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Malaysian Management Journal (MMJ) Vol. 1 No. 2 June 1995

On the Operating Efficiency of the Commercial Banking Sector in Malaysia : Empirical Evidence
Muzafar Shah Habibullah
Faculty of Economics and Management, Universiti Pertanian Malaysia, Malaysia.
 
Abstract Ɩ Full Text
It has been argued and recognised in the literature on economic development that finance is inevitable for economic growth. The ability of financial institutions to perform their basic role as an intermediary between savers and investors in the financial system affects the performance of the economy as a whole. Thus, it is not surprising that the efficiency of the financial markets, particularly the banking sector, must by now be one of the most intensively researched topics in economics, especially in developed countries such as the United States, Canada and the United Kingdom. The purpose of this study is to complement the literature on banking efficiency, with respect to a developing country, namely, Malaysia. In this study, we used three approaches — single-output bank cost function, multiproduct bank cost function and profitability analysis — to identify whether the banking sector in Malaysia exhibits scale economies. The study used cross-sectional data for the 1984-1986 period. Results of our multiproduct bank cost function approach show that, as a whole, the banking sector in Malaysia exhibits decreasing ray average cost or economies of scale. Further, our results indicate that banks exhibit economies of scope or interproduct complementarity among various outputs. However, it was also revealed that foreign banks in Malaysia do not experience scale economies. This is probably due to the fact that current regulations do not permit foreign banks to establish their branches in the country. As such, the banks do not have the opportunity to spread their operating costs more 'evenly' compared to domestic banks.
 

 
Addressing The Customers: The Influence Of Status, Physical Contact, And Age On Customers' Level Of Irritation
Nik Rahimah Nik Yacob & Mohammad Naim Ahmad
Faculty of Business Management, Universiti Kebangsaan Malaysia, Malaysia.
 
Abstract Ɩ Full Text
How do customers react when they are called by their first name in a service encounter? This paper explores the influence of a service provider's status, physical contact and age on customers' feelings of irritation when they are first-named by a service provider. Data for the study was a sample of ITM students. From three replications of the study, mixed support was obtained for the influence of status and physical contact, while age registered a non-significant influence on customers' level of irritation. Some interactions between the independent variables were also discovered.
 

 
Who Are The Next Entrepreneurs ?
Zainal Abdullah, Frank T. Griggs & Sandra L. Planisek
Seidman School of Business, Grand Valley State University, Allendale. USA.
 
Abstract Ɩ Full Text
Identifying potential entrepreneurs is important for governments trying to increase the number of small, flexible, job-creating domestic businesses. Academic research into the personality tendencies of actual and potential entrepreneurs has generated confusing and contradictory results. Current work stresses that motivation, learnable and non-learnable characteristics, might all distinguish future entrepreneurs from the general population. In this study, survey data on the motivation, demographics and learnable characteristics of business students in Malaysia and the United States were used to seek answers to the following questions 1) Do entrepreneurs differ from the general population? 2) Do actual entrepreneurs differ from potential entrepreneurs? and 3) Do entrepreneurs differ across cultures? The results indicate that it is possible to differentiate entrepreneurs from the general public, that actual and potential entrepreneurs do differ and that American and Malaysian entrepreneurs are different.
 

 
Malaysian Institutional investors’ Annual Reports Information Needs
Noor Haslina Yusoff & Mustafa Mohd. Hanefah
School of Accounting, Universiti Utara Malaysia, Malaysia
 
Abstract Ɩ Full Text
This paper examines annual report information needs of Malaysian institutional investors. Data were colleted from a sample of 286 institutions (comprising government agencies and private industries) through questionnaires, and were analysed to test for differences and relationship in the extent of usage and perceived importance of annual reports in Malaysia. The result indicate some significant differences in the extent of usage and in the perceived importance of items in annual reports between institutional investors.
 

 
R & D Screening Process : The Commercial Viewpoint
Chan Kook Weng
Guthrie Research Chemara, Malaysia
 
Abstract Ɩ Full Text
The process of R&D screening is a very important component of any R&D organization and must be done continuously. At Guthrie Research Chemara, such screening has been an integral part of research. R&D screening has a direct value in making decisions as to which research proposals should be included in or excluded from R&D programs which, eventually, will influence the corporate strategy of the Company. Screening involves a whole range of internal vetting before justified R&D proposals are prioritized, approved and implemented. Also, one of the major elements of the screening process, the cast and profit calculation of research proposals, greatly assists in the rapid commercialization of R&D findings. This paper relates some of the experiences from Guthrie Research Chemara on the usefulness of R&D screening for effective research.
 

 
The Use of Logarithmic Transformation and Numerical Derivatives for Business Performance Data
Marvin D. Troutt, Suresh K. Tadisina & Harold K. Wilson
Department of Management, Southern Illinois University, Carbondale, USA.
 
Abstract Ɩ Full Text
The value of plotting business performance data over time on a semi-logarithmic graph has been advocated, but in a somewhat offhand and intuitive way. While examples have been discussed, no mathematical justification has been. given. In this paper, we give such a justification in order to underscore, and perhaps acquaint the reader with this simple yet powerful graphics tool. We also discuss and illustrate an extension of the idea underlying this technique. These methods are particularly useful with spreadsheet packages which include graphics capabilities.
 

 
Corporate Size and Rank Maintenance in the Malaysian Industrial Sector
Omar Marashdeh
Department of Economics, International Islamic University, Malaysia.
 
Abstract Ɩ Full Text
The study empirically tests the hypothesis that firms try to maintain or improve their ranks. Malaysian data is used. The findings of the study indicate that; 1) companies, in general, try to maintain or improve their relative ranks in the corporate structure over time; 2) smaller and larger companies are more concerned about maintaining their ranks in the corporate hierarchy; 3) companies are more concerned with maintaining their ranks in the short run than in the long run; 4) the concentration of wealth and monopoly power of the largest eleven companies declined over the years as more companies were listed and mailer companies improved their positions in the industry; and 5) there is a non-significant relationship between asset-size and profitability of the firm, at least in the short run. However, the study indicates that in the long run, rank maintenance and profit maximization are complementary hypotheses.
 

 
Monetary and Exchange Rate Policies in an Open Economy the Malaysian Case, 1959-1992
Lin See-Yan
Bank Negara Malaysia, Kuala Lumpur
 
Abstract Ɩ Full Text
The main purpose of this paper is to analyse the role of the exchange rate and monetary policy in a small open economy and to discuss the interaction of these policies in the Malaysian context. The Malaysian experience indicates that there is a close interaction and sometimes a trade-off, between monetary and exchange rate policies. The experience of Malaysia, particularly in 1992, underscores the need to view stabilisation policies in their totality within the proper perspective. Both exchange rate and monetary policies must be seen as part and parcel of an integrated package of macroeconomic measures. In addition, there is a need for co-operative actions across the full range of policies, both domestically and across countries, in order to promote stable long­term economic developments.