Issue #3 (cont. 2) (Volume 13 2016)

The study investigates how working capital management (WCM) impacts the profitability and operating performance of publicly traded companies in Republic of China, Taiwan. The authors use the quarterly data of 539 stocks listed on the Stock Exchange of Taiwan from 2008 to 2015, containing 17,248 observations. The study examines whether two WCM variables, namely, the cash conversion cycle (CCC), as well as the gap between days of payables outstanding and days of sales outstanding (PRGap) have any significant effects on firm profitability and operating performance. The findings demonstrate that there are significantly negative relationships between the CCC and performance indicators, whereas there are consistent positive relationships between PRGap and performance indicators.

Keywords: working capital management, performance, cash conversion cycle, PRGap, Tobin’s Q.
JEL Classification: G30, G31, G32, M10

The article shows peculiarities of functioning of pension fund system in Ukraine and some foreign countries. Analysis and assessment of financial situation of Pension Fund of Ukraine are done. Imbalance of revenues and expenses of budget of Pension Fund of Ukraine is found. Factors are determined which influence on effectiveness of functioning of pension system of Ukraine. Priorities of policy concerning improvement the situation of pension coverage of Ukraine are presented.

Keywords: pension coverage, Pension Fund, revenues, expenses, pension payment, pension system, non-state pension coverage.
JEL Classification: G2, H3, O1

Corporate governance and the availability of external financing can be important determinants of corporate cash holdings. In this research, in line with Opler et al. (1999), the authors find that Korean firms’ cash holdings are affected by firm-level characteristics including firm size, leverage, market to book, cash flow ratio, net working capital, and cash flow volatility in addition to corporate governance. Rather than agency-prone, the authors can ascribe the increase in cash holdings to the precautionary corporate demand for cash (Campbell et al., 2001). The authors also report that operating risks stemming from cash flow volatility, unavailability of external finance, credit rating downgrades, etc., may be associated with precautionary corporate demand for cash. Lastly, it is documented that corporate governance proxied for by block and/or insider ownership stakes is inversely associated with corporate cash holdings.

Keywords: demand for money, corporate governance, corporate cash holding.
JEL Classification: G39, E41, G34

This paper examines the role of commodity-related investments in the decumulation phase of retirement. Benchmarked against a balanced portfolio, the findings suggest that including commodities in a traditional portfolio improves the retirement outcomes at the lowest percentiles of wealth distribution. Furthermore, we demonstrate that downside protection is more pronounced by reducing allocation to equities (rather than bonds) to invest in alternatives. An equally weighted combination of passive and active commodity-related investments provides superior downside protection compared to a traditional portfolio at all levels of allocations used in the analysis. As a consequence, commodities may be employed as a portfolio diversification tool particularly in the decumulation phase of retirement.

Keywords: alternatives, commodities, life cycle, superannuation, retirement.
JEL Classification: G11, G23

The main purpose of this paper is to investigate the impact of an endogenous relationship between international financial reporting standards (IFRS) and sovereign credit ratings on the factors that determine foreign direct investments, by using an instrumental variable panel data framework. The results show that the adoption of IFRS by developed economies is interpreted by credit rating agencies as a positive sign that the firms will provide more transparent financial reports. In addition, the authors find that the consideration of the endogenous relationship between IFRS and credit ratings for developed economies highlights the importance of some variables that was not evident previously such as the degree of corruption and the educational level. Finally, the authors suggest that foreign direct investments are more easily attracted when one considers a joint factor which captures people’s perceptions about the ability of the government to implement policy and regulations that promote the development of public and private sector.

Keywords: credit ratings, IFRS, FDI determinants.
JEL Classification: C23, C26, M41, E51

The main objective of this research was to examine the degree of practical application of management accounting in Spanish airline companies as far as management accounting is a crucial tool for the financial decision making process. In particular, the goal was to get to know the degree of strategic planning, the utilized methods of budgeting, procedures used to present the comparison between planned and actual results, and the reported key performance indicators, as well as their frequency. Quantitative methodology has been used through the creation of an on-line questionnaire. The results showed that the level of implementation, and utility granted to the different techniques of management accounting in the analyzed companies that are corresponding to the six most important airlines in Spain, is pretty high, helping airline companies to make operations and financial decisions.

Keywords: strategic planning, airline companies, financial decision making, key performance indicators, management accounting.
JEL Classification: M41, L93

This paper examines the effect of various economic and financial indicators on the Dow Jones Sustainability Index (DJSI) returns. In particular, four explanatory variables are employed, namely United States (US) 10 Year bond value, gold price, Trade Weighted U.S. Dollar Index and Consumer Sentiment Index calculated by Michigan University. A generalized autoregressive conditional heteroskedasticity (GARCH) model is applied over DJSI United States which incorporates socially responsible companies for the period August, 1999 to May, 2016 using monthly data. The empirical results indicate that the consumer sentiment and the bond market exert positive impact on the DJSI US, whereas the gold and currency market affects it negatively. In addition, the structural analysis of DJSI US returns volatility showed that the US trade balance has a stabilizing effect on the conditional variance of the DJSI US return series.

JEL Classification: G1, F2, Q40, M21.
Keywords: Dow Jones Sustainability Index, bond value, gold, exchange rate, consumer sentiment

Notwithstanding its struggles to tame the high levels of poverty and inequality, South Africa is considered as a major economic hub of Africa. However, as an economic hub, there are other countries that perceive South Africa as a capitalist, neo-liberal economy that goes all out to dominate not only its neighbors in the southern hemisphere, but also many other developing nations in the continent. Therefore, the main aim of the study is to assess the socio-economic implications of South Africa’s foreign direct investment in Southern Africa. As far as the authors are concerned, there is yet to be a frank analyses of the varying perspectives, as well as a holistic explanation of the clearly, yet complex relationship which exists between South Africa and many other countries in the southern hemisphere. While the authors acknowledge the efforts of several scholars in trying to juxtapoze the nuances in these relationships, they insist that there has not been a contextual treatment with due consideration for the socio-economic implications of South African business expansion in Africa. Thus, the authors sincerely believe that the paper has serious implications for emerging economies especially in Africa. Other African countries can learn from South Africa’s tactical brilliance; the way it has positioned its economy as a major economic hub in Africa with illustrious attractions that are derived from sophisticated infrastructure, a good educational system, a functional health care system and world class standard ecotourism. The study was conducted using documentary analysis and, therefore, allowed the researchers to source and utilize documents, both in private and public domain, on the basis of their relevance to the research.

Keywords: democracy, foreign direct investment, public administration, Southern African Development Community, Southern African Customs Union, Southern African Power Pool, regional cooperation.
JEL Classification: H5, N27, 016, 019, 024, 055

The growth of online shopping channels gradually forces brick and mortar retailers to explore the importance of online shopping trends and online customer behavior. While maintaining customer satisfaction has been recognized as one of the essential factors for business survival and growth, this has not been sufficiently explored for online shopping platforms. Understanding what online constructs appeal to generation-X consumers is critical for organization that would want to pursue virtual business platforms. From a brief literature review in this study, it could be said that online customer satisfaction and its influences on online repurchase intentions in the South African retailing environment remain sparsely researched. Therefore, this study seeks to analyze the dimensions of online customer satisfaction and regress the online satisfaction dimensions on repurchase intentions of generation-X consumers. An attempt is made to apply the theory of planned behavior and social exchange in the adapted conceptual of the study. These theories are deemed to provide an appropriate theoretical grounding to this study. The target population was South African generation-X online consumers in Gauteng. A total of 377 questionnaires were received for data analysis. Implications of the research findings are discussed and limitations and future research directions are provided.

Keywords: online shoppers, online customer satisfaction, repurchase intentions, generation-X consumers, South Africa.
JEL Classification: M1, M30, M31, L10

Many African countries have been struggling to achieve sustainable economics in order to contribute in putting Africa in the path for socio-economic development. This is partly due to the burden of debt that hangs over many African countries that borrowed funds from multilateral partners irresponsibly. As a result of this, the International Monetary Fund (IMF) and the World Bank put in place in 1996 a strategy to provide debt relief to countries that were struggling to repay their debts. This debt relief initiative was reviewed in 1999 to provide adequate results. This paper is, therefore, a critical assessment of HIPIC and the implication of NEPAD from 2001 to date.

Keywords: HIPIC, NEPAD, IMF, World Bank, socio-economic development.
JEL Classification: H62, H63

The impact of self-service technologies on service quality at a major international airport in South Africa, was determined using an adapted SERVQUAL instrument, which focused on Reliability, Convenience, Ease of Use and fulfillment, by developing and testing three hypotheses, which postulated relationships between the aforementioned. The data from a systematic random sample of 318 passengers collected during peak hours at the international departures terminals was analyzed using inferential statistics, confirmed that there is an association between convenience and fulfilment; between ease of use and fulfilment, and between reliability and fulfilment, although some relationships were not very strong. SSTs have addressed the long queues at the airport and improved passenger service experience. The findings must, however, be interpreted with caution as there are inherent limitations and opportunities for further research.

Keywords: service experience, self-service, technology, airport service.
JEL Classification: M31

It is well documented that road infrastructure is an important catalyst of the South African economy because of the interchange of people, goods and services which are dependent upon transport. The purpose of this study was to investigate the perceived impact of public sector leadership on road infrastructure service delivery. A qualitative methodology approach was employed using a purposive sampling technique. Twenty in-depth face-to-face interviews were conducted with respondents from both the public and private sectors. Data were analyzed using thematic analysis and the findings of this research indicate that public sector leadership is ineffective in driving road infrastructure development. The results also suggest that the lack of accountability and corruption hinders the delivery of infrastructure.

Keywords: accountability, corruption, engineering, government, South Africa.
JEL Classification: L3, L92, H11

The success of higher education institutions worldwide lies in the quality of their employees. The study investigated the influence of human resource practices on academic staff members’ intention to leave. The study which was conducted at a selected university in South Africa, consisted of (n = 35 males = 85.7% and female = 14.3%) who completed a questionnaire on their perceptions of human resource practices on employees’ intention to leave. Data was analyzed to determine the human resource practices which have significant influence on employees’ intention to leave. Findings from the correlation analysis indicated a significant relationship between organizational culture, working conditions, remuneration, as well as remuneration administration, and employees’ intention to leave.

Keywords: intention to leave, recruitment, organizational culture, remuneration, working conditions, organizational policy.
JEL Classification: J63, M12, J31, J81

This paper sought to ascertain the factors that impact on the growth of African immigrant-owned craft businesses in selected craft markets. The purposive and snowball non-probability sampling technique was deemed to be the best method to use in this study to select the respondents. The study utilized a mixed method approach to collect and analyze data. Questionnaires (quantitative) were administered to 122 African immigrant entrepreneurs, and in-depth interviews (qualitative) were conducted with the three municipality managers responsible for the four selected craft markets. The quantitative data were analyzed using the Statistical Packages for Social Sciences (SPSS) software, and face-to- face interviews were analysed by content analysis. Pushed by the need to survive and pulled by the many tourists in South Africa, African immigrant entrepreneurs turned to the craft business Seasonal and irregular nature of trade, competition, and xenophobia were noted to be the main growth challenges. Recommendations were made to the relevant stakeholders.

Keywords: African immigrant entrepreneur, business growth, survivalist businesses, craft markets, SMEs.
JEL Classification: M10, M13