Abstract

     Digital transformation is challenging the competitiveness of micro and small enterprises (MSEs), especially in emerging markets where factors that inhibit the growth of these businesses traditionally prevail. This paper aimed to assess the digital maturity of MSEs, using the Brazilian context as a study model. A validated digital transformation framework was applied to 346 companies for data collection and subsequent statistical treatment. Almost 60% of the Brazilian MSEs are at primary levels of digital maturity, with 19.1% being unconscious about the digitization process. Digital maturity was shown to be statistically correlated with innovations (p = 0.000) and business revenue (p = 0.009), suggesting that these factors are facilitators in the MSEs digitization. This paper pointed to the urgency of efforts on the part of companies and policy makers in Brazil to implement actions that can foster behaviors, capabilities, and enablers to digital transformation. These findings can allow in-depth discussions and aligned strategies among emerging economies to point out best practices for companies inserted in markets with similar characteristics and challenges.

Introduction

     Micro and small enterprises (MSEs) have contributed significantly to the economic development of many countries, and both developed and developing regions have a predominance of this type of business on the market. Especially in the emerging countries, besides the economic function, MSEs have social importance due to the assimilation of a significant number of workers, the development of rural regions, the encouragement of entrepreneurship, and the dissemination of business opportunities for women [1, 2]. In Brazil, an emerging country that is the focus of this paper, MSEs (up to 99 employees and revenue up to 3.6 million Brazilian Real) represent 98% of business in the country, generating 50% of formal jobs in the private sector and representing a contribution of 27% of gross domestic product (GDP) [3].

     In emerging markets, the management and expansion of businesses face inhibiting factors associated with the lack of infrastructure, poor access to bank loans, limitation of tangible and integrable resources, and the absence of audacious public policies. This challenge is accentuated for MSEs, forcing them to constantly rethink their business model and organizational strategy to remain competitive [4].

Conclusion

     It was found that digital transformation is a highly integrated and multifaceted process, showing that less than 3% of the Brazilian MSEs presented a consistent digital structure, representing a maturity degree of at least 80% of digitalization according to the validated instrument. Considering this group of companies, the main aspects identified were related to the development of a digital strategy as well as systematic control of organizational results and data management, strengthening the digital business transformation.

     At the same time, more than half of the sample still has low digital maturity due mainly to weaknesses in technology, people, and governance dimensions. In addition, it was observed an absence of learning management controls, so the enterprise applies some innovation related to digitization, but not to collect, share and disseminate the lessons learned especially those related to technological innovations.

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Introduction

Literature review

Methodology and data

Results

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Abstract

A comprehensive corporate governance index (JCGI, 0–100) is constructed to measure the quality of corporate governance practices of the universe of publicly traded Jordanian firms during 2018–2019. We survey all firms’ corporate governance practices and manually collect governance data for listed corporations in Amman Stock Exchange to construct the first JCGI, which comprises five sub-indices and 60 elements.The results show that Jordanian companies did not progress in the corporate governance reform during the study period. The overall JCGI mean value is 67.80%. Sub-index results show that governance is weakest in both board procedure and disclosure, with a mean value of 57.36% and 52.43%, respectively. The board procedure subindex shows that most listed firms practice poor governance. Within the board structure sub-index, only 18% of the study sample has the policy to specify the board’s professional qualifications and training requirements. Results of shareholders’ rights show a rigid and nontransparent environment in the enterprises’ control structure.

Introduction

“Corporate governance, a term that scarcely existed before the 1990s, is now universally invoked wherever business and finance are discussed” (Keasey et al. 2005). Corporate governance has become a global phenomenon. The financial scandals and crises that have hit most countries pave the road for ongoing corporate governance interest. Governments worldwide are continuously developing corporate governance codes and guidelines or refurbishing those in existence (Mallin 2006).

The main sources of corporate governance legislation in Jordan are the Companies Law, the Securities Law, the Banking Law, and several Instructions and Regulations issued by the Jordanian Securities Commission and the Central Bank of Jordan.

The banking sector in Jordan is heavily regulated. Much attention by regulators and market commissioners was directed to this sector, for example, the “Bank Directors Handbook of Corporate Governance” issued in 2004, the “Corporate Governance Code for Banks in Jordan,” issued in 2007, and the “Corporate Governance Instructions for Banks” issued in 2014 (Cigna and Sigheartau 2016).

Jordan authorities have developed additional national corporate governance codes for listed companies; the Corporate Governance Code for Shareholding Companies listed on the ASE, issued in 2008. According to this law, companies must comply with its articles based on “comply or explain” principles or on a compulsory basis according to the law’s requirements (See, Cigna and Sigheartau 2016 and OECD Investment Policy Reviews: Jordan 2013).

Abstract

     This paper studies the US and global economic fundamentals that exacerbate emerging stock markets volatility and can be considered as systemic risk factors increasing financial stability vulnerabilities. We apply the bivariate HEAVY system of daily and intra-daily volatility equations enriched with powers, leverage, and macro-effects that improve its forecasting accuracy significantly. Our macro-augmented asymmetric power HEAVY model estimates the inflammatory effect of US uncertainty and infectious disease news impact on equities alongside global credit and commodity factors on emerging stock index realized volatility. Our study further demonstrates the power of the economic uncertainty channel, showing that higher US policy uncertainty levels increase the leverage effects and the impact from the common macro-financial proxies on emerging markets’ financial volatility. Lastly, we provide evidence on the crucial role of both financial and health crisis events (the 2008 global financial turmoil and the recent Covid-19 pandemic) in raising markets’ turbulence and amplifying the volatility macro-drivers impact, as well.

Introduction

     A common stylized fact about emerging economies is the high volatility of their stock markets (De Santis 1997; Aggarwal et al. 1999; Xu 1999; Cano-Berlanga and Giménez-Gómez 2018). The liberalization of the emerging world’s financial markets, which attracted a significant amount of capital flows by foreign institutional investors, has been the first step of an integration process with significant economies’ interdependence and asset markets’ synchronization. Given that emerging economies are characterized by critical vulnerabilities to external shocks, they exhibit higher equity market fluctuations than the developed markets and it is worth investigating how US and global common economic forces affect their intra-daily volatility. In general, modeling the volatility of financial returns has crucial implications for asset allocation, risk management practices, and financial stability oversight. Robust modeling and reliable forecasting of the volatility trajectory of financial instruments has been the main task and objective of financial economics applications for business operations, given that volatility constitutes one of the fundamental input variables in estimations and decision processes of any corporation on investing and funding choices. Financial volatility is also closely inspected by policymakers since it is perceived to constitute an early warning crisis signal, entailing critical destabilizing threats for the financial system (see, for example, Kürüm et al. 2018).

Conclusions

     Our study has examined the HEAVY model and its extension with leverage, power transformations, and macro-characteristics. For the realized measure, our empirical results favor the macro-augmented cross asymmetric power specification, where the lags of both powered variables—squared negative returns, and realized variance—move the dynamics of the power transformed conditional variance of the latter. Similarly, modeling the returns with a double asymmetric power process, we found that not only the powered realized measure asymmetry but the power transformed squared negative returns, as well, help to forecast the conditional variance of the latter. The macro-augmentation of the asymmetric power model ensures the superiority of our contribution, which can be implemented in several investment and risk management practices. We further demonstrated the forecasting dominance of the extended specifications over the benchmark HEAVY and standard volatility models through the out-of-sample forecasting across multiple short- and long-term horizons.

     Moreover, we demarcate our study from previous literature by estimating the significant US uncertainty effect on the power of leverage (Heavy and Arch), and the macro-determinants of emerging markets realized variance. The US-led uncertainty spillovers shed light on new evidence for volatility modeling and macro-financial linkages literature. Our findings’ novelty is twofold: Given higher (lower) daily US policy uncertainty levels, mostly associated with economic downturns (upturns), (i) heavy and leverage effects become more (less) acute in realized variance modeling, and (ii) US EPU volatility, financial uncertainty, credit conditions, commodity market benchmarks, and disease news impact on emerging financial volatility increases (decreases). Similarly, financial and health crisis events magnify further the Heavy, Arch, and Macro parameters of the bivariate system and the EPU indirect impact on the volatility drivers, as well.

Abstract

     In a financially globalized world, managing long-term interest rates through short-term interest rates can be difficult. In this paper, we examine whether net capital inflows contribute to weakening the link between short- and long-term interest rates. We find that more financially open economies or those with more developed financial markets tend to have a greater negative relationship between net capital inflows and short- to long-term interest rate pass-through. We also examine whether macroprudential policies can affect the extent of interest rate pass-through and find that broad-based capital macroprudential tools are effective in retaining control of interest rate pass-through.

Introduction

     Recently, many researchers have argued that fnancial globalization has made domestic fnancial markets more vulnerable to developments in the major economies, namely the United States, the European Union, and lately China. Rey (2013) argues that in the fnancially globalized world, countries are vulnerable to the “global fnancial cycle” of capital fows, asset prices, and credit growth. In such an environment, non-major economies are subject to the center countries’ monetary policy unless the former decides to curtail capital mobility

      Figure  1 makes it clear that the volume of capital fows to emerging market economies (EMGs)2 tends to rise when risk appetite, measured by the reversed VIX index, is higher3 . When “risk is on,” investors’ risk appetite would rise and capital would fow to where the yields are higher, which was the case for EMGs when industrialized countries (IDCs) implemented extremely low interest rate policies in the late 2000s through the mid-2010s. When “risk is of” or when the interest rates are expected to rise in IDCs, capital would leave EMGs for IDC’s markets. Thus, capital fows to EMGs only passively react to the conditions of the major economies.

Concluding Remarks

     It has been increasingly argued that fnancial globalization has been playing a bigger role in determining domestic asset prices and interest rates. In such an environment, even with greater monetary autonomy, monetary authorities may not be able to keep controls of fnancial markets and the real economy as Rey (2013) argues. In fact, in recent years, the correlation of long-term interest rates between EMGs, especially those in East Asia, and the United States has been rising while the correlation of short-term rates does not show such a trend. In other words, Rey’s (2013) view of global fnancial cycles afecting domestic monetary policy – in which policymakers face a dilemma between monetary autonomy and free capital mobility – may be applicable to long-term interest rates, though not to the short-term interest rates.

     We examine whether receiving net capital infows can contribute to weakening the link between the short- and long-term interest rates, i.e., the interest rate passthrough. Our estimation results suggest that a country receiving more net capital infows tends to have a weaker interest rate pass-through. When we instrument net capital infows with its potential determinants to control for potential endogeneity, we fnd that both the magnitude and the statistical signifcance of the estimate for net capital infows increase.

Abstract

     How entrepreneurial orientation facilitates the identification of new opportunities in newly established ventures in emerging economies remains largely unexplored. Approaching entrepreneurial orientation as a second order latent construct, we examined the mediating role of opportunity recognition on new venture performance. Using a survey data from 316 SMEs, the results of the analysis in SmartPLS highlights that entrepreneurial orientation indirectly contributes to the performance of new ventures, where the relationship is partially mediated by opportunity recognition. The findings show that firms with high entrepreneurial orientation can identify and exploit new opportunities as well as enjoy superior performance.

Introduction

     Many emerging economies are confronted with immense challenges such as uncertain markets (Czakon et al. 2020; Yu et al. 2020), globalization (Fatima 2017), new market systems (Alvarez et al. 2015) and intense competition (Chari and Banalieva 2015). As compared to developed markets, new ventures suffer from a higher failure ratio due to institutional challenges. For instance, Wang and Chen (2010) argue that in China, more than 70% of newly established ventures fail in the first year. Another study by Parnell et al. (2015) reports 67% failure ratio of Chinese ventures in the first year while 85% in the first 10 years. Anwar and Ali Shah (2020) report that more than 50% of new ventures in Pakistan do not survive in the long run. These institutional challenges impinge on the growth of small and medium enterprises (SMEs) largely due to the liability of newness and smallness, which limits their ability to adapt rapidly to changing business conditions (Yu et al. 2020). Consequently, the ability of these firms to exploit new opportunities in order to survive the competition is impeded (Zhou and Li 2010; Chen et al. 2020). Thus, bringing to the fore the issue of performance and survival of newly established SMEs in emerging economies (Anwar and Ali Shah 2020; Yu et al. 2020; Guo et al. 2019a).

Conclusion

     Our research examined and tested predictions about the mediating role of opportunity recognition between EO and new venture performance in emerging markets. The study also examined the effect of opportunity recognition on venture performance. Even though we found empirical support for the derived hypotheses, this line of inquiry also opens an opportunity for theory building regarding which dimension of EO is more appropriate in opportunity recognition concerning newly born enterprises in emerging market settings.

Abstract

     The emerging-market banking sector plays a significant role in modern-day banking sector stability. In this study, we have used the dynamic conditional correlation (DCC) version of the Generalised autoregressive conditional heteroscedasticity (GARCH) model to estimate the correlation among Emerging Markets (BANKSEK), Latin America (BANKSLA), Brazil, Russia, India, and China (BRIC) (BANKSBC), Portugal, Ireland, Italy, Greece, and Spain (PIIGS) (BANKSPI) and Far East (BANKSFE). The study covers more than 100, 200 and 300 trading days of the GFC (starting July 8, 2008) and the COVID-19 pandemic (starting January 1, 2020). We have found that generally, in the short-term excluding PIIGS, all banks show similar pairwise correlation, and the pattern holds in the medium and long term. The far east banking sector displays a reduced correlation than their counterparts, even following the same pattern.

Introduction

     The modern-day financial market has undergone tremendous change due to the rapid nature of growing challenges and subsequent supervision it faces in the contemporary world (Hassan et al., 2020; Baglioni et al., 2019; Fabris, 2018; Leuz, 2018). It can be stated without any doubt that COVID, as a health-driven medical crisis, has fundamentally influenced the basic concept of modern-day investment (Meher et al., 2020; Kinateder et al., 2021). Previously, the Western financial superpowers dominated the financial market and system (Armijo et al., 2020). However, emerging markets and the corresponding ecosystem have played a significant role in recent times, especially in the aftermath of the COVID (Ahmed et al., 2017; ElBannan, 2020; Jeon and Wu, 2020). Unlike the global financial crisis (GFC), COVID has some fundamentally different impacts on the emerging market, as suggested by other authors. In most cases, the emerging markets are producing a better recovery than their western counterparts (Akhtaruzzaman et al., 2021) and adding up the impact of China and India (Blarel, 2012; Dharani et al., 2022; Liu et al., 2019; Wu, 2019). It has never been more critical to understand the impact of the emerging nations’ financial outlook in the scope of modern-day crises (GFC and COVID).

Conclusion

     GFC and COVID, at a very core, restricted our fundamental understanding of the financial market stability and connectedness. After the GFC, many financial experts predicted that this is low, and there is no chance of having a lower point. However, COVID has proved them wrong. What started as a medical crisis now has converted into a full-blown financial meltdown, especially in the financial sector. As a core of the financial sector, the banking sector is not above the impact, especially in emerging banks. Emerging market banks have defining characteristics compared to the rest of the world, where they must play a significant role in local economic sustainability. Thus, how they impact and work together plays a significant role in their performance. From that point of view, our paper is the first paper that has looked at the spill over behaviour between the emerging market banking sectors and compared the GFC vs COVID relationship among them in different time horizons. From an investor’s point of view, it opens many avenues of a safe investment. Even in the short term, there might be some changes in the pattern of pairwise correlation, especially with PIIGS; both cases are the same in the long term. This suggests that all crises will similarly impact the emerging market banking sector, especially in the medium to long term. The results obtained in the study have severe implications for the governments, policymakers, and portfolio managers in the selected emerging markets. To manage the risk accurately, portfolio managers need to access the covariance between different markets correctly. This makes the DCC values obtained in the study more appealing because it forecasts the covariation between the different emerging markets studies in the paper.

Abstract

     Investors commonly rely on macroeconomic variables to drive capital allocation decisions. But other institutional factors may alter investor returns as well, particularly in emerging market countries. Given these concerns, this paper examines the effects of institutional factors—specifically democracy, transparency and corruption—on emerging market equity returns and flows. We find that institutional quality impacts stock market returns and flows in emerging markets where corruption, transparency, and democracy levels are below average. We also find that government-owned or controlled industries are positively impacted by a deterioration in the corruption and democracy indexes, while highly concentrated sectors, like the financial industry, are negatively impacted by improving transparency.

Introduction

     Investors often rely on macroeconomic factors (e.g., inflation, GDP growth) to drive allocation decisions (Ahlquist, 2006). But a burgeoning body of research suggests that investors should couple macroeconomic factors with market-specific institutional factors such as corruption when deciding where to allocate their capital across international markets. Institutional quality varies significantly across emerging market (EM) countries and within EM countries over time presenting an opportunity to explore the impact of institutional quality on EM stock market performance. As such, this paper examines if, and when, institutional quality impacts investor equity (i.e., stocks) returns and flows in emerging markets. Additionally, we assess if institutional quality has differential effects on investor equity returns in specific EM industries.

     The three institutional factors we focus on are: democracy, transparency, and corruption. The quality of these factors can affect market performance because they impact the reliability of the data in which investors rely upon to allocate capital. In addition, institutional quality can influence the cost of doing business, and affect the stability of markets.1 But how do each of these three institutional factors affect stock market performance in emerging markets.

Conclusions

     This paper examines the effect that varying levels of institutional quality regarding corruption, transparency, and democracy has on annual equity returns, flows, and industry returns in EM countries over an 18-year period. We find that an increasing level of transparency has a positive, significant impact on average annual market returns in each of the below median group of countries relative to corruption, transparency, and democracy. This result suggests that for emerging market countries where corruption, transparency, or democracy are poor, policies that improve transparency will have a positive impact on market returns.

     In addition, changes in institutional indices impact several EM industry returns. Specifically, we see higher democracy scores result in lower returns in the utility, oil and gas, and technology industries, while higher scores for corruption result in lower returns for the consumer services and utility industries. The commonality between these industries is that they have a high level of government ownership or management, particularly in emerging market countries, or are highly concentrated industries. Finally, we see higher corruption scores result in lower net equity flows, a result that may be driven by FDI into China. Less surprising is the finding that net equity flows are positively impacted by an increase in the democracy index in countries with below median democracy and transparency scores.

Abstract

     Emerging markets often experience instability due to rapid changes to the institutional environment, social changes like rapid urbanization, or even unrest. We argue that emerging market multinationals (EMNEs) manage such instability by constructing and changing locational portfolios, and qualitatively analyze six cases in South Africa over a period that included the entrenchment of Apartheid, increasing resistance to it, the immediate post-Apartheid era, and finally the period of state capture. The four periods of (in)stability – initial tenuous stability, extreme instability, comprehensive stability, and finally growing instability – differently affected EMNEs’ location choices. EMNEs went to proximate developing countries when the home country was relatively stable, but left for host countries in the developed world once the home country became unstable. Few EMNEs capitalized on their experience there once home-country stability returned, instead returning to emerging markets. These patterns are best explained by a portfolio logic that takes into account home-country environmental dynamism.

Introduction

     Most of the operations of emerging market multinational enterprises (EMNEs), as indeed for MNEs generally, take place in their home country (Banalieva and Santoro, 2009, Rugman, 2005). What are the implications of dramatic and sudden changes in the stability of EMNEs’ home countries for the host locations in which they operate? This paper provides evidence that EMNEs’ internationalization is affected by the (in)stability in their home country. EMNEs use a portfolio logic in making location choices, opting for ‘safe’, stable host locations when the home country is unstable, and for riskier, less stable host locations when the home country is stable. This finding addresses a gap in existing scholarship and suggests at least two novel contributions.

     First, we contribute to the growing body of literature on how dynamic changes in the macro-environment shape firm behavior, especially in emerging markets (Banalieva et al., 2018, Klein et al., 2019). Our evidence suggests that the stability or not of home country conditions contributes to EMNEs’ location choices and we explain why that may be the case.

Conclusion

     In this paper, we provide evidence that EMNEs use a portfolio logic in making location choices, opting for ‘safe’, stable host locations when the home country is unstable, and for riskier, less stable host locations when the home country is stable. We develop propositions that acknowledge the outsized influence of the home country, and in which the desire of the EMNE to construct a balanced locational portfolio has an important influence on where they locate.

     Research within international business on Africa is still in its infancy and Africa is probably its least researched continent (Adeleye et al., 2020, Boso et al., 2019). If we are to seriously understand EMNEs, then Africa has to be part of that conversation. We therefore believe that our empirical focus is useful, although it is a limitation of our work that the South African context is so extreme in the frequency and extent of changes in (in)stability experienced. However, as Barnard, Cuervo-Cazurra and Manning (2017) point out, the extreme conditions in Africa are often useful to highlight the boundaries of extant theory. Moreover, the South African case is not unique: The fallout from Argentina’s dollarization experiment and subsequent debt default in 2001; Mexico’s peso (so-called tequila crisis) of 1994; the South-east Asian financial crisis of 1997; recent hyperinflation in Venezuela, and the Russia-Ukraine conflict are but some other examples of home country instability in emerging markets.

1- Opportunity-ambiguity dilemma in emerging market categories

2- The influence of socio-cognitive cues

3- Data and methodology

4- Results

5- Discussion and conclusion

References

Abstract

Industries with emerging market categories offer greater opportunities for firms to innovate. However, such opportunities are not a matter of “the more, the better.” An increasing number of emerging market categories poses a dilemma. While more emerging market categories arguably bring about increasing growth opportunities, they can also generate greater ambiguity for incumbent firms, which may hinder their innovation efforts. This study attempts to address this dilemma by proposing that the number of emerging market categories in an industry will have an inverted U-shaped relationship with incumbent firms’ innovation efforts. We further argue that this curvilinear relationship will be influenced by the socio-cognitive context of a firm’s focal industry, in the sense that the degree of collective identity incoherence at the industry level will intensify the proposed inverted U-shaped relationship, whereas the prevalence of trade associations in the industry will depress this relationship. We test our hypotheses by examining research and development (R&D) investments of a sample of U.S. high-technology manufacturing firms and find support for our main prediction and the hypothesized effect of collective identity incoherence. We also find a surprising but intriguing moderating effect of trade associations.

Conclusions

In this study we endeavor to resolve an important but relatively understudied dilemma posed by our collective understanding of industry dynamics and emergence. On the one hand, a dominant realization in the literature that has been borne out by a significant body of empirical work, is that emergence in industries spurs innovation and growth. On the other hand, emergence can pose significant socio-cognitive challenges for industry incumbents due to its inherent ambiguity. We have tackled this paradox in industries belonging to the high-tech U.S. manufacturing sector and have empirically assessed the effects of the multiplicity of emerging market categories in such industries on innovation-related strategic behaviors of incumbent firms. Our findings suggest a co-existence of both opportunity and ambiguity, and the relative prevalence of one over the other is largely driven by an increasing multiplicity of emerging market categories and the socio-cognitive context of an industry. We believe that the explicit emphasis on the effect of this multiplicity on the opportunity-ambiguity tension in emerging contexts contributes to our collective knowledge of the interplay between market emergence and innovation.

1- Introduction

2- Literature review

3- Study 1: Qualitative

4- Study 2: Empirical validation of the framework

5- Potential explanation of the realized results

6- Contributions

7- Limitations and future research

References

Abstract

Luxury brands across the globe have made inroads into emerging markets (EM). While some brands have succeeded in one EM, they have failed to replicate their success in others. We investigate the drivers of luxury brand sales in EM using a multi-method approach. First, through a qualitative study, we identify which market characteristics of EM (market heterogeneity, competition from unbranded products, socio-political governance, and resources and infrastructure) affect luxury brand sales, with a firm’s marketing effort and a market’s financial freedom being important contingencies. Second, we empirically test the insights using data from 88 luxury brands and robust econometric analyses. Our results show that market characteristics influence luxury sales and that the effects of such market characteristics on luxury brand sales are heterogeneous. We also find significant moderating effects of marketing efforts and financial freedom. Our study thus extends the literature on the marketing of luxury brands and EM.

Introduction

Multiple luxury brands have experienced stagnation in their sales in developed markets.1 Consumption figures (see WA2 -Exhibit 1 & 2) indicate that during the last decade, such brands have either witnessed no growth or have shown negative growth. Hence, realizing the challenges to sustainability in this situation, many luxury brands have started to explore new markets. Expansion in emerging markets (EM) led the industry to reach €1 trillion by the end of 20173 . Brands such as Hermes and Ralph Lauren attained tremendous success in the Chinese and Mexican markets, respectively. However, many luxury brands that are successful in one EM have failed to replicate their success in others. For example, Hermes, a brand known for leather and lifestyle accessories, has made inroads into several Chinese cities by correctly identifying and targeting its consumers but failed to move beyond a couple of cities in India.4 Possible reasons for this range from product assortment to distribution to partner selection, which are closely related to the nature of the markets (e.g., resources and infrastructure (RI) as well as the prevailing socio-political environment in the host country). Such nonuniformity in luxury brand sales raises two fundamental questions: firstly, what drives the success of a luxury brand5 across EM; and secondly, whether the effects of country characteristics on luxury brand sales are heterogeneous.

This study investigates the asymmetric effects of unanticipated monetary shocks on stock prices in India over the period 1994M4–2018M11. We find that the evolution of stock prices is state-dependent across different monetary policy processes. Unanticipated monetary shocks appear to have significantly asymmetrically lagged effects on stock prices, namely: (i) the positive effect of negative unanticipated shocks in bull markets; and (ii) the negative effect of positive unanticipated shocks in bear markets. Our findings imply that monetary policy-markers should attend to these situations for the future of money-supply policies to diminish the degree of uncertainty about the money supply in adjusting stock prices.

Introduction

The relationship between monetary policy and the real economy has been well developed in the specialized literature. Lucas (1972), Barro (1978), and Frydman and Rappoport (1987) indicated that if anticipated monetary policy is neutral, only unanticipated monetary shocks are probably to entirely impact real output. Interestingly, the literature argues that the impacts of unanticipated monetary shocks can be asymmetric on real economic activities. This is attributed to the following factors: (i) the business cycle’s different stages (Galí, 2015; Iacoviello, 2005); (ii) the contraction versus the expansion in the conduct of monetary policy (Jiang, 2018; Shiu-Sheng, 2007); and (iii) the different levels of monetary policy effect on real economic activities. In the same vein, regarding financial markets, several studies found that the relationship between the monetary policy process and stock market prices is also asymmetric (Ravn, 2014; Ülke and Berument, 2016). Most studies on the relationship between monetary policy and stock market employed such estimation techniques as event analysis (Val et al., 2018), VAR models (Fausch and Sigonius, 2018; Singh and Nadkarni, 2018), DSGE models (Ravn, 2014), and Markov Switching models (Ivrendi and Guloglu, 2012).

We explore the co-movements between emerging markets by employing dynamic conditional correlation approach. We additionally explore the factors that might drive the conditional correlations between emerging markets. We show that trade with the high income countries is a more important driver of the co-movements between emerging markets relative to trade with other emerging markets either within or outside the geographic region of the given country. We further document that the overall health of an economy, investment and market depth explain the correlation between emerging markets. Evidence is also provided that although, the recent emerging markets and global financial crises raised the correlation between emerging markets, not all country pair correlations increased around the period of the crisis. The findings show that economic engagement as opposed to geographic proximity is more relevant in describing within emerging markets integration. The findings suggest that diversification gains could be achieved by strategically investing across some emerging markets even in crisis periods.

Introduction

We examine the relationship between cross-country economic activity and the integration among emerging markets. International financial market linkages have relevance for cross-market diversification benefits, macro-economic policies, the price discovery process and the vulnerability of global financial markets to crisis originating from other countries (see e.g. Stulz, 1999; Bekaert et al., 2002; Büttner and Hayo, 2011). Bekaert et al. (2002), Lombardo and Pagano (2002), and De Jong and de Roon (2005) for instance show that increased interdependence amongst financial markets facilitates cross-border investment, reduces capital cost and broadens the opportunities for investment. International capital flows minimise capital constraint problems thereby promoting more productive investments (Acemoglu and Zilibotti, 1997), additionally, capital flows allow international risk sharing which may facilitate risk taking and creative investment in the domestic economy (Saint-Paul, 1992; Obstfeld, 1994). Financial integration permits a more efficient capital allocation across countries – this has a growth enhancing effect. Financial market depth and liquidity, institutional quality and economic activity have consequences for financial markets integration (see e.g. Campa and Fernandes, 2006; Bekaert et al., 2011; Boamah et al., 2017a,b). Deléchat et al. (2010) argue that capital market development leads to increased capital inflows which may consequently lead to a surge in financial market integration. Emerging markets are uniquely characterised by smaller market depth, illiquidity, limited trade among themselves and weak institutional environment. Hearn and Piesse (2013); Hearn (2014) and Boamah (2015) for instance observe that emerging markets are largely illiquid.

1- Introduction

2- Theoretical framework

3- Methods

4- Data analysis and discussion of results

5- Conclusions

References

Abstract

Purpose – The purpose of this paper is to verify the relationship of job satisfaction in the banking sector with its antecedent constructs ( financial rewards and psychological rewards) and the mediating role of internal marketing in this relationship and to verify the relationship between job satisfaction in the banking sector and its consequent constructs (work engagement and the intention to leave) and the moderating effect of internal marketing on this relationship.
Design/methodology/approach – The paper adopts a quantitative, descriptive, cross-sectional research methodology. Data are collected through an online questionnaire, which involves 355 bank employees.Partial least squares–structural equation modeling is used to verify the predicted relationships.
Findings – The results show that internal marketing tends to mediate the relationship between financial rewards and job satisfaction and the relationship between psychological rewards and job satisfaction. Internal marketing presents a moderating effect on the relationship between job satisfaction and work engagement, but internal marketing does not moderate the relationship between job satisfaction and the intention to leave the bank.
Originality/value – This study expands the understanding of the scope of internal marketing by exploring its mediating and moderating effects on the interactions among the behaviors of banking sector employees.

Introduction

In very competitive markets, producing value for the consumer, be it internal or external, can be as complex as it is essential for the longevity of organizations. In the banking sector, there is a demand to understand and manage the relationship and interaction with employees (Narteh, 2012; Du Preez and Bendixen, 2015; Bailey et al., 2016) to provide a favorable environment for the development of behaviors that contribute to the delivery of high-quality services to the final client and to the objectives of the organization (Caruana and Calleya, 1998; Ahmed et al., 2003; Awwad and Agti, 2011; Narteh and Odoom, 2015). In this context, internal marketing plays a relevant role in an organization’s ability to manage its relationships with its employees (Naudé et al., 2003) from a market orientation perspective (Narver and Slater, 1990; Awwad and Agti, 2011). In the internal marketing view, an organization’s employees are its first customers and have the ability to create, relate and even influence the perception of external customers (Berry, 1981; Caruana and Calleya, 1998; Bailey et al., 2016). Thus, internal marketing allows researchers to look at two potential sources of competitive advantage, employees, who are one of the few resources that cannot be copied by competitors, especially in the banking sector, where financial services are almost homogeneous (Papasolomou and Vrontis, 2006; Introduction In very competitive markets, producing value for the consumer, be it internal or external, can be as complex as it is essential for the longevity of organizations. In the banking sector, there is a demand to understand and manage the relationship and interaction with employees (Narteh, 2012; Du Preez and Bendixen, 2015; Bailey et al., 2016) to provide a favorable environment for the development of behaviors that contribute to the delivery of high-quality services to the final client and to the objectives of the organization (Caruana and Calleya, 1998; Ahmed et al., 2003; Awwad and Agti, 2011; Narteh and Odoom, 2015). In this context, internal marketing plays a relevant role in an organization’s ability to manage its relationships with its employees (Naudé et al., 2003) from a market orientation perspective (Narver and Slater, 1990; Awwad and Agti, 2011). In the internal marketing view, an organization’s employees are its first customers and have the ability to create, relate and even influence the perception of external customers (Berry, 1981; Caruana and Calleya, 1998; Bailey et al., 2016).