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2010

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Articles 241 - 270 of 278

Full-Text Articles in Finance and Financial Management

Could Decision Trees Help Improve Farm Service Agency Lending Decisions?, Benjamin P. Foster, Jozef Zurada, Douglas K. Barney Jan 2010

Could Decision Trees Help Improve Farm Service Agency Lending Decisions?, Benjamin P. Foster, Jozef Zurada, Douglas K. Barney

Faculty and Staff Scholarship

This study examines whether a statistically derived decision tree could serve as a means to improve U.S.A. Farm Service Agency lending decisions. The study is a substantial extension and reanalysis of an earlier work by Barney, Graves and Johnson, (1999). Results indicate that a decision tree could be a valuable tool for Farm Service Agency employees in their lending decisions. The decision tree provides as good or better predictive accuracy than neural networks and logistic regression models at reasonable cutoff levels of Type II to Type I costs of lending. The decision tree also meets the transparency criteria for Farm …

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The Determinants Of Trade Credit Extension And The Problem Of Late Payment In The Malaysian Manufacturing Sector., Teh Chee Ghee Jan 2010

The Determinants Of Trade Credit Extension And The Problem Of Late Payment In The Malaysian Manufacturing Sector., Teh Chee Ghee

Student Works (2010-2019)

This study investigates the determinants of trade credit extension and the association between late payment from trade debtors and profitability in the Malaysian manufacturing sector. It is based on exploratory data analysis and ordinary least squares (OLS) regressions on a crosssectional sample of 383 and 287 public-listed manufacturing companies, respectively, using audited financial statements for the financial year ending 2007/2008.Investment in accounts receivables is even higher than in inventories in the Malaysian manufacturing sector. Contrary to previous studies, this study finds that large companies,manufacturers with higher liquidity and with higher collateral assets extend less trade credit, indicating that the listed …

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Why Does The Law Of One Price Fail? An Experiment On Index Mutual Funds, James J. Choi, Xavier Gabaix, David Laibson, Brigitte C. Madrian Jan 2010

Why Does The Law Of One Price Fail? An Experiment On Index Mutual Funds, James J. Choi, Xavier Gabaix, David Laibson, Brigitte C. Madrian

Faculty Publications

Experimental subjects review four S&P 500 index fund prospectuses and then allocate $10,000 across those funds. We randomly select subjects to be paid for their subsequent portfolio performance. Subjects cannot access any non-portfolio services such as financial advice from their selected funds. Nevertheless, they overwhelmingly fail to minimize their index fund fees. When we make fund fees salient and transparent, subjects’ portfolios shift towards lower-fee index funds, but over 80% still do not invest all of their money in the lowest-fee fund. When funds’ annualized returns since inception are made salient, portfolios shift towards index funds with higher returns since …

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Executive Compensation And The Maturity Structure Of Corporate Debt, Paul Brockman, Xiumin Martin, Emre Unlu Jan 2010

Executive Compensation And The Maturity Structure Of Corporate Debt, Paul Brockman, Xiumin Martin, Emre Unlu

Department of Finance: Faculty Publications

Executive compensation influences managerial risk preferences through executives’ portfolio sensitivities to changes in stock prices (delta) and stock return volatility (vega). Large deltas discourage managerial risk-taking, while large vegas encourage risk-taking. Theory suggests that short-maturity debt mitigates agency costs of debt by constraining managerial risk preferences. We posit and find evidence of a negative (positive) relation between CEO portfolio deltas (vegas) and short-maturity debt. We also find that shortmaturity debt mitigates the influence of vega- and delta-related incentives on bond yields. Overall, our empirical evidence shows that short-term debt mitigates agency costs of debt arising from compensation risk.

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Operational Risk In Trading Platforms, M. Thulasidas Jan 2010

Operational Risk In Trading Platforms, M. Thulasidas

Research Collection School Of Computing and Information Systems

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. A trading platform is a system, and therefore comes under the umbrella definition of operational risk.

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Pemakaian Maqasid Al-Shari'ah Dalam Produk Takaful Keluarga Di Etiqa Takaful Berhad., Che Ismail Che Othaman Jan 2010

Pemakaian Maqasid Al-Shari'ah Dalam Produk Takaful Keluarga Di Etiqa Takaful Berhad., Che Ismail Che Othaman

Student Works (2010-2019)

Takaful is one of the financial instruments that has its own importance. It is the fundamental to Islamic insurance and its existence is as an alternative to the present conventional insurance in the conventional world of banking and finance. Al-Takaful which is based on al-mudarabah, at-tabarru’ and al-wakalah is very supportive towards syara’ in facing the conventional insurance which contains the element of gharar, usury and gambling element. The existence of takaful has aroused various issues, among them is to what extend is the application of maqasid al-shari‘ah in all of the products offered either in Family Takaful or General …

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Risk Modelling In Finance, Dave Allen Jan 2010

Risk Modelling In Finance, Dave Allen

ECU Research Week

Examines the measurement of risk in finance and the shortcomings of the various approaches to this measurement.

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Comparative Analysis Of Islamic And Conventional Banking Performance, Mirza Ali Huzaifa Sultan, Muhammad Zahid Siddique Jan 2010

Comparative Analysis Of Islamic And Conventional Banking Performance, Mirza Ali Huzaifa Sultan, Muhammad Zahid Siddique

Business Review

This paper analyzes the performance of Islamic banks compared to that of conventional banks in Pakistan. This comparison is based on the financial performance, product services and customer perception. We have selected two Islamic banks, namely Meezan Bank limited & Albaraka Bank, and two conventional Banks, Soneri and My Bank. This selection was made because of the similar size of these banks in terms of their deposits. The paper shows that Islamic Banking is falling behind the conventional one both in terms of its business as well as customer perspective. The research is divided into three parts. First part covers …

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Book Review Of: Meezan Bank’S Guide To Islamic Banking By Muhammad Imran Ashraf Usmani, Javed A. Ansari Jan 2010

Book Review Of: Meezan Bank’S Guide To Islamic Banking By Muhammad Imran Ashraf Usmani, Javed A. Ansari

Business Review

Islamic banking has been seriously effected by the financial crisis of 2007- 2010. The impending collapse of financial institutions in the Gulf, specially in Dubai and the growing threat of sovereign debt repudiation and default by oil exporting countries has had a particularly severe impact on global Islamic finance growth. Forecasts for Islamic finance transactions have been revised downwards several times during 2009 and riskiness and illiquidity of leading Islamic finance institution are perceived as having increased due to the growing instability of the Gulf economies.

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Do Analyst Earnings Beta Explain Growth Anomaly?, Sophie Phuong Thanh Doan Jan 2010

Do Analyst Earnings Beta Explain Growth Anomaly?, Sophie Phuong Thanh Doan

Dissertations and Theses Collection (Open Access)

Using a measure of cashflow risk derived from analyst forecasts, I find that cashflow risk offers a partial explanation for the value – growth anomaly. In particular, the lowest asset growth portfolio has a higher earnings beta than the highest asset growth portfolio. Approximately cashflow risk measured by earnings beta carries a significant positive risk premium of 1.24% with a t-value of 3.51.

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Auditor Choice, Audit Fees And Internal Governance In Family Firms, Shaohua He Jan 2010

Auditor Choice, Audit Fees And Internal Governance In Family Firms, Shaohua He

Lingnan Theses

I study the role of auditing in mitigating agency concerns in family firms. Family firms face less severe agency problems due to the separation of ownership and control (Type 1) but more severe agency problems between controlling and noncontrolling shareholders (Type 2). As family firms make up a large part of most free enterprise economies it is important to examine these two agency problems with respect to auditor choice and audit effort. I find that family firms are more likely to choose a specialist auditor than nonfamily firms, consistent with the argument that family firms need to signal their non-expropriating …

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Is The Special Purpose Vehicles Act Responsible For The Decline In Npl Ratios?, Stephanie L. Chan, Andrew Adrian Y. Pua Jan 2010

Is The Special Purpose Vehicles Act Responsible For The Decline In Npl Ratios?, Stephanie L. Chan, Andrew Adrian Y. Pua

DLSU Business & Economics Review

This study aimed to determine if the SPV Act was actually responsible for the marked decline in NPL ratios this past four years. Using aggregated data for the entire Philippine Banking System, segregated according to type of bank, results suggest that the SPV Act was not responsible for the decline in the NPL ratios but may be attributed to a downward trend in the loan to asset ratio where values are getting closer to the interval for which NPL ratios are at a minimum, economic sluggishness as measured by deviations from the long run trend of macroeconomic variables, and seasonal …

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A Comparative Analysis Of The Entrepreneurial Styles Of Second, Third, And Fourth Generation Overseas Chinese And Filipinos In The Philippines, Gerley Q. Po Jan 2010

A Comparative Analysis Of The Entrepreneurial Styles Of Second, Third, And Fourth Generation Overseas Chinese And Filipinos In The Philippines, Gerley Q. Po

DLSU Business & Economics Review

This study used the multiple case study research approach and presents a comparative analysis of the similarities and differences in entrepreneurship styles among second, third and fourth generation overseas Chinese and Filipinos in the Philippines. Specifically, it aimed to compare the entrepreneurs’ entrepreneurial characteristics, leadership styles, and value orientation. The results indicate that the two groups are heterogeneous even though they operate business in the same country. However, slowly, the influence of Filipino culture is seen in the fourth generation overseas Chinese. The study hopes to provide new generation of entrepreneurs insights on entrepreneurial styles that need to change to …

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Human Resource Management Practices: Drivers For Stimulating Corporate Entrepreneurship In Large Companies In The Philippines, Divina M. Edralin Jan 2010

Human Resource Management Practices: Drivers For Stimulating Corporate Entrepreneurship In Large Companies In The Philippines, Divina M. Edralin

DLSU Business & Economics Review

Leading companies in the Philippines have realized that nurturing an entrepreneurial culture through the implementation of various strategic human resource management (HRM) practices will enhance their firm’s ability to gain competitive advantage and achieve superior performance. This study attempted to determine the degree to which various HRM practices stimulate corporate entrepreneurship and which HRM function is the most significant driver of corporate entrepreneurship (CE) in large companies in the Philippines. Findings reveal that the companies are extensively implementing different practices related to HRM functions that cultivate CE. Employee relations, training and development, and recruitment and selection HRM functions are found …

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Nigeria’S Debt Overhang (1960-2005): A Critical Revisit, Solomon A. Adebola Jan 2010

Nigeria’S Debt Overhang (1960-2005): A Critical Revisit, Solomon A. Adebola

DLSU Business & Economics Review

A general global trend up to the 1980’s has been for nations to rely substantially on external loans and aids for economic sustenance and technological development. This is particularly true for less developed countries (LDC). Unfortunately for these LDCs, their debts have gone beyond the countries’ capacity to repay. The debts have, for many such developing countries, been on a perpetual geometrical increase. Such countries have ended up with a debt overhang, with its detrimental impacts on the countries’ economic growth and social development. This research note gives a treatise on the theoretical framework of a debt overhang, and a …

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Exploratory Market Survey Of Tuba In Tacloban City, Arturo Pacho Jan 2010

Exploratory Market Survey Of Tuba In Tacloban City, Arturo Pacho

DLSU Business & Economics Review

This research note explores the market condition of tuba in Tacloban City in the Philippines. It examined the market viability of tuba as a source of income for small retailers as well as coconut farmers. To determine whether there is any commercial value to tuba, and to what extent, a survey was made on the type of tuba sold, the price it is sold for, the quantity sold, the age of tuba, and the source of tuba. This report provides basic information as to the commercial value of tuba to small store retailers in the city.

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Changing Careers -- Six Options For Becoming A Cpa, Elizabeth V, Grace, T. G. Black Jan 2010

Changing Careers -- Six Options For Becoming A Cpa, Elizabeth V, Grace, T. G. Black

Faculty Publications

No abstract provided.

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Analysis Of The Relation Of Corn And Soybeans Futures And Etf Prices., Stoyu Ivanov Jan 2010

Analysis Of The Relation Of Corn And Soybeans Futures And Etf Prices., Stoyu Ivanov

Faculty Publications

In this study I examine the relation between corn and soybeans exchange traded funds and their respective futures contracts. Considering that the exchange traded funds for these commodities track an index based on a basket of the futures instruments a natural link exists between exchange traded funds and futures contracts. This is the first study, to the best of my knowledge, to examine this relation by using cointegration methodology and provide a Vector Error Correction Model of the relation between these two prices.

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The Regulation Of Consumer Financial Products: An Introductory Essay With Four Case Studies, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano Jan 2010

The Regulation Of Consumer Financial Products: An Introductory Essay With Four Case Studies, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano

Faculty Publications

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration proposed a new agency to oversee consumer financial services, and the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act embraced the Administration’s proposal by creating the Bureau of Consumer Financial Protection. Other regulatory reforms have been advanced, and in some cases adopted, in recent years, at both the federal and state level. In this paper, we provide an overview of consumer financial markets, detailing the purposes …

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The Desire To Acquire And Ipo Long-Run Underperformance, James C. Brau, Robert B. Couch, Ninon K. Sutton Jan 2010

The Desire To Acquire And Ipo Long-Run Underperformance, James C. Brau, Robert B. Couch, Ninon K. Sutton

Faculty Publications

We analyze a sample of 4,795 IPOs that went public between 1985 and 2003 to determine the impact of acquisition activity on long-run stock performance. After controlling for relevant factors, we find that IPOs that acquire within a year of going public significantly underperform for three-year holding periods following the first year, whereas non-acquiring IPOs do not significantly underperform over this time frame. In addition, firms that wait for more than a year after the IPO to become an acquirer do not underperform. Our event- and calendar-time results suggest that the acquisition activity of newly public firms plays a previously …

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Discretionary Deletions From The S&P 500 Index: Evidence On Forecasted And Realized Earnings., Stoyu Ivanov Jan 2010

Discretionary Deletions From The S&P 500 Index: Evidence On Forecasted And Realized Earnings., Stoyu Ivanov

Faculty Publications

The literature in the area of index changes finds evidence that index changes are information free events. However, Denis, McConnell, Ovtchinnikov and Yu (2003) find evidence contrary to this theory. This study extends the work of Denis, McConnell, Ovtchinnikov and Yu (2003) in an attempt to complete the assessment of the information hypothesis of index changes. Denis, McConnell, Ovtchinnikov and Yu (2003) address only index additions and do not examine index deletions in their study. Our contribution is in filling this void in the literature by examining forecasted and realized earnings of firms discretionary deleted from the S&P 500 index …

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Esops And Corporate Officers' Compensation., Stoyu Ivanov Jan 2010

Esops And Corporate Officers' Compensation., Stoyu Ivanov

Faculty Publications

In the literature two major hypotheses have been developed for Employee Stock Ownership Plans used as a takeover defense, the management entrenchment and shareholder interest hypotheses, with the existing research not finding conclusive evidence for either one. In this paper we provide evidence that the entrenchmenthypothesis is not supported by finding that Employee Stock Ownership Plan firms pay less to their managers than non-Employee Stock Ownership Plan firms. If managers were truly entrenched they would have been able to expropriate wealth from the existing shareholders, which appears not to be the case for Employee Stock Ownership Plan firms.

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The Impact Of Employer Matching On Savings Plan Participation Under Automatic Enrollment, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian Jan 2010

The Impact Of Employer Matching On Savings Plan Participation Under Automatic Enrollment, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

Companies have used a variety of approaches to encourage participation in employer- sponsored savings plans. The most common approach, the provision of an employer matching contribution, is now offered by the vast majority of large fi rms (Profi t Sharing Council of America 2006). Even with a match, however, savings plan participation rates are often surprisingly low (Choi, Laibson, and Madrian 2005), and empirical studies of matching contributions’ effect on plan participation have uniformly found relatively small effects (Andrews 1992; Papke and Poterba 1995; Papke 1995; Bassett, Fleming, and Rodrigues 1998; Kusko, Poterba, and Wilcox 1998; Choi et al. 2002; …

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The Regulation Of Consumer Financial Products: An Introductory Essay With A Case Study On Payday Lending, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano Jan 2010

The Regulation Of Consumer Financial Products: An Introductory Essay With A Case Study On Payday Lending, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano

Faculty Publications

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration has proposed creating a new Consumer Financial Protection Agency. Other regulatory reforms have been advanced, and in some cases adopted, in recent years, at both the federal and state level. In this paper, we provide an overview of consumer financial markets, detailing the purposes they serve, the extent to which they suffer from market failures or other deficiencies, and how they are currently regulated. To illustrate our analytical …

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What's On The Menu? Included Versus Excluded Funds For Singapore's Central Provident Fund Investors, Seng Kee, Benedict Koh, Olivia S. Mitchell Jan 2010

What's On The Menu? Included Versus Excluded Funds For Singapore's Central Provident Fund Investors, Seng Kee, Benedict Koh, Olivia S. Mitchell

Research Collection Lee Kong Chian School Of Business

As one of the oldest and largest national mandatory defined contribution pension systems, Singapore's Central Provident Fund (CPF) permits employees to invest their retirement accumulations in a variety of investment instruments rather than leaving them in a government-managed investment fund. Many plan participants avail themselves of this opportunity, selecting from a menu of more than 200 `included' funds that satisfy specific admission criteria set by the CPF Board. Nevertheless, many other funds are excluded from the list of eligible retirement system investments. This article shows that the `included/non-included' screening criteria have been effective, in that included fund managers earned higher …

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Long-Term Earnings Growth Forecasts, Limited Attention, And Return Predictability, Zhi Da, Mitchell Craig Warachka Jan 2010

Long-Term Earnings Growth Forecasts, Limited Attention, And Return Predictability, Zhi Da, Mitchell Craig Warachka

Research Collection Lee Kong Chian School Of Business

Long-term earnings expectations are critically important to stock price valuations. We identify relative optimism and relative pessimism in long-term analyst forecasts by comparing these forecasts with implied short-term earnings growth forecasts across rms within the same industry. Stocks with relatively optimistic and relatively pessimistic long-term analyst forecasts have negative and positive risk-adjusted returns, respectively. This return predictability depends critically on short-term forecasts since relative optimism and relative pessimism originate from the slow diffusion of information from short-term to long-term analyst forecasts. Our results indicate that market participants have limited attention regarding the long-term earnings implications of information.

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Strategic Financial Management: Evidence From Seasoned Equity Offerings, Michael Barclay, Fangjian Fu, Clifford Smith Jan 2010

Strategic Financial Management: Evidence From Seasoned Equity Offerings, Michael Barclay, Fangjian Fu, Clifford Smith

Research Collection Lee Kong Chian School Of Business

Extant theories of capital structure assume myopic financial managers. So they have hard time to explain the financing behavior of seasoned equity offering (SEO) firms. In contrast with the pecking order theory, SEO firms typically are financially healthy companies with significant cash balances, low leverage, and unused debt capacity. At odds with the tradeoff theory, SEOs often move firms away from, rather than closer to, their target leverage ratios. SEOs appear to be driven by capital needs associated with large investment projects rather than by market timing considerations. Firms issue debt following the SEO to finance investment further and to …

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Is Regime Switching In Stock Returns Important In Asset Allocations?, Jun Tu Jan 2010

Is Regime Switching In Stock Returns Important In Asset Allocations?, Jun Tu

Research Collection Lee Kong Chian School Of Business

The stock market displays regime switching between upturns and downturns. This paper provides a Bayesian framework for making portfolio decisions that takes this regime switching into account, together with asset pricing model uncertainty and parameter uncertainty. The findings reveal that the economic value of accounting for regimes is substantially independent of whether or not model and parameter uncertainties are incorporated: the certainty-equivalent losses associated with ignoring regime switching are generally above 2% per year, and can be as high as 10%. These results suggest that the more realistic regime switching model is fundamentally different from the commonly used single-state model, …

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Pakistan’S Experience With The International Monetary Fund (Imf) 2000 – 2004, Ishrat Husain Jan 2010

Pakistan’S Experience With The International Monetary Fund (Imf) 2000 – 2004, Ishrat Husain

Business Review

Pakistan’s relationship with the International Monetary Fund during the 2000 – 2004 period was quite unique and distinctive. Unlike the earlier eight agreements that were concluded with the IMF during 1988-99 and were never implemented beyond the first tranche release it was only in this period that two successive agreements – a nine month Stand-by Arrangement (SBA) in the year 2000 followed by a three year Poverty Reduction and Growth Facility (PRGF) were successfully completed. All the sixteen reviews by IMF staff were completed and eleven successive tranches were drawn on time without any extension or interruption 1 . The …

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Financial Market Development And Capital Structure Pattern In Pakistan: An Aggregate Level Analysis, Mohammed Nishat Jan 2010

Financial Market Development And Capital Structure Pattern In Pakistan: An Aggregate Level Analysis, Mohammed Nishat

Business Review

This study empirically identifies the factors that explain the capital structure choice pattern of listed companies during 1964–2000. Three measures of debt (total debt ratio, long term book debt ration, and long term market debt ratio) are explained by a set of independent fundamental variables such as growth of firm, size of firm, tangible asset, profitability, earning variability, market to book ratio, and reforms. The analysis is also done to identify any capital structure pattern prevail across various industries in Pakistan. Most of the results are consistent with theory and similar to other empirical studies. The growth and profitability of …

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