Muhammad Azeem Qureshi - Academia.edu (original) (raw)

Papers by Muhammad Azeem Qureshi

Sustainability, 2020

Explaining sources of profitability has been a major research stream in corporate finance and str... more Explaining sources of profitability has been a major research stream in corporate finance and strategic management literature for decades. However, we have limited understanding of the sources of variations in firm profitability, especially in Norway, where the linkage of the sustainability of business entities and the economic sustainability of Norway is quite pronounced due to the extended role of the state actively engaged in business activities. Using a unique and all-inclusive dataset of all businesses in all sectors having various ownership forms over 2008–2016 of this advanced service economy, this study opens the black box of variations in profitability of Norwegian businesses. Overall, firm characteristics explain most of the variation in profitability, but we identify one industry where the industry effect dominates. Among several variables, long-term finance and short-term finance explain most of the variations in profitability.

In this paper we analyze the relationship between bankruptcy risk and the corporate life cycle in... more In this paper we analyze the relationship between bankruptcy risk and the corporate life cycle in Pakistan from 2005 to 2014. For this purpose, we run a Hierarchical Linear Mixed Model (HLM) for a sample of 301 non-financial listed firms in 12 different sectors. The empirical outcomes reveal that firms during introduction, growth and, decline stages (mature stage) of life-cycle experience higher (lower) bankruptcy risk. Moreover, in juxtaposition with growth stage, bankruptcy risk is higher at the introduction stage of life-cycle. These findings suggest that financial managers should be cautious about the financial fragility of the firm at each stage of corporate life-cycle. The results also entail that Pakistani firms do not follow a sequential pattern in their life-cycle rather they have the tendency to revert to a previous stage or jump to the next stage of life-cycle. This is the first study that empirically examines the association between firm life-cycle stage and correspondin...

The purpose of this study is to investigate how earnings announcement event affects stock returns... more The purpose of this study is to investigate how earnings announcement event affects stock returns at Karachi Stock Exchange (KSE). For this purpose we use the KSE-100 Index as our sample. We use the CAR Analysis to analyze the impact of earnings announcement over the stock returns around announcement dates. Our results suggest that KSE experiences abnormal stock returns around earnings announcement dates for the overall market and for different categories which indicate that efficient market hypothesis does not hold in Pakistani market and point out the presence of informational dissemination inefficiencies in the market.

International Journal of Business and Management, 2012

The purpose of this paper is to analyze comparative efficiency of banking system in Pakistan comp... more The purpose of this paper is to analyze comparative efficiency of banking system in Pakistan comprising of Islamic banks (IB), conventional banks with Islamic banking division (IBD) and conventional banks (CB). For this purpose we use two methods: First, ratio analysis to analyze cost, revenue and profit efficiency; Second, data envelopment analysis (DEA), for comparative analysis of banks' technical, pure technical and scale efficiencies. We use efficiency scores of DEA to analyze the impact of size on the efficiency. Finally, we compare and contrast the efficiency estimates with the traditional measures of banks efficiency. We find that Islamic bank is more cost efficient and less revenue efficient. Considering their growth rate which is rudiment to scale efficiency (SE) we argue that Islamic banks should be encouraged to reach the efficient frontier in the banking industry by reducing their wastes. We further observe that hybrid banking may not be feasible form for banking industry in Pakistan. In view of the observed inverse relationship of size with scale efficiency we recommend reconsideration of the regulators' policy of increasing the capital base of the banks thus forcing them to increase their size.

International Education Studies, 2012

The increasing diversity in students' enrolment in higher education in Norway offers an opportuni... more The increasing diversity in students' enrolment in higher education in Norway offers an opportunity to use collaborative learning and teamwork as a learning vehicle to exploit the synergy in the community to have formal and informal agoras. Theoretical and empirical observation of the value of team processes provides the framework to personify our understanding of learning and present a model for teaching in higher education in Norway. We consider learning as a holistic process and one must appreciate its dynamics and be flexible and responsive to it. Moreover, such a view of the entire process necessitates an active communication with all stakeholders of the system and to make an integrative and coordinated effort to ensure availability of the required institutional resources, equitable distribution of the students' resources, and a smooth transition from the traditional lecturing to this form of collaborative learning to make higher educational institution a learning organization. We report a positive feedback from the students attending two courses at School of Business at HiOA, indicating that students consider this teaching method adding more value compared to traditional lecturing.

Asian Social Science, 2012

Diversification has become a common strategy of corporate risk management along with availing oth... more Diversification has become a common strategy of corporate risk management along with availing other potential benefits. The intent of this study is to identify and analyze the nature of relationship that exists between diversification and capital structure as well as profitability in Pakistan. For this purpose we use the 10 years' (2000-2009) data of all the companies of chemical and food sector listed at the Karachi Stock Exchange (KSE). We find that the diversified firms are more profitable. Using independent variables of firm size, growth and tangibility the results show that whenever significant, the relationship is associated with greater amount of debt held by the firms.

AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 2012

Most of the chemical sector firms in Pakistan have foreign ownership or collaboration with foreig... more Most of the chemical sector firms in Pakistan have foreign ownership or collaboration with foreign companies. It may be hypothesized that the leverage behavior of such firms is likely to be in line with the results of international studies of leverage generally carried out in developed economies. But there are a number of factors which differentiate developed economies from the developing ones. Hence, we identify an interesting conjunction for our research to add to the existing body of literature empirical evidence as to what determines leverage in chemical sector firms of Pakistan which have generally foreign ownership/collaboration. For this purpose we use the data of all listed firms of chemical sector of Pakistan for the period 1988 to 2006 (19 years). We use the framework provided by two competing theories, trade-off theory (TOT) and pecking order theory (POT), to identify the determinants of capital structure in the sector by using panel data models to identify the determinants of leverage and nature of their relationship. We find a significant direct relationship between profitability, business risk and leverage. This finding is consistent with TOT and negates the findings of some of the earlier studies in Pakistani context. Further, we find an inverse relationship between size, growth and leverage which is consistent with POT. These findings suggest that most of the chemical sector firms of Pakistan, having foreign ownership/collaboration, use a mix of local and international strategies for their leverage formation in Pakistan.

Systems Research and Behavioral Science

The complexity surrounding the maximization of firm value agenda demands a comprehensive causal m... more The complexity surrounding the maximization of firm value agenda demands a comprehensive causal model that effectively embeds the intertwining relationships of the variables and the policies involved. System dynamics provides an appropriate methodology to model and simulate such complex relationships to facilitate decision making in a complex business environment. The objective of the study is to analyze the impact of capital structure policy, being a key managerial decision, on the firm value. For this purpose, the study develops a system dynamics-based corporate planning model for an oil firm, including the operational as well as financial processes. Various scenarios and capital structure policies have been designed and simulated to identify the policy that helps in increasing the firm value. The results demonstrate that increase in debt percentage in capital structure mix increase the firm value.

System Dynamics Review, 2020

The purpose of this study is twofold: (i) to analyze the impact of investment policy decision on ... more The purpose of this study is twofold: (i) to analyze the impact of investment policy decision on the firm value given the uncertain oil and gas prices and (ii) to propose policies that enhance firm value. The study develops a system dynamics model that integrates the financial and operational activities of oil firms. The simulation results reveal that, when oil and gas prices increase, positive future expectations lead to increased investments and reduced cash flows. Greater volume of investments over the firm's current investment policy decreases its future cash flows and the total firm value over the first 20 years of the simulation period; it increases thereafter. To support higher investments, the firm would issue a higher number of shares, and consequently the market price per share would be lower, and vice versa. The simulation results suggest a relatively lower volume of investments to increase the market price per share.

businessperspectives.org

Growth opportunity has been considered as a significant determinant of capital structure. The lit... more Growth opportunity has been considered as a significant determinant of capital structure. The literature generally fa-vors the negative relationship between the growth opportunities and leverage of firms. However, another school of thought finding such a relationship to be positive also ...

Economies, 2021

The influence of market sentiments on the bankruptcy risk propensity of firms has been extensivel... more The influence of market sentiments on the bankruptcy risk propensity of firms has been extensively explored in the literature. However, less attention has been paid to whether the corporate life cycle plays any role in this nexus. The purpose of this research is to unveil how the corporate bankruptcy risk propensity responds to market sentiments, and whether this sentiments–risk relationship varies over different stages of the corporate life cycle. Using a sample of 301 Pakistani non-financial listed firms for 2005–2014, we employ two-step generalized method of moments (GMM) regression estimation to address the issue of endogeneity. Empirical evidence reveals that managers tend to escalate a firm’s bankruptcy risk during high market sentiments. Further analysis indicates that during the period of positive market sentiments, introduction stage firms prefer to assume the highest bankruptcy risk followed by decline and growth firms, while mature firms continue to be risk-averse. This r...

Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice, 2019

The objective of this study is to investigate which of the two competing theoretic frameworks; pe... more The objective of this study is to investigate which of the two competing theoretic frameworks; pecking order theory (POT) or trade-off theory (TOT); better explains the corporate leverage behaviour in Pakistan. For this purpose, we use fixed effects model on a large unbalanced panel data comprising of 13,026 firm-year observations of non-financial firms listed on Karachi Stock Exchange Pakistan during 1972-2010 Our results indicate that leverage has two pervasive and significant relationships. First, leverage is negatively related to current and past profitability. Second, leverage is positively related to past dividends. In addition, empirical results present a reasonable support to POT regarding growth. However, POT gets nominal empirical support in Pakistan regarding firm size. The results of this study will help the corporate managers to better formulate the leverage policy.

SAGE Open, 2021

Increasing interest in sustainability performance (environmental, social, and governance pillar p... more Increasing interest in sustainability performance (environmental, social, and governance pillar performance [ESGP]) and corporate financial performance (CFP) is noteworthy. However, we do not find any all-inclusive study that employs both individual components of environmental, social, and governance pillars (ESG) as well as the cumulative ESG score on both the accounting and market performance of firms. Furthermore, we do not find any study that puts forth “best practices” in the ESGP-CFP nexus. Therefore, our study intends to provide additional empirical evidence in this debate by including all three pillars of ESG as well as the overall ESG score by employing a unique sample of “100 best corporate citizens” in the United States declared by 3BL Media during 2009 to 2018. For this purpose, we employ panel vector auto regression (PVAR) that allows us to overcome the methodological challenges faced by some earlier empirical studies. The core findings are: (a) for market-based financi...

Climate change discourse integrates 3Ps – People, Planet, and Profit. However, we do not find any... more Climate change discourse integrates 3Ps – People, Planet, and Profit. However, we do not find any empirical study that integrates 3Ps. Therefore, using a large global panel dataset from 46 countries this study intends to fill this gap by providing empirical evidence about investors’ value proposition of corporate climate performance in different cultural environments. The results show that Hofstede’s cultural dimensions affect corporate climate performance and its market pricing. We find that in cultures with high power distance, low individualism, high masculinity, high uncertainty avoidance, high long-term orientation, and high restraint, the investors generally penalize the firms disclosing higher environmental performance. Strangely enough, corporate waste production is universally value irrelevant. Our results indicate some policy implications.

Applied Economics, 2020

ABSTRACT Policy uncertainty (PU), and sustainability disclosure, influence the performance of the... more ABSTRACT Policy uncertainty (PU), and sustainability disclosure, influence the performance of the firms. We use European data to extend the nascent literature on sustainability disclosure, and economic policy uncertainty by investigating the moderating impact of sustainability disclosure on the relationship between economic policy uncertainty and firm performance. We find overwhelming evidence that policy uncertainty reduces firm performance; however, sustainability disclosure moderates this destructing impact of policy uncertainty on firm performance. Our results show that environmental and social disclosure by the European firms enhances their reputation and help these firms in reducing the policy-induced uncertainty. A higher governance disclosure representing efficient corporate governance also help European firms to moderate the negative effect of policy uncertainty on their performance. Our results are robust to alternate proxies of firm performance as well as endogeneity issues.

Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice, 2019

This chapter uses panel data techniques to analyze the impact of corporate governance and competi... more This chapter uses panel data techniques to analyze the impact of corporate governance and competition on performance of the firms operating in Muslim and non-Muslim economies. Also analyzed the corporate data of 3,158 firms operating in five non-Muslim economies and 1,785 firms operating in five Muslim economies. It is observed from the results that most of the firm-level variables have similar behavior with firm performance irrespective of ownership structure. It is also found that direct majority-owned firms are more profitable as compared to independent firms irrespective of the operating region. Further, it is also observed that operating environment, specifically governance system, has significant impacts on firm performance.

Journal of Modelling in Management, 2019

Purpose A plethora of studies focused on the cause and solutions for the bullwhip effect, and con... more Purpose A plethora of studies focused on the cause and solutions for the bullwhip effect, and consequently many have successfully experimented to dampen the effect. However, the feasibility of such studies and the actual contribution for supply chain performance are yet up for debate. This paper aims to fill this gap by providing a holistic system-based perspective and proposes a fuzzy logic decision-making implementation for a single-product, three-echelon and multi-period supply chain system to mitigate such effect. Design/methodology/approach This study uses system dynamics (SD) as the central modeling method for which Vensim® is used as a tool for hybrid simulation. Further, the authors used MATLAB for undertaking fuzzy logic modeling and constructing a fuzzy inference system that is later on incorporated into SD model for interaction with the main supply chain structure. Findings This research illustrated the usefulness of fuzzy estimations based on experts’ linguistically and ...

The Pakistan Development Review, 2006

Capital structure is one of the most complex areas of strategic financial decision making due to ... more Capital structure is one of the most complex areas of strategic financial decision making due to its interrelationship with other financial decision variables. For more than four decades discussion in corporate finance concerns the question of optimal capital structure: Given a level of total capital necessary for supporting firm’s activities, is there a way of dividing this capital into debt and equity which maximises firm value? And, if so, what are the critical factors in setting the leverage ratio for a given firm? Corporate finance literature is overwhelmed by this hot debate, which is still going on, about firm value triggered by the two conflicting conclusions of Modigliani and Miller (1958, 1963). For a comprehensive review of this literature, see Harris and Raviv (1991). The theoretical and empirical research about the optimal capital structure has so far been inconclusive and conflicting. However, the capital structure approach to firm value has been successful to replace ...

International Journal of Islamic and Middle Eastern Finance and Management, 2017

Purpose The purpose of this paper is to investigate how conventional and Islamic commercial banks... more Purpose The purpose of this paper is to investigate how conventional and Islamic commercial banks in Pakistan choose their capital structure and what are the most significant factors that affect their choice of capital structure. Design/methodology/approach The authors collected the data from the annual reports of commercial banks listed on Karachi Stock Exchange Pakistan during 2004-2014. Panel data techniques, namely, pooled ordinary least squares, fixed effects and random effects, were used to estimate the relationship between book leverage and bank-specific variables such as profitability, size, growth, tangibility and earnings volatility. Findings Descriptive statistics indicate that conventional commercial banks are more levered than Islamic commercial banks. Moreover, conventional commercial banks are larger, profitable and have relatively safe earnings than Islamic commercial banks. In contrast, Islamic commercial banks have relatively more fixed operating assets and growth ...