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No. 3

The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?

Pages: 234-244
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DOI: 10.18488/journal.62.2021.83.234.244

Regret Sunge , Nyasha B. Kumbula , Biatrice S. Makamba

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Regret Sunge , Nyasha B. Kumbula , Biatrice S. Makamba (2021). The Impact of Trade on Poverty in Sub-Saharan Africa: Do Sources Matter?. International Journal of Business, Economics and Management, 8(3): 234-244. DOI: 10.18488/journal.62.2021.83.234.244
Global trade development has provided noteworthy global poverty gains since the 1990s. Accordingly, Africa has gradually engaged itself in trade and trade policy reforms through multilateral and regional trade agreements among other initiatives. Nonetheless, poverty levels in the Sub-Saharan Africa (SSA) region remain relatively high. Recognizing that existing evidence on trade-poverty nexus is based on aggregate trade, we provide a new perspective on SSA by disaggregating trade by sources for the period 2003-2017. We employed the Generalised Method of Moments (GMM) estimation of a panel data model derived from the Modified Basic Household Model and Neo-Conservative Poverty Theory for analysis. The results document poverty gains from trade liberalization, with the extent varying according to sources. Specifically, trade from MENA and within SSA was found to offer more gains. Furthermore, findings suggest that poverty gains from trade are strengthened with better institutional quality. It follows that to accelerate poverty gains from trade liberalization, SSA should promote intra-Africa trade as well as trade with MENA countries. To accelerate the gains, Africa has to invest in better institutions, in particular, to improve governance and corruption eradication.
Contribution/ Originality
This study contributes to existing literature on trade-poverty nexus in two ways. Firstly, instead of basing conclusions on aggregate trade, we focus on trade by sources. We disaggregate SSA’s trade by regional sources. Secondly, we introduce control of corruption interaction term to control for institutional quality in the analysis.

The Influence of Institutional Voids in the Institutionalization of Bitcoins as a Currency

Pages: 219-233
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DOI: 10.18488/journal.62.2021.83.219.233

Maike Rafael Sa , Jorge Renato Verschoore , Jefferson Marlon Monticelli

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Maike Rafael Sa , Jorge Renato Verschoore , Jefferson Marlon Monticelli (2021). The Influence of Institutional Voids in the Institutionalization of Bitcoins as a Currency. International Journal of Business, Economics and Management, 8(3): 219-233. DOI: 10.18488/journal.62.2021.83.219.233
Bitcoin is a social movement, which promises free and decentralized money, absent from the traditional regulatory institutions, but it can be challenging for financial industry regulators and other players in the financial markets. Thus, our study aims to analyze how the institutional voids manifest in the bitcoin institutionalization process as a currency. We adopt the institutional theory, from the perspective of institutional voids, in order to observe the concepts in emerging markets that show the difficulty or the beginning of the institutionalization of bitcoin as a currency. The institutional theory provides an opportunity to understand the reasons for using particular practices, actions, or manifestations. Our method is based on a qualitative exploratory approach with semi-structured interviews to understand how financial market experts perceive this phenomenon. Our results show that it is possible to identify how institutional voids manifest themselves, reinforcing the debate on whether bitcoin is, in fact, a currency.
Contribution/ Originality
This study analyzes bitcoin as an economic object through the logic of institutional voids. Thus, with the institutional perspective as a background and theoretical support, it is examined how the institutional voids are manifested in the process of institutionalization of the bitcoin as a currency.

Financial Development and Economic Growth in Nigeria: New Evidence from a Threshold Autoregressive and Asymmetric Analysis

Pages: 207-218
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Financial Development and Economic Growth in Nigeria: New Evidence from a Threshold Autoregressive and Asymmetric Analysis

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DOI: 10.18488/journal.62.2021.83.207.218

Nuraddeen Umar Sambo , Ibrahim Sambo Farouq , Ali Umar Ahmad , Aminu Hassan Jakada , Ismail Aliyu Danmaraya , Saadatu Suleiman Sanusi

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Nuraddeen Umar Sambo , Ibrahim Sambo Farouq , Ali Umar Ahmad , Aminu Hassan Jakada , Ismail Aliyu Danmaraya , Saadatu Suleiman Sanusi (2021). Financial Development and Economic Growth in Nigeria: New Evidence from a Threshold Autoregressive and Asymmetric Analysis. International Journal of Business, Economics and Management, 8(3): 207-218. DOI: 10.18488/journal.62.2021.83.207.218
Financial development is concerned with policies, procedures and initiatives to increase the financial access, depth and productivity of financial institutions and financial markets. To that regards, this paper investigates the asymmetric relationship between financial development and economic growth by incorporating financial globalization uncertainty and inflation into a production function covering the Nigerian economy from 1980–2019. The threshold Autoregressive co-integration and nonlinear autoregressive distributed lag techniques are applied to examine the asymmetric cointegration between the variables, as well as the degree of the relationship among the variables. The results indicate long-run relationship between the parameters in the light of asymmetries. The asymmetric estimation results show that positive shock of financial development dampen economic growth. By comparison, symmetrically, the negative shock of the financial development improves the productivity growth of the Nigerian economy. Finally, while inflation shows a positive relationship, the financial globalization uncertainty indicates insignificant result. The implications of the said findings for productivity policies in Nigeria are also discussed.
Contribution/ Originality
This study contributes to investigating the asymmetric relationship between financial development and economic growth by incorporating financial globalization uncertainty and inflation into a production function covering the Nigerian economy from 1980.

IT Governance as Drivers of Dynamic Capabilities to Gain Corporate Performance Under the Effects of Environmental Dynamism

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DOI: 10.18488/journal.62.2021.83.181.206

Adilson Carlos Yoshikuni

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Adilson Carlos Yoshikuni (2021). IT Governance as Drivers of Dynamic Capabilities to Gain Corporate Performance Under the Effects of Environmental Dynamism. International Journal of Business, Economics and Management, 8(3): 181-206. DOI: 10.18488/journal.62.2021.83.181.206
For researchers and practitioners, there is an important central question to answer, how information technology (IT) governance can help organizations survive and thrive in constantly changing business environments. To address this issue, this study examines the influence of IT governance on dynamic capabilities to sustain corporate performance under environmental dynamism. Tests of the proposed model were performed using survey data from 147 Brazilian firms to support the hypotheses. The results demonstrated that IT governance is a core enabler of dynamic capabilities innovation and operational capabilities for corporate performance gains. The heterogeneity tests also showed that the firm's orientation strategy of prospector and analyzer, under conditions of high dynamism environmental, increased the value of IT governance to enable innovation capability, while the impact of IT governance-enabled operational capabilities under low dynamism, amplified the firm's orientation strategy of defender and reactor. For practical application, this study indicated that managers should be knowledgeable about how IT governance capability plays a fundamental role to enable dynamic capabilities and generate economic payoffs.
Contribution/ Originality
The original contribution of the work is illustrated of the relationship between IT governance practices, an approach that combined five IT capabilities, and dynamic capabilities (innovation and operational) to gain corporate performance under an uncertainty environment of dynamism, which has not been previously subject to large scale empirical testing.

The Effects of The Covid-19 Pandemic on Exploitative and Explorative Strategies of Pharmaceutical Industries in Brazil

Pages: 165-180
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The Effects of The Covid-19 Pandemic on Exploitative and Explorative Strategies of Pharmaceutical Industries in Brazil

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DOI: 10.18488/journal.62.2021.83.165.180

Macario Neri Ferreira Neto , Sergio Henrique Arruda Cavalcante Forte , Flavio Juliao , Cristiane Maria Galvao Viana

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Macario Neri Ferreira Neto , Sergio Henrique Arruda Cavalcante Forte , Flavio Juliao , Cristiane Maria Galvao Viana (2021). The Effects of The Covid-19 Pandemic on Exploitative and Explorative Strategies of Pharmaceutical Industries in Brazil. International Journal of Business, Economics and Management, 8(3): 165-180. DOI: 10.18488/journal.62.2021.83.165.180
The survey assesses whether changes in highly competitive market environments have led pharmaceutical companies in Brazil to adjust their corporate strategies in order to maintain or expand their performance. The study is of a theoretical-empirical type, and supported by a regression model and content analysis. Data collection applied questionnaires and interviews with managers of the pharmaceutical industries in two moments. The questionnaire referred to previous information (year 2019) and during the Covid-19 pandemic (June and December 2020). The interviews sought answers about future perspectives. As main results, the correlations between Market Turbulence, Exploitation, Exploration, Ambidexterity and Performance were positively validated, with the exception between Market Turbulence and Exploitation in 2019 and between Market Turbulence and Exploitation and also Exploration in 2019 and 2020. It is clear that companies in the pharmaceutical industry in Brazil changed their strategies to maintain or expand their performance in the face of this uncertain scenario, keeping exploration at levels similar to the previous year, but seeking balance in terms of exploitation, in the pursuit of ambidexterity, optimizing advantages of both strategies, with the mitigation of risks inherent to a turbulent scenario.
Contribution/ Originality
This study contributes to the organizational ambidexterity literature in highly turbulent environments, as is the case of the Covid-19 Pandemic, as well as identifies and analyzes how the pharmaceutical industries in Brazil had to carry out their incremental and or radical innovations in the global health crisis in 2020.

Internal Audit Quality and Disclosure on Risk Management and Internal Control

Pages: 154-164
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Internal Audit Quality and Disclosure on Risk Management and Internal Control

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DOI: 10.18488/journal.62.2021.83.154.164

Nor Hafizah Zainal Abidin

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Nor Hafizah Zainal Abidin (2021). Internal Audit Quality and Disclosure on Risk Management and Internal Control. International Journal of Business, Economics and Management, 8(3): 154-164. DOI: 10.18488/journal.62.2021.83.154.164
Disclosure and transparency are essential for informed decision-making. Timely reporting and accurate financial information including risk related information are key facets of investor protection and market confidence. This study examines the impact of internal audit quality on disclosure on risk management and internal control. The empirical evidence is gathered using data extracted from the annual report of 200 listed companies in 2017. Results indicate that higher internal audit quality significantly and positively enhances greater disclosure on risk management and internal control. Other characteristics such as firm size, firm liquidity, and audit firm size were further analyzed and found that those characteristics were not significantly related to the disclosure on risk management and internal control. Hence, this study provides empirical evidence on the likelihood of internal audit quality in facilitating the oversight duties of the audit committee and the board with regards to greater disclosure on risk management and internal control.
Contribution/ Originality
This study contributes to existing literature by examining the impact of internal audit quality on disclosure on risk management and internal control.