Asian Journal of Business and Accounting

Editorial Notes

Noor Sharoja Sapiei, Yeong Wai Chung — Sun, 31 Dec 2023 00:00:00 +0800

The Volatility and Risk-Return Trade-Off of Malaysian Islamic and Conventional Indexes During the Global Financial Crisis and COVID-19 Pandemic

Foo Siong Min, Nazrul Hisyam Ab Razak, Fakarudin Kamarudin, Nadisah Zakaria — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: This study aims to investigate the volatility characteristics
and risk-return trade-off of Islamic and conventional indexes in the
Malaysian market.
Design/Methodology/Approach: The research covers the daily data
of the period from August 2007 to December 2022, divided into four
distinct periods: the full sample, the period during and after the 2007-
08 financial crisis, and the period during the COVID-19 pandemic. The
research employs a hybrid model that combines ARIMA with GARCH
family models.
Research findings: In this research, both Islamic and conventional indexes
in the Malaysian market demonstrate a memory effect, emphasising
the persistence of market volatility through the influence of past
volatility. Additionally, historical data, represented by lagged values,
significantly shape volatility, while negative shocks have an immediate and pronounced impact compared to positive shocks, providing valuable
insights for investors and risk management. Lastly, during the COVID-19
crisis, the conventional index showed no leverage effect, and the Islamic
index lacked safe haven characteristics, making this crisis unique in the
Malaysian financial context.
Theoretical contribution/Originality: This research contributes to the
understanding of market volatility dynamics in the Malaysian context by
utilising a hybrid ARIMA-GARCH model. The identification of memory
effects, asymmetric responses, and the unique characteristics observed
during the COVID-19 crisis adds to the body of knowledge on financial
market behaviour.
Practitioner/Policy implication: The findings of this study have practical
implications for investors and supervisory entities operating in the
Malaysian market. Understanding the persistence of volatility and the
differential impact of positive and negative shocks can help investors
make more informed decisions, while regulators can use this information
to quantify and manage market volatility effectively.
Research limitation/Implications: The limitation of the present study is
that the results may be influenced by the selection of the sample period,
potentially yielding different outcomes depending on market conditions,
such as the presence of bull or bear markets, periods of high or low
volatility, or other contextual factors.

Market Timing and Asymmetric Information: How do Rights Issues and Private Placements Attract Investors to Overvalued Stocks?

Dewi Ratih, Mamduh M. Hanafi, Bowo Setiyono, I Wayan Nuka Lantara — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: This study examines the background of selecting the
equity offering mechanism between rights issues and private placements
when facing asymmetric information and overvalued prices.
Design/Methodology/Approach: This research employs the concept
of information asymmetry and focuses on analysing market timing
data about stock offering transactions in Indonesia from 2000 to 2020.
This study uses regression analysis to examine the correlation between
information asymmetry and trade volume. Abnormal trade volume before
various offerings is subjected to regression analysis using generally used
proxies for information asymmetry.
Research findings: The conclusions of our research indicate that
companies that issue more shares than the overpriced stock tend to exhibit
a more excellent abnormal return value in the context of rights issues.
The sales volume indicates the company’s prospects derived from private
information obtained during the offering Theoretical contribution/Originality: There is a shortage of existing
literature about research that specifically investigates the identification
of SEO techniques that elicit negative market responses. Consequently,
this study explores the connection between the underlying motivations
driving the selection of stock offering mechanisms.
Practitioner/Policy implication: The distribution of profits in the
transaction indicates the company’s future policies. Before investing,
investors can acquire pertinent information on the company’s current
state, strategic goals, and prospects.
Research limitation: The present analysis has not considered the factors
of internal ownership or insider trading. These factors might serve as a
foundation for investigating the underlying incentives for issuing shares
with more precise market timing considerations.

Do Powerful CEOs Benefit Firm Performance in Pakistan?

Kashif Arif, Che Ruhana Isa, Mohd Zulkhairi Mustapha — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: This study examines the impact of Chief Executive Officer
(CEO) power dimensions on firm performance.
Design/Methodology/Approach: A panel data of 110 Pakistani firms
listed on the Pakistan Stock Exchange for the period of 12 years (2008-
2019) was analysed using the GMM approach.
Research findings: The GMM regression results revealed significant
relationships. The analysis suggests that CEOs with considerable
structural, ownership, prestige, and expert power tend to exhibit
superior performance, as these factors are positively correlated with
firm performance. Conversely, CEO family power appears to have no
discernible impact on firm performance. Importantly, the robustness of
our findings underscores the consistent nature of these relationships.
Theoretical contribution/Originality: This study makes a valuable
contribution to the existing literature by demonstrating the positive
influence of CEO power on firm performance, which aligns with the
theoretical framework of the Approach/Inhibition theory of power.
The originality of this research stems from its examination of individual
dimensions of CEO power and their impact on firm performance, as well
as the inclusion of the additional dimension of family power.
Practitioner/Policy implication: The insight from this study suggests
that powerful CEO leadership is beneficial for firm performance and the
concentration of power at the CEO position should be seen positively
rather than the negative perspective provided by agency theory.

Why/How are Integrated Reporting Practices Adopted/Diffused? Evidence From Public Listed Companies in Sri Lanka

Nawarathna Liyanage Erandi Abeywardana, S.M. Ferdous Azam, Kevin Low Lock Teng — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: This study explores the factors affecting and the internal
mechanisms employed by companies to manage their integrated reporting
practices.
Design/Methodology/Approach: The qualitative study is conducted
through semi-structured interviews with 15 officers responsible for the
integrated reporting practices of public listed companies in Sri Lanka.
Research findings: The study found that relative advantage,
compatibility, complexity, trialability, and observability affect the
adoption of integrated reporting practices. Under the internal mechanism,
it was found that sustainability reporting helped the adoption, and
companies used their own ways to collect and manage information.
Despite the companies’ duration of practice, the constellations of
structures, cultures, and reporting practices with which integrated
reporting is managed change within the companies. Furthermore, the
study showed the success stories of integrated reporting.

Theoretical contribution/Originality: The study is the first South
Asian and emergent market study to identify the enablers of integrated
reporting by employing the diffusion of innovation theory as the
theoretical foundation and internal mechanism.
Practitioner/Policy implication: This study provides insight into
the dynamic processes that operate within the framework of the
organisational change that has taken place from this perspective and
demonstrates how integrated reporting can be incorporated into the
organisational change process. The experience of these organisations
allows others that intend to embrace integrated reporting to choose the
optimal way to implement it and use integrated reporting.
Research limitations/Implications: Although much effort was taken to
ensure that the study comprised successful IR businesses that displayed
best practices in IR, this research study was confined to a small number
of 15 public listed companies who participated.

Financial Integration and Variance Decomposition of Asian Stock Market: Evidence from India

Nikhil Bhardwaj, Nishi Sharma, Anupreet Kaur Mavi — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: International investments made in non-integrated
economies provide benefits of portfolio diversification, but investment
made in integrated economies may lead to oscillations due to volatility
spillover. Therefore, the knowledge of market linkage of an economy is
imperative for investors, as well as regulators. In this context, the present
paper investigates the financial integration of the Indian stock market
with China, Hong Kong, Japan, UK and USA.
Design/Methodology/Approach: To examine the financial integration in
the long run, closing daily indices of leading stock markets of respective
countries have been analysed through the Johansen cointegration method
over a period of 20 years from 2002 to 2022. The vector error correction
model has been applied to examine whether market equilibrium can
be restored after an infusion of shock. The short run linkage has been
investigated through a causality test. Further the possibility of volatility
spillover has been examined through variance decomposition and impulse
response function.
Research findings: The results show cointegration among the selected
markets, which indicates the possibility of convergence towards market
equilibrium in the long run. The stock markets of India and USA were
observed to have a bidirectional causal relationship indicating lesser
chances of benefits from international portfolio diversification. The results reveal the sensitivity of the Indian stock market to innovations in the UK
and USA. However, no significant influence of the Hong Kong, Japanese,
and Chinese stock markets has been observed on the Indian stock market.
Further, the Indian stock market has a significant contribution to the
volatility of other stock markets, except the Chinese stock market.
Theoretical contribution/Originality: The present study is crucial owing
to two prominent reasons. Firstly, the linkage between various financial
markets is very dynamic and needs to be studied in the present context.
Secondly, the linkage of Indian economy with other countries has
increased manifolds in recent few years so it will be fruitful to analyse
the linkage of Indian economy with other economies.
Practitioner/Policy implications: The findings are useful to investors
while designing international portfolios to reap diversification benefits.
The results are fruitful for market regulatory bodies to mitigate the
adverse impact of volatility spillover.
Research limitation/Implications: The study can be extended to other
markets, monthly data and different sub-periods

The Influence of Employee Competence and Use of Information Technology on Financial Accountability with the Success of Information Systems as Moderating Variables

Sukhemi, Marti Widya Sari — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: This study aims to determine the influence of employee
competence and the use of information technology on financial
accountability, and also the role of moderation in the success of the
information system and how it impacts financial accountability vis-à-vis
the use of information technology.
Design/Methodology/Approach: This research was implemented with
a casual setting for the Local Government Work Unit (LGWU) finance
department employees in Bantul Regency. Samples were taken from 150
employees with accidental sampling. Data collection was carried out
using questionnaires. Data analysis was performed using the PLS-SEM
method.
Research findings: Employee competence and the use of information
systems have a positive and significant effect on financial accountability.
The information systems' success did not moderate the influence of
information technology itself on financial accountability.
Theoretical contribution/Originality: This research provides new insight
into the role of moderation in the success of information systems on the
influence of information technology on financial accountability.

Practitioner/Policy implications: This study suggests that local
governments can continue to improve employee competence through
the use of information technology. One actionable way would be to
make budget allocations for the maintenance and repair of the current
information technology facilities and infrastructure.
Research limitation/Implication: While previous research has focused on
the use of information technology in enhancing financial accountability,
these results show that the success of information system is a moderating
predictor of accountability

Do Social Media Marketing Activities Enhance Customer Satisfaction and Co-Creation

Indra Listyarti, Tatik Suryani, Faza Faikar Cordova — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: The main objective of this research is to examine the role
of Social Media Marketing Activities (SMMA) in enhancing customer
satisfaction and co-creation of local brands from the Schematic Perspective
Theory. Specifically, this research aims to analyse the effect of SMMA on
brand awareness and brand image, and the impact of brand image on
customer satisfaction and customer co-creation.
Design/Methodology/Approach: This research was designed with
a survey method which involved 316 respondents, and the data was
analysed using partial least squares structural equation modeling, with
the WarpPLS 7.0 software.
Research findings: The findings indicated that the effect of SMMA is
positively significant on customer brand awareness and brand image. And
brand image, in turn, has a positively significant effect on satisfaction,
and satisfaction has an impact on customer co-creation. This research
also found that satisfaction has an important role in mediation, that also
stimulates customer co-creation.
Theoretical contribution/Originality: This study theoretically contributes
to the relationship between customer satisfaction and co-creation in the
context of SMMA, based on Schematic Perspective Theory and Social
Exchange Theory (SET). However, the research focus on SET on the effect
of customer satisfaction on customer co-creation is secondary.

Practitioner/Policy implications: The implication of this research is
very important for companies to design their own SMMA based on
interactivity and customisation attributes. Customer satisfaction is a
necessary condition for enhancing customer co-creation.
Research limitation/Implications: To enhance the understanding of the
complex relationship among the variables, we suggest examining the
effects of SMMA directly on customer satisfaction, and the possibility
of reciprocal relationship between customer satisfaction and customer
co-creation.

Factors Influencing Indonesians' Intentions to Use the Tokopedia Online Marketplace

Yeni Rafita Sihombing, Jaka Permana — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Objective: Many factors influence people’s intention to use online
marketplaces, especially Tokopedia in Indonesia. The purpose of this
study is to explain these influencing factors of usage intention by
simulating the impact of innovativeness, mobility, perceived ease of use,
and perceived usefulness.
Research Design and Methods: A quantitative approach was used
through an online survey and resulted in 250 responses which were
analysed with a structural equation model to test construct reliability,
average convergent validity, and structural model fit.
Findings: According to the findings, mobility, innovativeness, perceived
utility, and perceived simplicity of use are characteristics that influence
user intention. The perception of utility has the biggest influence on the
intention to use something, whereas perceived ease of use has the least.
Implications and Recommendations: These findings have significance
for online marketplaces, such as Tokopedia in Indonesia, in terms of
developing and improving application performance based on user
demands.

Investigating the Impact of Social Media Marketing Activities on Customer Satisfaction with the Mediating Role of Brand Equity and Perceived Value

Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: In today’s businesses, social networks are seen as an
applicable instrument for influencing consumer behaviour, raising
awareness, connecting with consumers, and improving service quality
and satisfaction. The present study analyses the effectiveness of social
media marketing activities to expand the use of XX insurance online
services and it investigates how social marketing initiatives affected
consumers’ satisfaction using brand awareness and perceived value as
mediating factors.
Design/Methodology/Approach: This research used an experimental
study, using a survey method (questionnaire distribution), to confirm the
hypotheses and discover its management concepts, and uses Structural
Equation Modeling (SEM).
Research findings: The results showed that the social media marketing
activities variable (entertainment, interaction, trendiness, customisation,
perceived risk) has a positive and significant impact on customer
satisfaction, with brand image, brand awareness, perceived value,
and social identity serving as mediating factors. Social identity has an
influence on perceived value as well as social marketing initiatives do
have on consumer satisfaction.

Extending the Theory of Planned Behavior to Examine Factors Influencing Intention to Purchase Halal Chocolate Among Malaysian Muslims

Wan Rasyidah Wan Nawang, Syadiyah Abdul Shukor, Amalina Mursidi, Anita Ismail — Sun, 31 Dec 2023 00:00:00 +0800

Manuscript type: Research paper
Research aims: The purpose of this study is to examine factors influencing
intention to purchase halal chocolate among Muslim consumers in
Malaysia by extending the classical Theory of Planned Behaviour (TPB).
This study specifically investigates the influence of attitude, subjective
norms, perceived behavioural control, halal knowledge, habit, and
religiosity on the intention to purchase halal chocolate.
Design/Methodology/Approach: A total of 252 valid responses were
obtained through convenience sampling and analysed using SmartPLS
4.0.
Research findings: The results indicate that attitude, subjective norms,
and religiosity are the factors that influence purchase intention for halal
chocolate, while perceived behavioural control, halal knowledge, and
habit do not. Subjective norms have the strongest influence on purchase
intention for halal chocolate, followed by attitude.
Theoretical contribution/Originality: The findings contribute to the
growing literature on halal food and consumer behaviour. In particular,
the study provides empirical evidence on the importance of attitudes,
subjective norms, and religiosity in influencing purchase intentions for
halal chocolate.
Practitioner/Policy implications: This study could serve as a basis for
halal chocolate manufacturers, retailers, exporters, and importers to
better understand Malaysian Muslim customers and the factors that
drive them to purchase halal chocolate. Furthermore, the government and
related agencies, such as the Malaysian Cocoa Board (MCB), could devise
strategies to re-establish and strengthen the country’s cocoa industry,
allowing Malaysia to reclaim its position as the world’s leading cocoa
producer.
Research limitation/Implication: This study includes six variables that
influence halal chocolate purchase intention. Future studies could include
other internal and external factors influencing purchase intention, such as
the role of the halal certification logo