Full Text Articles
The Lahore Journal of Business, Volume 7, Issue 2, Oct - Mar 2019
Ummar Aftab, Waseem Akhter Qureshi and Attiya Yasmin Javid
The Lahore Journal of Business, Volume 7, Issue 2, Oct-Mar 2019, pages 1-32, https://doi.org/10.35536/ljb.2019.v7.i2.a1
This paper identifies the determinants that contribute towards the variation in financial assets that make up a firm’s total cash reserves, specifically in two important regions of the world i.e. Asia Pacific and Europe. The findings of the research reveal that firms in the region of Asia Pacific have slightly higher cash holdings, as compared to firms in Europe. Moreover, the study also identifies that the elevated cash holdings in Asia Pacific are not a result of the agency problem, as is generally viewed, rather, the shareholder power hypothesis is a more appropriate measure to elucidate this elevation in the level of cash holdings in the region. When shedding light on to the firm specific cash holding determinants, the findings of the research reveal that leverage, dividend payment, profitability, growth and net working capital, cash flows and financial strength, influence cash reserves in both the regions, exactly in the same manner. This shows the application of transaction, and precautionary motives in both the regions. The study further identifies that size, and investments have a varying effect in both the regions that are taken into consideration. Again, this difference may be attributed to Shareholders’ Power Hypothesis, specifically for Asia Pacific and the Agency View, specifically for Europe. Shareholders’ Right Index influences cash reserves in Asia Pacific in a positive manner, while in Europe, the same index shows a negative influence. The development in the financial markets has a negative negatively influence on cash holdings in Asia Pacific, and a positive one in Europe.
Humyra Dawood
The Lahore Journal of Business, Volume 7, Issue 2, Oct-Mar 2019, pages 33-58, https://doi.org/10.35536/ljb.2019.v7.i2.a2
The purpose of this research is to analyse the influence of consumers’ perception of Corporate Social Responsibility (CSR) practices on a brand’s image, satisfaction and trust in Pakistan. While the strategic importance of CSR, as a corporate marketing tool, is fairly established in the developed world, the concept is still finding its ground in developing countries. This study focuses on the consumers of the apparel industry of Pakistan, and has used the Structural Equation Modelling (SEM) to test the model. The findings show that the perceived CSR affects brand image in a positive manner, but has no impact on consumer satisfaction and trust directly. Brand image, however, has a favourable effect on both satisfaction and trust, and completely mediates the relationship between perceived CSR, and satisfaction and trust. This study provides insights to apparel manufacturers to formulate corporate marketing strategies that aim at enhancing their brand image through CSR activities.
Rana Tanveer Hussain, and Abdul Waheed
The Lahore Journal of Business, Volume 7, Issue 2, Oct-Mar 2019, pages 59-94, https://doi.org/10.35536/ljb.2019.v7.i2.a3
Under the influence of the framework that defines the Resource Based View, the purpose of this paper is to examine the contribution of the strategic resources (intellectual capital) that create value for the firm. More specifically, we assess the effect of intellectual capital on operating, financial and stock market performance of the firms listed in the personal goods sector of Pakistan Stock Bourse, for the period of 2005 to 2014. The notion of intellectual capital is measured by intellectual capital efficiency, and the “value added intellectual coefficient” method proposed by Public (1998), which comprises of capital employed efficiency, human capital efficiency, and structural capital efficiency. The results depict that intellectual capital has a significant, positive effect on operating and financial performance of the firms, while capital employed resources have an insignificant, and mixed effect on operating and financial performance of the firms. This means that the more the firms will accumulate intellectual capital resources, the higher will be their operating and financial performance. Capital employed resources have a significant, positive effect on stock market performance of the firm, and intellectual capital also affects stock market performance, but this relationship is insignificant in nature. The accumulated effect of all the resources (physical & intellectual) shows a positive relationship with the performing areas of the firm in the sector.
Shiraz Ahmed, Junaid Ansari, Yamna Waqas Khan and Muhammad Sufyan Ramish
The Lahore Journal of Business, Volume 7, Issue 2, Oct-Mar 2019, pages 95-120, https://doi.org/10.35536/ljb.2019.v7.i2.a4
One of the reasons affecting job satisfaction is the leadership style that engages the employees on a daily basis. Although perceived leadership has been studied well in the past, but there are fewer studies focusing on the mediating effect of employee empowerment. The key objective of this research is to study the relationship of perceived leadership, employee empowerment and job satisfaction of the employees, and also to study the mediating role of employee empowerment on the relationship between perceived leadership, and job satisfaction of the employee. A sample of 200 professionals from different banks was selected for the purpose of this study. Moreover, the Smart PLS 3.0 software was used to analyze whether the model was fit by referring to the PLS-SEM. The results of this study revealed that the independent variable (perceived Leadership) has a significant and positive influence on job satisfaction. All the hypotheses were accepted, and there were none that could be rejected after the results were revealed. The study proves that a partial mediating effect of employee empowerment exists between perceived leadership and job satisfaction. This study can help managers in designing the right strategies for retaining their employees by empowering them according to the boundaries set by their organizations. The results can help organizations to identify the potential reasons for job satisfaction, which will eventually lead to higher productivity and profitability.
Mehvish Umer and Sohnia Salman
The Lahore Journal of Business, Volume 7, Issue 2, Oct-Mar 2019, pages 121-146, https://doi.org/10.35536/ljb.2019.v7.i2.a5
The purpose of this study is to ascertain the influence of price and promotion on brand equity, which eventually leads to the determination of consumer’s preference for a particular brand. This research aims to add value to the current field by testing this relationship under the influence of three other mediating dimensions including the brand image, brand loyalty and quality of the product. In order to test the proposed model, the Structural Equation Modeling technique was used in this study. Within this realm, the CFA and path analysis were used to assess the validity and reliability of the latent constructs. The results of the research revealed that the price and promotion of a particular product have a statistically significant relationship with its brand equity. The results also seem to reject the mediating effect of brand image, perceived quality and brand loyalty between price and brand equity. The relationship of promotion, however, does allow for mediation by the perceived quality of a brand, but rejects the other two hypotheses. A number of researchers in Pakistan have previously conducted research on brand equity, albeit using different predictors in different industries. It must be noted that this proposed model of price and promotion, and its effects on the brand equity has not been thoroughly tested in the Pakistani context. Hence, this study proves to be a preliminary basis for further research on the linkages between price, promotion actions and brand equity.
The Lahore Journal of Business, Volume 7, Issue 1, Apr - Sep 2018
Saad Shahid and Rida Ayaz
The Lahore Journal of Business, Volume 7, Issue 1, Apr-Sep 2018, pages 1-32, https://doi.org/10.35536/ljb.2018.v7.i1.a1
The purpose of this study is to examine whether an organization can create customer engagement by practicing market orientation, personalization and using multi-channel marketing. The proposed conceptual framework is empirically tested using quantitative data. Survey data were collected from 240 students of both private and public universities in Pakistan. The findings show support that market orientation and personalization do not lead to customer engagement but multichannel marketing does have a relationship with customer engagement. The proposed mediation of personalization and multi-channel marketing was not empirically supported. The results of this research suggest that firms should practice multi-channel marketing to interact with the target market. Multichannel marketing is most likely to keep the existing and potential consumers engaged. This study adds value to the literature by providing an explanation of the impact of the two inbound marketing themes; personalization and multi-channel marketing and their consequent relationship with customer engagement.
Ramla Sadiq, Tahseen Mohsan Khan and Noman Arshed
The Lahore Journal of Business, Volume 7, Issue 1, Apr-Sep 2018, pages 33-59, https://doi.org/10.35536/ljb.2018.v7.i1.a2
The primary purpose of this study was to conduct an exploratory and explanatory analysis to determine the impact of structural income on performance of the all commercial banks in Pakistan from 2008 to 2015. It aimed to establish the theory on dual impact of income diversification and ownership on bank performance in a developing economy. This population was divided into two categories – ownership mode characterized into conventional and Islamic banks and category mode characterized into five proportions of non-markup and mark up income structures. The divisions were analyzed on the basis of change in assets and equity and gross income, using a non-linear approach. This approach ensured robustness of analysis and clearer outcomes regarding strategic approaches in this sector. Ownership mode finding suggested conventional banks tilt towards non-markup income significantly for asset and gross income base increase and Islamic banks insignificantly towards markup income. Our findings also showed that conventional banks lead Islamic banks, and banks with nonmarkup income between 30%-40% lead other bank categories in terms of managing profitability. Islamic banks are ahead of conventional banks, and category1 banks with non-markup income above 50% are ahead of all other categories in terms of utilization of funds.
Muhammad Akhtar, Faqir Muhammad and Muhammad Ayub Siddiqui
The Lahore Journal of Business, Volume 7, Issue 1, Apr – Sep 2018, pages 61-84, https://doi.org/10.35536/ljb.2018.v7.i1.a3
In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through Andrew Hayes process. Extroversion and openness to experience positively impact stock market participation, while consciousness, agreeableness, and neuroticism have a negative impact. Financial literacy, trading experience and gender are the likely paths by which personality impacts stock market participation. Financial literacy can modify the relationship between some basic personality traits and stock market participation. It shows that behavior finance is not completely predetermined by one’s DNA and also identifies which traits are less influenced by financial literacy. Perhaps this implies that these traits are more predetermined by one’s innate characteristics.
This study provides an interdisciplinary contribution by extending Big Five taxonomy as a viable approach for stock market participation. Future research may investigate the impact of family resources, investment exposure, and parent’s financial literacy, which were beyond the scope of the current study. The theoretical and practical implications of the study with respect to stock market participation are discussed.
Imtiaz Ahmad and Hafiz Ihsan Ur Rehman
The Lahore Journal of Business, Volume 7, Issue 1, Apr-Sep 2018, pages 85-111, https://doi.org/10.35536/ljb.2018.v7.i1.a4
The current study was designed to observe the impact of consumer ethnocentrism and brand personality on purchase intention, perceived quality and brand trust in the Pakistani clothing market. Famous Pakistani clothing brands were selected to examine the impact of consumer ethnocentrism and brand personality on purchase intention, evaluation of the product and brand trust. 300 questionnaires were distributed to consumers. The response rate was 90%. The sample comprised 52.2% males and 47.8% females. Two-level Structural Equation Modelling using LISREL 8.80 was employed to determine the convergent and discriminant validity. The study has concluded that Pakistani consumers are highly ethnocentric and ethnocentrism strongly affects purchase intention of domestic brands among Pakistani customers. The research found that brand image has a greater effect on purchase intention, perceived quality and brand trust than consumer ethnocentrism. Results also demonstrate that quality, as perceived by consumers, influences purchase intention which indicates that alone, brand personality and consumer ethnocentrism tendencies do not guarantee sales of local brands. This study puts both consumer ethnocentrism and brand personality into one model to access its role on consumer behavior. The results of the research can assist domestic marketers to comprehend the role of consumer ethnocentrism propensity and brand personality in purchasing domestic products, quality perception and building trust among young customers. To the best of the researchers’ knowledge, it is one of the pioneer studies in the context of Pakistan that casts light on the significance of ethnocentrism in evaluating domestic products by contributing to the literature of marketing.
Adnan Bashir and Arshad Hassan
The Lahore Journal of Business, Volume 7, Issue 1, Apr-Sep 2018, pages 113-136, https://doi.org/10.35536/ljb.2018.v7.i1.a5
This paper examines and compares the relationships between capital regulations, risk and efficiency of Islamic banks with conventional banks in Pakistan from 2003 to 2015. By employing seemingly unrelated regression (SUR) this study finds that capital regulations have no significant effect on the risks taken by Pakistani Islamic banks. Capital regulations have increased the operational efficiency, while it has neither decreased nor increased the cost efficiency of the banks. The results of this study find no major difference in the capital regulations, risk and efficiency relationships between Islamic and conventional banks. The findings of this study also highlight the significant difference in the effect of capital regulations on the bank risks before and after the Global Financial Crisis of 2008, while there is no difference in the impact of capital regulations on bank efficiency before and after the 2008 crisis.
Kanwal Iqbal Khan, Muhammad Mudassar Ghafoor, Muhammad Sheeraz and Shahid Mahmood
The Lahore Journal of Business, Volume 7, Issue 1, Apr-Sep 2018, pages 137-157, https://doi.org/10.35536/ljb.2018.v7.i1.a6
This paper attempts to understand the linkage of dividend decisions and investors’ perceptions within the context of the Pakistani corporate sector. It is intended to proffer new evidence for designing dividend policies that satisfies investors’ perceptions. Data are collected from individual investors by using questionnaires to obtain opinions about essential factors, patterns, processes and preferences for cash dividends. Results indicate that stability in the rate of dividend, compatibility with the inflation rate and continuity of dividend payment are the topranking factors for investors. Stock dividends are preferred by Pakistani investors if their company is not paying cash dividends, and share buy-back decisions are taken negatively. The theoretical explanation for preferring dividends indicates that Pakistani investors support dividend signaling theory, agency cost, clientele effect, asymmetric information effect, tax effect and rational expectation models. That is why it exhibits a positive relation between dividends and investors’ perception. The contributions and recommendations for further studies are also addressed.