Business Risk

The management of exchange risks occurs regularly with the acquisition of hedges of derivative products in the financial markets, according to the theoretical review in publications of scientific articles, books and theses. The objective of this article is to measure the maximum probable loss with the value-at-risk method in the period 2014 to 2016 to analyze the alternative of managing exchange risks through hedging in an industrial micro-enterprise in Sinaloa. The methodology is qualitative with a case study. The contribution of this research work is to measure the maximum probable loss of a micro-industrial company that invests in raw materials inventories that vary according to the peso / dollar exchange rate, since there is an absence in this type of publications. The VaR model is applied with real data from the unit of analysis for exchange risk management. The main result confirms that the micro industrial company is not profitable to invest in hedges as an alternative to minimize its exchange risks.

The household enterprise sector has a significant role in the Tanzanian economy. It employs a larger share of the urban labor force than wage employment, and is increasingly seen as an alternative to agriculture as a source of additional income for rural and urban households. The sector is uniquely placed within the informal sector, where it represents both conditions of

Compensation for damage caused to patients by vaccination is an increasingly prominent issue given the important public health consideration of ensuring the highest possible take-up of vaccination. This study explores the approach to vaccine damage cases in four different European countries (France, Germany, Italy and the UK), examining the variety of different mechanisms for providing redress, including specific compensation funds, social security systems, the operation of orthodox regimes of tort law and product liability, as well as in certain jurisdictions bespoke legislation for healthcare products or pharmaceuticals. The authors then go on to examine the recent case law on this topic at a Member State and European level, focussing particularly on issues relating to the notion of defect and that of causation in vaccine damage cases. Zusammenfassung: Der Ersatz von Impfschäden gewinnt angesichts des Bestrebens, zur Sicherung der Volksgesundheit eine möglichst hohe Impfdichte zu erreichen, ständig an Bedeutung. Diese Studie untersucht die Herangehensweise an Impfschäden in vier EU-Mitgliedstaaten (Deutschland, Frankreich, Großbritannien und Italien), indem sie die verschiedenen Mechanismen, den Geschädigten Ersatz zu verschaffen, analysiert, darunter spezielle Entschädigungsfonds, sozialrechtliche Instrumente, klas-sisches Delikts-und Produkthaftungsrecht und schließlich sektorspezifische Gesetzgebung. Zudem erörtern die Autoren die jüngste Rechtsprechung auf mitglied-staatlicher wie auf EU-Ebene, unter besonderer Berücksichtigung des Fehlerbegriffs und der Kausalität in Impfschadensfällen. Résumé: La réparation des dommages causés par les vaccins est une question majeure, compte tenu notamment de l'objectif de santé publique visant à obtenir une couverture vaccinale aussi large que possible de la population. Cette étude s'intéresse à la manière dont sont appréhendés les dommages imputés aux vaccins dans quatre pays européens (l'Allemagne, la France, la Grande-Bretagne et l'Italie) et envisage différents mécanismes d'indemnisation, en particulier les fonds d'indemnisation, la sécurité sociale, les règles de droit commun de la responsabilité civile ainsi que les règles spéciales applicables aux produits de santé et aux médicaments dans certains pays. Les auteurs se penchent 57 également sur la jurisprudence en la matière, au niveau national et européen, s'intéressant particulièrement à la notion de défaut et à la caractérisation du lien de causalité dans les affaires relatives aux dommages attribués aux vaccins.

SYNOPSIS Although auditor litigation risk is considered as a leading explanation for auditor resignations, audit risk and business risk might also trigger resignations. Auditor litigation risk is defined as the risk of the auditor being involved in a lawsuit, audit risk is defined as the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated and, finally, business risk is defined as the risk associated with the client's survival and profitability. Because the three risk factors are not mutually exclusive, we examine their relevance and incremental importance using measures from the pre- and post-resignation periods. Using summary indices from the pre-resignation period, we find that all of the three ex ante risk indices are incrementally important for resignations, especially when the predecessor auditor is a Big 4 firm. Because the ex ante risk factors are prone to measurement errors and are less likely to capture t...

With the enormous expansion of scholarship on this subject,���rule of law��� has come to mean different things-ranging from security and order to the operations of courts and the administration of justice. We review the various streams of theoretical and empirical research by academics and practitioners, emphasizing the connections to economic development. The core logic is that security of property rights and integrity of contract underpin, respectively, investment and trade, which in turn fuel economic growth and ...

This paper discusses a study to explore the relationship among distinctive capabilities, business strategy, environment and performance of manufacturing small and medium enterprises (SMEs) in Palestine. More specifically the study attempts to determine whether the performance of manufacturing SMEs in Palestine is associated with their choice of business strategy they adopt, their distinctive capabilities, dimensions such as administrative capabilities, production/operation capabilities, marketing capabilities, human resources capabilities, environment uncertainty and performance. The model of the study illustrates that the relationship between independent variables which are distinctive capabilities and business strategy, moderating variable which is business environment while the dependent variable is the performance. The result of this study would provide a great benefit for owner-managers, government policy makers, scholars, and educators on the concepts of distinctive capabilities, business strategy, environment and their relationship with performance in the context of manufacturing SMEs in Palestine.

This paper discusses the essence of the entrepreneurial risk, ethical and legal standards, which must be adhered to by the head of a commercial organisation. In the Russian legislation, there is debate concerning the boundaries of the responsibilities of the corporate manager. Existing literature doesn't contain many studies about the norms on the responsibility of persons authorised to act on behalf of a legal entity because it is new for Russian civil legislation, which shows the novelty of this study. We identify problematic aspects that arise both in the doctrine and judicial practice regarding the determination of the criteria of good faith and reasonable behaviour of the head of the corporation. Our study examines the legal nature of entrepreneurial risk and how it affects the formation of managerial decisions. As a result, we propose a basic model of the criteria for the good behaviour of a corporate manager within a reasonable entrepreneurial risk.

The objective of this research is to examine the effect of profitability, liquidity, financial leverage, investment opportunities, sales growth, firm size, business risk, previous year's dividend payment, and industry dummies to dividend payout ratio using regression model. This research focused on non financial firms that are listed on Indonesian Stock Exchange for four years (2010 – 2013).

Objective – The objective of this study is to observe the effects of managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability on debt policy. Methodology/Technique – Using the purposive sampling method, secondary data were retrieved from 16 firms that fulfil the criteria of this study. Analysis was made through the multiple regression method. Findings – The results of this research indicate that: (1) managerial ownership has a significantly negative effect on debt policy, (2) institutional ownership has no positive effect on debt policy, (3) dividend policy has no negative effect on debt policy, (4) firm growth has no positive effect on debt policy, (5) business risk has a significantly positive effect on debt policy, (6) liquidity policy has a significantly negative effect on debt policy, (7) profitability has no negative effect on debt policy, (8) managerial ownership, institutional ownership, dividend policy, firm growth, business risk, liquidity, and profitability, simultaneously, have a significant effect on debt policy. Novelty – This study implies that all the independent variables are related to debt policy, simultaneously. This shows that the regression model has an appropriate fit in estimating the accrual value of the model.

Evaluating business risks becomes especially precarious in volatile information-poor emerging markets where issue-based isolated models of risk assessment no longer seem to apply. In particular,
multinational corporations (referred to as ‘‘multinationals’’) seem not to use more established models for evaluating business risks in the second largest market for foreign direct investment (FDI), China. First, this article notes how an integrated framework of business risks may pertain to multinationals’ operations in emerging markets. Next, it applies aspects of this framework to appraising business risks in China and highlights some strategies that multinationals are implementing to control risks. Finally, it
offers recommendations on an effective integrated framework for business risk analysis.

Cybercrime is on the rise. Many organizations have fallen victim and many more are running the risk of security breach, loss of data and information and loss of billions of dollars. Big corporates are struggling to keep a tight lid on this as the consequences of losing their pants in public will seal the fate of their businesses. It is time to change our attitude towards cybercrime. It is time to pay attention. It is real and we need to act now.

SYNOPSIS Although auditor litigation risk is considered as a leading explanation for auditor resignations, audit risk and business risk might also trigger resignations. Auditor litigation risk is defined as the risk of the auditor being involved in a lawsuit, audit risk is defined as the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated and, finally, business risk is defined as the risk associated with the client's survival and profitability. Because the three risk factors are not mutually exclusive, we examine their relevance and incremental importance using measures from the pre- and post-resignation periods. Using summary indices from the pre-resignation period, we find that all of the three ex ante risk indices are incrementally important for resignations, especially when the predecessor auditor is a Big 4 firm. Because the ex ante risk factors are prone to measurement errors and are less likely to capture t...

This study aimed to examine the prospective role played by environmental uncertainty on the performance of manufacturing SM Es. Interestingly, only a few empirical researches were conducted on the effect of business environment on Performance of SM Es in Palestine. The environmental uncertainty, and performance were measured on the basis of extensive literature. The number of Questionnaire used to collect data from the respondents were 341. The respondents are from manufacturing SM Es in West Bank of Palestine. The findings indicate that there is a negative significance relationship between environmental uncertainty and the performance of manufacturing SMEs.

Dear colleagues,

We are pleased to publish the third issue of The Journal of Applied Economics and Business Research that contains four inaugural papers featuring both fine quality and a wide spectrum of topics across applied economics, business and finance. We hope you will enjoy these readings. To view articles, visit http://www.aebrjournal.org/current-issue.html.

We now welcome your full papers, research notes, review papers, conference reports, and other related materials for the second issue. Articles of between 5,000 and 8,000 words can be sent via e-mail to editorial team at fsuvankulov@aya.yale.edu or filiz.karabag@sh.se

We look forward to an interesting second issue!

Yours truly,

Alisher Akhmedjonov,
Filiz Karabag,
Farrukh Suvankulov

Associate Editors

This paper discusses a study to explore the relationship among distinctive capabilities, business strategy, environment and performance of manufacturing small and medium enterprises (SMEs) in Palestine. More specifically the study attempts to determine whether the performance of manufacturing SMEs in Palestine is associated with their choice of business strategy they adopt, their distinctive capabilities, dimensions such as administrative capabilities, production/operation capabilities, marketing capabilities, human resources capabilities, environment uncertainty and performance. The model of the study illustrates that the relationship between independent variables which are distinctive capabilities and business strategy, moderating variable which is business environment while the dependent variable is the performance. The result of this study would provide a great benefit for owner-managers, government policy makers, scholars, and educators on the concepts of distinctive capabilities, business strategy, environment and their relationship with performance in the context of manufacturing SMEs in Palestine.

Compensation for damage caused to patients by vaccination is an increasingly prominent issue given the important public health consideration of ensuring the highest possible take-up of vaccination. This study explores the approach to vaccine damage cases in four different European countries (France, Germany, Italy and the UK), examining the variety of different mechanisms for providing redress, including specific compensation funds, social security systems, the operation of orthodox regimes of tort law and product liability, as well as in certain jurisdictions bespoke legislation for healthcare products or pharmaceuticals. The authors then go on to examine the recent case law on this topic at a Member State and European level, focusing particularly on issues relating to the notion of defect and that of causation in vaccine damage cases.

ABSTRACT Agility is meant as a feature enabling the enterprise to use opportunities and avoid the threats. Agile enterprise is oriented on using the market opportunities. The ability is dependent on the resources the enterprise possesses or which are in its disposal. The resources can be classified into four following groups: material technologies, finance, social, and knowledge. In the paper the variety of state of resources are discussed to show their influence on the agility of enterprise. According to the four above categories of the resources the following models of agility are distinguished: technological, financial, social, and entrepreneurial. Each of the models presents the relation between the state of the resources and the both agility and business risk

The motivation for this research enquiry is to identify the role of the business age, size and risk for the choice of debt financing in the textile and apparel sector of Pakistan along with other controlled factors. The textile and apparel sector of Pakistan comprises 464 listed entities as the targeted population while the study randomly finalized 60 firms as the sample after carefully analyzing the required information from the financial statements during the annual revenue streams of 2013-2019. The predicted variable for this research enquiry is measured by short, long and total-debt ratios while the predictor variables include the business age, firm's scale and risk. In addition, the research includes tax shield, tangibility, liquidity, profitability, and growth as the controlling factors. The study estimated that the choice of total-debt ratio is strongly affected by business age, size and risk alongwith tax shield, tangibility, liquidity and profitability while the choice of short-term debt ratio mainly depends upon the firm's scale and age along with the tax shield. In addition, the choice of long-term debt ratio is strongly explained by the firm's scale and age along with the tax shield, liquidity and profitability. The estimated evidence provides management with the implications for the textile and apparel sector of Pakistan to consider as significant factors in deciding the debt financing choice of this sector. The estimated evidence of this research enquiry applies to the non-financial textile sector only and cannot be generalized to the financial sector. Future research may enhance the financing choice towards the inclusion of equity financing with the same set of variables.

The recent drought in southern Africa and impacts on inter alia water resources, crop growth and turnover/profit has many companies asking whether the effects could have been avoided, or at least minimised with improved foresight and planning. Water has moved to the top of the business risk agenda for many companies, especially those who rely on it as a key input in their supply chains.