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The Effect of Managerial Overconfidence on Firm Value: Evidence from the Johannesburg Stock Exchange

  • Page: 1
  • Authors: Damien KUNJAL, Jameson NYASHA, Amir GHISYAN, Prinushlee J. GOVENDER, Sameshen MURUGASEN, Priyen NAIDOO, Dhruva S. PATEL, Paul-Francois MUZINDUTSI
  • Abstract: Managers of a company are responsible for enhancing shareholder wealth. However, decisions made by managers are not always rational, and such irrational decisions could have a direct impact on the value of a firm, and thus, the wealth of its shareholders. Therefore, the objective of this study is to investigate the effect of managerial overconfidence on the value of firms trading on the Johannesburg Stock Exchange. The results of this study indicate that managerial overconfidence exhibits an insignificant effect on a firm’s leverage and innovation levels. Interestingly, this study reports that managerial overconfidence exhibits a significant negative effect on firm value. This finding implies that investors should avoid investing in firms with overconfident managers because such investments could result in a reduction of their wealth. As such, it is important that regulators and policymakers introduce policies to mitigate overconfident and biased decision-making processes.
  • JEL Classification: G11, G32, G41
  • Keywords: firm value, innovation, leverage, managerial overconfidence
  • DOI: 10.24818/mer/2021.06-01
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Environmental Stewardship and Strategy for Business Sustainability: Evidence from Small and Medium Packaged Water Enterprises in Nigeria

  • Page: 15
  • Authors: Idowu Emmanuel OLUBODUN, Yinusa Toyese AGBAJE
  • Abstract: Climate change phenomenon and non-biodegradable nature of some industrial outputs are creating an increasing awareness and need to balance economic activities with social and environmental demands of the society. Also the rising concerns of government, consumers and the society at large regarding whether organisations see the necessity for the balance is gaining more momentum. In this regards, this paper seeks to examine the relationship between environmental stewardship and business sustainability. Research survey is used in which environmental stewardship proxy as community engagement activities, recycling activities, and waste reduction and management activities were investigated on business sustainability which is viewed along three dimensional (economic, social and environmental) balances in the questionnaire. The data were analysed using descriptive statistics while multiple regression was employed to determine the effect of environmental stewardship on business sustainability. The two objectives were achieved as stated. The results show that there is positive significant effect of environmental stewardship on business sustainability at p-value < 0.05. Also, waste reduction and management has the highest mean value of 3.021 compared to others. The study concludes that recycling and waste reduction and management actions will enhance business sustainability. Future studies are suggested.
  • JEL Classification: M10, Q01, Q56
  • Keywords: business sustainability, community engagement, environmental stewardship, recycling, waste reduction and management
  • DOI: 10.24818/mer/2021.06-02
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A Case Study on Kurdistan's Electronic Banks: Key Challenges Facing Consumers

  • Page: 33
  • Authors: Murad Muzafer HAMZE, Kamaran Ibrahim YOUSIF
  • Abstract: With advances in technology, financial institutions and their users needed to turn to the modern style of banking which is called e-banking. It provides numerous profits for both organizations and individual customers in terms of the comfort, ease, and cost of transactions. The main purpose of this study is to investigate and identify key challenges facing consumers to utilize e-banking services. To accomplish the purpose and problem of the study, the researchers conducted a quantitative approach via an online survey among 62 respondents in Kurdistan Region Government (KRG) and the sampling was chosen randomly. The descriptive research approach has been used and the methodology of the study depends on both primary and secondary data. SPSS software and Microsoft Excel have been used to evaluate the collected data. The main results indicated that privacy and security issues have the most significant challenge that affects consumers while using e-banking services, about 21%, whereas knowledge issues have the least effect on them, about 3.2%. Moreover, the COVID-19 outbreak has hurt the e-banking system both in the Kurdistan Region and around the world since Chinese authorities first announced it in late 2019. If there was an effective online banking system in KRG, employees would have received their salaries without having any infections from others.
  • JEL Classification: M1, M10
  • Keywords: e-banking, challenges, Kurdistan, financial, services
  • DOI: 10.24818/mer/2021.06-03
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Green Space and Its Role to Improve Social and Economic Development for a Better Quality of Life

  • Page: 49
  • Authors: Nguyen Thi Hoai TRINH, Claudiu CICEA
  • Abstract: This paper aims to clarify the role of green space in improving the quality of life by a systematic review of literature. This review analyzes 45 publications to extract relevant insights. Green spaces presumably bring about many social, economic and environmental benefits to humans, thereby enhancing their life quality. Besides, to clarify the role of green spaces to improve social and economic development for a better quality of life in a particular city, the author proposes a theoretical framework and policies to promote the efficient use of green space in this regard.
  • JEL Classification: O18
  • Keywords: economy, environment, green space, quality of life, society
  • DOI: 10.24818/mer/2021.06-04
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Macroeconomic Factors and Birth of New Businesses in Developing Countries: Evidence from a Dynamic System GMM Approach

  • Page: 61
  • Authors: Othmane FAHIM, Salma NAAMANE
  • Abstract: This paper aims to discuss and determine the nature of relationship between the birth of new enterprises and macroeconomic factors in using a panel data of 73 developing countries for the period of 2006-2018. The study used panel corrected standard error approach (PCSE) and system generalized method of moments (GMM) approach. The main conclusions revealed that foremost economic growth, translated in terms of real gross domestic product per capita, and in terms of variation in demand, has proved to be a positive determining factor in the creation of enterprises. Furthermore, the population growth rate and inflation, while contributing positively to the creation of new enterprises, did not produce the effect that would have been expected, given the relatively low elasticity. Addition, the results also indicate that unemployment rate and employment vulnerability have small negative effects on new firms’ creation.
  • JEL Classification: C23, M13, O11
  • Keywords: economic growth, macroeconomic factors, birth of new firms, PCSE approach, GMM-system
  • DOI: 10.24818/mer/2021.06-05
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Gender Inequalities in the Workplace: Case Study of South Africa

  • Page: 70
  • Authors: Mavhuthu MUSETSHO, Nicoleta ISAC, Cosmin DOBRIN
  • Abstract: The South African government implemented different legislative mechanisms in an attempt to address gender equality in the workplace, discrimination, and empowering women. To review whether there has been any progress after implementing these legislative mechanisms, this paper empirically analyzes the advancement of gender equality in the South African workplace as of 2020. It also provides an overview of different legislative mechanisms implemented by the government of South Africa as an endeavor to achieve gender equality in the workplace and equal opportunities for all regardless of gender. The main objective of this paper is to review gender equality progress in the South African workplace and a qualitative research method has been used to analyze different gender inequalities. Lastly, the paper provides an overview of gender equality analysis in different occupational levels in the South African workplace. The research shows that regardless of the South African government’s different legislative mechanisms to address gender equality, progress is still gloomy as discrimination against women in the workplace continues and the men remain dominant. The data analyses conclude that progress in addressing gender equality has been inert, delaying equal opportunities for all South Africans.
  • JEL Classification: J16, J71, J83, K38, M54
  • Keywords: discrimination, gender equality, South Africa, women, workplace
  • DOI: 10.24818/mer/2021.06-06

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How Trade Wars Affect Exports of the Belt and Road Countries: New Evidence from Dynamic Panel Data Analysis

  • Page: 82
  • Authors: Ayberk ŞEKER, Oktay Kaan HÜGÜL
  • Abstract: Globalization of the world affects the interests of the people continuously in the tendency of being shaped by the integrations geographic factors. By being different from the previous ages, the flow of information allows us today the integration of perception for needs and demands in common sense as a result of global approach, which has been leading to increase in speed of movement of commodities among economies. This increase and practically optimized logistics frameworks drastically reduced the challenge of physical movement of assets among far regions in globe. In our days, a new concept called Belt and Road Initiative (BRI) is being discussed and searching for participant economies to enlarge the volume of trade among Far East and Western Europe. Whereas the process of seeking for participants for BRI, the Trade Wars have been continuing among world’s leading economies to sustain domination roles over world trade volume. Considering that the effects of the trade wars between China and the USA on the Belt and Road Initiative have not been examined broadly until today, it is thought that this paper will make important contributions to the literature. As a result of Arellano-Bond (1991) and Arellano-Bover(1995) GMM estimators, it is determined that tariff rates of China is statistically significant and negative on the export of BRI countries whereas tariff rates of the USA does not have a statistically significant effect on these countries. In Addition, Dumitrescu-Hurlin panel causality analyzes demonstrate that there are unidirectional causality relationships from tariff rates of China and USA to exports of the BRI countries. The empirical findings indicate that trade wars have a significant impact on exports of the BRI countries.
  • JEL Classification: F10, F13, F14
  • Keywords: Belt and Road Initiative, Dumitrescu-Hurlin panel causality test, dynamic panel data, export, trade wars
  • DOI: 10.24818/mer/2021.06-07
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An Empirical Research on the Factors Determining Economic Literacy Level

  • Page: 99
  • Authors: Murat TEKBAŞ
  • Abstract: Economic literacy, which is explained as being able to interpret economic events and developments, and having a basic level of economic knowledge, becomes more and more important every day. In the globalizing world, it is seen that the economic decision-making processes of individuals who have consumer, producer and investor roles have diversified and become more complex. In this diverse and complex decision-making process, individuals' economic knowledge levels affect the decisions to be made. In this direction, the decisions taken by individuals become more important for both their own wealth and the economies of the country. Survey of individuals living in Turkey for over 385 people in the framework of the aforementioned considerations in this study to determine the level of economic literacy is made. When the answers given by the participants are evaluated, it is seen that the level of economic literacy is sufficient. When the effect of demographic factors on economic literacy is examined in the study, there is no statistically significant difference according to gender, age, marital status and income level, it is seen that the differentiation is significant according to education level and occupation groups. Within the framework of the findings obtained as a result of the study, it is considered that making economics education more widespread and providing access to information with the cooperation of universities and economic institutions will be beneficial in increasing the level of economic literacy.
  • JEL Classification: A29, A20, A11, A14, A10
  • Keywords: economic literacy, economic education, role of economics, sociology of economics, general economics
  • DOI: 10.24818/mer/2021.06-08
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Is there a Connection between Renewable Energy and Geopolitics? A Review

  • Page: 112
  • Authors: Nicolae PINTILIE
  • Abstract: This article attempts to capture the link between geopolitics and renewable energy by reviewing the literature. This topic has been carefully covered since 2010, although the 1970s marked the beginning of writing about the geopolitics of renewable energy. From the literature there can be extracted the following conclusions: the use of renewable energy has both possible advantages and disadvantages: on one hand, it leads to the abandonment of fossil fuels, so that the environment is protected and divergences between states are reduced; on the other hand, the need to use certain materials to achieve technologies that allow the transition to renewable energy gives rise to various scenarios. Moreover, among the countries of the world, winners and losers can be identified in relation to renewable energy, but there are ways to change the situation in the future for some countries. There are 6 forces that favor the transition to the circular economy, with a different impact for each country, but that can influence relations between states in the future when fossil fuels will no longer be preferred in the energy production process.
  • JEL Classification: Q20, Q27
  • Keywords: renewable energy, energy transition, geopolitics
  • DOI: 10.24818/mer/2021.06-09
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A Review of the Relationship between Corporate Entrepreneurship and Financial Performance

  • Page: 123
  • Authors: Andreeea CHIȚIMIEA, Loredana Nicoleta ZAINEA, Cristian MARCU, Alexandru PARU, Vasile Emil ȘTEFAN
  • Abstract: The correlation between performance and entrepreneurship is researched in a large number of studies over the years. The research is analysing multiple aspects: the position of corporate entrepreneurship in gaining financial performance and also its position next to the other drivers and how corporate entrepreneurship is interconditioned with the others. The research results indicate the strong influence on the financial performance of the corporate entrepreneurship among the major drivers (human resources management, economic environment and digitalization), has confirmed our theory of their interconnectivity and has led us to the conclusion that entrepreneurial orientation includes corporate entrepreneurship, organisational culture, managerial tools in future research can be approached as a single element.
    In the development of this study, the authors used two methods of analysis (bibliometric analysis and systematic review) to synthesize and evaluate all published studies collected from the database Web of Science through a planned and structured approach. By realizing a quantitative analysis of the 317 papers using bibliometric analysis and the qualitative one carried out by filtering the papers with systematic review and resulting in a more in-depth analysis of 39 papers, the authors want to contribute to the improvement of literature for future research that can help increase the financial income of European entrepreneurs.
  • JEL Classification: L25, L26, L29
  • Keywords: financial performance, entrepreneurship, drivers, literature review, systematic review
  • DOI: 10.24818/mer/2021.06-10
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The Bucharest University of Economic Studies (ASE)
Faculty of Management, Department of Management
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