Search results for: cash waqf

Authors: Mohammad Enayet Hossain, Nur Farhah Mahadi

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The global COVID-19 pandemic has contaminated millions of people at a startling rate. The COVID-19 pandemic came out of mediocre and has since spread all over the world, causing to record 5 million deaths worldwide in just a few months. The economic crisis has triggered a global contraction, leading to an economic collapse expected over 2020-2021. This study examines whether Islamic social finance can effectively mitigate the dangers of humanitarian catastrophes. The study provides a multirange method for maximizing the advantage of Islamic social financings tools such as zakat and waqf. The information, documents, and data for this study are gathered using a qualitative method. The study employed ongoing research, literature review, news stories, reports, and trusted online sources. Eventually, this may add to knowledge by examining the role of Islamic social finance in the current Covid-19 crisis. The findings have consequences for governments and policymakers who want to solve the COVID-19 problem with Islamic social finance ideas and solutions, thereby enhancing people's social well-being and the global economy's development.

Keywords: covid-19 pandemic, Islamic social finance, zakat, waqf

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Authors: Victoria Adikpe

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The ills of the Nigerian public sector have been identified at various fora to include lack of financial accountability and poor reporting of government performance. With the enthronement of democracy, citizens’ expectations from the government are drifting from the mere provision of public services to efficiency and accountability. One of the major challenges to achieving accountability in Nigeria is the capability of the cash basis of accounting to meet the reporting requirements of policies and programmes of the government. This paper discussed the growing trend in the debate about the adoption of private sector financial management processes in the public sector as part of the public sector reform programmes. The paper does not claim the ultimate superiority of accrual over cash accounting but shows how it will help to further strengthen the quality of government accounting and reporting.

Keywords: cash accounting, accrual accounting, accountability, reporting

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Authors: R. O. Babatunde, O. M. Igbalajobi, F. Matambalya

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Moderate economic growth in developing and emerging countries has led to improvement in the food consumption and nutrition situation in the last two decades. Nevertheless, about 870 million people, with a quarter of them from Sub-Saharan Africa, are still suffering from hunger worldwide. As part of measures to reduce the widespread poverty and hunger, cash transfer programmes are now being implemented in many countries of the world. While nationwide cash transfer schemes are few in Sub-Saharan Africa generally, the available ones are more concentrated in East and Southern Africa. Much of the available literature on social protection had focused on the poverty impact of cash transfer schemes at the household level, with the larger proportion originating from Latin America. On the contrary, much less empirical studies have been conducted on the poverty impact of cash transfer in Sub-Saharan Africa, let alone on the food security and nutrition impact. To fill this gap in knowledge, this paper examines the impact of cash transfer on food security in Nigeria. As a case study, the paper analysed the Ekiti State Cash Transfer Scheme (ECTS). ECTS is an unconditional transfer scheme which was established in 2011 to directly provide cash transfer to elderly persons aged 65 years and above in Ekiti State of Nigeria. Using survey data collected in 2013, we analysed the impact of the scheme on food availability and dietary diversity of the beneficiary households. Descriptive and Propensity Score Matching (PSM) techniques were used to estimate the Average Treatment Effect (ATE) and Average Treatment Effect on the Treated (ATT) among the beneficiary and control groups. Thereafter, a model to test for the impact of participation in the cash transfer scheme on calorie availability and dietary diversity was estimated. The results indicate that while households in the sample are clearly vulnerable, there were statistically significant differences between the beneficiary and control groups. For instance, monthly expenditure, calorie availability and dietary diversity were significantly larger among the beneficiary and consequently, the prevalence and depth of hunger were lower in the group. Econometric results indicate that the cash transfer has a positive and significant effect on food availability and dietary diversity in the households. Expanding the coverage of the present scheme to cover all eligible households in the country and incorporating cash transfer into a comprehensive hunger reduction policy will make it to have a greater impact at improving food security among the most vulnerable households in the country.

Keywords: calorie availability, cash transfers, dietary diversity, propensity score matching

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Authors: Ateba Benedict Belobo, Faan Pelser, Ambe Marcus

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Aims: This study arise from repeated complaints from both electronic mails about the underperformance of Mafikeng Small and Medium-Size enterprises after the global financial crisis. The authors were on the view that, this poor performance experienced could be as a result of the negative effects on the cash flow of these businesses due to volatilities in the business environment in general prior to the global crisis. Thus, the paper was mainly aimed at determining the shortcomings experienced by these SMEs with regards to cash flow management. It was also aimed at suggesting possible measures to improve cash flow management of these SMEs in this tough time. Methods: A case study was conducted on 3 beverage suppliers, 27 bottle stores, 3 largest fast consumer goods super markets and 7 automobiles enterprises in the Mafikeng local municipality. A mixed method research design was employed and a purposive sampling was used in selecting SMEs that participated. Views and experiences of participants of the paper were captured through in-depth interviews. Data from the empirical investigation were interpreted using open coding and a simple percentage formula. Results: Findings from the empirical research reflected that majority of Mafikeng SMEs suffer poor operational performance prior to the global financial crisis primarily as a result of poor cash flow management. However, the empirical outcome also indicted other secondary factors contributing to this poor operational performance. Conclusion: Finally, the authorsproposed possible measures that could be used to improve cash flow management and to solve other factors affecting operational performance of SMEs in the Mafikeng local municipality in other to achieve a better business performance.

Keywords: cash flow, business performance, global financial crisis, SMEs

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Authors: Md. Abu Yousuf

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Islamic social financing (ISF) refers to the fair distribution of wealth and financial dealings and prevents economic exploitation at all levels. ISF instruments include Islamic institutions Zakat (obligatory charity), Sadaqah (voluntary charity) and Waqf (endowment) based on philanthropy such and Qard-al Hasan (beautiful loan), micro takaful (insurance) and social investments through Sukuk (bonds) based on cooperation. ISF contributes to socio-economic development, end poverty, protects environmental sustainability, promotes education, equality, social justice and above all, establishes social well-being since the birth of Islam. ISF tools are instrumental towards achieving sustainable development goals (SDGs) set by United Nations (UN). The present study will explore the scope of ISF for community development in Bangladesh and examine the challenges in implementing ISF tools and will provide the most practical model of ISF. The study will adopt a mixed-method (MM) design in the process of data collection and analysis. The researcher will consider all issues related to ethics, reliability, validity and feasibility while conducting the study.

Keywords: Islamic social financing, sustainable development goals, poverty eradication, zakat, waqf, sadaqah, Islamic microfinance

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Authors: Helen S. Ghali, Engy Serag, A. Samer Ezeldin

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In many countries, the construction industry relies heavily on outsourcing models in executing their projects and expanding their businesses to fit in the diverse market. Such extensive integration of subcontractors is becoming an influential factor in contractor’s cash flow management. Accordingly, subcontractors’ financial terms are important phenomena and pivotal components for the well-being of the contractor’s cash flow. The aim of this research is to study the contractor’s cash flow with respect to the owner and subcontractor’s payment management plans, considering variable advance payment, payment frequency, and lag and retention policies. The model is developed to provide contractors with a decision support tool that can assist in selecting the optimum subcontracting plan to minimize the contractor’s financing limits and optimize the profit values. The model is built using Microsoft Excel VBA coding, and the genetic algorithm is utilized as the optimization tool. Three objective functions are investigated, which are minimizing the highest negative overdraft value, minimizing the net present worth of overdraft, and maximizing the project net profit. The model is validated on a full-scale project which includes both self-performed and subcontracted work packages. The results show potential outputs in optimizing the contractor’s negative cash flow values and, in the meantime, assisting contractors in selecting suitable subcontractors to achieve the objective function.

Keywords: cash flow optimization, payment plan, procurement management, subcontracting plan

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Authors: Mahdi Azizzadeh, Ali Nabizadeh

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This paper investigates whether ownership structure has significant effects on dividend policy and the percentage of cash dividend payout ratio in Iranian companies listed on the Tehran Stock Exchange. We use a sample of 300 firm-years for 2010-2014. Results indicate that there is no significant relationship between family ownership and/or institutional ownership and dividend policy. Furthermore, there is no significant relationship between dividend policies in family-owned firms with high or low institutional ownership. However, our empirical test shows that family firms with a low level of institutional investors distribute more cash dividends on average than family firms with a high level of institutional ownership.

Keywords: family ownership, institutional ownership, dividend policy, dividend payout ratio

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Authors: Edlira Donefski, Tina Donefski, Lorenc Ekonomi

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Edgeworth Approximation, Bootstrap, and Monte Carlo Simulations have considerable impacts on achieving certain results related to different problems taken into study. In our paper, we have treated a financial case related to the effect that has the components of a cash-flow of one of the most successful businesses in the world, as the financial activity, operational activity, and investment activity to the cash and cash equivalents at the end of the three-months period. To have a better view of this case, we have created a vector autoregression model, and after that, we have generated the impulse responses in the terms of asymptotic analysis (Edgeworth Approximation), Monte Carlo Simulations, and residual bootstrap based on the standard errors of every series created. The generated results consisted of the common tendencies for the three methods applied that consequently verified the advantage of the three methods in the optimization of the model that contains many variants.

Keywords: autoregression, bootstrap, edgeworth expansion, Monte Carlo method

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Authors: Reza Heidari, Maryam Amiri

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In a technological world, many countries have a tendency to fortifying their companies and technological infrastructures. Also, one of the most important requirements for developing technology is innovation, and then, all companies are struggling to consider innovation as a basic principle. Since, the expansion of a product need to combine different technologies, therefore, different innovative projects would be run in the firms as a base of technology development. In such an environment, enterprise resource planning (ERP) has special significance in order to develop and strengthen of innovations. In this article, an economic-probabilistic analysis was provided to perform an implementation project of ERP in the technological innovation (TI) based firms. The used model in this article assesses simultaneously both risk and economic analysis in view of the probability of each event that is jointly between economical approach and risk investigation approach. To provide an economic-probabilistic analysis of risk of the project, activities and milestones in the cash flow were extracted. Also, probability of occurrence of each of them was assessed. Since, Resources planning in an innovative firm is the object of this project. Therefore, we extracted various risks that are in relation with innovative project and then they were evaluated in the form of cash flow. This model, by considering risks affecting the project and the probability of each of them and assign them to the project's cash flow categories, presents an adjusted cash flow based on Net Present Value (NPV) and with probabilistic simulation approach. Indeed, this model presented economic analysis of the project based on risks-adjusted. Then, it measures NPV of the project, by concerning that these risks which have the most effect on technological innovation projects, and in the following measures probability associated with the NPV for each category. As a result of application of presented model in the information and communication technology (ICT) industry, provided an appropriate analysis of feasibility of the project from the point of view of cash flow based on risk impact on the project. Obtained results can be given to decision makers until they can practically have a systematically analysis of the possibility of the project with an economic approach and as moderated.

Keywords: cash flow categorization, economic evaluation, probabilistic, risk assessment, technological innovation

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Authors: Peng Lu, Liu Ting

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Because of the difficulty of financing from the external capital market, the reorganization and merger of private enterprises have formed a family group, seeking the help of the internal capital market to alleviate the capital demand. However, the inefficiency of the internal capital market can damage the effect it should have played, and even hinder the development of enterprises. This paper takes the "Tomorrow Group" as the research object to carry on the case analysis. After using the improved cash flow sensitivity coefficient to measure the efficiency of the internal capital market of Tomorrow Group, the inefficiency phenomenon is found. Then the analysis reveals that the reasons for its inefficiency include that the pyramidal equity structure is conducive to control, the separation of cash flow rights and control rights, the concentration of equity leads to poor balance, the abandonment of real industries and information asymmetry.

Keywords: tomorrow group, internal capital market, related-party transactions, Baotou tomorrow technology Co., LTD

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Authors: Gaurav Gupta, Jitendra Mahakud

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This study focuses on the significance of internal financing constraints on the determination of corporate fixed investments in the case of Indian manufacturing companies. Financing constraints companies which have less internal fund or retained earnings face more transaction and borrowing costs due to imperfections in the capital market. The period of study is 1999-2000 to 2013-2014 and we consider 618 manufacturing companies for which the continuous data is available throughout the study period. The data is collected from PROWESS data base maintained by Centre for Monitoring Indian Economy Pvt. Ltd. Panel data methods like fixed effect and random effect methods are used for the analysis. The Likelihood Ratio test, Lagrange Multiplier test, and Hausman test results conclude the suitability of the fixed effect model for the estimation. The cash flow and liquidity of the company have been used as the proxies for the internal financial constraints. In accordance with various theories of corporate investments, we consider other firm specific variable like firm age, firm size, profitability, sales and leverage as the control variables in the model. From the econometric analysis, we find internal cash flow and liquidity have the significant and positive impact on the corporate investments. The variables like cost of capital, sales growth and growth opportunities are found to be significantly determining the corporate investments in India, which is consistent with the neoclassical, accelerator and Tobin’s q theory of corporate investment. To check the robustness of results, we divided the sample on the basis of cash flow and liquidity. Firms having cash flow greater than zero are put under one group, and firms with cash flow less than zero are put under another group. Also, the firms are divided on the basis of liquidity following the same approach. We find that the results are robust to both types of companies having positive and negative cash flow and liquidity. The results for other variables are also in the same line as we find for the whole sample. These findings confirm that internal financing constraints play a significant role for determination of corporate investment in India. The findings of this study have the implications for the corporate managers to focus on the projects having higher expected cash inflows to avoid the financing constraints. Apart from that, they should also maintain adequate liquidity to minimize the external financing costs.

Keywords: cash flow, corporate investment, financing constraints, panel data method

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Authors: Basma Yassa

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Evidence on cash transfers’ effectiveness in mitigating macro and idiosyncratic shocks’ impacts has been mixed and is mostly concentrated in Latin America, Sub-Saharan Africa, and South Asia with very limited evidence from the MENA region. Yet conditional cash transfers schemes have been continually used, especially in Egypt, as the main social protection tool in response to the recent socioeconomic crises and macro shocks. We use 2 panel datasets and 1 cross-sectional dataset to estimate the effectiveness of cash transfers as a shock-mitigative mechanism in the Egyptian context. In this paper, the results from the different models (Panel Fixed Effects model and the Regression Discontinuity Design (RDD) model) confirm that micro and macro shocks lead to significant decline in several household-level welfare outcomes and that Takaful cash transfers have a significant positive impact in mitigating the negative shock impacts, especially on households’ debt incidence, debt levels, and asset ownership, but not necessarily on food, and non-food expenditure levels. The results indicate large positive significant effects on decreasing household incidence of debt by up to 12.4 percent and lowered the debt size by approximately 18 percent among Takaful beneficiaries compared to non-beneficiaries’. Similar evidence is found on asset ownership levels, as the RDD model shows significant positive effects on total asset ownership and productive asset ownership, but the model failed to detect positive impacts on per capita food and non-food expenditures. Further extensions are still in progress to compare the models’ results with the DID model results when using a nationally representative ELMPS panel data (2018/2024) rounds. Finally, our initial analysis suggests that conditional cash transfers are effective in buffering the negative shock impacts on certain welfare indicators even after successive macro-economic shocks in 2022 and 2023 in the Egyptian Context.

Keywords: cash transfers, fixed effects, household welfare, household debt, micro shocks, regression discontinuity design

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Authors: Ugbor Raphael Oluchukwu

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The survey research design was adopted to examine whether liquidity and cash management practices of owner-managed firms in South East Nigeria influence their profitability, growth and survival. Four independent variables (accounting systems, working capital management, budgetary control, and managerial planning) were used in the evaluation which was restricted to eight small firms. Results indicate that one variable, working capital management alone dominate the liquidity perception of owner managers. As a result, owner managers find it difficult to meet maturing business obligations as growth sets in. The study also reveals that the four independent variables have significant impact on the profitability, growth and survival of owner managed firms. Owner managers are therefore advised to undertake regular entrepreneurship training in order to upgrade their liquidity and cash management knowledge and practices to enhance their overall performance.

Keywords: liquidity management, owner-managed firm, profitability, survival

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Authors: Weiping Liu

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This paper presents an equation to calculate stock prices of different growth model. This equation is mathematically derived by using discounted cash flow method. It has the advantages of being very easy to use and very accurate. It can still be used even when the first stage is lengthy. This equation is more generalized because it can be used for all the three popular stock price models. It can be programmed into financial calculator or electronic spreadsheets. In addition, it can be extended to a multistage model. It is more versatile and efficient than the traditional methods.

Keywords: stock price, multistage model, different growth model, discounted cash flow method

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Authors: Farheen Akram

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Research and Development (R&D) is the most crucial element of the firm’s survival in a competitive business environment. R&D is a long-term investment; therefore, executives having the power to make the investment decisions may be pessimistic when their compensation is closely linked with short-term firm performance. Thus, the current study investigates the impact of board composition and executives’ compensation (cash or short-term benefits and LTIs) on R&D spending using a sample of 85 S&P/100 firms listed on the Australian Stock Exchange (ASX) in 2017. SmartPLS (v.3.2.7) was used to evaluate the proposed model of current research. The empirical findings of this study indicate that board composition has a significant and positive effect on R&D spending. While, as expected, executive cash compensation has negative and Long-Term-Incentives (LTIs) has a positive impact on R&D spending. Based on current findings, the study suggested that myopic behavior of CEOs and top management towards long-term value creation investment like R&D can be controlled by using long-term compensation rewards.

Keywords: cash compensation, LTIs, board composition, R&D spending

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Authors: Ehsan Ghahramani Aghdam

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The policy of dividends has been an interesting topic for a long time in financial literature. There are some studies about the policy of dividends, but a lot of them are in developed markets. It’s possible that there were differences between new and developed markets in some aspects. According to theoretical literature, agency costs and institutional stockholders affect on dividend payout ratio. In this research, free cash flow, collateralizable assets and dispersion of ownership are considered as agency cost factors that cause an interesting contrast between managers-stockholders and stockholders-credit makers. Generally, agency costs for managing the firm by manager or managers are created, and they appear when management is separated from ownership. The purpose of this research is to study the effect of free cash flow, collateralizable assets, dispersion of ownership and institutional stockholders on the dividend payout ratio of accepted firms in the Tehran Stock Exchange. 64 nonfinancial firms in the Tehran Stock Exchange were considered as samples of our experiment for the period of 2017-2022. Correlation and regression tests have been used to identify the relationship of dividend payout ratio with variables of agency costs and institutional stockholders. The results show that free cash flow and institutional stockholders in a positive way and dispersion of ownership in a negative way are related to the dividend payout ratio. But book value and cost of collateralizable assets have no influence on the dividend payout ratio.

Keywords: agency costs, institutional stockholders, free cash flow, dispersion of ownership, collateralizable assets, dividend payout ratio

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Authors: Asma Bentaifa

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This paper investigates the effect of ownership concentration and especially the presence of controlling shareholders on the firm’s payout decisions. Using a sample of 870 French companies during 2007 to 2012, we find that the share of dividends in total payout is negatively correlated with the size of cash flow held by controlling shareholder, and positively related to the divergence between voting rights and cash flow rights of largest shareholders. We also document that controlled firms tend to prefer dividends over repurchases to mitigate conflicts between controlling shareholders and minority shareholders related to the presence of control enhancing devices.

Keywords: ownership, payout policy, dividend, minority expropriation

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Authors: Maria A. Murtiati, Ancella A. Hermawan

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The objective of this study is to examine whether the firm’s eligibility to get a bank loan is influenced by earnings management. The earnings management is distinguished between accruals and real earnings management. Hypothesis testing is carried out with logistic regression model using sample of 285 companies listed at Indonesian Stock Exchange in 2010. The result provides evidence that a greater magnitude in accruals earnings management increases the firm’s probability to be eligible to get bank loan. In contrast, real earnings management through abnormal cash flow and abnormal discretionary expenses decrease firm’s probability to be eligible to get bank loan, while real management through abnormal production cost increases such probability. The result of this study suggests that if the earnings management is assumed to be opportunistic purpose, the accruals based earnings management can distort the banks credit analysis using financial statements. Real earnings management has more impact on the cash flows, and banks are very concerned on the firm’s cash flow ability. Therefore, this study indicates that banks are more able to detect real earnings management, except abnormal production cost in real earning management.

Keywords: discretionary accruals, real earning management, bank loan, credit worthiness

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Authors: Andreas Ahrens, Ojaras Purvinis, Jelena Zascerinska

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A successful shopping experience without overcrowded shops and long waiting times undoubtedly leads to the release of happiness hormones and is generally considered the goal of any optimization. Factors influencing the shopping experience can be divided into internal and external ones. External factors are related, e. g. to the arrival of the customers to the shop, whereas internal are linked with the service process itself when checking out (waiting in the queue to the cash register and the scanning of the goods as well as the payment process itself) or any other non-expected delay when changing the status from a visitor to a buyer by choosing goods or items. This paper divides the customer-server interaction into five phases starting with the customer's arrival at the shop, the selection of goods, the buyer waiting in the queue to the cash register, the payment process, and ending with the customer or buyer's departure. Our simulation results show how five phases are intertwined and influence the overall shopping experience. Parameters for measuring the shopping experience are estimated based on the burstiness level in each of the five phases of the customer-server interaction.

Keywords: customers’ burstiness, cash register, customers’ wait-ing time, gap distribution function

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Authors: Michael McCann

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Managerial theories propose that, in joint stock companies, executives may be tempted to waste excess free cash on unprofitable projects to keep control of resources. In order to conceal their projects' poor performance, they may seek to engage in earnings management. On the one hand, managers may manipulate earnings upwards in order to post ‘good’ performances and safeguard their position. On the other, since managers pursuit of unrewarding investments are likely to lead to low long-term profitability, managers will use negative accruals to reduce current year’s earnings, smoothing earnings over time in order to conceal the negative effects. Agency models argue that boards of directors are delegated by shareholders to ensure that companies are governed properly. Part of that responsibility is ensuring the reliability of financial information. Analyses of the impact of board characteristics, particularly board independence on the misuse of free cash flow and earnings management finds conflicting evidence. However, existing characterizations of board independence do not account for such directors gaining firm-specific knowledge over time, influencing their monitoring ability. Further, there is little analysis of the influence of the relative experience of independent directors and executives on decisions surrounding the use of free cash. This paper contributes to this literature regarding the heterogeneous characteristics of boards by investigating the influence of independent director tenure on earnings management and the relative tenures of independent directors and Chief Executives. A balanced panel dataset comprising 51 companies across 11 annual periods from 2005 to 2015 is used for the analysis. In each annual period, firms were classified as conducting earnings management if they had discretionary accruals in the bottom quartile (downwards) and top quartile (upwards) of the distributed values for the sample. Logistical regressions were conducted to determine the marginal impact of independent board tenure and a number of control variables on the probability of conducting earnings management. The findings indicate that both absolute and relative measures of board independence and experience do not have a significant impact on the likelihood of earnings management. It is the level of free cash flow which is the major influence on the probability of earnings management. Higher free cash flow increases the probability of earnings management significantly. The research also investigates whether board monitoring of earnings management is contingent on the level of free cash flow. However, the results suggest that board monitoring is not amplified when free cash flow is higher. This suggests that the extent of earnings management in companies is determined by a range of company, industry and situation-specific factors.

Keywords: corporate governance, boards of directors, agency theory, earnings management

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Authors: Ishmael Obaeko Iwara

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The Point of Sale (POS) cash and cashless semi-formal business has emerged as a significant driver of employment in countries like Nigeria and Kenya, similar to other micro and small-scale enterprises. This business model enables individuals to establish cash in/out outlets, offering entrepreneurs and small business owners a lucrative opportunity to generate additional income. However, the benefits extend beyond employment, as the POS model has become an integral part of the payment system in these countries. It facilitates convenient fund transfers, cash deposits, and withdrawals for individuals residing in both urban and rural areas. Given South Africa's high youth unemployment rate and limited banking services in rural households, coupled with a vibrant informal business economy akin to Nigeria and Kenya, the POS model potentially presents a business opportunity for the unemployed and serves as a banking solution for remote communities. Nonetheless, its implementation within South Africa's entrepreneurial landscape remains a subject of contention. Through qualitative research employing a participatory community-led action research approach, this study analyzes feedback, critiques, and potential interventions from various stakeholders, including business actors, grassroots communities, financial institutions, and policymakers. The findings offer crucial insights into the challenges associated with the adoption of the POS model and suggest mitigating factors to facilitate its successful implementation.

Keywords: grassroots entrepreneurs, rural households, POS banking, youth employment

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Authors: Jonghae Park, Daesung Kim

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The impact of aggressive and conservative working capital‘s strategies on the value and profitability of the firms has been evaluated by applying the panel data regression analysis. The control variables used in the regression models are natural log of firm size, sales growth, and debt. We collected a panel of 13,988 companies listed on the Korea stock market covering the period 2000-2016. The major findings of this study are as follow: 1) We find a significant negative correlation between firm profitability and the number of days inventory (INV) and days accounts payable (AP). The firm’s profitability can also be improved by reducing the number of days of inventory and days accounts payable. 2) We also find a significant positive correlation between firm profitability and the number of days accounts receivable (AR) and cash ratios (CR). In other words, the cash is associated with high corporate profitability. 3) Tobin's analysis showed that only the number of days accounts receivable (AR) and cash ratios (CR) had a significant relationship. In conclusion, companies can increase profitability by reducing INV and increasing AP, but INV and AP did not affect corporate value. In particular, it is necessary to increase CA and decrease AR in order to increase Firm’s profitability and value.

Keywords: working capital, working capital management, firm value, profitability

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Authors: Andrew Clark

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McCauley, Bassler, and Gunaratne show that integration I(d) processes as used in economics and finance do not necessarily produce stationary increments, which are required to determine causality in both the short term and the long term. This paper follows their lead and shows I(d) aluminum cash and futures log prices at daily and weekly intervals do not have stationary increments, which means prior causality studies using I(d) processes need to be re-examined. Wavelets based on undifferenced cash and futures log prices do have stationary increments and are used along with transfer entropy (versus cointegration) to measure causality. Wavelets exhibit causality at most daily time scales out to 1 year, and weekly time scales out to 1 year and more. To determine stationarity, localized stationary wavelets are used. LSWs have the benefit, versus other means of testing for stationarity, of using multiple hypothesis tests to determine stationarity. As informational flows exist between cash and futures at daily and weekly intervals, the aluminum market is efficient. Therefore, hedges used by producers and consumers of aluminum need not have a big concern in terms of the underestimation of hedge ratios. Questions about arbitrage given efficiency are addressed in the paper.

Keywords: transfer entropy, nonstationary increments, wavelets, localized stationary wavelets, localized stationary wavelets

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Authors: Bernadette F. De La Cruz, Susan Marie R. Dela Cruz, Georgia D. Demavibas

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Pantawid Pamilyang Pilipino Program (4P) is a conditional cash transfer program in the Philippines pay extremely poor household-beneficiaries in order to fulfill the country’s commitment to the number one of the Millennium Development Goals (MDG). 4P's send 10,235,256 school children aged 6-18 from a total of 4,353,597 registered households with an average of two to three children. We analyze this program in Iloilo, Philippines. We show that this program can be made efficient by selecting beneficiaries and calibrating transfer for a maximum breaking of intergenerational poverty cycle of hunger, health and achieve higher education.

Keywords: ESGP-PA, millennium development goals, house hold beneficiaries, cash transfer

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Authors: Cristian Crespo

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Conditional cash transfers (CCTs) have been targeted towards the poor. Thus, their targeting assessments check whether these schemes have been allocated to low-income households or individuals. However, CCTs have more than one goal and target group. An additional goal of CCTs is to increase school enrolment. Hence, students at risk of dropping out of school also are a target group. This paper analyses whether one of the most common targeting mechanisms of CCTs, a proxy means test (PMT), is suitable to identify the poor and future school dropouts. The PMT is compared with alternative approaches that use the outputs of a predictive model of school dropout. This model was built using machine learning algorithms and rich administrative datasets from Chile. The paper shows that using machine learning outputs in conjunction with the PMT increases targeting effectiveness by identifying more students who are either poor or future dropouts. This joint targeting approach increases effectiveness in different scenarios except when the social valuation of the two target groups largely differs. In these cases, the most likely optimal approach is to solely adopt the targeting mechanism designed to find the highly valued group.

Keywords: conditional cash transfers, machine learning, poverty, proxy means tests, school dropout prediction, targeting

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Authors: Francisco Fernandez de Castro

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The Conditional Cash Transfer (CCT) model gives monetary transfers to beneficiary families on the condition that they take specific education and health actions. According to the economic rationale of CCTs the poor need incentives to invest in their human capital because they are trapped by a lack of information and misleading beliefs. If left to their own decision, the poor will not be able to choose what is in their best interests. The basic assumption of the CCT model is that the poor need incentives to take care of their own education and health-nutrition. Due to the incentives (income cash transfers and conditionalities), beneficiary families are supposed to attend doctor visits and health talks. Children would stay in the school. These incentivized behaviors would produce outcomes such as better health and higher level of education, which in turn will reduce poverty. Based on a grounded theory approach to conduct a two-year period of qualitative data collection in northern Mexico, this study shows that this explanation is incomplete. In addition to the information failure and inadequate beliefs, there are structural barriers in everyday life of households that make health-nutrition and education investments difficult. In-depth interviews and observation work showed that the program takes for granted local conditions in which beneficiary families should fulfill their co-responsibilities. Data challenged the program’s assumptions and unveiled local obstacles not contemplated in the program’s design. These findings have policy and research implications for the CCT agenda. They bring elements for late programming due to the gap between the CCT strategy as envisioned by policy designers, and the program that beneficiary families experience on the ground. As for research consequences, these findings suggest new avenues for scholarly work regarding the causal mechanisms and social processes explaining CCT outcomes.

Keywords: conditional cash transfers, incentives, poverty, structural barriers

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Authors: Pouneh Soleimaninejadian, Chengyu Yang

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In this paper, we use data on Household Income and Expenditure survey of Statistics Centre of Iran, conducted from 2005-2014, to calculate several inequality measures and to estimate the effects of Iran’s targeted subsidy reform act on consumption and income inequality. We first calculate Gini coefficients for income and consumption in order to study the relation between the two and also the effects of subsidy reform. Results show that consumption inequality has not been always mirroring changes in income inequality. However, both Gini coefficients indicate that subsidy reform caused improvement in inequality. Then we calculate Generalized Entropy Index based on consumption and income for years before and after the Subsidy Reform Act of 2010 in order to have a closer look into the changes in internal structure of inequality after subsidy reforms. We find that the improvement in income inequality is mostly caused by the decrease in inequality of lower income individuals. At the same time consumption inequality has been decreased as a result of more equal consumption in both lower and higher income groups. Moreover, the increase in Engle coefficient after the subsidy reform shows that a bigger portion of income is allocated to consumption on food which is a sign of lower living standard in general. This increase in Engle coefficient is due to rise in inflation rate and relative increase in price of food which partially is another consequence of subsidy reform. We have conducted some experiments on effect of subsidy payments and possible effects of change on distribution pattern and amount of cash subsidy payments on income inequality. Result of the effect of cash payments on income inequality shows that it leads to a definite decrease in income inequality and had a bigger share in improvement of rural areas compared to those of urban households. We also examine the possible effect of constant payments on the increasing income inequality for years after 2011. We conclude that reduction in value of payments as a result of inflation plays an important role regardless of the fact that there may be other reasons. We finally experiment with alternative allocations of transfers while keeping the total amount of cash transfers constant or make it smaller through eliminating three higher deciles from the cash payment program, the result shows that income equality would be improved significantly.

Keywords: consumption inequality, generalized entropy index, income inequality, Irans subsidy reform

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Authors: Asanga Gunawansa, Shenella Fonseka

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On-demand bonds, also known as unconditional bonds, are commonplace in the construction industry as a means of safeguarding the employer from any potential non-performance by a contractor. On-demand bonds may be obtained from commercial banks, and they serve as an undertaking by the issuing bank to honour payment on demand without questioning and/or considering any dispute between the employer and the contractor in relation to the underlying contract. Thus, whether or not a breach had occurred under the underlying contract, which triggers the demand for encashment by the employer, is not a question the bank needs to be concerned with. As a result, an unconditional bond allows the beneficiary to claim the money almost without any condition. Thus, an unconditional bond is as good as cash-in-hand. In the past, establishing fraud on the part of the employer, of which the bank had knowledge, was the only ground on which a bank could dishonour a claim made under an on-demand bond. However, recent jurisprudence in common law countries shows that courts are beginning to consider unconscionable conduct on the part of the employer in claiming under an on-demand bond as a ground that contractors could rely on the prevent the banks from honouring such claims. This has created uncertainty in connection with on-demand bonds and their liquidity. This paper analyzes recent judicial decisions in four common law jurisdictions, namely, England, Singapore, Hong Kong, and Sri Lanka, to identify the scope of using the concept of “unconscionability” as a ground for preventing unreasonable claims for encashment of on-demand bonds. The objective of this paper is to argue that on-demand bonds have lost their effectiveness as “cash-in-hand” and that this is, in fact, an advantage and not an impediment to international commerce, as the purpose of such bonds should not be to provide for illegal and unconscionable conduct by the beneficiaries.

Keywords: fraud, performance guarantees, on-demand bonds, unconscionability

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Authors: Ebrahim Mansoori, Datin Joriah Muhammad

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Recent studies in finance have focused on the effect of external variables on working capital management. This study investigates the effect of corruption indexes on firms' working capital management. A large data set that covers data from 2005 to 2013 from five ASEAN countries, namely, Malaysia, Indonesia, Singapore, Thailand, and the Philippines, was selected to investigate how the level of corruption in these countries affect working capital management. The results of panel data analysis include fixed effect estimations showed that a high level of countries' corruption indexes encourages managers to shorten the CCC length. Meanwhile, the managers reduce the level of investment in cash and cash equivalents when the levels of corruption indexes increase. Therefore, increasing the level of countries' corruption indexes encourages managers to select conservative working capital strategies by reducing the level of NLB.

Keywords: ASEAN, corruption indexes, panel data analysis, working capital management

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Authors: B. Rusyidi

Abstract:

Since 2009, the Indonesian Ministry of Social Affairs has been implementing Program Kesejahteraan Sosial Anak (PKSA) (Child Welfare Program) a conditional cash transfer program that targets neglected children, children with disabilities, street children, children in conflict with the law, and children in need of special protection, all from poor households. PKSA integrates three elements: Transfer of cash, care and social services through social workers, and institutional childcare assistance. This qualitative study analyzed the roles and the challenges of social workers in implementing PKSA and lays out recommendations to inform policy changes. Data were collected in late 2014 from national and local government and non-government child welfare agencies, social workers, and childcare institution representatives through interviews and Focused Group Discussions (FGDs). Field work took place in six districts in the provinces of Jakarta, Central Java and South Sulawesi. The study found that the social workers’ role was significant in facilitating cash transfer, providing education and guidance, and linking children and families to basic social services. This improved utilization of basic social services enhanced children and families’ behaviors and contributed to the well being of the children. However, only a small number of childcare institutions have social workers, leaving many children and families without care and social service linkages, depriving them of rehabilitative components to help them regain their social functions. Some social workers reported their struggles with heavy workloads, lack of professional competencies and training, limited job security, and inadequate professional acknowledgment from other professions. Parts of those challenges were due to the centralized nature of the program and the lack of shared vision and commitment about the child protection system among related government agencies both at the national and local levels. The study highlights the necessity to implement an integrated child protection system, decentralize the PKSA program, and increase the number, competence, case management, and management and monitoring of social workers. The most recent progress of the program and its impacts on social workers are also discussed.

Keywords: child protection, conditional cash transfer, program decentralization, social worker, working conditions

Procedia PDF Downloads 199