example, the time period between an audit report date and a regulated filing date may send a positive signal about the quality of financial management to investors. For regulators, requiring some sort of centralized public access to municipal financial reports that have transparent time constraints may help states provide stronger governance and help lower municipalities’ borrowing costs.

Originality/value

We use a novel approach (with the Illinois date stamp filing information) to examine our research question. Most prior research has often relied on an assumption that the time between fiscal year-end and the audit report date is the component of time that provides useful information to investors (e.g. Henke and Maher, 2016). In our setting, we explore and find that a component of a constrained filing time period (i.e. the date from an audit filing to a required public accessibility filing) may also provide impactful information to investors.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 25 April 2024

Muhammad Tariq, Muhammad Azam Khan and Niaz Ali

This study aims to investigate the effect of monetary policy on housing prices for US economy. It specifically examines whether nominal or real interest rates are the key drivers…

Abstract

Purpose

This study aims to investigate the effect of monetary policy on housing prices for US economy. It specifically examines whether nominal or real interest rates are the key drivers behind fluctuations in housing prices in US.

Design/methodology/approach

Monthly data from January 1991 to July 2023 and various appropriate analytical tools such as unit root tests, Johansen’s cointegration test, vector error correction model (VECM), impulse response function and Granger causality test were applied for the data analysis.

Findings

The Johansen cointegration findings reveal the presence of a long-term relationship among the variables. VECM results indicate a negative correlation between nominal and real interest rates and housing prices in both the short and long terms, suggesting that a strict monetary policy can help in controlling the housing price increase in the USA. However, housing prices are more responsive to changes in nominal interest rates than to real interest rates. Additionally, the study reveals that the COVID-19 pandemic contributed to the upsurge in housing prices in the USA.

Originality/value

This study contributes by examining the role that nominal or real interest rates play in shaping housing prices in the USA. Moreover, given the recent significant upsurge in housing prices, this study presents a unique opportunity to investigate whether these price increases are influenced by the Federal Reserve's monetary policy decisions regarding nominal or real interest rates. Additionally, using monthly data, this study provides a deeper understanding of the fluctuations in housing prices and their connection to monetary policy tools.

Details

International Journal of Housing Markets and Analysis, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 30 April 2024

Madha Adi Ivantri, Muhammad Hakim Azizi, Ana Toni Roby Candra Yudha and Yudi Saputra

This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA…

Abstract

Purpose

This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA) contract.

Design/methodology/approach

This study using simulation approach to calculate the monthly installments for home financing using gold price references. In simple terms, propose a financing formula in the BBA contract by converting the selling price of the house to the gold price, and then the monthly installments also follow the actual gold price. The authors provide an example by simulating this formula using historical data and cases of housing financing at Indonesian Islamic banks. The authors compare housing financing models based on gold prices and interest rates. Finally, The authors can compare the two housing financing models that are affordable for low-income people.

Findings

The results show that in the initial period, monthly installments of BBA based on gold price were lower than home financing based on interest rate. This result makes it possible for low-income people who cannot access financing based on interest rates to access financing based on gold price. However, the total installments of financing based on gold prices are higher than the financing model based on interest rates.

Research limitations/implications

The paper confines one contract, namely, BBA, as it is claimed to be more Shariah-compliant than others.

Practical implications

These findings suggest an alternative model for Islamic banks and regulatory authorities in Indonesia to replace the interest rate reference with the gold price in BBA contract housing financing. This model can offer competitive advantages for Islamic banks, including lower initial installments and inflation-protected profits, serving as a means of differentiating them from conventional banks.

Social implications

Gold price-based housing financing model in Islamic banks will increase the affordability of housing financing for low-income people.

Originality/value

This paper tries to solve two problems, namely, first, the problem of assuming that Islamic and conventional banks are the same, and second, the problem of housing finance affordability. This study needs to be explored.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 16 April 2024

Mandy Hommel

In Germany, various approaches have been taken to tackle the current teacher shortage in technical and vocational education and training (TVET). One attempt to remedy the shortage…

Abstract

Purpose

In Germany, various approaches have been taken to tackle the current teacher shortage in technical and vocational education and training (TVET). One attempt to remedy the shortage in Bavaria has been the introduction of an engineering education study programme at universities of applied sciences. Ideal candidates for this programme should have an interest in both engineering and social interaction. For effective recruitment, therefore, it is necessary to know applicants’ characteristics such as their vocational interests. In this study, the vocational interest profiles of students in TVET teacher training programmes were identified and their interest profiles and further characteristics were compared with those of other VET students at universities and universities of applied sciences.

Design/methodology/approach

An online questionnaire based on Holland’s interest theory and adapted from the Allgemeiner-Interessen-Struktur-Test-3 (interest structure test) was administered to 85 students in TVET teacher training programmes at universities and universities of applied sciences in Bavaria. Items regarding reasons for choosing a particular study programme, university location and other personal details were added.

Findings

The vocational interest profiles of students at universities and universities of applied sciences can be described as similar but weakly differentiated. Insights are provided by the characteristics of students such as the majority being first-time academics in the family. The reasons for choosing the degree programme and university location highlight the fact that a large proportion of students in engineering education would not have chosen a teaching-related degree programme if it had not been offered at the respective university of applied sciences.

Research limitations/implications

Although the sample in this study was small and, therefore, limiting, it represented a high proportion of TVET teacher training students in Bavaria and a substantial proportion of first-year students in TVET teacher training programmes at universities and universities of applied sciences in Bavaria (section 2.2 and 3.1). Thus, the findings provide valuable insights into commonalities in interest profiles between engineering education students at universities of applied sciences and other TVET students at universities. With respect to the domain of the chosen vocational specialisation, differentiated profiles emerged that, for example, showed a stronger artistic orientation among students in construction technology/wood. For further analysis, the previous variable-centred orientation of the analysis can be supplemented by person-centred analyses (e.g. cluster analysis and latent variable mixture modelling, LVMM) (cf. Leon et al., 2021).

Practical implications

The findings in this study reveal the potential for attracting candidates to universities of applied sciences if they prefer to study in rather rural areas close to their hometowns. With the aim to educate prospective teachers for future work not only in metropolitan regions but in rural areas too, offering bachelor degree programmes in rural areas would seem promising. A regional option can boost the recruitment of new students and attract candidates that otherwise would be unable to pursue studies or a career as a teacher in vocational education. The results of this study and those of previous studies suggest that universities of applied sciences can cooperate with universities to help solve the teacher shortage problem.

Social implications

Overall, it is apparent that the students' interests reached comparatively high values in all interest orientations and thus are only weakly differentiated. If undifferentiated profiles indicate low levels of career readiness, this significantly affects the recruitment of young people for the teaching profession. Assessing career orientation and promoting vocational interests should be prioritised during secondary school education. Vocational orientation measures are essential and should provide insight into typical activities of daily work life in different professions and thus pique and foster interests.

Originality/value

This study provides insight into how to respond to the teacher shortage in VET by identifying important characteristics of engineering education students using vocational interest profiling.

Details

Education + Training, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0040-0912

Keywords

Book part
Publication date: 6 November 2015

Hans van Ees, Kaspar van den Ham, Theo J. B. M. Postma and Kees Verschoor

Defaults in corporations, financial institutions and semipublic organizations have resulted in (corporate) governance Codes and Law provisions that aim to improve governance, risk…

Abstract

Purpose

Defaults in corporations, financial institutions and semipublic organizations have resulted in (corporate) governance Codes and Law provisions that aim to improve governance, risk management and policy making by executive and non-executive directors of involved boards in The Netherlands and across the globe. The aim of this chapter is to discuss how semipublic organizations deal with public interest and the contribution of multiple stakeholder team production theory (MSTP) to effectively deal with the issue of how to include interests of different stakeholders and the general public interest in the governance of and policy making by boards of semipublic organizations. This includes the identification, raising awareness and analysis of various interests and their implications.

Methodology/approach

The authors use a literature review and their own experience.

Findings

Based on our literature review and experience converging in a case study design, we hold that a semipublic organization’s exposure to public interests and how it deals with that will remain a critical issue.

Practical implications

We develop a research approach for dealing with stakeholders’ and the public interest and conclude that a governance perspective grounded in team production theory allows for a much better focused incorporation of possibly conflicting stakeholder interests, including public stakeholder interests and stakeholder commitment and cooperation than the dominant control perspective that is currently prevailing.

Originality/value

We contribute to the literature by arguing that the combined MSTP approach offers a pre-eminent approach to influence and shape board behaviour, an increased awareness of interests of different stakeholders coalescing in the public interest and an alternative, complementary view on decision-making by boards viewed as a team.

Details

Contingency, Behavioural and Evolutionary Perspectives on Public and Nonprofit Governance
Type: Book
ISBN: 978-1-78560-429-4

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Book part
Publication date: 4 April 2016

Farley Grubb

The British North American colonies were the first western economies to rely on legislature-issued paper monies as an important internal media of exchange. This system arose…

Abstract

The British North American colonies were the first western economies to rely on legislature-issued paper monies as an important internal media of exchange. This system arose piecemeal. In the absence of banks and treasuries that exchanged paper monies at face value for specie monies on demand, colonial governments experimented with other ways to anchor their paper monies to real values in the economy. These mechanisms included tax-redemption, land-backed loans, sinking funds, interest-bearing notes, and legal tender laws. I assess and explain the structure and performance of these mechanisms. This was monetary experimentation on a grand scale.

Details

Research in Economic History
Type: Book
ISBN: 978-1-78635-276-7

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