Jahangirnagar University Journal of Business Research

Effect of Macroeconomic Factors on Mutual Funds Risk and Return: An Empirical Study from Bangladesh

Shaikh Masrick Hasan — 2024-08-10

This study aims to identify the influence of macroeconomic factors on the risk and return of mutual funds in Bangladesh. Monthly closing price data of 27 mutual funds from Bangladesh are collected from December 2015 to December 2022. Additionally, monthly data of 6 macroeconomic variables, i.e., deposit rate, export, import payments, remittance, broad money (M2) and GDP growth rate, are gathered for this study. This study utilized standard deviation and beta as risk measures, and the Sharpe and Treynor ratios are applied as risk-adjusted return (RAR) measures. All the risk and risk-adjusted return measures are computed using 12-months rolling window method. The random effect model of panel data analysis is applied to find the influence of macroeconomic variables on the risk and return of mutual funds. Overall findings indicate that macroeconomic factors significantly influence mutual fund risk exposure. On the other hand, risk-adjusted return (RAR) is also significantly influenced by the macroeconomic variables. This empirical evidence helps practitioners and institutional investors in their decision-making in the situation of market asymmetric.

Keywords: Risk-Adjusted Return, Bangladesh, Mutual Fund, Standard Deviation, Beta, Sharpe Ratio, Treynor Ratio

Language Barriers Impact on Trade Disputes: Evidence from the WTO Trade Disputes Cases

Fahmida Mostafiz — 2024-08-10

This study examines the impact of language barriers on trade disputes using a panel data set of 129 countries and 565 trade dispute cases from the World Trade Organization (WTO) spanning the years 1995 to 2018. The language barrier index is employed as a metric to assess the extent of language barriers between trade nations, while the panel probit model is utilized for conducting the empirical analysis. The empirical evidence indicates that language barriers exert a substantial and favorable impact on trade disputes. Language obstacles in trading countries have been found to heighten the probability of trade disputes, indicating that language barriers contribute to increase trade costs and hamper bilateral trade relations. Moreover, the Armington model is employed to elucidate the theoretical aspects of the impact of language barriers on trade disputes, with trade costs serving as the mediating factor. The findings of the study also validated the notion that linguistic barriers contribute to an elevated likelihood of trade disputes. This research study presents empirical findings regarding the influence of linguistic barriers on trade disputes. Additional investigation can be undertaken to examine the impact of language competency on trade disputes, given the substantial role that language plays in the realm of international trade.

Does Islamic Mutual Fund Bear Higher Risk than Conventional Mutual Funds? An Empirical Analysis from Bangladesh

Shaikh Masrick Hasan — 2024-08-10

This study aims to identify whether Islamic mutual funds bear higher risk exposure than conventional mutual funds due to implementing their shariah screening criteria to select assets on the portfolio. For this purpose, monthly closing price data of Islamic and conventional funds operated in Bangladesh are collected from January 2016 to August 2023. A total of 2320 observations of each risk measure (e.g., standard deviation, semi-standard deviation, semi-standard deviation, and beta) are computed using a 12-month rolling window method to compare risk exposure between Islamic and conventional funds using univariable and multivariate analysis. The univariate analysis is conducted by performing an independent samples t-test, which confirms that overall, Islamic funds bear lower risk exposure than conventional funds. In multivariate analysis, the Feasible Generalized Least Square (FGLS) method, a dynamic panel data analysis model, is applied where the effects of macroeconomic variables such as deposit rate, GDP growth rate, exports, imports, broad money, and remittances are controlled. The results of the multivariate analysis also confirm that Islamic mutual fund risk exposure is lower than that of conventional mutual funds. This study will be helpful for practitioners and institutional investors in decision-making.

Factors influencing Customer Purchasing Attitudes towards F-commerce in Bangladesh: Youth Group Perspective

Md. Al Amin — 2024-08-10

The study's objective is to identify the key factors that influence customers' attitudes towards purchasing on Facebook and establish the relationship between these variables and consumers' buying behavior on f-commerce. A quantitative research design was utilized to accomplish the goal of the study. This study utilized convenience sampling as a non-probability method of sampling. The study was conducted with a sample size of 219 young individuals engaged in online purchasing. In addition, the data was analyzed using the Structural Equation Model (SEM) with the assistance of PLS 4.0. Finally, the results demonstrate the intricate interaction between multiple factors and client preferences. Trust-related concerns, such as protecting sensitive information and online safety, significantly shape buying decisions of young customer groups. This study suggests that sales services, including prompt delivery and promotional activities, affect customers' opinions of f-commerce. F-commerce is also influenced by promotional activities, which in turn shape young consumers' perceptions. The report highlights the importance of companies understanding and addressing these factors in order to enhance customer engagement and achieve success in the digital marketplace. The study's findings will assist f-commerce enterprises in developing customized marketing plans for young customers.

Significance of Subsidiaries for Improving Financial Performance in the Sugar Industry: A Quantitative Analysis

Dhanonjoy Kumar — 2024-08-10

One of the greatest plants today for converting solar energy into biomass and sugar is sugar cane. It is a plentiful supply of fuel, chemicals, fodder (green cane plant leaves and tops, bagasse, molasses, and to some extent press mud), food (sucrose, jaggery, and syrup), fiber (cellulose), and other nutrients. Bagasse, molasses, and press mud are the principal byproducts. Bangladesh has been farming sugarcane for the production of gud, sukker, and khandeswari since very ancient times. These sweeteners can also be made from palm and date juice. The objectives of the study were to examine the significance of subsidiaries for improving financial performance in the sugar industry. The utilization of secondary data helped researchers accomplish their goals. Multiple regression analysis will be employed to assess secondary data gathered from diverse sources in order to uncover significant predictors of the business's financial performance. The study revealed that the distillery unit significantly increases net profit every financial year, recovering losses from other units like sugar and agro-firms. The sugar division loses money each fiscal year, while the agro-farm unit gradually loses money. The fertilizer unit earns a significant profit, contributing to minimizing the losses of other units like sugar and agro-firms. Only Carew & Company (Bangladesh) Limited has a distillery plant out of the 15 sugar mills.

[Keywords: Byproduct, sugar mills, distillery unit, cost minimize and sugarcane.]

The Association between Credit Risk Management and Banks’ Performance in Bangladesh: A Panel ARDL Approach

Md Badrul Alam — 2024-08-10

This paper aims to empirically investigate both the long-run and short-run association between credit risk management and commercial banks’ performance of Bangladesh by employing a panel data collected from 23 Dhaka Stock Exchange (DSE) listed conventional commercial banks over a period of 13 years spanning from 2008-2020. The study incorporates capital adequacy ratio (CAR), non-performing loan ratio (NPLR), and geographical loan concentration ratio (GLCR) as the indicators of credit risk management, while considering return on asset (ROA) as the performance measure. The results indicate that there is a significant positive long run as well as short-run relationship between CAR and ROA. In addition, the study reveals a short-run negative relationship between NPLR and ROA. The study suggests that commercial banks may maintain sufficient capital to absorb any substantial loan loss without collecting any emergency funds.