Bahria University Journal Of Management & Technology

Operational Efficiency based Investment strategies and Equity Returns: Evidence from Emerging Economy

Shoaib Ghulam, Muhammad Rizwan, Dr. Muhammad Awais — Wed, 31 Jan 2024 00:00:00 -0700

The objective of this paper is to study the impact of market premium, asset growth, net operating assets and volatility premium on future stock returns. This study uses secondary data of monthly closing stock prices of hundred non-financial companies, listed in Pakistan Stock Exchange (PSX). The sample period of the study consists of 20 years from Jun-1998 to Jun-2018 with 2000 firm year observations. The research methods used are quantitative research along with deductive approach. In logical and scientific methods, the needed data is collected from the official website of PSX. This study is descriptive in nature and relationship between variables is measured using Regression Analysis. The results of the study show that market premium and volatility premium have positive and significant impact on stock returns. Whereas, asset growth premium and net operating asset premium have mixed pattern.

Keywords: Pakistan Stock Exchange, Regression Analysis, Market Premium, Asset Growth, Volatility, Net Operating Assets

Role of Locus of Control in the Relationship between Behavioral Biases and Investment Decision

Ahmed Hassan Jamal, Adnan Riaz — Wed, 31 Jan 2024 00:00:00 -0700

The current study focuses on three heuristics commonly used in decision making; anchoring bias and representative bias with investor’s numeracy capability. This research explains the relationship between biases of investors in investment decision making of Pakistan Stock Exchange. The research also identifies the moderating role of locus of control between behavioral biases and decision making. Data was taken from 400 investors of Pakistan Stock Exchange. The results of the study revealed that representative bias and anchoring bias has a positive impact on investment decisions of the investors. However, the results also revealed that individual’s numeric capabilities do not affect his/her investment decision. Locus of control is used as a moderator in the study. Results show that presence of internal locus of control enhances the impact of biases on their investment decisions. Nonetheless, locus of control does not moderate the relationship between individual’s numeric capabilities and investment decisions. This study is helpful for both individual investors and the regulator in understanding the role of biases in the investment decision making.

Impact of Working Environment on the Employees’ Performance in the Nigerian Manufacturing Industry

Wed, 31 Jan 2024 00:00:00 -0700

This study examined working environment and its impact on the performance of employees in Colman Technical Industries Limitd, Arepo, Nigeria. This was with the specific objectives to: analyze the impact of physical environment on the employees’ effectiveness; and find out the impact of job safety and security on the employees’ creativity in the study organization. The sample of the study was One Hundred and Thirty - Nine (239) respondents. While simple random sampling technique was used through structured questionnaire. Regression was employed to test the hypotheses of the study. The findings of the study confirmed a significant impact of physical environment on the employees’ effectiveness; and also a significant impact of job safety and security on the creativity of employees in the establishment. It was concluded that there was a significant and positive impact of working environment on the employees’ performance in the Colman Technical Industries Limitd, Arepo. The study therefore recommended the creation of a workplace where employees would feel welcome, saved, secured and willing to work well, rather than feeling that they are compelled to do anything, as they could be motivated to perform better or more effectively when being satisfied.

Impact of HRM Practices on Employee Retention with Moderating Role of Organizational Culture, in Banking Sector of Pakistan

Momna Amjad, Dr. Rafique Ahmed Khan — Wed, 31 Jan 2024 00:00:00 -0700

ABSTRACT

The “current paper is aimed at investigating the impact of HRM practices on employee retention with moderating role of organizational culture in banking sector of Pakistan. In this study, recruitment and selection, training and development, performance appraisal, and compensation were considered as the independent variables, organizational culture being the moderator and employee retention being the dependent variable. The responses were recorded from 250 respondents through an adopted questionnaire based on 5-Likert scale. adopting convenience sampling technique. The data were analyzed through statistical tests including correlation, regression, and moderation analysis using SPSS Software. Findings of the research indicate that recruitment & selection, training & development, performance appraisal, and compensation are having a positive relationship with employee retention. Regression analysis has proved that there exists a significant positive impact of recruitment and selection, training and development, performance appraisal, and compensation on employee retention. Moreover, moderation analysis has proved the moderating effect of organizational culture in relationship between all variables under study. The study is considered quite useful for the banking sector in ascertaining the impact of various HRM practices on employee retention. The study is equally beneficial for the researchers and academia in understanding the prevailing trends in the banking sector. Other sectors of service industry may also benefit from the findings of this study.

Keywords: HRM Practices, Recruitment and Selection, Training and Development, Performance Appraisal, Compensation, Organizational Culture, Employee Retention.

AI adoption in recruitment and selection: exploring different factors of TOE model in Pakistan

Rehana Farhat, Temoor Anjum — Wed, 31 Jan 2024 00:00:00 -0700

In today’s business environment, the role of adoption of AI is very important. Although the pace of this adoption is low in emerging markets and Pakistan in particular, however, it is increasing significantly in the devolved markets. In the coming years it would be indispensable for organizations to opt for AI adoption in different task management. There is little evidence of AI adoption in recruitment and selection. The objective of this study is to explore the different factors impacting AI adoption in recruitment and selection process. The different factors that fall under the broader category of technological, organizational, environmental of TOE model in recruitment and selection process are investigated through interviews. The sample of this study is senior management from different organizations where AI adoption is used, or they have intention to use. This study has found and validated some existing factors and new some factors are identified. Management also has shown some concern about adoption of AI. The results of this study can be valuable for the organizations to develop their AI adoption practices in this competing environment to have viable and distinguishable edge.

EFFECT OF FINANCIAL INCLUSION ON GROWTH OF SMALL AND MEDIUM ENTERPRISES IN PAKISTAN THROUGH MODERATING EFFECT OF SHARIAH-COMPLIANT FINANCING

Chakar Khan, Dr. Abdul Raheman, Imran Farooq — Wed, 31 Jan 2024 00:00:00 -0700

The key objective of this study is to check the impact of financial inclusion on the SME's growth by taking Shariah-compliant financing as a moderator. The sample has been based on cluster sampling, the sample comprised the SMEs operating in nine major cities of Pakistan and its size is 600 in total. Structural equation modeling has been employed on the responses of the respondents through SmartPLS4. The direct results shows that the impact of financial inclusion is positive and significant on dimensions of the SME's sales growth and workforce growth, while insignificant on profit growth and market share growth. Similarly, Shariah-Compliant Financing impacts Market Share Growth and Sales Growth positively and are statistically significant, while insignificant effect on profit growth and workforce growth. Indirect results, Shariah-Compliant Financing is moderating between Financial Inclusion and dimensions of the SMEs growth has a positive and significant effect on market share growth and sales growth. The Shariah-compliant financing could be increased by adopting effective strategies and financial knowledge. The financial institutions campaign an awareness program about the products and services offered for SME sectors, rules and regulations of loans, and loan documentation and provide financial literacy to them.

Green Innovation and Financial Performance: Bridging the Profitability-Sustainability Gap

Shahid Rasheed, Prof. Dr. Syed Umar Farooq, Dr. Umer Qazi — Wed, 31 Jan 2024 00:00:00 -0700

In the current era of a knowledge-based green economy, green innovation has emerged as an important driver for firms to improve their financial performance. Recent studies have emphasized the significance of green innovation in addressing environmental degradation and enhancing financial performance. Few studies have been conducted about green innovation and its effects within the context of Pakistan. This study seeks to examine the impact of green innovation on the financial performance of publicly listed firms on the Pakistan Stock Exchange (PSX). The study utilized a dataset comprising 2702 observations from 351 listed companies from 2013 to 2021. The data was analyzed using weighted least square regression analysis. The study's empirical research indicates that Green Innovation has a statistically modest yet positive effect on Financial Performance in Pakistan. The research indicates that Green Innovation is significant for Financial Performance in developing countries like Pakistan. The study's findings and policy recommendations are significant for managers of various companies listed at PSX and policymakers. They can help in addressing environmental degradation and promoting sustainable development by implementing green innovation practices.

Institutional Investor Behavior: A Comprehensive Study at the Pakistan Stock Exchange

Wed, 31 Jan 2024 00:00:00 -0700

The primary aim of this research is to study the impact of the behavioral factors shaping the investment decisions of institutional investors operating within the Pakistan Stock Exchange. Additionally, the study investigates the relationship between these behavioral factors and investment decisions, considering the moderating impact of investment experience. Given the scarcity of studies on behavioral finance in the Pakistani context, this research anticipates making a substantial contribution to the advancement of this field within the country. Building on established behavioral theories and prior research, the study posits four categories of behavioral biases, Self-deception (encompassing Self-attribution and Overconfidence), Heuristics (comprising Representativeness, Loss-aversion, and Anchoring), Emotions (specifically, Regret aversion), and social biases (including Herding).

The sampling approach employes stratified random sampling, wherein the fund managers at Pakistan stock exchange (PSX) are divided into four strata based on homogeneous characteristics, then data is collected using questionnaire from each stratum. Subsequently, the collected data is analyzed using SPSS, incorporating techniques such as Exploratory Factor Analysis, Regression, Correlation Analysis, and Moderation Analysis.

The findings of the study suggest the presence of distinct behavioral factors that significantly influence the investment decisions of institutional investors at the Pakistan Stock Exchange. Notably, all biases exhibit a significant positive impact on investment decisions, except for the herding bias. The research findings also indicate that, contrary to expectations, there is no moderating effect of investment experience on the relationship between investment decisions and behavioral biases among institutional investors.

Impact of Economic Growth on Carbon Emissions In Pakistan

Muhammad Nameer Wajahat, Tabassum Iqbal, Sabir Ali — Wed, 31 Jan 2024 00:00:00 -0700

Pakistan is a developing country that seeks economic growth. However, Pakistan needs to analyze the environmental cost associated with economic growth and adapt to sustainable growth accordingly. The data spanning 41 years was extracted from the World Bank and Our World In Data, which was then analyzed. This paper studied the relationship between economic growth and carbon emissions in Pakistan. It analyzed the impact of economic growth on carbon emissions by conducting a time-series data analysis and applying the Engle and Granger cointegration approach to examine the long-run relationship between the independent and dependent variables. Error Correction Model (ECM) was also applied to study the short-run impact of economic growth on carbon emissions. The results of this study reveal that (i) energy consumption per capita has a strong and positive relation with carbon emissions in the short-run and long-run, whereas (ii) GDP has a weak but positive relationship with carbon emissions in the short-run and long-run. The results also show that GDP and energy consumption per capita cause carbon emissions to increase faster in the long-run. The study concluded that long-run adjustment is possible since the ECM model predicts that 37.76% of the long and short-run discrepancy will be corrected within a year. The study recommends that increasing the share of hydel and renewable energy in Pakistan’s energy mix and revamping the existing power distribution system to minimize power losses will mitigate the carbon emissions caused by energy consumption. Moreover, the adoption of sustainable practices by manufacturers, installing catalytic converters in manufacturing plants, and incentivizing the use of renewable energy for manufacturers and households will mitigate the carbon emissions caused by GDP growth.

Forecasting the Nexus and Impact of News Sentiment on NYSE, Gold Prices, and WTI Oil Using The Neural Network Approach

Javid Iqbal, Aneeza Ahmed, Muhammad Ramzan — Wed, 31 Jan 2024 00:00:00 -0700

The study aims to determine the impact of news sentiment during COVID-19 and the nexus between the NYSE, Gold prices, and WTI oil prices. For this purpose, we use hourly data of news sentiment and commodity prices hourly data from February 10, 2020, hours 1000 to March 06, 2020 hours 1600 hours, with the help of a multilayer artificial neural network. Further, We use the connection weight approach to observe the relative importance of input variables that help predict output variables. The results suggest that all the indexes are interconnected, where the increase/decrease of any index impacts the other commodity index. Further, the news index remains the second highest predictor for gold price and WTI oil price indexes. In addition, the news index also seems to be an essential predictor of these commodities.

Keywords: NYSE, WTI Oil, Gold, Covid-19, Neural Network, Connection Weight