american international journal of business and management studies vol. 2, no. 3; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 1 impact of covid on online teaching platform: study on ib curriculum in bangladesh syeda aliza salik international baccalaureate pyp teacher abdul kadir molla international school bangladesh e-mail: syedaaliza.salik@gmail.com md rezuan chowdhury international baccalaureate pyp teacher abdul kadir molla international school bangladesh e-mail: rez.akmis2020@gmail.com abstract the sudden upsurge of covid 19 pandemic has caused an immense effect in all the sectors throughout the world. likewise, the education sector is no exception. many countries around the world have decided to keep the educational institutions closed as an attempt to stop the pandemic from spreading. as a result of the outbreak of this pandemic the government of bangladesh has declared a general holiday since march 23, 2020. in this scenario, most of the educational institutions have called off their on-campus activities and chose online platforms to continue their academic activities. although the virtual classes initially began at only a few private institutions, the number started to rise gradually. there is an increase in the number of learners and institutions using the internet to continue the learning journey as the days are passing by. this paper aims to discuss the problems and prospects of online teaching in bangladesh presenting a comparative picture between the mainstream education and international baccalaureate curriculum applying during pandemic lockdown. this paper uses abdul kadir molla international school to present a partial picture of the online teaching scenario in bangladesh. the paper discusses some challenges such as unavailability of digital devices, unstable internet connection, lack of teachers training etc. some queries, concerns and thoughts along with some recommendations are put before your discussion. keywords: challenges, possibilities, online teaching strategies, comparison. 1. introduction with the unexpected flare up of covid 19, the education sector of bangladesh has been through a significant transition. to combat the unforeseen pandemic bangladesh government declared a public holiday since march 18, 2020 which brought in a closure in all the educational institutions resulting in thousands of students being away from school for an uncertain period. according to unicef, 1.6 billion children throughout the world are unable to attend school physically due to covid 19, having a remarkable portion of bangladeshi students. many schools decided to go for online teaching which led an important changeover in the education systemlessons shifted into virtual classrooms from on campus classes and the learners, teachers and their parents also tried to cope up with the new alteration. in this paper we will try to discuss and present the current scenario of online teaching in bangladesh, the challenges and prospects of online teaching in bangladesh and we will also try to suggest some recommendations for an effective online teaching. 2. research objectives the major objectives of this study are as follows: ▪ to identify the practices of online teaching in bangladesh ▪ to study the challenges and prospects of online teaching ▪ to present a comparative study between ib curriculum and national curriculum ▪ to recommend a solution for a better online teaching mailto:syedaaliza.salik@gmail.com mailto:rez.akmis2020@gmail.com www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 2 3. research methodology this paper is based on primary and secondary data. primary data is obtained through teachers, students and parents from both ib and national curriculum schools. the sources of secondary data include different journals, articles, blogs, newspapers and different publications of websites. a quantitative method is used in this study which includes conducting surveys. we conducted a survey among teachers from various schools. 4. literature review according to the standard business portal (august 14,2020), online education provides a healthy routine in a comfortable environment, but not everyone in bangladesh can afford it. to help the students continue their education, educational institutions are trying their best to reach out to students through different mediums, including television, radio, and social media platforms like facebook, zoom, google classroom, google meet etc. finance minister ahm mustafa kamal, in his budget speech, pointed out that 40 million students are not being able to continue regular academic curriculums across bangladesh. a survey conducted by bioted, a novel training and research initiative, revealed that 55 percent of students do not have proper internet connections. in order to attend classes regularly, a student needs to spend at least 300 mb to 1 gb data per day. this being a costly procedure, many students are being deprived of learning opportunities. according to uca news, sumon roy, a ninth grader of lalon shah school in kushtia district has been trying hard to make up for a valuable time of education lost during the pandemic. he has been at home since school closed on march 17and his family has no tv, smart phone and internet. he says, “i could catch up a bit if i could attend the online classes, but it is not possible for me. only god knows what will happen to us if its continues”. 5. data analysis and interpretation 5.1 online teaching in bangladesh with the declaration of public holiday by the government in mid-march educational institutions also called off their academic activities. some schools decided to start online teaching for their learners. though a remarkable number of schools are conducting online classes in the cities still it is not happening commonly in remote areas. schools located in the city are able to offer online teaching to their learners but for the learners habituating in the villages or remote areas are still not able to be blessed with this facility. holy cross brother ranjan purification, headmaster of st. mary’s junior high school in alikadam in hilly, forested bandarban district, is anxious about the fate of his 364 students. “there is no electricity in most houses among the hills, so tv or online classes mean nothing to the students” he says. a better picture is seen in the schools prevailing in the city areas. being blessed with all the modern facilities such as the internet it is a bit easier for them to offer online classes to their learners and a bigger number of students are able to continue their study virtually with this facility. 5.2 a comparative study of ib curriculum and national curriculum though it is difficult to figure out the exact number of national curriculum schools offering online classes to their learners as more schools are using the online platforms such as google classroom to teach, we would like to present a comparative picture between the schools of ib curriculum and national curriculum. a number of schools from the national curriculum have already started online teaching and everyday more schools are joining in. sangsad tv, a government owned tv channel also telecasts recorded classes for primary learners. there are few groups such as sylhet online school, dhaka online school that have taken initiative to provide support to the learners of primary and secondary schools through facebook live. these groups prefer facebook as a platform to continue academic activities as this is the most used platform and is convenient for everyone which does not require a high ict literacy. learners are attending classes and participating classes through facebook live. in comparison with the schools that are following national curriculum a better picture can be found in ib schools. there are seven ib schools in bangladesh. the aga khan school, international school dhaka, pledge harbor international school, australian international school dhaka, american international school dhaka, crans-montana international school and abdul kadir molla international school. all the seven schools are conducting online classes among all of them abdul kadir molla international school being the first school in bangladesh to start conducting online classes from 18th march 2020 right from the cancellation of on campus school. to have a close look at the online teaching scenario we have conducted a survey where 47 people from 34 schools participated including teachers, coordinators, principals, admins and other personalities related to schools gave answers to different questions such as how long they have been conducting online classes, what percentage of students attend, what curriculum are they following and what platform they are using to conduct online classes. the survey result shows that all the seven ib schools in bangladesh are conducting www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 3 online classes. these schools are using various online platforms to offer online teaching such as ms team, zoom, google classroom, hangout, google meet to conduct classes. the questions were as follows: ▪ are you a……teacher/coordinator/principal/ other? ▪ which institution are you working in? ▪ which curriculum does your institution follow? ▪ is your institution conducting online classes? ▪ how long is your institution conducting online classes? ▪ rank your and the parents ‘gratification of online teaching. ▪ what platform are you using for conducting online classes? ▪ how many students are attending the online classes? ▪ what device is the student using and what device are you using to conduct the classes? ▪ how many periods do the students attend per day? ▪ does your institution arrange any in house workshops for online teaching? did you personally attend any workshop on online teaching? ▪ how do you report your students' progress to the parents? figure 1: number of participants and designation figure 1. number of participants and designation figure 1 shows the number of participants presented in a bar graph. 38 teachers, 1 vice principal, 1 principal, 3 coordinators, 1 advisor, 1 councilor and 1 administrator participating in the survey. figure 2. curriculum followed by survey participant schools figure 1 2.27% 2.27% 2.27% 31.82% 2.27%14% 2.27% 22.73% 2.27% tertiary oxford esl curriculum national curriculum of … national curriculum ipcib ed excel cambridge british curriculum which curriculum does your institution follow? www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 4 from figure 2 we see the curriculum followed by various schools that participated in the survey. 2.27% schools follow the british curriculum, 22.73% schools follow the cambridge curriculum, oxford esl curriculum being followed by 2.27 schools, 31.82% schools follow national curriculum, 2.27% schools follow the edexcel school and 14% of the schools follow ib curriculum. figure 3. the online platforms used by the participant schools figure 3 shows us the platforms used by schools to conduct online classes. zoom, google classroom and meet is being used the most. figure 4. percentage schools conducting online classes www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 5 from figure 4 we see the percentage of all the participant schools conducting online classes. it was found all the 34 schools participated in the survey were conducting online classes. figure 5. percentage of students attending online classes among participant schools the percentage of students attending online classes is shown in figure 5. in 8 schools, 30-50% students are attending online classes. in another 8 schools the percentage is 50-70% and in 23 schools the percentage of student’s attendance is 70 -90%. figure 6. parents gratification with children’s online classes figure 6 shows parents’ gratification in bar graphs. we can see that all the 4 ib schools conducting online classes, 28.57% of the parents are satisfied with their children’s study, 21.42% of the teachers are satisfied with online teaching and in all these four schools 64.28% students are attending the online classes which indicates the number of 70-90% of the total students attending the classes. these schools are conducting their academic activities extensively. the orientation program at the beginning of the session is also happening virtually which is allowing the parents, teachers and the learners to meet and know each other without requiring any physical visit in the school. along with conducting classes ib schools are also conducting assessments regularly. schools are arranging summative and formative assessments virtually which is allowing to know the level of the learners. ib schools are celebrating pyp exhibition virtually where learners demonstrate their learning through various activities. these schools are also inviting mentors from different countries to groom the learners. ib teachers from bangladesh have also mentored pyp exhibitions in other www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 6 countries. one of the teachers from abdul kadir molla international school mr. rezuan chowdhury has mentored a pyp exhibition in domuschola, a school in the philippines. apart from these, regular workshops for teachers are also being arranged. abdul kadir molla international school arranges workshops for teachers twice every week wednesday and thursday as per the on-campus school schedule where teachers from other countries are invited through zoom. two of the teachers were invited by an association named “english medium school association of bangladesh” and “uk-bangladesh education trust” to share their online teaching practices. (voluntary action taken by ib teachers to promote online teaching) among all the ib schools abdul kadir molla international school has been conducting full-fledged academic activities virtually and was honored to be an authorized ib school. the authorization process was completely virtual and abdul kadir molla international school was the first virtually authorized ib school in bangladesh. the ib schools are also celebrating different national and international events virtually. abdul kadir molla international school celebrated world principals’ day virtually on 01.05.2020. 5.3 the challenges of online teaching ▪ unavailability of internet in urban areas: the most important challenge for conducting online classes in bangladesh is that the internet is still not accessible to a huge number of people living in the remote areas. the bd bureau of statistics multiple cluster survey 2019 shows that only 37.6 percent of households in the country have access to the internet. it is also found that only 5.6 percent of households have a computer. ▪ interrupted power supply: availability of electricity is another challenge. many hilly and water side areas are still not having electricity. some areas are having interrupted power supply because of load shedding. these are having impacts on flawless online classes. ▪ lack of ict literacy: online teaching requires ict skills such as using the google classroom app, using apps and platforms such as zoom, meet etc. in bangladesh these platforms, for many of the learners and teachers also, is a new phenomenon. teachers are not yet properly trained to conduct online classes. ▪ lack of trained teachers: conducting online teaching requires ict literacy. our country is lacking techsavvy teachers. many of the teachers do not have the expertise and are not comfortable in using apps such as google classroom, hangout or meet. ▪ not enough support from the education ministry: there has been a little step taken by the education ministry of bangladesh to promote and facilitate online teaching. 5.4 prospects of online teaching in bangladesh despite the various limitations there has been a noticeable progress in online teaching of bangladesh. learners and teachers are adjusting themselves to remote learning at home using the devices. both learners and teachers are exploring the endless possibilities of online teaching through using the various platforms. everyday new schools are starting to offer online classes, conducting assessments virtually. there was a rapid growth in the number of educational institutions coming ahead with virtual classes. unicef is also working with the government of bangladesh to offer effective remote learning programs using tv, radio, mobile phone and internet platforms to reach the maximum number of students. the english medium school association of bangladesh arranged a free webinar on online classes for teachers. 6. recommendations for effective online teaching ▪ to make the online classes effective ict literacy is a must do thing for teachers. teachers should have expertise in the technological know-how of using online platforms. schools should arrange training and workshops for teachers. each school should offer basic ict courses for students as well. ▪ government of bangladesh should focus on providing internet connection in remote areas also. people living in the faroff areas should have internet access. ict ministry should take steps to ensure internet facilities in those areas. ▪ attending online classes requires devices such as laptop, tab, mobile, desktop. these devices are expensive and still many people cannot afford these. the price of it devices should be reasonable so that mass people can afford it. ▪ government has taken some initiatives to telecast recorded classes for primary students on a government owned tv channel. but more tv channels and radios should telecast recorded classes for the students of different grades. ▪ mass media can play the most important role in raising awareness of attending online classes. tv and radio channels should invite educators and facilitators to discuss, motivate and inspire the learners to attend online classes. print and electronic media both have to work on this issue. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 7 ▪ non-government organizations such as unicef can arrange training and workshops for teachers for the underdeveloped countries. ▪ to provide more information to the student’s schools should have websites and blogs which should be updated on a regular basis. ▪ ugc (university grant commission) of bangladesh has conveyed the message to the education ministry and requested them to provide the students with free or low-cost internet facilities (the daily star, august 11, 2020). schools also should come up as an association and recommend the same sort of facilities to the government for the students to enhance their learning. ▪ to make online teaching organized and systematic a well written policy should be made. government of bangladesh should work on a policy on online teaching. 7. limitations there are some limitations of this study. one of the limitations is time. the research had to be conducted within a short period of time. accessibility of data was another limitation. enough data on the impact of covid on online teaching platforms was not available. the third limitation was the inability to move or travel because of the pandemic. the survey used in this research and other information had to be collected virtually. we could not visit the schools physically. 8. conclusion as it is said an online class can never be a substitute of a brick and mortar class, but still an online class has some opportunities as well. despite the challenges online teaching has been practiced by a bangladeshi youtube channel “ten minutes school” which has been uploading recorded classes on you tube. this channel has also played an important role in familiarizing online teaching in bangladesh. taking them as an example other initiative should be taken to promote online teaching. online teaching can be made interactive by providing students age appropriate contents rather than teaching only with the textbooks. the drawbacks and the challenges can be overcome, and online teaching can be made effective with a well written policy. references ahmed, s. f. (2014). potentials of e-learning in bangladesh: an analysis. dhaka: bangla vision. alamgir, m. (2020). schools in shutdown: virtual classes not reality yet. dhaka: the daily star. alamgir, p. d. (2020). a national online education policy is the need of the hour. dhaka: the daily star. bangladesh, u. (2020). students in bangladesh adjust to remote learning via national tv during covid-19. dhaka: bangladesh, unicef. chowdhury, m. s. (2020). making best of covid-19: pushing online learning in higher education in bangladesh. dhaka: bdnews24.com. fami, s. b. (2020). is online education system suitable for bangladesh? dhaka: the business standard. hassan, a.-s. k. (2020). e-learning: can it help the education in bangladesh? dhaka: north south university, bangladesh rural advancement committee (brac). howlader, k. c. (2020). prospects and perils of online education in bangladesh. dhaka: newage youth. hasan, z., & islam, k. m. a. (2020). academic, financial and administrative issues of online teaching during corona pandemic: the scenario of private universities in bangladesh. international journal of accounting & finance review, 5(1), 116-122. https://doi.org/10.46281/ijafr.v5i1.630 ní shé, c. f. (2019). teaching online is different: critical perspectives from the literature. dhaka: dublin city university. ronald, s. u. (2020). covid-19 disrupts education in rural bangladesh (pupils and teachers lament lack of access to online classes to poverty. dhaka: ucanews. schools, a. k. (2020). bangladesh: parents commend online classes. dhaka: aga khan schools. wal, m. (2020). covid-19: introducing a strange transition in our education system. dhaka: the daily star. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 2; 2019 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 18 transforming workers to winners: creating the high performance organizations negash geleta department of management college of business and economics ambo university, ethiopia e-mail:kenu2002@gmail.com abstract this analysis was carried out on the title of “transforming workers to winners by creating the high performance organizations”. the main aim of this article was to identify the factors that determine the continuous success of high performance organization. then to get this objective the paper was organized into introduction, body & conclusion of the reviewed empirical data. accordingly the empirical data was assessed and finally the conclusions drawn to show directions for business organizations how to make winners their employees. keywords: transforming workers, winners, high performance organizations. 1. introduction transforming workers to winners by creating the hpo is very interesting issues in the business organizations to get competitive advantage. this is forever increasing demands of stakeholders to adapt more rapidly to growing international competition. to compete simultaneously on the basis of price, quality, flexibility, delivery times & after-sales support any organization must know the concept of hpo (kasarda & rondinelli, 1998). hpo offer organizations competitive advantage (lawler, 2003). until now there is no generally accepted definition of hpos in the literature there are different terms which can explain the term hpo these terms are accountable organization, the adaptive enterprise, the agile corporation, the flexible organization, the high performance work organization, the high-performance work system, the high reliability organization, the intelligent enterprise, the real-time enterprise, the resilient organization, the responsive organization, the robust organization, & the sustainable organization(epstein, 2004). in some of the common themes found in the literature were: sustained growth; better financial & non-financial performance compared to its peer group; long-term orientation; better results over a period of at least five years. taking the common themes as starting point, the following definition of hpo was formulated: a high performance organization is an organization that achieves financial & non-financial results that are better than those of its peer group over a period of time of at least five to ten years (waal, 2007). nevertheless the main challenge facing managers today is how to transfer their organizations into highperformance work systems, with the right combination of people, technology, & organizational structure to make full use of resources & opportunities to achieve their organizations’ goals. organizations need to determine what kinds of people fit their needs, & then locate, train, & motivate those special people is the main question of this seminar paper. according to research, organizations that introduce integrated high-performance work practices usually experience increases in productivity & long-term financial performance (lawler, 2003). then this seminar paper was tried to see if the investigator covered all these issues to fill the existing gaps by using reasonable methods of the research. 2. definition of a hpo and empirical review as explained in the introduction parts there are different definitions of hpo in the literature. the definitions in the literature are combined, and the following themes: hpo achieves sustained growth, over a long period of time, which is better than the performance of its peer group (collins and porras etal., 1997), hpo has a great ability to adapt to changes(kotter and heskett etal., 1992),hpo is able to react quickly to these changes(garratt etal., 2000),hpo has a long-term orientation(mische etal., 2001), the management processes of a hpo are integrated & the strategy, structure, processes & people are aligned throughout the organization(hodgetts etal., 1998),hpo focuses on continuously improving & reinventing its core capabilities(hodgetts, etal., 1998) and hpo spends much effort on improving working conditions & development opportunities of its workforce(kling, etal., 1995) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 19 based on the common themes, the following definition of a hpo is more accepted: a high performance organization is an organization that achieves results that are better than those of its peer group over a longer period of time, by being able to adapt well to changes & react on these quickly, by managing for the long term, by setting up an integrated & aligned management structure, by continuously improving its core capabilities, & by truly treating the employees as its main asset. 3. hpo characteristics in order to be able to classify the hpo characteristics, the framework of kotter and heskett (1992) was used with that of scott morton (2003). these frameworks were used by different organization because their relatively simple set‐ups made it easy to subdivide a large amount of information into factors. the kotter and heskett framework defined four factors which influence human behavior in organizations: organizational culture; organizational structure (formal structure, systems, processes and policies); leadership of the organization; and external orientation (competitors, public and legislative organizations). scott morton’s framework enlarged the external environment factor by adding customers, suppliers and partners, and broadened the framework by adding a factor called ‘individuals & roles’ and by adding strategy, organizational design and technology to the organizational structure factor. each factor in the resulting framework determined the degree in which organizational members exhibit performance‐driven behavior, which reflected whether the organization was a hpo or not (de waal, 2004). 3.1 organizational culture a. organizational design characteristics  stimulate cross-functional & cross-organizational collaboration.  simplify & flatten the organization.  foster organization-wide sharing of information, knowledge & best practices.  constantly realign the business with changing internal & external circumstances.  create a sense of ownership & entrepreneurial feel.  establish a consistent responsibility structure with clear roles & accountabilities. b. strategy characteristics  define a strong vision that excites & challenges.  balance long-term focus & short-term focus.  set clear, ambitious, measurable & achievable goals.  create clarity & a common understanding of the organization’s direction & strategy.  align strategy, goals, & objectives with the demands of the external environment.  adopt the strategy that will set the company apart.  focus on a limited number of key priorities.  regularly alter & renew the organization.  have a ruthless focus on value.  keep growing the core business.  focus on bottom-line profit & cash-flow as well as top-line growth. c. process characteristics  design a good & fair reward & incentive structure. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 20  continuously simplify & improve all the organization’s processes.  measure what matters.  report to everyone financial & non-financial information needed to drive improvement.  continuously innovate products, processes & services.  strive to be a best practice organization.  create highly interactive internal communication.  deploy resources effectively.  strive for continuous process of optimization. d. technology characteristics  implement flexible ict-systems throughout the organization.  apply user-friendly ict-tools to increase usage.  become a pioneer at applying the chosen technologies.  constantly identify & exploit new technologies to gain competitive advantage. 3.2 organizational culture a. leadership characteristics  maintain & strengthen trust relationships with people on all levels.  live with integrity & lead by example.  apply decisive action-focused decision-making.  coach & facilitate.  stretch yourselves & your people.  develop effective, focused & strong leadership.  allow experiments & mistakes.  inspire the people to accomplish extraordinary results.  grow leaders from within.  stimulate change & improvement.  assemble a diverse & complementary management team & workforce.  be committed to the organization for the long haul.  be confidently humble.  hold people responsible for results & be decisive about nonperformers.  have a long-term orientation. b. individuals & roles characteristics  create a learning organization.  attract exceptional people with a can-do attitude who fit the culture.  engage & involve the workforce.  create a safe & secure workplace.  master the core competencies & be an innovator in them.  develop people to be resilient & flexible.  align employee behavior & values with company values & direction.  foster self-discipline of people.  create a work environment that is challenging, satisfying & fun.  treat individuals as investors actively building & deploying their human capital. c. culture characteristics  empower people & give them freedom to decide & act.  establish strong & meaningful core values.  develop & maintain a performance-driven culture.  create a culture of transparency, openness & trust.  create a shared identity & a sense of community.  develop an adaptive culture to achieve long-term success. d. external environment characteristics  continuously strive to enhance customer value creation.  maintain good & long-term relationships with all stakeholders.  monitor the environment consequently & respond adequately.  choose to compete & compare with the best in the market place.  grow through partnerships & be part of a value creating network.  only enter new business that complements the company’s strengths.  develop a global mindset www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 21 4. hpo framework the american management association (ama) perceives hpos as companies that are role models of the organizational world to the extent that they become the reality of the world versions of a modern management ideal (ama, 2007). although the definition of hpos by the ama appears to be an apt description, the performance measures of organizations can also be viewed in terms of strong financial management (brown & eisenhardt, 1998); satisfied customers and employees (o’reilly & pfeffer, 2000); high levels of individual initiative (foster, & kaplan, 2001); productivity and innovation, aligned performance management, and reward systems as well as human resource performance measurement (becker & gerhart, 1996; delany & huseilid, 1996). de waal (2010) defines hpos as ‘‘organizations that achieve financial and non-financial results that are better than those of their peers over a period of time of at least five to ten years’’ (de waal, duong, & ton, 2009, p. 182; de waal, 2010, p. 10). for the purposes of this study, the definition of hpos by de waal (2010) has been adopted because it appears to incorporate the various dimensions of hpos and provides a holistic view by which to examine organizational performance. what follows, therefore, is a discussion of de waal’s hpo framework (de waal, duong, & ton, 2009; de waal, 2010). organizations that are high performing are the ones that are on top of their industry in terms of profit maximization and cost minimization while having excellent relationships with, employees, customers, and other stakeholders. these organizations have been described by jamrog, vickers, overholt, & morrison (2008) as examples of modern managerial excellence in the world. the five factors put forward by de waal (2010) constitute his hpo framework. accordingly, these factors should be able to assess and predict organizational performance and must be a reference point for other organizations in critical areas of organizational life. de waal’s hpo framework isolated five factors and argues that organizations that adopt them may become hpos. the question is to what extent does the hpo framework of de waal predict organizational performance? in order to understand the relationship between de waal’s hpo factors and organizational performance, each of the factors has been explained alongside the relevant hypothesis. a. continuous improvement & renewal (cir): de waal explains continuous improvement and renewal as the adoption of unique strategies through developing many new options and alternatives to compensate for dying strategies. the organization innovates products, processes, and services on an ongoing basis to gain and maintain competitive advantage by rapidly developing new products and services to respond to the changes in the market. added to this is the fact that the organization continues to master and innovate its core competencies by doing what it does best: keeping the core competencies in the firm and outsourcing the noncore competencies (de waal, 2010). the emphasis that de waal placed on core competencies of organizations appears to be what has been suggested by gary (2009) as strengths. gary (2009) appears to support de waal by stating that organizations should emphasize their strengths, which will make them hpos rather than worry about their weaknesses. b. openness with action orientation (oao): this characteristic calls for the creation of an open culture to be used in achieving results. in this regard, management devotes time for communication and knowledge exchange, respects the opinions of employees, and allows for risk taking, experiments, and mistakes, which are seen as opportunities to learn. management therefore ‘‘welcomes and stimulates change by continuously striving for renewal, developing dynamic managerial capabilities to enhance flexibility and is personally involved in change activities’’ (de waal, duong, & ton, 2009, p. 184). c. management quality (mq): management quality has been explained by de waal (2010) as maintaining a relationship of trust with people at all levels of the organization, valuing employee loyalty, understanding people’s ability, showing respect to people, creating and maintaining individual relationships with employees, encouraging belief and trust in others as well as treating people fairly. in addition, management is decisive and action focused and thereby holds people responsible for results and does not give room to non-performers. management thus develops an effective and strong management style in communicating the values and ensures that the strategy of the organization is known and accepted by all members of the organization (de waal, 2010). this characteristic appears to be in line with the concept of leadership put forward by gary (2009) in so far as he attributes the acts of leadership that make organizations hpos and not the positions of employees (gary, 2009). this approach also appears to be embedded in philosophies of hr (becker & gerhart, 1996; delaney & huselid, 1996) since it focuses on the strategy established to manage people so as to achieve the objectives of the organization. thus organizations that are able to set clear goals, understand their employees’ abilities, and guide their performance might be said to be on a path to achieving hpo status. d. workforce quality (wq): linked to the characteristic of management quality is the issue of workforce quality. this calls for the recruitment of a diverse and creative workforce, which should continuously be developed and trained to accomplish extra-ordinary results. a hpo would also ensure that the workforce goes www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 22 into partnership with suppliers and clients=customers and should be held accountable for performance to ensure their creativity and looking for new ways of production for the achievement of the desired results (de waal, duong, & ton, 2009; de waal, 2010). e. long-term orientation (lto): this factor emphasizes a good and long-term relationship with all stakeholders, be they employees, suppliers, clients=customers as well as with the society at large. there is thus the need to network broadly, create mutual and beneficial opportunities to all stakeholders by ensuring a winwin relationship and to be generous to society. a hpo should grow new management from within and develop leaders who could be promoted to fill vacancies that may occur and to provide a safe and secure work environment (de waal, duong, & ton, 2009; de waal, 2010). in addition, if organizations want to be high performing they need to think beyond the traditional approach of doing things and must, among other things, focus on customer experiences and collaborative networks (prahalad & krishman 2008). 4. relation b/n hpo factors & competitive performance: the hpo study shows that there is a direct relation between the hpo factors & competitive performance. organizations which pay more attention to hpo factors & score high on these consistently achieve better results than their peers, in every industry, sector & country in the world!. conversely it is also true those organizations which score low on hpo factors rank performance-wise at the bottom of their industry. the difference between hpos & non-hpos is particularly significant in the case of hpo factor long term commitment: hpos pay considerably more attention to the designated aspects of long-term commitment than non-hpo organizations, & are therefore able to improve their performance significantly. 5. outcomes of a high-performance work system  outcomes of a high-performance work system include higher productivity & efficiency.  these outcomes contribute to higher profits.  other outcomes include: o high product quality o great customer satisfaction o low employee turnover  the outcomes of each employee & work group contribute to the system’s overall high performance.  the organization’s individuals & groups work efficiently, provide high-quality goods & services, etc., & in this way they contribute to meeting the organization’s goals.  when the organization adds or changes goals, people are flexible & make changes to as needed to meet the new goals. 6. conclusion this seminar paper comprises a number of working papers, originating from the social sciences research network and assessed. in regard to the issue of generalization attempts to make empirical generalizations are inevitably inductive by nature and thus “i can never be sure whether my reasoning preserves truth or not, as is possible in the case of induction why for generalization companies fundamentally have to be quite similar. although many institutions worldwide are growing similar in the way they are managed, it still cannot be stated with certainty that they are similar in nature. based on the previous research results seen, there are so many ways how to transform organization in to high performance. so many hpo characteristics have to do with management – that the hpo factors are still valid for the foreseeable future. so, further research should focus on validating the hpo factors in even more countries and industries to check as they performing good or not. also, additional research should focus on the “how” know that the “what” is known. the hpo framework stipulates “what” is important to become and stay successful but is does not indicate “how” organizations can achieve success. so future research should concentrate on identifying, collecting and describing “best ideas” of organizations who have achieved success in some or maybe all of the hpo factors. finally, the ever present issue of causality should be further investigated to answer the question whether hpos have the time and resources to foster the characteristics of high performance, or whether the characteristics create a hpo. references becker, b.e. & huselid, m.a. (1998). ‘high performance work systems and firm performance: a synthesis of research and managerial implications’. in g.r. ferris (ed.) research in personnel and human resources management. vol 16: 53-101. stamford, ct: jai press. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 23 collins and porras, 1997; geus, 1997; brown and eisenhardt, 1998; hodgetts, 1998; mische, 2001; weick and sutcliffe, 2001; zook and allen, 2001; annunzio, 2004; bruch and ghoshal, 2004; van den berg and de vries, 2004 collins, j.c. (2001), good to great. why some companies make the leap … and others don’t, london: random house de waal, a.a., duong, h. & ton, v. (2009), ‘‘high performance in vietnam: the case of the vietnamese banking industry’’, journal of transnational management, vol. 14 no. 3, pp. 179-201. delaney, j.t. & huselid, m.a. (1996), “the impact of human resource management practices on perceptions of organizational performance”, academy of management journal, vol. 39 no. 4, pp. 949-969. dr. miles h. overholt, ph.d, donna j. dennis, ph.d et.al; how to build a high-performance organization, ama, 2008, pg2 epstein, m.j. (2004), the drivers and measures of success in high performance organizations. in: epstein, m.j. and j.f. manzoni (eds). performance measurement and management control: superior organizational performance. studies in managerial and financial accounting, volume 14. elsevier, amsterdam foster & kaplan, 2001; mische, 2001; coffman et al., 2002; manzoni, 2004; underwood, 2004; holbeche, 2005; siroat et al., 2005 foster & kaplan, 2001; weick and sutcliffe, 2001; hamel and välikangas, 2003; annunzio, 2004; light, 2005 foster, r. & s. kaplan (2001), creative destruction. why companies that are built to last underperform the market – and how to successfully transform them. doubleday, new york garratt, 2000; quinn et al., 2000; bossidy and charan, 2003; bruch and ghoshal, 2004; mcgee, 2004; light, 2005 hansen, gary s. & birger wernerfelt, determinants of firm performance: relative importance of economic and organizational factors, strategic management journal, 10, 1989. hodgetts, 1998; lawler et al., 1998; kirkman et al., 1999; lee et. al., 1999; o’reilly and pfeffer, 2000 jay j jamrog & team – american management association in the global study of current trends and future prospective 2007-2017 highlights the followings components kasarda, x. & x. rondinelli (1998), innovative infrastructure for agile manufacturers. sloan management review, winter, 39, 2, 73 kirkman, b.l., k.b. lowe & d.p. young (1999), high performance work organizations. defin itions, practices, and an annotated bibliography. center for creative leadership, greensboro, n.c. kling, 1995; lawler et al., 1998; garratt, 2000; o’reilly and pfeffer, 2000; weiss, 2000; doz et al., 2001; kotter & heskett, 1992; brown & eisenhardt, 1998; goranson, 1999; quinn et al., kotter, j. p. & j. l. heskett (1992), corporate culture and performance scott morton, m.s. 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(2003), treat people right! how organizations and individuals can propel each other into a virtuous spiral of success, san francisco: jossey-bass milgrom, p., & j. roberts (1990). the economics of modern manufacturing: technology, strategy, and organization. american economic review, 80, 3: 511-528 mische, 2001; underwood, 2004; maister, 2005; miller and breton-miller, 2005; siroat et al., 2005; light, 2005 mische, 2001; weick & sutcliffe, 2001; zook and allen, 2001; annunzio, 2004; bruch and ghoshal, 2004; van den berg and de vries, 2004 o’reilly iii, c.a. & j. pfeffer (2000), hidden value. how great companies achieve extraordinary results with ordinary people. harvard business school press, boston. waal, a.a. de (2007), the characteristics of a high performance organization. business strategy series, august copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 3; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 8 impact of reward and recognition, supervisor support on employee engagement muhammad baqir mba student department of business administration, art & social sciences university of education lahore multan campus, pakistan e-mail: baqiralisiddique@gmail.com sajid hussain mba student department of business administration bahauddin zakariya university multan, pakistan e-mail: sajid.hussain6441@gmail.com rashid waseem lecturer department of business administration, art & social sciences university of education lahore, pakistan e-mail: rashid.waseem@ue.edu.pk k. m. anwarul islam associate professor department of business administration the millennium university, dhaka, bangladesh phd candidate university of selangor, malaysia e-mail: ai419bankingdu@gmail.com abstract employee engagement play a key role for the success of any organization because they provides the highest employee satisfaction , lower employee turnover rate , greater employee loyalty, better customer service, higher sales and higher profitability. the aim of this study is to examine the impact of reward and recognition and perceived supervisor support on employee engagement. the method used in research is quantities descriptive. we used questionnaire to collect data. the population in this study consisted of employees of muslim commercial bank & national bank of pakistan. data were collected in multan from 108 employees but unfortunately 08 questionnaire data rejected because the data was not proper fill. the data were analyzed using through statically package for social science (spss version 21).the results show that reward & recognition and supervisor support can engage employees for better performance. hence; employee’s engagement can improve through the reward and recognition and supervisor support. keywords: employee engagement, mcb, nbp, reward and recognition, supervisor support. mailto:baqiralisiddique@gmail.com mailto:rashid.waseem@ue.edu.pk www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 9 introduction employee behaviour is based on organizational behaviour & human resource management. it is important for organization to get the benefits through employees by telling them why and how they can achieve tasks in organization. employees are the crucial part for achieving goals of organization. they can have hundreds of emotions & thoughts about work but organizational behaviour focuses on few work related variables. but we'll study following variables: employee engagement, supervisor support, reward and recognition. employee engagement is linked with members of company like customers, users, employees, stakeholders. for the employee engagement it is important to understand what is good for motivating them (kayes & jorden-evans, 2003). they focused that fully employee engagement is a very important task today especially; different stages of work live by understanding their mind and heart of employees. employee engagement is tough to manage because employees want appreciation & encouragement to be motivated. experts of motivational theories said that fulfil the desires and needs of employees to keep them motivated and energetic. organization can engage employees with the help of rewards and recognition. rewards are important part for employee engagement. rewards and recognitions have a great impact on employee’s performance and motivation. reward system is helpful to increase job satisfaction. (smit, stanz, & bussin, 2015) said that to motivate and retain an extraordinary workforce, the reward strategy has been played a key role. it is important to provide rewards, benefits, gifts and incentives to employees for achieving organizational goals and keeping employees satisfied with organization. there is much type of rewards. rewards can be extrinsic and intrinsic. extrinsic rewards are financial like pay, bonus, promotion &non-financial like benefits. intrinsic rewards are like appreciation. we can facilitate employees by rewards through a reward ceremony to appreciate employee’s performance. so there are many factors to motivate and manage employees. therefore, it is good to think about factors that will help you to understand, motivate and engage your employees. organization should take care of its employees with the help of supervisor. employees want support, concern and encouragement of superiors. according to (shuck, 2011) supervisor support can be empathy, care, feedback, guidance etc. supervisors can engage & disengage employees by their style of supporting. lack of supervisors support can create burnout situation for employees. supervisor support is helpful for the staffs that perform tasks. many researches are conducted to check the impacts of supervisor support, reward and recognition on employee’s engagement. through proper use of rewards and right selection of benefits, individuals are not only engaged but they feel that they are valuable for the company. at the end, results are positive. we can select effective supervisor supports and reward systems for employees to increase their performance & satisfaction. significance this study assesses effect of reward and recognition enhancing the employee engagement with organization and performance and search about how much supervisor behavior impact on individual employee engagement with organization. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 10 objectives according to the research problems, the core objectives of this study are:  to understand the impact of reward and recognition on employee engagement in the pakistanibanking sector.  to know the influence of supervisor behavior on employee engagement at banking sector.  to suggest ways to improve employee engagement. questions  to check the banking sector employees are happy with the current reward and reorganization system?  identify the supervisor support in banking sector?  to know about employees are satisfy with current job? research problem by choosing this certain topic for study due to limited practical research on this topic in the pakistani banking sector. currently business environment, employee engagement plays a key role in the success of an organization's long-term performance. this study is selected for empirical test because increase the value of this topic in recent years. literature review reward and recognition organization gets success with the help of its employees. researches conform that employee engagement is related to reward and recognition. rewards are helpful tools for improving employees’ performance. these are linked with employee engagement. according to your (rehman, khan, & lashari, 2010) reward means what employees want to get from organization or what they get in form of cash on working conditions. (bratton & gold, 2003) define rewards as rewards can be in different forms, these can be financial, non-financial and psychological benefits awarded by organization. so rewards are benefits which organization provides to their employees on their good performance. according to (luthans & peterson, 2002) rewards are categorised in 2 forms i.e., extrinsic and intrinsic.(porter & lawler, 1968) stated definition of extrinsic rewards that extrinsic rewards are basically tangible benefits that are given to employees after completing tasks. organization is directly linked with extrinsic rewards. examples of extrinsic rewards are pay promotion, holidays abroad, club membership, preferred lunch hours, impressive titles and bonuses (weatherly, 2002). according to (malhotra, budhwar, & prowse, 2007) as cited in (nujjoo & meyer, 2012)that extrinsic rewards can be in forms of social rewards which create a good relationship between superior and colleagues. (byars & rue, 2011) says that intrinsic reward are those reward which are related employee personal interest and tasks which they perform for reward purpose however these are not part of the job obligation because they are related with individual to individual. . according to (allen, takeda, white, & hemis, 2004), examples of intrinsic rewards are trust, feeling of self-esteem, involvement, fairness, recognition, job satisfaction, creativity, www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 11 empowerment, social status, personal development & efficient feedback. these all are related to employee’s personal satisfaction. employees can get these rewards by performing well. employees think that recognition and motivation will help them to enhance their productivity. (jeffries, 1997) said that recognize your employees and you will find best of your employees by encouraging them. a survey report by performance engagement group tells that employees like recognition on daily basis rather than incentives and bonus. sometimes recognition works more than rewards. (jeffries, 1997) supports nelson statement that it is not compulsory to give expensive recognition but it is important that recognition must be consistent and it must committed employees for a long time period. there is a fact about specific value for rewards and recognition, the successful organizations always know the best usage of rewards and recognition by which they get valuable work from employees (wiscombe, 2002) intention of recognition strategy is to employee performance increase through the increase the level of employee satisfaction .these method helped to achieved the organization goal and objective in efficient and effective manner. according to(andrew & kent, 2007), employees stay committed with the help of rewards and recognition. rewards and recognition are the most important factors for performance of employees. the purpose of reward and recognition is to create environment through which employees can achieve job satisfaction. flynn argued that employees can boost up morale and level of spirited through reward and recognition.(deeprose , 1994) said that reward and recognition are important for employees engagement. studies show that there is an effect of rewards and recognition on employee engagement (hulkko-nyman, sarti, hakonen, & sweins, 2014) by providing rewards and recognition you can increase employee’s performance, motivation and productivity. researchers have been shown that reward and recognition are linked directly with employee engagement. (freedman, 1978) explains that if rewards and recognition used effectively in organization then a good productive environment will develop which makes employees energetic to complete tasks and achieve goals. supervisor support according to (shuck, 2011) organizational theory pointed out that supervisor support can develop changes in employee’s behaviour for performing task.(bakker, hakanen, demerouti, & xanthopoulou, 2007) defined supervisor support as a term in which employees note their values through supervisors and they want backups for completing tasks. according to (akker, schaufeli, leiter, & taris, 2008) & employees want to take supervisors feedback as a support by which they feel comfortable during accomplishment of task. (britt, 2003)suggests in the book of personnel psychology that encouraging the employee always means supervisor support with(witte & lens, 2008), explain that if evaluation is made by supervisors with shifted to the executive. then strengths of employees will be developed and employees will work efficiently and effectively. according to (may , gilson, & harter, 2004) support and empathy of supervisor is important for organizational employees. maslach (2001), they said that for the purpose of maintain satisfaction & encouragement supervisor support is always key attention role for employees. may et al. (2004) point out that supervisor support is very much important for psychological safety. so, absence of supervisor support can create situation of burnout for www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 12 the employees (maslach, schaufelo, & leiter, 2001). employees engagement and disengagement is linked with supervisor's support (bates, 2004)&(frank , finneggan, & taylor, 2004). employee engagement employee engagement is the stage which employee conceive, act in ways that look that high level of correspond of participation by their organization in which (swarnalatha & sureshkrishna, 2013) higher employee job performance and higher customer fulfillment engagement leads by research supported. with low engagement are being match can be expected by an employee with high engagement. employee measurement is progressively seen by their workplaces and their firms in the most efficient workplace as way. human capital to accomplish upper limit attempt from their employee to this because of their firms react to make success highly competitive worldwide marketplace. in human capital engagement is an organization step of its investing human factors at work in other words. more probable to be engage the employee. hypothesis research the hypnotically model of the study is defined as the theoretical framework diagram items include reward and recognition, supervisor support which provides financial and behavioral support for employees and the dependent variable is employee engagement. thus, the subsequent hypothesis is presented to be tested: h1: supervisor support correlates with employee engagement. h2: reward and recognition have an impact on employee engagement. model: method research design a correlation research design was selected because it provide the originally information without any manipulation variables. this research is basically design to conduct in different banking sector (national bank of pakistan & muslim commercial bank) of employees in multan. population the selected population for this research is all the employees of national bank of pakistan & muslim commercial bank of multan. reward and recognition supervisor support employee engagement www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 13 sample and data collection we take the sample for study the employees of muslim commercial bank (mcb) and national bank of pakistan (nbp). we collected the date through questioner,108 employees selected of both banks(mcb & nbp) but 8 respondent not provide full information. measures questionnaire is basically a way helping in investigation of collection data and also for data collection. to measure the impact of reward and recognition, supervisor support on employee engagement used where case law by (sheeba, 2015). in this study used the likert scale strongly disagree =1 and strongly agree =5 and five point were given very unlikely =1 and extremely likely =5. result and discussion demographic information: table# 1.1 gender frequency percent valid percent cumulative percent valid male 78 78.0 78.0 78.0 female 22 22.0 22.0 100.0 total 100 100.0 100.0 table # 1.2 age frequency percent valid percent cumulative percent valid less than 30 42 42.0 42.0 42.0 from 31 to less than 40 28 28.0 28.0 70.0 from 41 to less than 60 30 30.0 30.0 100.0 total 100 100.0 100.0 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 14 table # 1.3 marital status frequency percent valid percent cumulative percent valid single 32 32.0 32.0 32.0 married 64 64.0 64.0 96.0 separated 4 4.0 4.0 100.0 total 100 100.0 100.0 table # 1.4 monthly income frequency percent valid percent cumulative percent valid less than 15000 1 1.0 1.0 1.0 16000-35000 46 46.0 46.0 47.0 36000 and above 53 53.0 53.0 100.0 total 100 100.0 100.0 after review the descriptive analysis of variables such as age, gender, monthly income and material status. we found that’s number of male respondent 78% and other remaining 22% female respondent. respondents whose age less than 30 years old 42%, other 31 to 40 year old respondent is 28% and 30% respondent were 41 to 60 year old. mostly of the respondent was married 64% and single 32%. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 15 table # 2. correlation reward supervisor employee reward pearson correlation 1 .484 ** .316 ** sig. (2-tailed) .000 .001 n 100 100 100 supervisor pearson correlation .484 ** 1 .564 ** sig. (2-tailed) .000 .000 n 100 100 100 employee pearson correlation .316 ** .564 ** 1 sig. (2-tailed) .001 .000 n 100 100 100 generally, if the value correlation value more than 1 or 1 this show strongly positive relation and the value correlation value less than 1 to 0 this show positive relation.the table show that independent variable reward has positive relationship with dependent variable employee engagement but another independent variable also have strongly positive relationship with dependent variable. table #03: variables entered/removed a model variables entered variables removed method 1 reward b . enter table# 3.1 model summary model r r square adjusted r square std. error of the estimate 1 .316 a .100 .091 .72865 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 16 table # 3.2 anova model sum of squares df mean square f sig. regression 5.785 1 5.785 10.895 .001 b residual 52.032 98 .531 total 57.816 99 table # 3.3 coefficients model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 2.602 .371 7.017 .000 reward .337 .102 .316 3.301 .001 in table 3 we check the independent value of reward impact on employee engagement. table 3.1 show that, r squared value of reward has 100% impact on employee engagement that’s mean significant value. in table 3.2, the significant value of anova is less than 0.05 which are significant so hypothesis is accepted. table 3.3 show that p-value (significant value ) is .001 that represent the positive coefficient correlation between the reward and employee engagement. table 04: variables entered/removed mode l variables entered variables removed method 1 supervisor . enter table # 4.1model summary model r r square adjusted r square std. error of the estimate 1 .564 a .318 .311 .63429 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 17 research limitations/future researches this research is based on banking sectors. mixed method approach is not used. qualitative aspects ignored. this research is quantitative. the study has been incorporated only in the job sector; rresults may be different if the data is collected from jobless people. the study is limited to banking sector. in future research, investigators broadens the scope of the study to different sectors.the focus of the present study can be increased if other parts of the population are also combined in it like working individuals of manufacturing, telecommunication, industrial and other sectors. table # 4.2 anova model sum of squares df mean square f sig. 1 regression 18.389 1 18.389 45.708 .000 b residual 39.427 98 .402 total 57.816 99 table # 4.3 coefficients model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 2.002 .274 7.316 .000 supervisor .509 .075 .564 6.761 .000 in table 4 we check the independent value of supervisor support impact on employee engagement. table 4.1 show that, r squared value of supper visor support has impact on employee engagement. in table 4.2, the significant value of anova is less than 0.05 which are significant so hypothesis is accepted. table 4.3 show that p-value (significant value) is .000 that represents the positive coefficient correlation between the supervisor support and employee engagement. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 18 conclusion after the testing the empirical study in mcb bank and national bank of pakistan, we found that reward and recognition has positive impact on employee engagement. while the other independent variable supervisor support has also significant impact on employee engagement. references akker, a. b., schaufeli, w. b., leiter, m. p., & taris, t. w. 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(2002). effects of external rewards on internal motivation and job satisfaction (unpublished master’s thesis). texas, usa: texas tech university. wiscombe, j. (2002). rewards get result. put away cash your cash. workforce, (pp. 42-47). witte, m. h., & lens, w. (2008). explaining the relationship between job characteristics, burnout and engagement : the role of basic psychological need satisfaction. work & stress, 22 (3), p. 277-294). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 20 appendices appendix a: questionnaire personal details:  gender: male ( ) female ( )  age:lessthan30 ( ) from 31 to less than 40 ( ) from 41 to less than 60 ( )  marital status: single( ) married ( ) separated ( )  monthly income/ pocket money: less than 15000 ( ) 16000 – 35000 ( ) 36000 and above ( )  occupation: self-employed/ business ( ) professional/ job holder ( ) sr. reward and recognition strongly disagree disagree neutral agree strongly agree q.1 higher salary and pay raise on good performance q.2 satisfied with the bonus/tip/reward in the organization q.3 satisfaction with the regular and systematic financial policies regarding the increment and other monetary benefits q.4 satisfied with promotional opportunities in the organization q.5 satisfaction with recognition on good performance q.6 satisfied with the recognition from the contribution in the organization supervisor support strongly disagree disagree neutral agree strongly agree q.7 supervisor encourages on good performance q.8 supervisor treats subordinates with respect positive things about this organization q.9 supervisor keeps employees well informed about what is going on in the organization q.10 supervisor encourages employee career development q.11 supervisor recognizes the potential amongst employees q.12 positive feedback on performance of employees www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 3; 2020 21 by supervisor without any bias q.13 supervisor is supportive in getting the job done employee engagement strongly disagree disagree neutral agree strongly agree q.14 feel energetic at work q.15 job is inspiring q.16 sense of fulfillment after completing the work q.17 willing to accept all sorts of challenges at work q.18 strong sense of belonging with the organization q.19 concerned about the image of the organization copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 2; 2019 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 1 effect of non-performing loans on the financial performance of commercial banks in nigeria okoh gabriel department of banking and finance ahmadu bello university, nigeria e-mail: okohgabriel39@gmail.com inim ekemini victor international organization for migration, lagos, nigeria e-mail: ekeminiinim@yahoo.com idachaba odekina innocent department of banking and finance ahmadu bello university, nigeria e-mail: innocentdaniel4grace@gmail.com abstract the study examined the effect of non-performing loans on the financial performance of commercial banks in nigeria between the periods of 1985 to 2016. the study employed the multiple regression techniques to analyze data collated from the central bank of nigeria (cbn) statistical bulletin and nigeria deposit insurance corporation (ndic) publications for various years. the result of the study shows that non-performing loans to total loans ratio (npl/tlr) and cash reserve ratio (crr) had statistically negative significant effect on return on asset (roa). these result shows that a high level of non-performing loans would reduce the financial performance of commercial banks in nigeria. consequently, the study recommends that the regulatory authorities in nigeria should create and support an environment where commercial banks in nigeria can have a strong risk management practices. keywords: non-performing loans, return on asset, bank financial performance. jel classification: g21, g29 1. introduction the efficiency of the bank’s performance is a function of how they are able to satisfy their customers at a minimum risk level and maximize profit as well. commercial banks are the dominant financial institutions in most developing and emerging economies and well-functioning commercial banks accelerate the rate of economic growth while poorly functioning commercial banks are an impediment to economic progress (richard, 2014). loans are part of the assets of a commercial institution since they are meant to earn interest in the course of time (waweru & kalani, 2016). this, however, is not always the case. some loans do not perform as expected and are termed non-performing loans (npls). obviously, credit creation is the main income generating activity of banks (kargi, 2011). however, it exposes the banks to credit risk. the basel committee on banking supervision (2001) defined credit risk as the possibility of losing the outstanding loan partially or totally, due to credit risks (default risk). credit risk is an external determinant of bank performance. the higher the exposure of a bank to credit risk, the higher the tendency of the bank to experience financial crisis and vice-versa. according to ahmad & ariff (2013), most banks in nigeria and other economies such as thailand, indonesia, malaysia, japan and mexico experienced high non-performing loans (npls) and significant increase in credit risk during financial and banking crises, which resulted in the closing down of several banks in indonesia and thailand. the negative effect of credit risk and non-performing loans on banks performance and the economy in general has made the issue of npls a global one and of great importance in the last www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 2 decades. according to hou & dickinson (2007), many researches on the causes of bank failures found that asset quality is a statistically significant predictor of insolvency, and that failing bank institutions always have high level of non-performing loans prior to failure. hence, this study seeks to investigate the effect of nonperforming loan on the financial performance of commercial banks in nigeria. 2. problem statement in nigeria, due to the rising increase of non-performing loans, the cbn (2010) through its prudential guideline, required licensed banks to periodically review their credit portfolios continuously, at least once in a quarter with a view to recognizing any deterioration in credit quality and that a credit facility should be deemed to be nonperforming once any of the following conditions exists; where interest or principal is due and unpaid for 90 days or more and interest payments equal to 90 days, interest or more have been capitalized rescheduled or rolled over into a new loan. thus they classified non-performing credit facilities into three categories namely, substandard, doubtful or lost (cbn, 2010). the nigeria banking industry, according to ndic (2013) annual statement and account show that the total loans and advances stood at n10.043 trillion in 2013, showing an increase of 23.22 percent over n8.150 trillion granted in 2012, and that the non-performing loans to total loans ratio improved from 3.51 percent in 2012 to 3.23 percent in 2013, this according to the report was within the regulatory threshold of 5 percent. however, in spite of this improvement, the volume of non-performing loans increased by 13.30 percent from 281.09 billion in 2012 to 324.14 billion in 2013 (ndic, 2013). as a proactive measure to avert the menace of resurgence of non-performing loan and to ensure safe and sound financial system the cbn in june 2014 directed that no financial institutions shall without the prior written approval of the cbn grant a credit facility to a potential borrower who is in default of the any existing credit facility to the tune of n500million and above in the case of deposit banks and n250million and above in the case of development banks and banks in liquidation. but in 2016, the ndic report shows that, the commercial banks total loans to the domestic economy stood at n16.29 trillion as at 31st december, 2016, out of which the sum of n2.08 trillion was non-performing. the sharp rise in the quantum of non-performing loans (npls) by 220% from n0.65 trillion as at 31st december, 2015 to n2.08 trillion as at 31st december, 2016 and the npl to total loans ratio (npl ratio) which increased from 4.88% as at 31st december 2015 to 12.80% as at 31st december 2016, compared unfavorably with the maximum prudential threshold of 5%. the ndic report 2016 indicated on a negative note that the commercial banks profitability indices declined in 2016. the commercial banks unaudited profit fell by 30.16% from n 0.63 trillion as at 31st december, 2015 to n 0.44 trillion as at 31st december, 2016. also, non-interest income decreased by 32.60% to n 0.17 trillion as at 31st december 2016 from n 0.25 as at 31st december, 2015. net-interest income also decreased to n 0.28 trillion as at 31st december, 2016 from n 1.44 trillion in 2015. the commercial banks return on assets (roa) decreased from 2.34% in 2015 to 1.48% in 2016 while return on equity (roe) fell from 19.78% in 2015 to 12.65% in 2016. yield on earning assets also depreciated from 13.40% in 2015 to 3.51% in 2016. the declining profit trend necessitated this study, to investigate the effect of non-performing loan on the financial performance of commercial banks in nigeria. 3. research questions the following research questions were raised:  does non-performing loan affect the financial performance of commercial banks in nigeria?  does cash reserve ratio affect the financial performance of commercial banks in nigeria?  does inflation rate affect the financial performance of commercial banks in nigeria? 4. objectives of the study the main objective of this study is to investigate the effect of non-performing loans on the financial performance of commercial banks in nigeria. specifically, the following objectives were designed to:  identify the effect of non-performing loan to total loans ratio on the financial performance of commercial banks in nigeria.  examine the effect of cash reserve ratio on the financial performance of commercial banks in nigeria.  identify the effect of inflation rate on the financial performance of commercial banks in nigeria. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 3 5. research hypothesis the following hypotheses were considered for the study: ho1: non-performing loan to total loan ratio has no significant effect on the financial performance of commercial banks in nigeria. ho2: cash reserve ratio has no significant effect on the financial performance of commercial banks in nigeria. ho3: inflation rate has no significant effect on the financial performance of commercial banks in nigeria. 6. literature review 6.1 non-performing loans and bank performance in nigeria, the rising trend in npls between 1981 and 2013 accounts for over 10% of the total loans granted and significantly resulted in bank distress. bank defaulting debtors were in many cases found to abandon their debt obligations and went to other unsuspecting banks to contract new debts which again most likely to degenerate into nonperforming loans. the use of status reports on bilateral basis was not effectively utilized to detect such dubious multiple loan defaulters. thus, the need for a central information data-base from which the required consolidated credit information on borrowers has become inevitable. this prompted the central bank of nigeria to establishment of the credit risk management system (ojo and somoye; 2013). mohd karim and sallahundin (2010), maintain that the management of non-performing loans is often associated with high operational costs leading to dwindling capital growths in the affected banks. non-performing loans (npls) reduces the liquidity of banks, distorts credit expansion, and slows down the growth of the real sector with direct consequences to the performance of banks. somoye, (2010) said that npls also bring down investors’ confidence in the banking system, thereby discouraging them from making reasonable investments. as far as the nigeria banking sector is concern, something has to be done seriously and urgently to bring back the confidence of bank customers in the sector. confidence is one of the factors banks must offer in order to get the patronage of customers. the performance of commercial banks can be measured by return on assets (roa) which reflects the ability of bank management to generate profits from the available assets. athanasoglou, brissimis and delis (2008) argued that roa is considered to be a core performance indicator used in the majority of empirical studies. studies by golin (2001) and rose and hudgins (2008) confirm the view that roa is one of the most important measures of profitability in banking literature. therefore, in this study roa will be used to measure the financial performance of commercial banks in nigeria. 6.2 empirical review there are a number of studies that investigated the effect of non-performing loan on the financial performance of commercial banks. while the debate on the usefulness of these non-performing loan factors in explaining financial performance of commercial banks is still rampant and inconclusive, extant empirical evidence can be sifted to identify some of these non-performing loans factors that have been frequently established by studies as important factors determining banks performance. this section presents empirical review of previous studies on the nonperforming loans and financial performance in developed and emerging markets. lydnon, peter and ebitare (2016) investigated the relationship between non-performing loans and bank performance in nigeria for the period of 1994-2014. the multiple regression technique was used to analyze the data. the result of the study shows that bad loans (bal) and doubtful loans (dol) had statistically negative significant influence on return on capital employed (roce), while substandard loan (sul) had statistically negative insignificant impact on roce. the result further shows that high level of non-performing loans would reduce the performance of banks in the long-run in nigeria. similarly, joseph and okike (2015) investigated the impact of non-performing loans on firm profitability: a focus on the nigerian banking industry for a period of (7) year (2006-2012). data were analyzed using the regression statistical tools and the result revealed that there is no relationship between the non-performing loans (npl) and return on asset (roa) of nigeria banks. this means that the assets values of the firms are not affected by the level www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 4 of npl. the shareholders wealth maximization is affected as the second result showed that there is a relationship between the non-performing loan (npl) and return on equity (roe) of nigerian -bank. ekanayake and azeez (2015) investigated the determinants of non-performing loans in licensed commercial banks in sri lanka for the period 19992012 and found that the level of non-performing loans can be attributed to both macro-economic conditions and banks specific factors. their study results reveal that non-performing loans tends to increase with deteriorating banks efficiency and there was a positive correlation between loan to asset ratio and nonperforming loans. they also observed that banks with high level of credit growth is associated with a reduced level of non-performing loans, while larger banks incur lesser loan defaults compared to smaller banks. however the study found with regards to the macro economic variables, that non-performing loans vary negatively with growth rate of gdp, while inflation was positively related to the prime lending rate. mwangi, (2014) carried out a study on the effect of nonperforming loans on the financial performance of commercial banks in kenya. the study aimed at establishing how nonperforming loans portfolio impacted on the financial profitability of commercial banks in kenya. the study focused on all the 46 commercial banks in kenya for the period 2005 – 2011. secondary data was obtained from the banks relating to two variables; return on assets (roa) which were the dependent variable and npl which was the independent variable. the study adopted simple linear regression model of the form y = a+bx to establish the effect of nonperforming loans on commercial banks financial performance. the results obtained from the study confirm that during the earlier years of the study, there was a high amount of npls resulting to a very low roa. later years however showed a different trend where roa was higher and npls were low. nir klein (2013) in an international monetary fund (imf) working paper investigates the non-performing loans (npls) in central, eastern and south-eastern europe (cesee) covering 1998–2011. the study reveals that the npls level can be ascribed to both macroeconomic conditions and banks’ specific factors, even though the banks’ specific factors was found to have a relatively low explanatory effect on npls. it further reveal that npls were found to respond to macroeconomic conditions, such as gdp growth, unemployment, and inflation which means it affects the economic recovery of the region. mohammad, ammara, abrar and fareeha (2012) examined economic determinants of non-performing loans using correlation and regression analysis to analyze the impact of selected independent variables and the result reveals that interest rate, energy crisis, unemployment, inflation and exchange rate has a significant positive relationship with the non-performing loans of pakistan banking sector, while gdp growth rate has a significant negative relationship with the non-performing loans of pakistan banking sector. 6.3 theoretical framework this section explains the related theories on which the study is based. there are a number of theoretical perspectives which are used in explaining the relationship between non-performing loan and profitability such as moral hazard theory is used to underpin the study 6.3.1 the moral hazard theory moral hazards refers to a condition leading to risk that results when a banks customer provides information that is misleading about its financial statements or his or her credit capacity, or has a hidden incentive to take risks that are unusual in an attempt to earn a profit before the contract settles. the bank customer who is the borrower may not enter into the contract with the bank in good faith, hence gives misleading information about his or financial status or credit capacity. the theory postulates that, the problem of moral hazard may result from information asymmetric between banks customer and the bank which makes it almost impossible to distinguish bad from good prospective borrowers (richard (2011). researchers have noted that moral hazard problem has led to overtime pilling up of npls (bofondi & gobbi, 2003). this theory underpins this study because efficient financial systems and financial intermediation requires accurate information about borrowers and the venture the credit are used for. more so, the moral hazard theory stated that the higher the nonperforming loan's the lower the financial performance and the higher the assets quality the higher the financial performance of banks and vice versa. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 5 7. methodology the study examined the effect of non-performing loans on the financial performance of commercial banks in nigeria. the study adopted ex-post facto research design as there was the existence of variables and secondary time series data at the time of the study. secondary data for 32 years period covering 1985 to 2016 was collated for the commercial banks in nigeria. data was collated from the central bank of nigeria (cbn) statistical bulletin and the nigerian deposit insurance corporation (ndic) annual reports for various years. 7.1 variables measurement table 1 variable measurement and description s/n variable name description/measure variable type source apriori expectation 1 roa measured as net profit before interest and tax divided by total assets of commercial banks. dependent kakanda et al, (2016) positive sign 2 npl to measure the nonperforming loans, the study used the npl ratio computed as a percentage of nonperforming loans to total loans independent achou and tenguh (2008) negative sign 3 crr crr is the specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. independent montoro and moreno (2011) negative sign 4 ifr inflation is the persistent increase in the general price level of goods and services in the economy. measured as inflation rate in nigeria for the period under study. independent farhan (2012) negative sign source: researchers’ compilation, 2019 7.2 model specification a multiple regression model in the order below was formulated to capture the relationship between nplr, crr and ifr. roa = f (nplr, crr, ifr.) translating the above into it explicit form we have: roa = α + β1 nplr + β2 crr + β3 ifr + μ where; roa = return on asset nplr = non-performing loans to total loans ratio crr = cash reserve ratio www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 6 ifr = inflation rate α = the intercept or constant term β1, β2 = coefficients of the independent variables to be estimated μ = the error term of the regression equation. 8. result and discussions table 2: diagnostics test results (pre-regression test) probability centered vif chi-square vif 1.162,1.496,1.66 jarque 0.67 775.97 breusch-pagan godfrey test 0.67 source: author’s computation using e-view 10.0 version. the multicollinearity tests was carried out using the variance inflation factor (vif) which quantifies the severity of multicollinearity. from the result above in (table 2) it can be concluded that there is no multicollinearity because the vif value of 1.162, 1.496, 1.66 lies between the range of 1-10. as a vif greater than 10 would be a cause of concern eston (2016). 8.1 unit root test the test of stationarity of the variables was conducted using the augmented dickey-fuller (adf) and the phillipperron (pp) tests. the results of the adf and pp tests with trend and intercept are presented in table 3 below: table 3: unit root test of adf and pp variables adf individual intercept pp individual intercept t-statistic critical value 5% pvalue orde r of integ ratio n remark t-statistic critical value 5% pvalue order of integr ation remark roa (6.512642) (2.967767) 0.0000 1(1) stationary (31.78560) (2.963972) 0.0001 1(1) stationary npl/tl (4.299634) (2.967767) 0.0022 1(1) stationary (3.810861) (2.963972) 0.0071 1(1) stationary crr (4.916469) (2.963972) 0.0004 1(1) stationary (5.002036) (2.963972) 0.0003 1(1) stationary ifr (3.641647) 2.981038 0.0118 1(1) stationary (6.094187) (2.963972) 0.0000 1(1) stationary source: author’s computation using e-view 10.0 version. the results of the unit root tests indicate that all the variables are integrated of order one, that is 1(1), which implies they are non-stationary at level but become stationary after first differencing. both the adf and pp test statistic result values were greater than the critical values 5%. moving on to the co-integration as presented below, since all the variable are stationary at the same level. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 7 table 4: co-integration test hypothesized no: trace statistics 0.05 critical value probability max-eigen statistics 0.05 critical value probability none 24.67132 29.79707 0.1735 17.82000 21.13162 0.1367 at most 1 6.851323 15.49471 0.5950 6.770532 14.26460 0.5166 at most 2 0.080791 3.841466 0.7762 0.080791 3.841466 0.7762 source: author’s computation using e-view 10.0 version. the result presented above (in table 4) shows that no co-integration exist among the variables, that is no long run relationship exist among the variables. hence, the alternate hypothesis that there is no co-integrating vector is rejected as a result of the fact that both the trace statistics and the max-eigen statistics is less than the critical value at 5% significance level respectively. table 5: multiple regression analysis variable co-efficient std-error t-statistics probability c 7.566539 6.374114 1.187073 0.2452 npl/tl (0.293620) 0.186558 (1.573880) 0.1267 crr (0.396248) 0.424607 (0.933212) 0.3587 ifr (0.067998) 0.145315 (0.467938) 0.6435 r-square 0.571284 adjusted r-square 0.535614 f-statistics 4.32146 prob(f-statistics) 0.00004 source: author’s computation using e-view 10.0 version. the result presented above shows that the coefficient for all the variables, npl/tl, crr and ifr had negative signs, meaning that to every one percent decrease in npl/tl, crr and ifr will on average, lead to 0.29, 0.39 and 0.06 percent reduction in roa. the result further indicates that npl/tl & crr had negative relationship with roa at 5 percent significant level suggesting that an increase in npl/tl & crr will result to a reduction in roa which means a reduction in return on asset (roa) used as proxy for the commercial banks financial performance. this result is in line with previous studies conducted by joseph & okike (2015) and lydon, peter & ebitare (2016) using roa and return on capital employed (roce) respectively. as proxy for bank performance, meaning that there is a negative effect of nonperforming loan on the financial performance of commercial banks in nigeria. moreso, the r2 value reveals that the explanatory variable in the model i.e npl/tl, crr and ifr accounted for about 57 percent of the variation in the dependent variable roa, while the 43 percent that is unaccounted for is due to other factors. the result shows that the independent variables are good predictors of roa. for the f-statistic, which apart from the adjusted r2 also tells about the overall significance of the model, the value obtained through estimation 4.32146 shows how the model is highly fit for the analysis. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 8 9. conclusion and recommendation the study examined the effect of non-performing loans on the financial performance of commercial banks in nigeria for the period 1985-2016. secondary aggregate data (figures) were collated from the annual reports and publications of the nigerian deposit insurance corporation (ndic) and the central bank of nigeria (cbn) statistical bulletin for various years. roa was employed as proxy for the financial performance of commercial banks which is the dependent variable, and on the other hand npl/tl, crr and ifr were used as proxy for nonperforming loans (the independent variables). a multiple regression model was formulated to examine the effect of the variables; the diagnostic test was carried out to check the severity of the multicollinearity, followed by the adf and the pp unit root test, the co-integration test which shows that there is no co-integration among the variables and the multiple regression analysis. the unit root tests (i.e both the adf & pp) shows that all the variables of interest were integrated of order 1(1) and were stationary at first differencing. the multiple regression results show that npl/tl, & crr had statistically significant negative influence on roa, while ifr had statistically insignificant negative influence on roa. it proved that non-performing loan had a negative effect on the financial performance of commercial banks in nigeria. the effect of the above is that any increase in the volume of non-performing loan would reduce the financial performance of commercial banks in nigeria. consequently, upon the findings of the study, the following recommendations were made: that the regulatory authorities in nigeria should ( through the asset management corporation of nigeria amcon) create and support an environment where commercial banks in nigeria can have a strong risk management practices, by strengthening the bank’s internal risk management process of identification, measurement and monitoring of risk. considering the negative correlation that crr had on performance, the study therefore, recommends that commercial banks should come up with innovative ways of boosting their internal financial capacity to be able to handle any possible policy movement (changes) in crr and inflation rate. references acho, f. t., & tegnuh, n. c. 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(2016). commercial banks crises in kenya:causes and remedies. african journal of accounting, economics, finance and banking research, 12-33. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 2; 2019 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 10 the determinants of pro-poor growth: evidence from brazil joseph i. amuka department of economics university of nigeria nsukka, nigeria email: dobuamuka@gmail.com fredrick o. asogwa department of economics university of nigeria nsukka, nigeria e-mail: fredrick.asogwa@unn.edu.ng anthony o. agu department of economics odumegwu ojukwu university, anambra state, nigeria e-mail: aguagain@yahoo.com chukwuma c. ugwu department of economics federal university wukara, taraba state, nigeria e-mail: ucollins98@yahoo.com abstract pro-poor growth is good for poverty eradication if it can be achieved. brazil is a good example of a country where growth was pro-poor between 1981 and 2014 but the pro-poor growth was reversed in 2015. the paper examined what led to pro-poor growth between 1981 and 2014 and what may have been responsible for the reversal in 2015. the dynamic ordinary least squares method was used to analyse brazilian data from world bank development indicators between 1981 and 2014 for the determinant of pro-poor growth. regression analysis shows that job creation was responsible for the pro-poor growth between 1981 and 2014. moreover, rise in unemployment rate in 2015 was responsible for the reversal in the pro-poor growth. the result has good policy implication for poverty and inequality reduction in brazil. keywords: pro-poor, pro-rich, growth, determinants, brazil 1. introduction growth and poverty reduction has been at the centre of the discussion in economic development for a long time now. lustig, arias and rigolini (2002) asserted that economic growth as well as the pattern of the growth is very important in achieving substantial poverty reduction. in the early discussion on the relationship between growth and poverty in 1950s and 60s, the debate was around trickle down hypothesis because of the belief that as an economy grows, its benefits will pass through the rich down to poor and solve poverty problem (kakwani and permia, 2000). however, experience showed that in many developing countries, poverty increased instead of reducing with growth, especially in sub-saharan african countries (world bank, 2016). the simultaneous rise in growth and poverty in many countries in late 1990s and early 2000 led to a shift in discussions on growth and poverty to pro-poor growth. there are many definitions of pro-poor growth. according to kakwani and permia (2000) pro-poor growth is the growth which favours the poor more than the non-poor in income redistribution. similarly, son (2007) points out that pro-poor growth means the growth in favour of the poor. white and anderson (2001) defined pro-poor growth as that growth which can increase the share of the poor from growth above the international norm. white and anderson considered the mean income of the bottom 20 and 40 income group as the international norm. in the definition given by grant (2005), pro-poor growth in its absolute term is the growth which can reduce poverty, and from the relative term it is the growth which can increase the income of the poor disproportionately such that inequality falls. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 11 overseas development institute brief (2008), organization for economic co-operation and development (oecd, 2010) and federal ministry for economic cooperation and development (fmecd, 2006) have different approaches in the definition of the pro-poor growth. the overseas development institute brief defined pro-poor growth as the growth which can increase the income share of the poor more than the rich, and the federal ministry for economic cooperation and development (fmecd, 2006) sees pro-poor growth as the growth which can increase the income share of the poor such that inequality falls. according to fmecd, growth is pro-poor if the growth in income share of the poor rises more than the growth rate. but the oecd in its definition maintained that pro-poor growth is the growth which can increase the welfare of the poor who provide services in the sectors which drive the growth. from these various definitions of pro-poor growth, two important issues emerge. first, pro-poor growth should be able to reduce poverty, and two, it must lead to a fall in inequality (jmurova, 2017). poverty is harmful to growth and development. according to nallari and griffith (2011), poverty reduction is very essential because its reduction can speed-up growth. de la fuente (2016) emphasized that it is good to fight poverty because it is one of the factors which is threatening world growth. de la fuente maintained that to increase the speed of world development, effort must be made to improve the current world living standard. the assertion fell in line with the view of lustig, arias and rigolini (2002) who maintained that poverty impairs growth. therefore, pursuance of poverty reduction policy will expectedly lead to sustainable economic growth and world development in the twenty-first century. the poor are the people who lack the resources to meet basic needs that improve wellbeing (world bank, 2018). or, they are the people who have higher risk of disease, people who live in substandard condition and lack basic infrastructure (fatima and ali khan, 2018). dollar and kraay (2001) defined the poor as the people on the bottom fifth of income distribution. for general use, the poor are those people whose consumption expenditure is less than $1.90 per day. from purchasing power parity, it is assumed that people who earn less than $1.90 per day cannot meet their basic necessities of life. development indicators showed that the brazilian economy experienced a boom between 1966 and 1980, with an average growth rate of 8.23. the country’s average growth rate fell to 2.21 between 1981 and 1995. her economy picked up in 1996 and posted an annual average growth rate of 7.21 percent between 1996 and 2014 (world bank development indicators, 2018). an important aspect of the growth between 1981 and 2014 which is good to note is its distribution pattern. for instance, between 1981 and 2014, the income share of the bottom 20 percent group rose by 1% against the fall in the income share of the top 20 percent group by 6 percent. the scenario led to a decline in income inequality by 6.9% and a reduction in poverty from 21.4 % in 1981 to 2.8% in 2014 (world bank, 2016). unfortunately, poverty rose to 3.4% in 2015 while the income share of the bottom 20% fell by 0.4%. the fall in income share of the bottom 20%, and rise in poverty in brazil in 2015 is a signal that the propoor growth experienced between 1981 and 2014 is being reversed. it raises a serious concern because if the trend continues, the gains of economic prosperity the country recorded for two decades will be lost. to see that the trend is not reversed, it is important to investigate the factors that determine pro-poor growth in brazil and advice policy makers on the measures to take so as to stop the economy from taking more people back to poverty. while the study is being done in brazil, it will serve as a lesson for other emerging economies, especially the sub-saharan africans where poverty is endemic. 2. theory and related literature the growth-poverty debate is old but still ongoing. the debate in the 1960s was built around the trickle down hypothesis. however, global poverty continued despite the trickle down thesis. jafar (2015) argued that the only way trickle down can lead to substantial reduction in poverty is if the benefits of growth shared is large enough to make an impact in the income of the poor, and once the benefits shared is small, the trickle down thesis will be ineffective. the redistribution with growth theory questioned the use of growth in domestic product as a measure of economic performance and the fight against poverty reduction (chenery, ahuwalia, bell, duloy and jolly, 1979). chenery et al maintained that 75 percent of economic assets in majority of the countries are owned by the top two income quintiles. that means that in every dollar increase from growth, 75 cent will go to the 40 percent of the population, leaving only 25 cent to the remaining 60 percent. this shows that the benefits of the growth that go to the poor are small because they neither possess physical nor human capital to command bigger share from growth. the work of chenery et al led to a shift in policy direction to social investments as the way to tackle poverty in the developing countries in the 1990s. ogujiuba and alehile (2011) and grant (2005) see investment in skill development as good step towards poverty reduction because it is the only way through which the poor can access modern sector employment with better condition of services. the united nations (2012) supported social protection policy in developing countries, pointing out that it is an important tool to tackle multidimensional poverty and deprivation. kakwani et al (2005) maintained that social protection is good because it ensures that the benefits www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 12 of growth can go round. study by marcus (2014) suggests that social spending is good for poverty reduction. on the other hand, cantillon et al (2015) reiterates that social spending in many of the welfare states failed to reduce poverty, and kakwani et al (2005) in a cross country study discovered that social spending in most countries is small to have good impact on poverty reduction. in the pro-poor growth debate, grant (2005) points out that the poor are mainly in the rural area doing business in the agriculture sector, and to achieve pro-poor growth, government must direct attention to the improvement in agricultural productivity. this argument is supported by klasen (2007) who stresses that pro-poor growth strategy should target the agriculture and rural economy where the poor works. page (2005) and timmer (2004) also accept that the promotion of agricultural productivity can enhance pro-poor growth because it is the sector where majority of the poor carry out their economic activity. kakwani and permia (2000) and kakwani et al (2004) in different studies discovered that pro-poor growth depends on country because there is no guarantee that every growth will benefit all the poor in a country. cross country research in asia, europe, latin america and sub-saharan africa by cord, lopez and page (2003) discovered different effects of growth on the poor. pasha and palanivel (2004) equally discovered that growth affects the poor differently across countries. from a cross country study in asia by pasha and palanivel, employment opportunity and growth in agriculture significantly lead to pro-poor growth. other cross country investigations showed that some other determinants of pro-poor growth are improvement in education and health, control of corruption, financial openness and financial development (djeneba, 2018, olaogun, 2008, chhibber and nayyar, 2007). according to chhibber and nayyar, education and literacy promotes pro-poor growth because it increases the opportunity of the people to get good jobs, and equally creates more entrepreneurs who can establish business with modern technology. moreover, study by menezes-filho and vasconcellos (2004) revealed that improvement in education (primary, secondary and college) and infrastructure development are the key factors that determined propoor growth in brazil. other factors are growth in urbanized area and low levels of wage differential. so far, one study has been done in brazil on pro-poor growth. we went into this present study for two reasons, namely (1) the study was done based on cross-sectional data, and (2) the study was done more than ten years ago and the pro-poor growth in brazil is reversing. we improved on the study and used annual data and focused on total employment of labour and growth of sectors because oecd (2009) argues that the pattern of growth of the sectors of the economy determines the effectiveness of growth in reducing poverty and becoming pro-poor. annual data are better than cross sectional data in the study of growth because growth is a macro variable and annual data accommodate changes overtime. 3. the model the ordinary least squares method of research was adopted in this study because of its simplicity and good properties of best linear unbiased estimates (blue). an exogenous growth model shows a long run economic growth which operates within the framework of the neoclassical economists. the solow-swan growth model which explains long run economic growth using capital, labour and technological progress belongs to this class. accordingly, where: t= time, 0<α<1 = elasticity of output accrued to capital, y(t) = total output, a is a labour-augmenting technology, and al is the effective labour. the effective labour (al) grows at ŋ+g while capital depreciates at δ, hence, the derivative of k with respect to time becomes k ꞌ(t) = s*y(t) *k(t) ………………………………………….(2) the model for this study is income share function using data from brazil. growth in some sectors of an economy can create jobs and lead to pro-poor growth (oecd 2011b; oecd, 2013a). the model is designed to capture the impact of such change in some sectors of the economy of brazil on the income share of the lowest 20% group. ys = f(hc,,agr,,emp, indg, grs) ……………………………………..(3) where: ys = income share of a group, hc = human capital development, agr = growth in agriculture, emp = total employment, indg= industrial growth, and grs= growth in services. equation 3 captures the behaviour of income share by the lowest and highest 20% income group in brazil. for estimation, equations 4 is transformed, thus ys = α + β1hct + β2agrt + β3empt + β4indgt + β5grst + et ………………… (4) where www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 13 α= intercept, β1-β5 are coefficients, e= error and t= time to denote time series. equations 4 and 5 can be transformed further as specified below where: yt represents income share of a quintile group in brazil, xt is made up of all the explanatory variables as described in the model; ei is the error term. 4. data data for the estimation were sourced from world bank development indicators between 1981 and 2015. 5. result the results of the analyses are presented in tables 1, 2, 3 and 4 below. table 1: unit root test variable adf 5% order of integration ysh -12.09519 -2.881685 i(1) loghc -12.03975 -2.881685 i(1) ind -4.226382 -2.881123 i(0) agr -3.554343 -2.882279 i(0) emp -12.00003 -2.881260 i(1) serv -8.550733 -2.881685 i(1) ysl -12.05008 -2.881260 i(1) source: analysis of brazil data unit root is a pre-estimation test always done to make sure stationary data are used in regression analysis to avoid spurious and misleading regression results. table 1shows that industrial and agricultural growths are stationary at the level forms, and other variables are stationary at the first difference. . table 2a: cointegration test (lowest 20% income group) variable adf 5% residual -1.794723 -2.882910 source: analysis of brazil data table 2b: conitegration test (highest 20% income group) variable adf 5% residual -8.674401 -2.882279 source: analysis of brazil data in table 1, none of the variables is integrated in order 2, and there was the need to test for cointegration. table 2a shows that there is no long run relationship between the dependent and independent variables. however, in table 2b, the relationship between the dependent and independent variables continued in the long run. table 3a: dynamic equation (dependent variable= lowest 20% income group) variable coeff std error t prob c 0.008226 0.008611 0.96 0.3411 d(loghc) -0.344480 0.154494 -2.23 0.0274 ind -0.000278 0.001448 -0.19 0.8478 agr 0.000262 .001554 0.17 0.8665 d(emp) 0.089345 0.011617 7.69 0.0000 d(serv) -0.012511 0.009180 -1.36 0.1752 r2 0.31 f-stat 12.56 prob(f-stat) 0.00000 source: analysis of brazil data www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 14 table 3b: dynamic equation (dependent variable= highest 20% income group) variable coeff std error t prob c -0.012259 0.095226 -0.13 0.8978 d(loghc) 3.839217 1.708532 2.25 0.0262 ind 0.013878 0.016014 0.87 0.3877 agr -0.021951 0.017191 -1.28 0.2038 d(emp) -1.096943 0.128476 -8.54 0.0000 d(serv) 0.267224 0.101519 2.63 0.0095 r2 0.39 f-stat 17.38 prob(f-stat) 0.000000 source: analysis of brazil data tables 3a and 3b are the results of the dynamic equation. in the dynamic equation, the stationary levels of the variables are taken into consideration. beginning with the poorest group in table3a, the coefficients of the human capital, industrial and services growth are negative. the coefficients of employment and agriculture growth are positive. in the richest income group, the coefficients of human capital, and industrial and service growths are positive. the coefficients of agricultural growth and employment creation are negative. 5.1 collinearity test the result of the collinearity test is presented in table 4a and 4b below. table 4a: result of collinearity (lowest 20%) ysh agr emp hc indg serv ysh 1.000000 -0.069834 -0.299121 -0.522350 0.008786 0.094827 agr -0.069834 1.000000 0.231187 0.120450 0.174502 0.196375 emp -0.299121 0.231187 1.000000 0.603715 0.289614 0.550833 hc -0.522350 0.120450 0.603715 1.000000 0.067812 0.237155 indg 0.008786 0.174502 0.289614 0.067812 1.000000 0.569599 serv 0.094827 0.196375 0.550833 0.237155 0.569599 1.000000 source: analysis of brazilian data table 4b: result of collinearity (highest 20%) ysl agr emp hc indg serv ysl 1.000000 -0.020331 0.166024 0.514102 0.002121 -0.132081 agr -0.020331 1.000000 0.231187 0.120450 0.174502 0.196375 emp 0.166024 0.231187 1.000000 0.603715 0.289614 0.550833 hc 0.514102 0.120450 0.603715 1.000000 0.067812 0.237155 indg 0.002121 0.174502 0.289614 0.067812 1.000000 0.569599 serv -0.132081 0.196375 0.550833 0.237155 0.569599 1.000000 source: analysis of brazilian data the highest value in the correlation matrix in tables (4a) and (4b) is 0.6. it is evidence that there is no problem of collinearity in the model. 6. discussion of finding the study investigated the determinants of pro-poor growth in brazilian economy between 1981 and 2014, and what led to reversal in pro-poor growth in 2015. results presented in tables 1-5 is interesting and met some degrees of expectation. our discussion will however concentrate on the dynamic result in tables 3a and 3b because the analysis was based on stationary data. the structural equation can be referred to if there is a special case. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 15 6.1 pro-poor growth and its determinants 6.1.1 agriculture the poor in every developing economy are found mainly in the agricultural sector. brazil is no exception. the 2006 brazilian agriculture survey showed that almost half of the farms in the country are family farms with annual income of less than a thousand dollar (< $1000). evidence shows that members of the family farm group own less than 2 ha of land and the poor control only 0.3% of the agricultural land area (bolliger and de oliveira, 2010). table 3a shows that growth in agriculture has a positive effect on the income share of the bottom 20% group. the positive effect is in line with theoretical expectation that expansion in the sector where the poor carry out economic activity will bring an improvement in their income (timmer, 2004). the finding falls in line with the work of pasha and palanivel (2004) which suggests that growth in agriculture has positive effect on pro-poor growth. however, the growth in agriculture did not have significant effect on the growth of the income of the in brazil between 1981 and 2014. 6.1.2 human capital human capital development is important because it leads to skill development and helps the poor to acquire the necessary skill needed in the modern economy with better work condition. it is an expectation that improvement in the skill of the poor will give them opportunities to move to high paying jobs. in this study, human capital development led to a significant reduction in income share of the poor in brazil between 1981 and 2014. this outcome is surprising but falls in line with the argument of dollar and kraay (2001) who maintained that the benefit of education spending in the developing countries always go to the non-poor, and kakwani and permia (2000) pointed out that it is only the education spending at the basic level that is pro-poor. 6.1.3 employment increases in employment opportunity expectedly had a positive and significant effect on pro-poor growth between 1981 and 2014. a unit change in employment opportunity, that is, whenever employment increases by a unit, the income share of the poor from the economy’s resources will increase by 0.09 units. it suggests that the more the jobs are created in brazil, the more the income share of the poor in the country increases and the more the growth will be pro-poor. this suggests that increase in unemployment will have detrimental effect on pro-poor growth. in line with this, job creation fell in brazil in 2015 and led to a fall in job opportunities. as a consequence, the income share of the poor fell and led to a reversal in pro-poor growth. hence, for policy purpose, if government is interested in the reduction in poverty and inequality, government programmes must target creation of more jobs. 6.1.4 industrial growth in real life situation, the industrial sector is largely owned by the middle and high income groups. the implication is that the benefits of growth in the sector do not go direct to the poor but to the rich and the middle class who are the owners of the assets. however, if the link between agriculture and industrial sector is high, growth in the industrial sector can generate growth in the agriculture activities and the poor will benefit. the result of the dynamic equation in table 3a shows that expansion in industrial activities has negative but insignificant effect on the income share of the poor. 6.1.5 growth in services growth in the service sector has a negative and insignificant effect on the income share of the poor. a unit increase in the service sector will reduce the income share of the poorest group by 0.01 units. this is an indication that the poor are no gainfully working in the service sector in brazil. 6.2 pro-rich growth and its determinants table 3b is the dynamic result for the highest 20 percent income group. the richest group is included in the analysis only because we want to use it as a check on the result of the poor. in actual fact the result turned out as expected. for instance, growth in the service sector had a significant effect on the increase in the income share of the highest 20 percent group. the factors which have positive effects on the income of the poor turned out to have negative effect on the income of the rich. the finding is very important for policy making purpose. for example, in pursuance of social investment through tax policy, the best way to finance it so that it will not hurt the poor is to tax the service sector. it will lead to e redistribution of resources from the rich to the poor. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 2; 2019 16 7. conclusion the essence of going into the investigation on the determinants of pro-poor growth is because the world is interested in redistribution of benefits of growth in such a way that global poverty will fall. from the analyses with data from brazil, employment was the significant factor that led to increase in the income share of the bottom 20% as well as the pro-poor growth in brazil between 1981 and 2014. government spending in education to build human capital significantly reduced the income share of the poor between 1981 and 2014. moreover, the study reveals that increase in education spending and growth of the service sector had significant effect on the increase in the income share of the highest 20 group. on the reverse of the pro-poor growth in brazil in 2015, this is traced to increase in unemployment in the country in 2015. therefore, to reverse back to pro-poor growth in brazil, policy should target employment generation programmes. the policy direction of the result is that whenever government action leads to expansion in the service sector when every other thing remains the same, inequality will rise because the income share of the richest group will rise and the share of the poorest group will fall. similarly, employment promotion programmes will narrow poverty and inequality in the country. references bolliger f.p. and de oliveira o.c. 2010. brazilian agriculture: a changing structure.retrieved from https://www.researchgate.net/publication/235635521 cantillon b., collado d. and van mechelen n. 2015. the end of decent social protection for the poor? the dynamics of low wages, minimum income packages 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issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 16 human resources management factors as determinant of quality of work life in uba plc elegbede sikirulahi tunde phd department of employment relations and human resource management faculty of management sciences university of lagos, nigeria e-mail: telegbede@unilag.edu.ng elegbede olusegun ibrahim m.sc department of business administration & management school of management and business studies yaba college of technology, nigeria e-mail: egbedeolu2013@gmail.com bakare rasaki dayisi phd department of business administration faculty of management sciences university of lagos, nigeria e-mail: dbakare@unilag.edu.ng abstract this paper examined the role of hrm factors in achieving quality of work life in the organization. the main objective of this paper therefore was to determine any significant relationship that main exist between hrm factors such as engagement , talent management , compensation, learning and development on the one hand and quality of work life on the other. the study adopted cross sectional design and employ survey as the research strategy to elicit responses from respondents in uba plc. the study employed the use of questionnaire as the main research instrument. it was revealed from the hypotheses tested that hrm factors are significantly related to work life balance, and therefore hrm factors are major determinants of quality of work life in the organization. keywords: quality of work life, employee engagement, talent management, learning and development, compensation policy. 1. preamble human resources management (hrm) focused attention on the formal process for the management of people in an organization (mullins, 2007). effective management of people towards achieving organizational goals is a central theme in the field of human resource management. therefore, hrm practices are key to organizational efficiency and high productivity (elegbede, 2016); also wood & wall (2002) stressed that high commitment approach to hrm enhance internal fits and organizational fits. wood (1999) opined that internal fits ensure synergy among various hrm practices while organizational fit, while lawler (1995) advocated hrm practices are associated with quality practices. the role of hrm practices in quality of work was further stressed by minbaeva(2004) that there is a strong link between hrm practices and total quality management (tqm). achieving the organizational fit is a major challenge to most organizations small and big, and it is significant in achieving quality of work life (qwl). improving qwl practices in an organization seems to promote effectiveness and eliminate negative attitudes (amin, 2013). hrm practices such as pay and compensation, training and development, talent management, employee engagement, recruitment and selection appears to ensure achievement of qwl in an organization. the improvement of qwl at the workplace has been a major concern to managers globally. increasingly, qwl has been a major area of attention in last two decades due to changes in life styles of workers and family relationship generally (akdere, 2006). mailto:telegbede@unilag.edu.ng mailto:egbedeolu2013@gmail.com mailto:dbakare@unilag.edu.ng www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 17 it was in this regards that previous researchers adopting both empirical and conceptual analysis to identify factors that determined and influenced qwl at the workplace. in view with the objective of identifying factors responsible for qwl at work, researchers such as (kahn, 1981); focused on talent management as determinant of qwl;(kalra & ghosh, 1984); (mirvis and lawler, 1982); ( kerce& booth-kewley, 1993). focus on the entirety of hrm functions as the determinant of qwl at work. essentially, human resource management factors (hrmf) serves a major role in the determination of qwl practices (fajana, 2002); (bateman and snell, 1999); (obisi, 1995) qwl is enhanced by high level hrmf. however, in the developed world researchers such as tim (1997) examine the relationship between human resources practices and job satisfaction. stein (2004) examine the positive effect of human resources practices on job satisfaction and organizational performance while appelbaum, bailey ,berg , and kallerberg (2000) examine the effect of sound human resource practices on the improvement of organizational performance. similarly, gould –williams (2003) addressed the use of specific human resource practices in local government organizations. all these studies have significantly demonstrated the link between hrmf and qwl. in contrast to studies conducted in most of developing and underdeveloped countries for instance in nigeria, ghana and togo private companies and most public institution managers and business owners pay lip service to efficacy of qwl in achieving organizational objectives such as the studies by elegbede (2016) which focus on financial sectors in nigeria and ikemefuna, anyim and mbah (2012) which focus on challenges of hr in nigeria. as noted by fajana (2002) hrm factors should address and focused attention on influencing and promoting qwl in nigeria. fajana (2002) stressed further that in recent times business managers and human resources professionals in nigeria have become more sensitive to the need to utilise strategic. however, the study by amin (2013) empirically determined the role of career development and personal factors on quality of work life in indonesia public sector. moving further than the study by amin (2013) this study empirically examined the impact of human resource management factors on quality of work life amongst asian multinational companies in nigeria, the paradigm shift from personnel management to human resource management in most asian multinational companies in nigeria influence the concern for a robust workforce through quality of work life balance( ikemefuna, 2012) transited from the humble beginnings of personnel management to the more robust strategic human resource management practice ( fajana, 2002). this arguably estimate the reasons for some researchers to conceptually advocated that human resource management practices impacted on quality of work life and influence. huselid (1995) opined that human resource practices are associated with organisational outcomes; and through their influence on employee quality of work life (fajana, 2002. the industrial set-up in nigeria can be segmented into two categories; namely asian multinationals and american / europeans multinationals operating in nigeria excluding local industries. as noted by otobo (2012) nigeria’s current industrial landscape is diverse with american, french and italian organisations on the one hand and the asians multinational companies on the other. asian companies in nigerian operate in oil and gas, food and beverage, manufacturing, agriculture and technology sectors of the nigerian economy. these organisations employed nigerians as the bulk of human resources required to achieve business success. this provides a viable ground to investigate the human resources management of asian multinational companies and its influence on quality of work life balance. however, human resource approach appears to play significant role in actualization of organizational objectives and quality of work life balance in particular. as noted by mullins (2007) that hrm and the successful implementation of personnel activities are essential ingredients for improved organizational performance while lych ( 2008) opined that people are vital resource for sustainable competitive advantage. there is significant influence and relationship between human resource management and quality of worklife balance practice (fajana, 2012); this explain the needs for more emphasis on specific hrm factors that are synonymous with quality improvement, innovation and speed (bateman & snell, 1998); other hrm factors as identified by elegbede (2016) includes employee engagement , talent management , compensation management policy , learning and development. in this study employee engagement, talent management, compensation management policy, and training and development will be conceptualized as those hrm factors that determine the success of quality of work life balance. the importance of this conceptualization will be demonstrated later in this study through empirical submissions on the influence of hrmf on quality of worklife balance in asian multinational companies operating in the various sectors within the nigeria economy. 2. review of empirical literature the section examined review of empirical literature in line with the theme of research objectives and research questions. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 18 2.1 employee engagement and quality of work-life balance employee engagement is an essential tool for effective management and utilization of people at work. particularly employee engagement enhanced positively work-life balance practices. in the study by lazer & ratiu (2010) which investigated work-life balance and organizational performance. their study revealed that work-life balance has significant business cost associated with lack of engagement. similarly, the study by meenakshi, subrahaman, and ravichandra (2013) revealed that work-life balance is significantly related to employee engagement. however, the study by becker & gehart (1990) revealed that human resource management decisions such as employee engagement, impacted on work-life balance practices. although , the study by becker & gehart (1990) does not directly examined the relationship between employee engagement and work-life balance but the study was able to indirectly established the importance of effective relationship between employee engagement and work-life balance practices. the studies by wright & mcmahan (2011) identify some of the issues emerging with human capital research and propose some future directions for research on human capital in organisations. wright etal was able to identify compensation management as one of the key factor that influence performance in an organization. bustillo ,llorente, & mac´ıas (2005) revealed that job satisfaction is not a measure of job quality . contrary to the finding of bustillo , llorente, & mac´ıas (2005) the study by ahktar, din, and ge (2008) revealed that a valid set of strategic hrm practices (training, participation, results-oriented appraisals, and internal career opportunities) affect both product/service performance and financial performance. the study by snape & redman (2010) examine the relationship between hrm practices, conceptualized within an organization both at workplace level and individual attitude and behaviour. their study focuses on the explanation for the relationship between social exchange and job influence or employee discretion. finding from their study shows that there is a positive impact of hrm practices on organizational citizenship behaviour. relating more closely to work-life balance in nigeria, the study by ojo, salawu, &falola(2014), on worklife balance practices in nigeria revealed that there is a diversity in terms of how respondents perceived the concept of work-life balance. their finding revealed further that there is a wide gap between corporate work-life balance practices and employee understanding of the concept. the study by ojoetal (2014) was able to reveal the difference of conceptualization of work-life balance by employees and employers in nigeria. however, their study failed to focus attention on the significant relationship between employee engagement and work-life balance. also , the study by oludayo, gbrevbie, popoola , & omonijo (2015) examines the effect of a time usage policy on employee’s worklife conflict and the impact of leave programme on employees attitude using five selected banks in nigeria. the finding from the study by oludayoetal (2015) shows that there is relationship between job related attitude and leave initiatives. their study emphasised work-life balance and time usage and not on employee engagement and worklife balance. in the same vein, the study by akanji(2012) on the realities of work-life balance in nigeria focused on perspectives of role conflicts and coping beliefs revealed that there exist some barriers to work-life balance practices in nigeria. these barriers were empirically examined in the study by issa (2014). his study revealed that there is a significant relationship between work=life balance and workers performance in the higher education in nigeria. 2.2 talent management and quality of work-life balance talent management entails the process by which human resources of an organization are effectively managed in terms of skills, competency, and attitude towards achieving organization’s objectives. it was in this regards that lyria ( 2013) provide conceptual analysis on the role of talent management on organizational performance. his study reviewed literature that established gaps for further studies on the topic of talent management. also, legnickhall & legnick – hall (1998) examined the importance of management of human resources as a business strategy. their study shows that management of human resources increase organizational effectively using effective work-life balance and talent management increase organizational overall gaols, strategy, and structure. however, the major shortcomings of the study by legnick-hall etal (1998) was lack of empirical evidences. the study by delaney & huselid (1986) revealed that there is positive association between human resource management practices such as training and staffing and perceptual firm performance measures. this finding was supported by the findings from the study by guest (2011) on the impact of human resource management on organization’s performance. the study by ahmed (2016) empirically revealed that talent management significantly influence organizational performance. his study also discovered that hrm best practices are related to work-life balance practices. this finding was supported by the study of niedźwiecka (2016). niedźwiecka (2016) discovered from his study that talent management play a positive role in human resource management and contribute significantly to the achievement of corporate goals and objectives. similarly , the study by oladapo (2014) on the challenges and success of talent management revealed that all hr managers support talent management. the study revealed further that talent management promote employee retention in the organization. contrarily, to previous findings mention above , the study by hanif&yunfei (2013) revealed that talent management is an integral function within hr generic strategies. they concluded , www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 19 therefore, that hrm practices are all significant to achieving organizational success. the conclusion of hanif &yunfei (2013) was further supported by the conceptual analysis of talent management by sireesha and ganapavarapu (2014). sireesha and ganapavarapu (2014) stressed that talent management is about employment of the right people in the right jobs to perform the right task. chitsaz-sfahan & boustani (2014) empirically determined that talent management there is a significant relationship between talent management, employee retention and organizational trust. the study by ahmed (2016) focused on the impact of talent management on company competitive advantage revealed that talent management contributed to the achievement of competitive advantage. his study revealed further that talent management brings about innovation of employees skills and decisssion making process. niedźwiecka (2016) on the role of talent management in hr process adopted theoretical models also revealed that talent management is a key strategy in hrm. . however, the study by oladapo (2014) adopted an empirical approach and explanation to role of talent management in hrm functions. his study revealed that 69 per cent of those studied recognised the strategic importance of talent management programme. oladapo (2014) revealed further from his study that job security, compensation, and opportunity for advancement were not found to have predictive value for employee retentions. his study concluded that for firms to remain competitive, executive management must develop stable, long-term talent management strategies to attract, hire, develop, and retain talent . the study by hanif &yunfei (2013) on the role of talent management and hr generic function revealed that there is a significant relationship between talent management and employee retention, reduced turnover, and succession turnover. their study further revealed that there is collaboration between talent management and other hr practices such as training and development, recruitment and selection, resources and skills building of employee. boustani (2003) adopting descriptive survey to examine the effect of talent management on employee retention revealed from the hypothesis tested that there is a significant relationship between talent management, employee retention and organizational trust. however, the findings from current study under investigation will either refute or support most the previous studies mention above. however, most of the previous did not focus attention on the relationship between hrm practices and work –life balances which will be the main thrust of the current study under investigation. although the study by eva (2014) revealed that talent management significantly relates to through proper remuneration and conducive work environment. however, the study did not mention the role of work –life balance in achieving organizational success. 2.3 the relationship between compensation management policy and quality of work life practices the study by resurreccion (2012) performance management and compensation policy revealed that performance management and compensation management are significant in organizational competitiveness. his study revealed further that reward management in particular is a major predictor of organizational competitiveness. this claim was supported by the study of odunlade (2012) on managing employee compensation and benefits for job satisfaction, his study revealed that there is a relationship between employee compensation and job satisfaction. however, the study by resurrection (2012), and odunlade (2012) did not factor into their analysis the relationship between employee compensation and work-life balance in ensuring job satisfaction. however, the study by jiang, xiao, qi, and xiao (2009) examined the impact of total reward on employee job satisfaction. their study revealed that managers that adopt integrated total reward tend to gain more profit. also the study by adeoye& fields (2014) revealed that compensation management and employee job satisfaction are correlated the findings revealed further that compensation management impacted on motivation and job satisfaction. they therefore concluded that hrm practices are the pivot of any organization. supporting the empirical l claims by adeoye& fields (2014). the study by oladejo & oluwaseun( 2014) revealed that compensation management has positive effect and significantly related to workers performance. their study showed also that compensation policy is the backbone of all hrm policies concerning acquisition and utilization of human resources. the findings from the study by oladejo & oluwaseun (2014) confirmed the findings from the study by obasan (2012) on the effect of compensation and corporate policy. the study by obasan (2012) revealed that compensation management is a veritable tool for attacting , retaining, and motivating employees for improved performance in the organization. 2.4 relationship between training and development programmes and quality of work life practices the study by kum, cowden,&karodia ( 2014) examine the impact of training and development on employee performance revealed that training and development is affected by working conditions and lack of resources. the study by tahir, yousafzai, & jan (2014) aimed to examine impact of training and development on employee performance and productivity revealed that there exist a significant relationship between training and development and employees performance and productivity. the study by imran &tanveer (2015) examined the impact of training and development on employee performance revealed that training and development has significant impact on job www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 20 knowledge, quality of job outcomes, employee skills, motivation and loyalty to the organization. the study by nassazi (2013) aimed to examine the impact of training and development on employees’ performance using a qualitative study revealed that training have a clear effect on employees’ performance. the study by engetou (2017) examined the impact of training and development on organizational performance using both quantitative and qualitative approaches revealed that training and development impacted on organizational performance. the study revealed further that training and development is essential for all type of workers and that training and development bring about improved productivity. the study by asfaw, argaw, & bayissa( 2015) examined the impact of training and development on employee performance and effectiveness quantitative study showed that training and development has a positive relationship with employees performance. their study also revealed that there is a statistically significant relationship between training and development and employee effectiveness. 3. methodology 3.1 research setting the location of this study is among the asia multinational located in lagos state , nigeria. the choice of lagos state was because the operations and activities of commercial banks experienced in lagos state appear to be replicated in other states as well. furthermore, lagos state serves as the location of the study because it is the commercial hub of nigeria. 3.2 research design this study adopted a cross-sectional research design because it is based on the observation that takes place within different groups at one time, while the research strategy adopted was survey research. survey research is useful for collecting information and analyzing characteristics of a large population (barbie, 2006). it also helps to gather data for targeted results which help to draw conclusions and make important decisions. 3.3 limitation to the research methods the study employed empirical approach to examine the relationship between hrm practices and work-life balances in united bank of africa plc, lagos, therefore, the study does not take into consideration the qualitative approach. 3.4 population of the study the target population was made up of all staff of united bank of africa plc, lagos state branch head office has 152 staff members. 3.5 sample size determination the sample size of the targeted population was determined using yamane (1967) sample size formula with a confidence interval of 95% n = n (1 + n(e2)) n= population size e= sample error (5%) n = 152 e = 0.05 therefore the sample size is: n= 152 (1+ 152(0.05)2) n = 152 1.38 n = 110.14 approximately n = 110 3.6 sampling procedures this study adopts a simple random sampling technique in selecting its sample in which every employee has equal right of being selected. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 21 3.7 research instrument 3.7.1 validity of the instruments the validity of the research instrument was carried out by experts in the field of employment and labour relations through external and internal validity. 3.7.2 reliability of the study the cronbach’s alpha coefficient was used to test the degree of consistency of the questionnaire. see cronbach’s alpha coefficient test table below table 1 case processing summary n % cases valid 109 99.1 excludeda 1 .9 total 110 100.0 a. listwise deletion based on all variables in the procedure table 2 reliability statistics cronbach's alpha n of items .816 22 the obtained coefficient alpha score was 0.816 which indicates that the scale has high interval consistency. this result is good and correct because it provides good information about consistency 4. method of data analysis pearson product-moment correlation was used to test the formulated hypothesis at 5 percent significant level 4.1 hypothesis testing table 3 correlations qwl employee engagement learning and developm ent compensat ion policy talent management qwl pearson correlation 1 .599** .653** .556** .515** sig. (2-tailed) .000 .000 .000 .000 n 110 110 110 109 110 employee engagement pearson correlation .599** 1 .672** .292** .268** sig. (2-tailed) .000 .000 .002 .005 n 110 110 110 109 110 learning and developmen t pearson correlation .653** .672** 1 .375** .221* sig. (2-tailed) .000 .000 .000 .020 n 110 110 110 109 110 compensati on policy pearson correlation .556** .292** .375** 1 .504** sig. (2-tailed) .000 .002 .000 .000 n 109 109 109 109 109 talent pearson correlation .515** .268** .221* .504** 1 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 22 management sig. (2-tailed) .000 .005 .020 .000 n 110 110 110 109 110 **. correlation is significant at the 0.01 level (2-tailed). *. correlation is significant at the 0.05 level (2-tailed). 4.2 testing of hypothesis hypothesis 1 h0:there is no significant relationship between employee engagement and quality of work life h1:there is a significant relationship between employee engagement and quality of work life discussion of findings the p-value of pearson is 0.000 which is less than 0.01, therefore the null hypothesis is rejected and alternative hypothesis accepted. hence, there is significant relationship between employee engagement and quality of work life this finding supported and reinforced the findings by the study of lazer & ratiu (2010) which investigated worklife balance and organizational performance., the study by meenakshi, subrahaman, and ravichandra (2013), the study by becker & gehart (1990) the studies by wright & mcmahan (2011), bustillo ,llorente, & mac´ıas (2005) hypothesis 2 h0:there is no significant relationship between learning and development and quality of work life h1:there is a significant relationship between learning and development and quality of work life discussion of findings the p-value of pearson is 0.000 which is less than 0.01, therefore the null hypothesis is rejected and alternative hypothesis accepted. hence, there is a significant relationship between learning and development and quality of work life. this findings is agreed with findings from the study by legnick-hall etal (1998),delaney & huselid (1986) , guest (2011) the study by ahmed (2016) , niedźwiecka (2016). niedźwiecka (2016) hypothesis 3 h0: there is no significant relationship between compensation policy and quality of work life. h1: there is a significant relationship between compensation policy and quality of work life discussion of findings the p-value of pearson is 0.000 which is also below 0.01, so the null hypothesis is rejected and alternative hypothesis accepted. hence, there is a significant relationship between compensation policy and quality of work life . this findings supported previous studies by jiang, xiao, qi, and xiao (2009) and also the study by adeoye & fields (2014) hypothesis 4 h0:there is no relationship between talent management and quality of work life h1:there is relationship between talent management and quality of work life 5. discussion of findings the p-value of pearson is 0.000 which is also below 0.01, so the null hypothesis is rejected and alternative hypothesis accepted. hence, there is a relationship between talent management and quality of work life. this finding is line with the previous studies by kum, cowden,&karodia ( 2014) , tahir, yousafzai, & jan (2014) and imran &tanveer (2015) 6. conclusion the findings of this study revealed that there is a strong relationship between hrm factors and work life balance. employee engagement, learning and development, compensation policy, and talent management played a vital role in achieving quality of work life in united bank of africa plc. the organization can achieve high performance and profit turnover if the organisation can focus more on effective employee engagement and other development programmes for their workforce, it will enhance quality of work life which may in the long-run ensure high productivity. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 23 references ahmed,h.k.(2016). the impact of talent management on the competitive advantage in the organizations, bein a paper presented at the international conference, abu dhabi. akhtar, s., ding, d.z., &ge, g.l. 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(1999). human resource management and employee performance, international journal of management review, 1, 367-413. . copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 2; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 1 bilateral export trading analysis between bangladesh and china: opportunities and prospects mukut sikder college of finance and economics gansu agricultural university lanzhou, china e-mail: sikdermukut@outlook.com xuecheng dou phd professor college of finance and economics gansu agricultural university lanzhou, china e-mail: tigerzyx@163.com abstract the predominant of multilateral international business between bangladesh and china has expanded significantly in current times. the business friendship between two partners in improving across will deliver much assistance to the economy of both nations. however, some of the researchers have properly explored the familiarity between these countries. the initial objective is to emphasize and highlights the international export trade between these two partners, particularly, the opportunities in and importance of principal aptitude of trade. to detail the business model, we here apply the trade intensity index. the findings have been used to find strong areas for future contributions between these two partners to strengthen the economy and to seek diplomacy involvement for ongoing trade and monetary prosperity. keywords: bangladesh, china, trade intensity, opportunity, prosperity. 1. introduction the international economic involvement is a crucial part that makes an impression of international trade these modern eras. nations have become more familiar to neighbour partners and worldwide. since 1975 creating administrative affinity china has become one of bangladesh's leading countries in enlargement stakeholders (kabir, 2017). in march 1978, vice premier li jianlian of china first time visited bangladesh for the first and the two countries signed the collaboration in the fields of technology, economy, and infrastructure (china-bangladesh relations, 2007). during the chinese vice premier visit to bangladesh, it hypothecated providing aid of free chinese loan around the us $58.3 million chargeable last ten years. it was first time aid to bangladesh from any foreign country (haider, 1991) . in 2010 relations between bangladesh and china have celebrated its 35th anniversary with an efficiency standpoint to introduce a systematic relationship of collaboration (hossain m. s., 2010). china gains tremendous conquest with the financial reformation particularly after 1990. between all the south asian developing partners, china became the largest rapidly developing nation in the world and develops its surviving situations. china's export range has expanded due to sustainable manufacturing and technology, besides often sustain a helpful policy and kinship with all south asian countries includes bangladesh. in 2016, the chinese development of national ict infra-network invest $01 (billion) and at the same time, bangladesh and china propelled a deal to build the country’s unutilized3.4 kilometres river tunnel down the karnapully in chittagong at a value us $705 million. the bilateral collaboration on the largest seaport construction is a win-win pleasure for both nations to access its cast anchor. bangladesh-china power distribution company mailto:sikdermukut@outlook.com mailto:tigerzyx@163.com www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 2 limited going to cooperate a value of $2.04 billion, the connected strategy of the bangladeshi and chinese companies and the bangladesh government have a plan to develop from were $3.1 billion investing amount, besides the raised area of payra seaport is assuredly perfunctory in-depth and needs a remarkable figure of cleansing for cargo ships to be able to get 660 mw electricity generation to 23,222 mw capacity(xinhua, 2019). this article aimed to have familiar attention to the concern of conception about contribution between bangladesh and china, focusing on export trade opportunities (elinor, 2012). besides, we have computed the intensity of trade benefits of bangladesh and china which will consider competition between countries in several sectors and sustainable parts of both partners, which may further reveal future investment cooperation sectors. however, there are huge opportunities for getting access to the advantages of bangladesh and other countries which belong to china’s contribution. to achieve the defined goal, it is important to find the sector of export and import opportunities available for bangladesh to get involved with china (hossain m. s., 2017). a short disclosed of the two economies is also been observed in this study and we particularly argue trade analysis and opportunity. moreover, we calculate here the intensity of trade bangladesh-china in textiles and clothing sectors to focus the emulative between the partners and to glance at the proper sectors of both the nations, which can indicate the future collaborating sectors of investments too. the analysis of figure 1 shows that from 2011 to 2015 there was so much trade value between bangladesh and china. figure 1. between bangladesh and china bilateral trade volume during 2000 to 2015. source: the world integrated trade solutions database since 2000 they were specially roughly not less than us$10,000 thousand, while bangladesh to china exports value us$13,901 thousand and imports from china were so much, nearly us$ 8,56,965 thousand. the volume of import increase more compares to export. the volume of bangladesh’s imports gained it is high during 2015 alongside a trade volume of around the us$ 10349332 thousand, from 2000 to 2015 that time was not comprehensively switch exports to china. in 2007 it can be observe that bangladesh export ratio much better us$ 222217 thousand, were import rate also indicates us$ 2750202 thousand and keep slightly increasing and decreasing from year to until the year 2012. currently, bangladesh’s products are so demandable in europe and the american international market and in china’s local market. the main point of this study is studying contemporary of this explanation of gain-able opportunities for bangladesh from export trading particular commodities and value. there are various general compositions about the bilateral trade bangladesh-china relationship, but there are limited published documents regarding bangladesh’s export trade opportunities. this study will try to find out, discuss the opportunities, and trade for bangladesh from engagement in the undivided part of sustainable chinese policy. in the earlier majority of studies on sino-bangladesh cooperation has been included in the partnership about historical, bilateral there is limited scholastic literature exploring the bangladesh-china connection purposed the temporarily. the study will be possible for bangladesh to cut many advantages from continuous sino-bangladesh collaboration. furthermore, this article is capable of assistance that builds government policy. therefore, policy www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 3 creators can get the strength to imagine the appraisement, finding, analysis, and solicitation of the research helpful for their policy profiling. 1.1 limitation of study the author has analyzed secondary data, and most of the data not available in the online recent portal. this article will indicate approachable connectivity bilateral business, infrastructural development, financial cooperation, diplomatic, and trade relationship. 2. literature review 2.1 modern account of bangladesh-china relations at present, the relationship between the two nations has a hugely enduring characteristic extension of economic cooperation (kabir, analysis of bilateral trade between bangladesh and china, 2017). two countries are building simultaneously for globalization and economic causes generous and that is induction each country neighbor to each other. in october 2010, co-chaired the chinese ambassador in bangladesh with the ministry of foreign affairs of bangladesh for the 35th golden jubilee of the establishment of administrative friendship between bangladesh and china(bangladesh e. o., 2010). bangladesh-china defence collaboration is sustainable and relations were sign as an excess of bilateral covenants on several economic outreaches (rahman & uddin, 2011). china and bangladesh both have seen significant growth in international trade in current condition: china's trade-to-gdp proportion has dropped by 55% and bangladesh's communication volume has exceeded by 50%. china's biggest bilateral trade associate in bangladesh, complete trade surpassed $7 billion in 2010. on the other hand, the previous export target for beijing is currently proposal 4,721 duty-free access to bangladeshi products to curb the progressive dealing quality (islam m. , 2012). finally, the persuasive will confirm trade between china and asean members, which formerly been tied by a trade free contract. however, if the favourable effects of the initiative are largest, it is also crucial to do many improvements between international trade and policies (kunaka, 2018). table 1 access for collaboration aims sharing nations important to support five major goals of assembling. there is extensive dynamic for larger and superfluous efficient cooperation into countries toward relationships. table 1. five major goals and trade cooperation priorities. principal aims and collaboration presidency economic integration peaceful trade facilities connectivity people to people embracement adjustment policy source: china’s domestic improvement and remodel authority (2015). since their developments are reciprocally supplementary in this era of globalization, peaceful trade is the key to involving countries that can build figured try for development and appointment aid. it helps to reduce trade obstructs, adjust duty-free areas and effective ameliorate investment. the entrancing area facilities the connectivity for serially progress aggregate infrastructural including sub-urban from asia via europe to africa. people to people embracement will simplify internal aid for an enlarged multilateral and bilateral collaboration. 2.2 financial contribution between bangladesh and china after the global economic crisis, the world has experienced a continuous deceleration in financial growth, and for several years, trade and investment have been on the decline. this section of the study aims to enunciate analyzed www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 4 explain the opportunities for bangladesh from ancient cooperation. the research has proven that policy would naturalize bangladesh with diverse advantages to extended investment and trade in bangladesh would improve. table 2 focuses on chinese foreign aid distribute during visit china’s vice-premier li jianlian in 1986. table 2. chinese foreign aid distribute (in million us $) year food aid distribute project aid distribute non project aid distribute grant loan total grant loan total grant loan total 1975-78 1.0 2.0 3.0 1.9 1.9 1978-80 4.0 4.0 1980-81 8.51 8.51 1981-82 2.66 2.66 11.34 11.37 source: ministry of finance, bangladesh, december 1987. from 1975 to 1982, it shows china allocate few major sectors and much financial help with bangladesh in food, several developmental project, and others. the year from 1975 to 1978 fiscal years food aid value total $3.0 (millions) including grand and loan, at the same time project aid amount total $1.9 (millions). after two years when the fiscal year 1980-81 bangladesh got a total of $8.51 (millions) as a loan. it was ample foreign aid from china, for local investment with infrastructural improvement. furthermore, years 1981 and 1982 china become a great foreign aid provider for bangladesh, and that time loan value totals $2.66 (millions) for a project, at the same time, the nonproject loan was slightly increased with the amount of $11.37 (millions). the governments of governing bangladesh has determined power purvey as the main obstacle to gdp increase and in total country development. as well as the efficiency of distribution ways and the correlative value of these inputs, power, and transport are mostly unavoidable elements of recent creation as the key destined of competition in the worldwide economy (arefin, rashid, & habib, 2019). table 3 shows that several projects of economic aid getting bangladesh from china. table 3. financial support from china’s asian infrastructure investment bank (2013). source: asian infrastructure investment bank the sector of energy-natural gas production and transmission supporting cost $167 million, which are the highest contribution from the asian infrastructure investment bank. besides, about five bangladeshi mega projects are getting aid from china, most of the sectors power, gas, water supply, and infrastructure development. the cooperation between bangladesh and china about $60 million was for the bhola infrastructure power plant. across all asian outgoing countries, china becomes the world's largest developing country and increases its quality of life (kabir, 2017). bangladesh is also another recent rapid developing region from the asian zone and often creating a sustainable relationship with china. description sector cost ($) million municipal water supply and sanitation water supply and sanitation 100 power system upgrade and expansion energy power transmission 120 bangladesh bhola ipp energy / power generation 60 natural gas infrastructure and efficiency improvement energy – natural gas production and transmission 167 distribution system upgrade and expansion powerenergy 165 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 5 2.3 several sectors, which await china’s cooperation bangladesh is the 2nd highest ready-made garments and textile commodities exporter of worldwide afterwards china. bangladesh has gained remarkable improvement in the industrial capacity building. the textile industry has build-up eighty percent of the country's $ 24 billion in yearly exports and fifteen percent part of the country’s whole economy (islam, khan, & islam, 2013). table 4 focuses on chinese investment in bangladesh’s engagement with a total value of $106.27 million. the most investing amount is for the improvement of textile and wearing $18.52 million and trading $11.08 million. table 4. chinese investment opportunities in bangladesh during fy 2017 source: bangladesh bank(2017). in china, although market strength are generally playing role for producing industrial fascicles, the administrative advantages them in several paths with the establishment of an industrial foundation on attending bunches (zeng, 2012). china can contribute bangladesh in forming reciprocally beneficial industrial, bilateral trade, and others receptivity in textile industries. bangladesh along its unrivaled geopolitical location between china and india remains to avail huge, whether it may depart the surge of this uncountable advantage. so far this era is whole about divided attainment and advancement, bangladesh would do great to favor full chinese collaboration. the bangladesh government visualize that whether desire turns to a middle-income nation by 2021, its strategy requires to classified at present; it may not lengthily constrict itself to assuage sole elected partners. bangladesh’s economy has overgrown in the last ten years. china has ocular abundant propagation over the final fifteen years, and bangladesh’s essential investment in develop infrastructure and other segments (khan, 2017). china is prepared to invest in economic zones through belt and road, agree to exchange technology. the echelon is a kit for the contribution that is reciprocally favourable. there is a shock multiplier from china and bangladesh normally demands to upon its haul creator. it is conceivable that china's cooperation for the development opportunity of bangladesh will advance all types of planned policy. the analysis of trade intensity index shows that in contrast to the fact that bilateral business between the two trading partners cannot used, china's export intensity is higher than bangladesh's. moreover, china is present a much trade and commerce nations of bangladesh. china’s efforts an extensive chances for places bring to consciousness financial enhancement by excessive infrastructure improvement opportunities which in switch will qualify bigger streams of bilateral trade diagonally frontiers. therefore, being a neighbour and a familiar fellow of today's largest economy, the opportunity to get greater chinese investment to boost its exports to bangladesh's large chinese market should not missed and besides negotiation is a necessity (uddin, 2015). 3. research methodology the purpose of this study is to analyze and focus on the priority of the exporting trade between bangladesh and china. analysis data fixed for which in various segments we could not able to analyze and calculate. we mainly demonstrated bilateral trade for export. then we considered goods shares in trade formation, finally conducting export trade data we calculate the indices of trade intensity. 3.1 source of data the author predominantly used secondary documented data such as journal articles, electronic document, reports, conference papers, etc. the data enrolled the index of trade intensity computed from the world integrated trade sector (in million us $) trading 11.08 leather and leather products 7.58 agriculture and fishing 0.02 pharmaceuticals and chemicals 0.05 construction 0.12 others 68.90 textile and wearing 18.52 total 106.27 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 6 solutions database and international trade centre database. the information has been particularly acquire from various reliable databases such as google scholars, science direct, official website, elsevier, a web of science, springer link website. secondary sources have been extensively link to the prospects of strategy, opportunities, and policy for the economic development of bangladesh in the future. 3.2 data analysis the data were analyzing in statistical package for social scientists (spss) version, microsoft excels, and recent information has been collected during 2010. the analyzes and observed data majorly based on the following has been from different aspects, opportunities, financial contributions, infrastructures, engagement of neighbor countries, the flexibility of the economic corridor, and implementation policy. the trade intensity index model, which indicated the export chance of some progress, also considered. 4. trade composition and model the key export products exchanged by both partners are painted on two important levels of internationally valued industry motivation and think from 2010 to 2015. this will focus on the principal commodities traded by two partners. calculation data based on raised from wits, we will decide the commodities sectors and also the primary export goods exchange by both countries. the goods categories are highly parted into raw materials, textiles and clothing, industrial, manufacture, chemical, and so on. 4.1 the trade intensity index the business takes place between two other countries around globally, it strengthened because the interruption between the two countries is under than considering envisaging the world (kabir, 2017). the trade intensity index turns to realize which the business standard between two countries is larger or small than would be awaited depends on their worth in global trade. the severity index of trade is one of the most widely used by researchers (kiyoshi, 1964). there is one part of the export intensity of trade. they can identify as; export intensity index: e𝐼𝐼𝑏 = e𝑏𝑐/e𝑏𝑟 x𝑐𝑟/(x𝑟 − x𝑏𝑟) where ebc represented export from bangladesh to china; xbr represented the import of bangladesh from the world. ebr represented export of bangladesh to the world; xcr represented import of china from the world; xr represented world import; the explanation of the trade intensity index relies on the worth of its index. this index change from 0 to infinity. when its value is 0, that sense no bilateral business, when the worth is 1, it means no geographical diversity among the business shareholders. similarly, when the value of the index is bigger or smaller than 1, which mentions higher or lower multilateral business than expected, this indicates the importance of the given partner in the international trade. 5. results and discussion to count if export trade commerce between bangladesh and china is sustainable or not, we count the export intensity index. being the largest trading partner of bangladesh, china is the primary source of raw materials for the bangladeshi industry. table 5,6 mentions here the export value of productivity and trade between bangladesh and china. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 7 table 5. bangladesh’s top six exported product to china us$ (thousand) commodities 2010 2011 2012 2013 2015 textiles and clothing 161,585 235,833 249,541 259,586 425,127 agricultural raw materials 105,460 92,232 76,062 45,019 24,556 chemical 24,309 38,255 44,155 29,638 21,133 manufactures 111,277 238,497 298,654 374,694 658,726 machinery and transport equipment 7,451 10,870 7,767 4,098 7,646 plastic or rubber 24,365 38,270 44,108 28,064 20,710 source: the world integrated trade solutions database from table 5 we can see the few large exported sectors like textiles and clothing, agricultural raw materials, and manufactures to china with the value from the year 2000 to 2015. some of the sectors exporting ratio enormously increased and create a bilateral relationship with china. the observation of exported product agricultural raw materials from 2010 to 2015 each year highly descried. because, bangladesh giving more priority a country industrializations and large amounts invest for built factories, economic zones, and the manufacturing industry. improving production values in china has allowed bangladesh the opportunity to export cotton-based clothing. china is unwilling to involve in secondary-end clothing manufacturing as big-tech factory going towards production, worried factory beginners. table 6 shows some of the major exporting products from china to bangladesh. bangladesh’s major imports from china include raw materials, textile and clothing, mach and electronics, transportation products, plastic and miscellaneous. the chinese export with bangladesh textile and clothing sector rapidly increased among them others, which stand to $ 5,200,702 thousand in 2015 from 2010 $2,741,465 thousand. table 6. china’s top six exported product to bangladesh us$ (thousand) source: the world integrated trade solutions database table 7 mention author has selected products of the using trade intensity index that only trade bangladeshchina among textile and clothing effective sector. as well as we can see from 2010 to 2015 most trading goods in this part and share effective percentages with the economy. bangladesh export and import to and from is not consistent. commodities 2010 2011 2012 2013 2015 raw materials 186,960 189,202 167,077 183,878 233,140 textile and clothing 2,741,465 3,661,200 3,726,445 4,476,736 5,200,702 mach and elec 1,753,185 1,809,035 1,764,355 2,078,237 3,120,189 plastic or rubber 155,620 215,058 242,828 332,092 483,408 transportation 282,225 271,860 184,561 332,143 440,166 miscellaneous 170,660 208,169 385,465 456,406 767,657 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 8 table 7. textiles and clothing of products traded by bangladesh and china year export (usd) import (usd) export product share (%) import product share (%) 2015 425,127 4,161,971 59.44 40.21 2013 259,586 3,045,009 53.47 42.18 2012 249,541 2,698,891 57.79 41.66 2011 235,833 1,348,394 61.59 37.35 2010 161,585 1,936,511 62.35 36.38 source: author’s calculated data and accumulated from the wits database the exports of textiles and clothing products which shows that export share at 62.35% during 2010 had randomly decreased to 59.44% between 2010 and 2015, both were import share at the same time 36.38% and 40.21%. but the export decreased to 53.47% during 2012 and imports peaked to 42.18% during 2013. this demonstrates that under industry business is not improving all the years. the results of table 5 mention that the most exported goods from bangladesh to china in the current years are; textiles and clothing, agricultural raw materials, chemical, manufacturers, machinery, and transport equipment, plastic or rubber. we can uphold, founded on the results of table 5 that bangladesh predominantly textiles and clothing goods to china. textiles and clothing are particularly the primary export commodities of bangladesh. exports from bangladesh to china indicate of the consequence in table 7 demonstrate that from 2010 to 2015, textiles and clothing goods are not near the much exported commodities through bangladesh to china, with a yearly average of 58.92% [(59.44+53.47+57.79+61.59+62.35)/5]. the review of the exports and imports goods between bangladesh and china shows evidently that the bilateral business partnership between two nations such as the interchange of textiles and clothing materials for ready made garments products. it also shows that the imports of textiles and clothing goods have not numerously non-persistent; the average is 39.55% per year [(40.21+42.18+41.66+37.35+36.38)/5] from 2010 to 2015. table 8. the trade intensity index this demonstrates that the exports of bangladesh to china are not high. the above-mentioned table 8 focuses that the export severity of bangladesh to china is not the same, except in 2012, where it holds 0.18385. the export intensity of china to bangladesh has slowly raised and decreased from 2010 to 2013 except 2015, but has fostered a much level with 1.24006 in 2013. these results show that china’s exportation ratio was higher than in bangladesh. besides, the value of import intensity from china 15.54601 in 2015, which is the largest since 2010, notifies that bangladesh not much better than china in importing trade. the results of table 8 mention that every figures of export intensity are not higher than 1. the significance of this is bangladesh and china’s bilateral export business more waited, which clear away many opportunities for trade improvement between the two countries. besides, through cooperation and developing infrastructure two regions may enjoy the benefits of bilateral trade and achieve remarkable success. the article we discussed that the outgoing aptitude between bangladesh and china trade relations centering on the modern position as well as international business, cooperation, investment, and smooth connectivity. the study has been discussed several trading sections, especially analyzed data regarding textiles and clothing which is got china first position then bangladesh as the largest exporter country in the world. export intensity index 2015 2013 2012 2011 2010 bd to china 0.30330 0.20197 0.18385 0.19978 0.19143 china to bd 1.02179 1.24006 1.036195 1.00389 1.08384 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 9 6. conclusion and recommendation bangladesh-china export trading period 2010 to 2015 brightly enquired into in this study, and the results show that two areas have gained from this business friendship in various ways. meanwhile, bangladesh should not depend only on export textiles and clothing goods; it should improve much native transformation. although bangladesh's trade deficit is significant, due to the impact of china's exports to bangladesh rather than bangladesh's exports, the consequence shows that the much business opportunities waiting for two nations. it also analyzes behalf of the emergence, prospect, competence, and extension of trade policy shaking its appropriately to development cooperation between bangladesh and china. the article centrally finds out a few conceive export trade opportunities for bangladesh. it announces that potential consistency among the partner of bangladesh is essential to get consequences of terms perfect strategy implementation, countless trading policies, regulations, without impurities attainment process, financial integration, infrastructural and other factors. moreover, bangladesh should find out to recover more trade and commerce gap between bangladesh and china. the witnesses that china has already reduced tax for exporting goods from bangladesh and created positive sentiment to support bangladesh defeated a large number of trade deficits. the reason behind, chinese local market immensely competitive and variegated. therefore, bangladesh should eject several complicated strategies and mythical obstacles to gain high ingress to the chinese market. additionally, bangladesh has to follow chinese investment policy, industrial growth conduct research on how it can consume the global market, and increase the country whole economy. bangladesh and china need to take steps to remove restrictive para-duty interruption for the opportunity and exacerbated trade. finally, a proper work together of all these measures will expressly lead to huge exports, opportunities from bangladesh and impressive results in the trade relationship with china, bangladesh would await facilitation trade and enrichment with limitless opportunities and dominance about china’s collaboration. acknowledgment author’s cordial perception and gratitude to sunandan sikder and mohammed hossain for creation my dreams come with the help of always giving me remarkable support. at last, i wish to thank god for bringing me safely this far. declaration of conflict the work is truly ours and we both concerted to its publication. there is no conflict of interest. funding this article received no specific funding support. references arefin, s., rashid, t., & habib, d. 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(2012). china’s special economic zones and industrial clusters:success and challenges. lincoln institute of land policy. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 1; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 1 impact of monetary policies on the exchange rate and global trade evidence from ghana rabnawaz khan school of finance and economics jiangsu university zhenjiang, jiangsu, zhenjiang 212013, people’s republic of china e-mail: khan.rab@stmail.ujs.edu.cn abstract the impact of monetary policies and their implementation by the exchange rate covered the economic condition of ghana. the social inclusion and conversion factors change the implemented policies of nations, where the real price, trade, technology, a price rate, and price level of ratio take an important part of growth. the reform of the financial sector favors the free-floating of the exchange rate and global trade under the premise of flexible exchange rates. the tragedy of country growth and exchange rate toward a trajectory of growth with the growth-enhancing effect through social inclusion, conversion factors, price level ratio, exchange rate, merchant rate, export, and trade services. the research study is based on the secondary study and social inclusion equity indicators with public resources, building human resources and social protection for economic development has determined. different evidence and trade indicators classify the monetary policies. the significant influence of growth and internal policies has affected trade and exchange rates with growth and reserve policies. the results have computed by linear regression and it proved that social inclusion and alternative conversion factors impact on global trade and create short term binary relationships. keywords: trade, conversion factors, price rate, economic growth. 1. introduction the main aims of this study paper are to examine the importance of monetary policies and their implication on the growth level with the exchange rate, which showed by the trade, conversion factor, a price rate, and the growth level of gdp. the economic growth in ghana determines the two different policies of patents and promoting. 30% ghanaians deal with the financial sectors and hold the big flow of financial circumstance, will this effect on monetary policies and or just creating the big gap in economic principle. there are two macroeconomic policies implemented to control government budgets and financial flow. such as fiscal and metering policy, that can use the economic manager to control the budgeting and fiancé. (khanna, greener, straka, & adams, 2019) the health of fiancé to manage by expanding economic growth (gdp). the monitoring and fiscal policies are complementary to each other in ghana. the monitoring policies are being worked by a civil society along with the strong policy program and strategies. (agusto& khan, 2018; ahmed et al., 2020). the insight policies and an agenda based on trade and fiscal policies. it is advance to understanding the policy agenda and trade sector pregame in ghana. and, to determine the agenda of sector programs which influenced by how the national income level uses their sources of power to define the material of fiscal policies. (adu, marbuah, & mensah, 2013) the power sources identified the structural authority; access by political influence, control, conversion factor, trade implementation, demographic change plan of trade, (lin & agyeman, 2019; uddin, sjö, & shahbaz, 2013) the policies should not the pursuit of transformative changes and improvement of economic system by low-income countries. according to rochefort the frame of label issues of economic decision influences trade, a price rate in economic development. (kong & khan, 2019) the policy agenda setting and planning the subsequent issues labeling and policy sector with a problem. (bond, söderbom, & wu, 2011; mensah & botchway, 2013) the importance of this research paper is showing the basic monetary policies under the state of social inclusion, conversion factors, economic growth, and global trade. however, prior research papers discussed the issues of global trade in a term of long term but not directly classify the issues of monetary policies under the above www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 2 indicators, therefore this research study based on novelty. (murtazashvili, murtazashvili, & salahodjaev, 2019; traoré, 2019) the research data based on world bank indicators and the financial department of ghana. 2nd section of a research paper is based on literature and expert theories. we base the 3rd section on the research method and 4th is an analysis and the last one shows the recommendation and conclusion of the research paper. 2. literature the prior work of research showed the financial development-economic growth with extensive attention in the development and have analyzed the finance-led growth hypothesis with the content of cal-innovation through the efficient allocation of resources from the trade and unproductivity sectors. (adu et al., 2013) the development of robust financial factors can spur growth and services with non-financial sectors along a growth path. the content of this economic growth based on trade and implemented economic policies and financial sectors, and thus development financial sectors focus on the efficiency of trade and monitoring policies. (amri, 2017) the financial development and efficiency of investment are important for financial liberalization in promoting domestic and hence investment. the works of the foundation for liberalization and developing countries including ghana, as part of the imf bank change program. (herrerias, cuadros, & luo, 2016). we must emphasize that variant argument has been an advance in the literature between economic growth and financial development. (acheampong & maryudi, 2020) the empirical studies in the literature have investigated the relationship between financial depth and growth with the impact of causality. the most studies across on the panel data affirm the fact that financial development influence on growth and covariates of growth and the potential simultaneity, and unobserved country-specific growth. likewise, the 71 countries period 1960-1995 using indicators of financial development by regarding different expects of trade and monitoring policies. (adom & kwakwa, 2014) they conclude on the positive influence between financial development on economic growth with trade and the implication of a change in policies and strategies with global tradition change. the non-tradable sector effect on the currency and different price issues similar to an export subsidy and import of tax by the foreign ministry of ghana. we illustrate the literature from the great part of the exchange rate and the consequence of a different way of investment. there are several issues of the relationship between exchange rate and export value with misalignment and international trade. hence, the part of the undervaluation of the exchange rate is different investing from which do not fully adjust their price of the evolution of the exchange rate. the vertical integration and importer currency network of large shapes in trade and investment. the final issue of the relationship between exchange rate and investment with trade and explored the effects of exchange with decision foreign ministry, especially they influence the investment rate and trade value of international trade. the prior research study is also showed the limited and largely focused contingency in the long period of overvalued. the trade policy may compensate for the different levels of currency and domestic firm exchange rate and lose competitiveness because of the exchange rate and an overvalued currency. the dispute of the exchange rate policies among trade partners creates the relationship between trade and investment. in more general, the countries use trade and substitute for the exchange rate with persistent disequilibria in a trade of business and investment. this paper main finding showed the exchange rate with a vitality which it does not affect international trade except in the occurrence of union and pegged exchange and trade rate in international market, the rate is not directly covert the country monitoring policy in the long term, its effect on the short term but the economy directly volatility the trade and investment for the long term. second, the currency directly flows the relationship of the exchange rate and pegged the trade and investment in an international market by the misalignment which is directly affected on the cross of sustain issues. the currency undervaluation found and restrict import also effect on the investment policies with huge interaction of magnitude, and it across the currency and evidence of trade policy. third, the fund evidence converts evidence of support and compensates for the overvalued currency policies. however, the policies seem to be the anti-dumping intervention of international trade and investment. (amoako, cobbinah, & mensah darkwah, 2019) the recent persistence of the panel data affirms the fact that financial development influence on growth and covariates of growth and the potential simultaneity, and unobserved country-specific growth. hence, the above countries indicators of financial development by regarding different expects of trade and monitoring policies and investment. (frimpong boamah & sumberg, 2019) they conclude on the positive influence between financial development on economic growth with trade and the implication of change in policies and strategies with global tradition change. the recent imbalance in non-traditional trade and the effect of exchange rate restrictive measures international trade. (brobbey, pouliot, hansen, & kyereh, 2019) the presumption of investment indirectly in different public and private sectors are showed the presumption of the exchange rate with theoretical literature and trade investment. (ayanoore, 2019; gad et al., 2019) . we affect the volatility of the relationship of investment and trade and policy on the regression estimate on the panel datasets of these countries and in touch with other different countries whose policies only interact with www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 3 misalignment affect trade policies decision. (sovacool, 2019) we also discuss the method framework in the next section with a linear relationship of social inclusion and conversion factors change the implemented policies of nations, where the real price, trade, a technology, a price rate, and price level of ratio taking an important part of growth. the international trade could have driven by the different causality, which directly related to trade and their flow of exchange because we base the investment and trade on the proper finance policies with a legal interaction of foreign affairs. (mullineux & murinde, 2014) therefore, the exchange rate compelling the argument of risk association of forwarding contact and currency option. another critique of related sunk cost in export and investment. (alhassan & fiador, 2014) the higher fixed cost of investment and export are the volatility issues of international trade where the exchange rate is a critical issue of international trade. the cross-border transaction of the international firm in ghana held and monitoring by under the private contract and the involvement of government also based on that private firms so international market the investment is a flow-on inside and not given directly benefit to individuals to the state. 3. methodology we base the paper method on world bank indicators, which is undertaking in ghana and focused on the critical issues of monitoring policies. in particular, the study sought to determine the influence of exchange rate and global trade evidence by table 1, in which the trade policies have determined the social inclusion and equity with the public resource, building human resources and social protection for economic development has determined. we have analyzed the alternative dec factors' annual exchange rate and also reported with the imf’s international financial statistics by dollars. the exchange rate is determined by legally sanctioned an annual average incomebased. the purchasing power parity has been computed by a unit of the domestic market and the ppp conversion factor results got by the exchange rate of ghana. the ratio also referred to the national level. the real price nominal effective rate and weighting average of several exchange rates are divided by a price deflator or index of cost. the merchandise trade as a share of gdp and merchandise exports with imports divided by the value of gdp in all current us. dollars. the high technology export targets the monitoring policies with high r&d intensity. the travel service determined the service economy which is used in one year and also include the good or services. initially, by the linear state, we have computed the data in unit root and individually hypothesis each indicator. table 1. indicators country name indicator indicator name indicator code ghana cpia cpia policies for social inclusion/equity cluster average (1=low to 6=high) iq.cpa.soci.xq ghana dec dec alternative conversion factor (lcu per us$) pa.nus.atls ghana lcu official exchange rate (lcu per us$, period average) pa.nus.fcrf ghana plr price level ratio of ppp conversion factor (gdp) to market exchange rate pa.nus.pppc.rf ghana rex real effective exchange rate index (2010 = 100) px.rex.reer ghana mt merchandise trade (% of gdp) tg.val.totl.gd.zs ghana the high-technology exports (% of manufactured exports) tx.val.tech.mf.zs ghana tsc travel services (% of commercial service exports) tx.val.trvl.zs.wt 4. results and analysis table 2. mean deviation cpia dec lcu mt plr rex the tsc mean 3.878571 0.829691 0.829399 54.82708 0.333163 335.0439 4.566921 25.94839 median 3.9 0.18415 0.184172 54.08051 0.323188 109.9112 4.443817 8.795014 maximum 4 4.5853 4.585325 93.19641 0.608276 3549.286 8.259932 77.20946 minimum 3.7 0.000188 0.000115 25.3466 0.146365 64.66527 1.698087 0.347222 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 4 std. dev. 0.10509 1.248766 1.248978 15.22207 0.124527 676.9838 2.657452 27.5994 skewness -0.387414 1.795421 1.794974 0.372768 0.184021 3.574841 0.363313 0.63838 kurtosis 2.050271 5.268294 5.267016 3.177636 1.971886 15.61889 1.594373 1.676852 jarque-bera 0.876367 33.07204 33.04967 1.076859 1.440906 341.8259 0.730267 6.057327 probability 0.645208 0 0 0.583664 0.486532 0 0.694104 0.04838 sum 54.3 36.50641 36.49354 2412.391 9.66173 13066.71 31.96845 1115.781 sum sq. dev. 0.143571 67.05493 67.07769 9963.595 0.434196 17415670 42.3723 31992.53 observations 14 44 44 44 29 39 7 43 they indicate table 2 the mean deviation with a standard deviation and shows the highest mean value of rex with cpia, which shows a significant impact on monitoring policies. table 3 analyzed the indicator summary with the different codes where the person test value shows 0. table 4 is showing the test of equality. where the second-highest deviation in mt. table 3. tabulation summary of indicators tabulation summary variable categories cpia 5 dec 5 lcu 5 mt 4 plr 6 rex 5 the 8 tsc 5 product of categories 600000 test statistics df value prob pearson x2 599964 6362469 0 likelihood ratio g2 599964 420.7576 1 table 4. test of equality test for equality of means between series sample: 1975 2018 included observations: 44 method df value probability anova f-test (7, 256) 7.279739 0 welch f-test* (7, 65.6711) 1364.163 0 *test allows for unequal cell variances www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 5 source of variation df sum of sq. mean sq. between 7 3475070 496438.5 within 256 17457804 68194.55 total 263 20932873 79592.67 category statistics std. err. variable count mean std. dev. of mean cpia 14 3.878571 0.10509 0.028087 dec 44 0.829691 1.248766 0.188259 lcu 44 0.829399 1.248978 0.188291 mt 44 54.82708 15.22207 2.294814 plr 29 0.333163 0.124527 0.023124 rex 39 335.0439 676.9838 108.4042 the 7 4.566921 2.657452 1.004422 tsc 43 25.94839 27.5994 4.208869 all 264 63.4993 282.1217 17.36339 table 5. unit root test null hypothesis: unit root (common unit root process) series: cpia, dec, lcu, mt, plr, rex, the, tsc sample: 1975 2018 exogenous variables: individual effects automatic selection of maximum lags automatic lag length selection based on sic: 0 to 4 newey-west automatic bandwidth selection and bartlett kernel total number of observations: 237 cross-sections included: 8 method statistic prob.** levin, lin & chu t* -6.41942 0 ** probabilities are computed assuming asympotic normality intermediate results on d(untitled) 2nd stage variance hac of max band series coefficient of reg dep. lag lag width obs d(cpia) -0.86486 0.0046 0.0037 1 1 1 11 d(dec) 0.54354 0.014 0.0148 4 9 2 38 d(lcu) 0.54367 0.014 0.0148 4 9 2 38 d(mt) -1.19398 133.81 6.8088 0 9 41 42 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 6 d(plr) -1.08333 0.0036 0.0005 0 5 13 27 d(rex) -1.22533 281967 46476 0 9 26 37 d(the) -2.31254 0.4467 15.284 0 0 2 3 d(tsc) -1.0286 122.17 24.487 0 9 10 41 coefficient t-stat se reg mu* sig* obs pooled -1.13345 -13.579 1.318 -0.548 0.895 237 it indicates table 5 the unit root test for the stationary factor individual and with 2nd coefficient determined the variance of hac. the least-squares are shown in table 6 with the dependent variable. the other two variables exclude a cause of a unit root. fig 1 is showing the mean deviation of individual variables. figure 1. mean deviation www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 7 table 6. least square dependent variable: dec method: least squares sample (adjusted): 1990 2017 included observations: 28 after adjustments variable coefficient std. error t-statistic prob. lcu 0.99996 1.35e-05 73956.32 0 mt -1.71e-06 9.22e-07 -1.853493 0.0773 plr 2.33e-05 9.32e-05 0.250096 0.8048 rex -1.19e-06 6.30e-07 -1.886635 0.0725 tsc 4.07e-07 3.29e-07 1.238736 0.2285 c 0.000249 0.000138 1.80822 0.0843 r-squared 1 mean dependent var 1.136611 adjusted r-squared 1 s.d. dependent var 1.21936 s.e. of regression 3.61e-05 akaike info criterion -17.4304 sum squared reside 2.87e-08 schwarz criterion -17.14493 log likelihood 250.0257 hannan-quinn criter. -17.34313 f-statistic 6.14e+09 durbin-watson stat 1.987947 prob(f-statistic) 0 table 7. ramsey test ramsey reset test equation: untitled specification: dec lcu mt plr rex tsc c omitted variables: squares of fitted values value df probability t-statistic 0.836358 21 0.4124 f-statistic 0.699494 (1, 21) 0.4124 likelihood ratio 0.917463 1 0.3381 f-test summary: sum of sq. df mean squares test ssr 9.27e-10 1 9.27e-10 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 8 restricted ssr 2.87e-08 22 1.31e-09 unrestricted ssr 2.78e-08 21 1.32e-09 lr test summary: value restricted logl 250.0257 unrestricted logl 250.4844 table 7 shows the test of restricted ssr and mean square with the 22 number of observations and tabulation of indicators has determined in fig 2. t-test has computed in table 8 and table 9 is showing the ranger causality.the covariance relationship showing the relationship between indicators. table 10 shows the residual factor individually determined in fig 3. figure 2. tabulation of indicator table 8. t-test unrestricted test equation: dependent variable: dec method: least squares variable coefficient std.error t-statistic prob. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 9 lcu 1.000011 6.24e-05 16020.65 0 mt -1.88e-06 9.50e-07 -1.976053 0.0614 plr -7.64e-05 0.000152 -0.503698 0.6197 rex -8.22e-07 7.71e-07 -1.067055 0.2981 tsc 1.26e-07 4.72e-07 0.267545 0.7917 c 0.000232 0.00014 1.6555 0.1127 fitted^2 -9.89e-06 1.18e-05 -0.836358 0.4124 r-squared 1 mean dependent var 1.136611 adjusted r-squared 1 s.d. dependent var 1.21936 s.e. of regression 3.64e-05 akaike info criterion -17.39174 sum squared resid 2.78e-08 schwarz criterion -17.05869 log likelihood 250.4844 hannan-quinn criter. -17.28992 f-statistic 5.05e+09 durbin-watson stat 2.050199 prob(f-statistic) 0 table 9. granger causality pairwise granger causality tests lags: 2 null hypothesis: obs f-statistic prob. dec does not granger cause cpia 12 11.1375 0.0067 cpia does not granger cause dec 1.35528 0.318 lcu does not granger cause cpia 12 11.137 0.0067 cpia does not granger cause lcu 1.35531 0.318 mt does not granger cause cpia 12 1.86558 0.2242 cpia does not granger cause mt 0.17201 0.8454 plr does not granger cause cpia 12 2.28497 0.1723 cpia does not granger cause 0.46151 0.6482 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 10 plr rex does not granger cause cpia 12 7.15632 0.0203 cpia does not granger cause rex 1.32846 0.3243 the does not granger cause cpia 3 na na cpia does not granger cause the na na tsc does not granger cause cpia 11 2.14637 0.1981 cpia does not granger cause tsc 1.40867 0.3151 lcu does not granger cause dec 42 0.07055 0.932 dec does not granger cause lcu 0.06758 0.9348 mt does not granger cause dec 42 0.36388 0.6974 dec does not granger cause mt 0.21054 0.8111 plr does not granger cause dec 27 6.6503 0.0055 dec does not granger cause plr 0.93937 0.406 rex does not granger cause dec 37 0.06702 0.9353 dec does not granger cause rex 0.0858 0.918 the does not granger cause dec 3 na na dec does not granger cause the na na tsc does not granger cause dec 41 2.30762 0.114 dec does not granger cause tsc 1.88969 0.1658 mt does not granger cause lcu 42 0.35945 0.7005 lcu does not granger cause mt 0.20806 0.8131 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 11 plr does not granger cause lcu 27 6.65019 0.0055 lcu does not granger cause plr 0.93944 0.406 rex does not granger cause lcu 37 0.06546 0.9368 lcu does not granger cause rex 0.08564 0.9181 the does not granger cause lcu 3 na na lcu does not granger cause the na na tsc does not granger cause lcu 41 2.31138 0.1137 lcu does not granger cause tsc 1.89108 0.1656 plr does not granger cause mt 27 2.48218 0.1066 mt does not granger cause plr 1.36785 0.2755 rex does not granger cause mt 37 2.15837 0.132 mt does not granger cause rex 1.70868 0.1972 the does not granger cause mt 3 na na mt does not granger cause the na na tsc does not granger cause mt 41 2.24547 0.1205 mt does not granger cause tsc 0.97516 0.3869 rex does not granger cause plr 27 2.37232 0.1167 plr does not granger cause rex 3.24392 0.0583 the does not granger cause plr 3 na na plr does not granger cause the na na tsc does not granger cause plr 26 1.39125 0.2708 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 12 plr does not granger cause tsc 2.49123 0.1069 the does not granger cause rex 3 na na rex does not granger cause the na na tsc does not granger cause rex 36 0.20672 0.8144 rex does not granger cause tsc 0.0816 0.9218 tsc does not granger cause the 2 na na the does not granger cause tsc na na figure 3: residual table 10. covariance covariance analysis: ordinary (uncentered) covariance sscp t-statistic cpia dec lcu mt plr rex the tsc cpia 15.34833 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 13 92.09 ---- dec 9.66819 7.598494 58.00914 45.59096 4.493159 ---- lcu 9.668307 7.598604 7.598713 58.00984 45.59162 45.59228 4.493104 117827.1 ---- mt 225.082 131.755 131.7567 3439.153 1350.492 790.5298 790.54 20634.92 10.92232 3.145414 3.145399 ---- plr 1.875342 1.184778 1.184791 27.16776 0.232391 11.25205 7.108668 7.108743 163.0065 1.394348 18.76971 4.402432 4.402349 7.769044 ---- rex 337.3352 203.5599 203.5624 5006.151 41.08372 7485.076 2024.011 1221.36 1221.374 30036.91 246.5023 44910.46 22.86413 3.6633 3.663269 13.56715 12.78949 ---- the 15.55299 9.702807 9.702915 232.7672 1.908802 335.1828 20.02387 93.31795 58.21684 58.21749 1396.603 11.45281 2011.097 120.1432 4.299181 2.848676 2.848651 4.29513 4.247352 3.868671 ---- tsc 117.712 60.10517 60.10579 1801.242 14.37304 2685.906 112.8893 1053.608 706.2722 360.631 360.6348 10807.45 86.23826 16115.44 677.3357 6321.647 5.470541 2.027712 2.027697 6.542025 5.195568 7.325082 2.761902 ---- 5. conclusion the results have been signifying the relationship and influence of monitoring policy on trade and foreign policies. we classify the above results in table5-7. therefore, the highly effected plr has been creating an influence on the, mt and tsc (table 8) and showed a significant influence on the growth and internal policies of government issues. the method of the real price shows the nominal effective rate and weighting average of several exchange rates and it is divided by a price deflator or index of cost. also, the monitoring policies with high r&d intensity. the travel service determined the service economy which used for one year and also includes goods or services. the expected outcomes of public policies and practice showed the influence of monitoring policies with comprehensive pioneering strategies of the exchange rate, the non-linarite and pass-through affect the volatility of ghana’s. 2nd the economic growth and ramifications of global competitiveness are shows the significant effects on poverty reduction and growing economic wealth. the relevance of this study is to serve as powerful strategical tools showing the practicality effect on the sluggish growth rate. however, the government has taken reserve, but the policies can change the magnitude of strength and policies. in we include last the exchange rate volatility to estimating growth www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 14 under the control of endogenous and resulting in simulating lag dependency so, the yield estimation shows above the robustness and stability test by liner square and restricted with ssr and mean square. the tabulation of indicators determined the t-test computed in granger causality. the prior most studies are showing the potential simultaneity and unobserved country-specific growth regarding the financial department and trade-in monitoring policies. therefore, the tragic policies of government control the inflation situation by proper monitoring policies in exchange rates. references acheampong, e., & maryudi, a. 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(2013). the causal nexus between financial development and economic growth in kenya. economic modelling, 35, 701-707. doi:https://doi.org/10.1016/j.econmod.2013.08.031 copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). https://doi.org/10.1016/j.jclepro.2019.117941 https://doi.org/10.1016/j.resourpol.2013.06.002 https://doi.org/10.1016/j.rdf.2014.05.001 https://doi.org/10.1016/j.forpol.2019.02.001 https://doi.org/10.1016/j.resourpol.2019.101459 https://doi.org/10.1016/j.forpol.2019.01.021 https://doi.org/10.1016/j.econmod.2013.08.031 american international journal of business and management studies vol. 2, no. 1; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 25 the factors affecting supplier relationship management in the food manufacturing small and medium enterprises (smes) in dar es salaam tanzania jesca mhoja nkwabi doctoral candidate university of the west of scotland, united kingdom e-mail: jesyoncy77@gmail.com julia fallon phd principal lecturer cardiff metropolitan university, united kingdom e-mail: jfallon@cardiffmet.ac.uk abstract the tanzanian food industry is one of the most critical sectors in the country. small and medium enterprises (smes) are the largest processors of food. although smes mostly deal with processing food, they still face challenges, especially with their suppliers. though previous researchers have investigated partnership issues in smes, little has been reported on the factors that impact the supplier relationships found in food manufacturing smes. this study employed a qualitative design where semi-structured interviews with 13 experts were conducted to identify the factors that impede srm in dar es salaam. the findings reveal that poor relationship management, poor storage facilities, poor transportation and inadequate production capacities are the main challenges affecting srm within these firms. to overcome these challenges, it has been recommended to improve the supplier relationships through being transparent, fostering trust and sharing quality information with the suppliers on time. furthermore, investment in technology has been recommended to reduce costs and to enhance the information sharing between suppliers and smes. government support is required with regard to financial aid and the improvement in the infrastructure to facilitate the easier flow of goods from smes to the customers. keywords: supplier relationship management (srm), food processing, small and medium enterprises (smes), supply chain management (scm). 1. introduction 1.1 background of the study srm is the process where a company interacts with its suppliers. srm is vital in firms as without effective srm, it becomes hard for a firm to attain customer responsiveness. srm plays a significant role in better scm implementation in organisations. through srm, firms can derive numerous benefits. onyango et al (2015) found that the components of srm such as open communication and joint decision making positively impact on the internal operational performance of a firm. oghazi et al. (2016) reported improved supply integration due to effective srm implementation. teller et al. (2016) suggests that srm leads to an increased collaboration between the members of a supply chain which leads to superior supply chains and improved scm. academics (dubey et al. 2019; li et al., 2019; la rocca et al., 2019) have also reported increased visibility, reduced lead times and increased customer responsiveness to be other key benefits of srm. despite the numerous benefits that have been associated with srm, the tanzanian food processing sector seems to be increasingly affected by poor srm. previous researchers in the tanzanian sector have reported srm issues to be the major challenge preventing effective scm implementation. for instance, ruteri and xu, (2009) highlighted that poor quality raw materials are a major factor that impedes efficient srm in tanzania. this is as it prevents the food processors in tanzania from consistently supplying quality products to customers. this results in the customers preferring imported goods or products from mailto:jesyoncy77@gmail.com mailto:jfallon@cardiffmet.ac.uk www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 26 multinational companies (mncs). in their study, katunzi and zheng (2010) reported that tanzanian smes are reluctant to share information with their partners due to a lack of trust. similarly, a review by nkwabi (2019) revealed that srm in the tanzanian smes is weak due to the poor coordination between suppliers and their focal firms. these researchers have highlighted issues prevalent in srm in tanzania. none of these studies, however, have specifically focused on the issues impeding srm implementation in the food manufacturing smes in dar es salaam. the aim of this study is to identify the factors that impede effective srm in tanzanian food manufacturing smes and to provide recommendations on how srm can be improved. 2. literature review 2.1 definition of srm srm is how firms manage their supplier base to keep the resources flowing in the company (forkmann, henneberg, naudé and mitrega, 2016). srm is a strategy-oriented approach in which a firm incorporates information-sharing technologies, cooperation and partnerships with the suppliers to manage their relationships (lechner and reimann, 2019). for successful ssrm to take place in an organisation, there needs to be mutual trust, coordination and the sharing of responsibilities among the firm members. kosgei and gitau (2016) point out that trust, mutual goals, communication and commitment are important features of effective srm. the same is supported by onyango et al. (2015) who suggest that trust, open communication and collaboration with a few suppliers is key when managing long-term supplier relationships. 2.2 importance of srm srm is important for many reasons as discussed in the following section:  visibility in the supply chains:srm allows the supply chain partners to achieve transparency by fostering trust and the sharing of vital information on time. when srm is effectively managed in the supply chain, the firm and its suppliers can coordinate better. moreover, through efficient srm, a company can monitor and track supplier interactions. these are crucial in supply chain management (sodhi and tang, 2019). recently, the use of blockchains in managing srm has gained much attention as suppliers and focal companies can interact on time and a company can easily track down defective raw materials supplied by suppliers. this reduces the supply chain risks such as producing defective products (pournader et al., 2019).  reducing lead times:lead time is measured from when the goods are produced up until they reach the final consumer. through srm, companies can speed up production by procuring raw materials on time and speeding up the entire production, which minimises the lead times (annamalah and pertheban, 2019). the inefficient management of ssr leads to various supply chain-related issues such as a delay in customer demands. this affects the scm of the company as they are not able to meet the customer demands and fail to add value for the customers. this further leads to customer retention problems.  improving procurement performance:srm leads to improved procurement performance through close monitoring and collaboration. a company can select a few reliable suppliers from which it procures goods on time to meet the ongoing demands (rane, narvel and bhandarkar, 2019). 2.2.1 benefits of srm various researchers have documented the benefits of srm in organisations as shown in table 1. table 1. benefits of srm author benefits of srm teller et al. (2016)  supply chain integration.  availability of raw materials. kharade and pataskar (2016)  reducing the logistical costs  customer satisfaction  decreased lead times mukura et al. (2016)  procurement performance. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 27 stentoft and rajkumar (2017) verghese et al (2019)  long-term relationships between suppliers and buyers. dash et al (2018)  open communication.  mutual trust. amoako-gyampah et al. (2019)  flexibility in the supply chain.  increased collaboration.  improved operational performance. kaufmann et al. (2018) dubey et al. (2019)  improved buyer-supplier collaboration. source: literature review 2020 table 1 shows the various benefits of srm to firms which includes supply chain integration, reducing costs, fostering long-term relationships with their suppliers and improving the procurement performance. the next section will discuss srm implementation in smes. 2.2.2 srm in smes when compared to large enterprises (les), smes often find it difficult to maintain long-term relationships with their suppliers. smes usually do not take into consideration the importance of reducing srm risks (annamalah and pertheban, 2016). as a result, smes are more vulnerable and they tend to fail in the long run due to a failure to prioritise srm. on the other hand, les understand the importance of maintaining better relationships with their suppliers which works in their favour. most les invest in opportunities with their suppliers and mutually share benefits. this is usually not the case in smes. smes fail to manage srm due to the numerous issues in their firms. annamalah and pertheban (2016) found that malaysian smes are unable to manage srm due to issues such as poor technology, poor quality materials and late deliveries. szegedi et al (2019) pointed out that hungarian smes find it difficult to maintain a spirit of cooperation with their suppliers. the same has been reported by therakorn (2014) who found that the inability to manage srm is a major obstacle impacting smes in thailand. in tanzania katunzi and zheng (2010) found that tanzanian smes fail to effectively implement srm due to the lack of trust among the partners. nkwabi (2019) reported that poor coordination was a major factor impacting srm in the tanzanian smes. although previous researchers have identified srm issues in the smes, there is a dearth of literature in the tanzanian context, particularly in the food processing sector. 2.3 the tanzanian food sector the tanzanian food sector is mostly comprised of smes engaged in processing products such as confectionery items, tea, coffee, cashew nuts, rice, flour, milk, spices, fruits and vegetables (mollel, 2015). despite processing various items, food processing smes underperform when compared to mnc’s due to the various challenges that they face such as capital constraints, using outdated technologies, poor facilities and a lack of r and d. mollel (2015) highlighted that the tanzanian food processing sector still lags behind as the processing firms in the country fail to produce quality products. a recent study by nkwabi et al. (2019) pointed out that the food processing sector in tanzania faces challenges such as technological difficulties, bureaucracy, a lack of raw materials and financial problems. 3. research methodology semi-structured interviews were adopted in this study. in total, 13 supply chain and scm experts from dar es salaam were purposively and conveniently selected to participate in the study. semi-structured telephone interviews were conducted from october to december 2018. this research design was deemed to be suitable by the researcher as it allowed the researcher to gather information on srm. this has been previously understudied in the food www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 28 processing sector in tanzania. the 13 informants were found to be suitable as has been suggested by previous researchers nkwabi (2019) and dai et al (2019). they also suggest that a minimum of 12 informants is sufficient for a researcher to reach saturation. 4. findings in total, 13 interviews were transcribed and analysed in nvivo. three themes were generated from the interviews conducted by experts who have been explained below:  srm implementation in food manufacturing smes in dar es salaam the informants were asked to explain the current implementation of srm in the food manufacturing smes.  srm issues in food manufacturing smes the respondents were asked to detail the challenges affecting srm in the food processing smes in dar es salaam.  measures to overcome the srm issues. the interviewees were asked to provide measures to enable effective srm implementation within the organisations. the findings from each of the themes mentioned above have been discussed. 4.1 theme 1: srm implementation in the food manufacturing smes in dar es salaam according to the informants, srm in the food manufacturing smes of dar es salaam is weak and needs further development. most of the interviewees stressed that the smes pay more attention to the downstream members while the upstream members are ignored. consequently, some of the informants suggested that srm was weak in the food processing smes due to the lack of trust, the untimely sharing of information, the lack of professionalism when dealing with relationships and poor infrastructure. some of the views of the respondents have been highlighted below: “there [are] no[t many] strategic supplier relationships from both ends of the supply chain… that is on the vertical and the other [on] th[e] supplier side.” (respondent 1) another response was: “most smes focus more on the downstream relationships and pay less attention to [the] supplier relationships. this is mainly [a] result due to [the] poor integration that exists between the supply chain partners. another cause for poor strategic supplier relationships is the lack of trust and untimely sharing of information largely caused by technological problems.” (respondent 3) respondent 4 mentioned: “in the partnerships, they're not doing that well [in] customer relationship management” (respondent 4) respondent 10 highlighted: no professionalism in managing relationships. smes do not apply professional steps in acquiring [their] products. no formal procedures are followed. also due to the number of smes that are producing food, competition is low and therefore they feel that they do not need to push themselves to manage [their] relationships.” (respondent 10) a similar view was: “very few are strategic. mostly they are not the strategic. [the] majority are still trying due to the nature of the business they are constrained. few have tried. most are still lagging.” (respondent 11) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 29 respondent 12 accentuated: "ssr is not conducted [much] because most of the food manufacturing smes, when they need materials, purchase [them] and they do not establish any long-term relationships." (respondent 12) “it’s going good. most try to segment [the] suppliers based on [the] products produced. [for] example, if it is biscuits or beverages, then they get the suppliers [that] they need. although long-term relationships usually don’t last due to mistrust and pricing.” (respondent 2) “most smes focus more on the downstream relationships and pay less attention to [the] supplier relationships.”(respondent 8) a few of the respondents (7 and 9) highlighted that the srm was good as shown in the next section: “they are adequate. most of the industries have been trying to come up with new techniques and even the suppliers so i can say it's of high quality.” (respondent 7) “my opinion is [that] i think it's good because they have learnt and have a discipline on how to interact and manage strategic planning [in order] to manage their supplier relationships. there is an improvement in [the] supply relationships.” (respondent 9). based on the views from the informants, it is evidenced that srm is weak in the food manufacturing smes in dar es salaam mainly because of the issues resulting from poor supplier relationships. most of the informants stressed that more focus is provided to the downstream members while the upstream members like the suppliers are ignored. as a result, the smes have weak relationships with their suppliers due to issues such as a lack of trust, poor integration, the poor management of relationships and the inability to maintain long-term relationships with their suppliers. the srm challenges will be discussed in the next section. 4.2 theme 2: srm challenges the respondents were asked to provide their views on the challenges impacting srm in the food manufacturing smes of dar es salaam. the responses are shown in table 2. table 2. srm issues in the food manufacturing smes s/no informant srm issue 1 (informant 1)  no good plans for resources or materials they just buy from the local markets.  issues in production capacity, sources of supply capacity and capability.  poor coordination.  unreliable sources of supply, fluctuations in the prices of commodities. 2 informant 2  mistrust.  pricing. 3 informant 3  poor integration that exists between the supply chain partners.  lack of trust and the untimely sharing of information. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 30 4 informant 4  poor movement of goods from the supplier to the customers. 5 informant 6  poor quality materials.  poor structures. 6 informant 7  lack of trust among partners. 7 informant 8  poor integration.  lack of trust. 8 informant 9  poor storage facilities.  lack of packaging. 9 informant 10  unreliable suppliers.  poor communication between the smes and their suppliers.  managing many suppliers at a time. 10 informant 12  failure to maintain long-term relationships with their suppliers. 11 informant 13  transportation issues. source: study interviews, 2018 with reference to the table 2, the respondents highlighted the major issues affecting the food processing smes in dar es salaam as follows:  relationship issues: most of the informants suggested that the smes had issues managing longterm relationships with their suppliers due to coordination problems, a lack of trust, poor quality of information, integration problems and pricing issues.  quality of materials: the interviewees stated that the quality of information was another main issue impacting srm.  transportation issues: the failure to deliver goods on time due to transportation issues was highlighted as a significant challenge impacting srm.  storage issues: furthermore, the respondents stated that the smes encountered issues in relation to the storage facilities and packing goods.  production capacities: the informants highlighted that production issues are another major factor impacting srm. from the views of the informants, food processing smes in tanzania need to improve their relationship with their suppliers through fostering trust and working together with the suppliers to improve the quality of the raw materials supplied in order to improve productivity. in addition, good storage facilities are vital to help the smes to retain the quality of the products produced. having discussed the issues, the respondents suggested measures to use to overcome the srm challenges as explained in the following section: 4.3 theme 3: measures to achieve srm the interviewees provided the following measures to effectively implement srm in food processing smes. the opinions from the informants are as follows: “build strong relationship with suppliers.” (interviewee 1) “srm training.” (interviewee 2) “i think [that] the communication between the suppliers and customers should be of a good quality. i also think [that] the partnership issue there should be a good link between the partners of the supply chain to ensure that they provide quality and adequate goods to the customers. without a strong partnership, each member focuses only on profiting themselves and not the customers. in other words, there should be an integration of the activities to make [sure that] the goods reach the customers on time." (interviewee 4) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 31 “ssr [needs] to be improved. more focus has to be given on [the] integration of companies so [then] they work together and improve [the] supply chains.” (interviewee 7) “improve [the] technology and [allow for the] employment of experts to enable [the] suppliers to be wellestablished. the reasons behind the poor supplier establishments have mainly been caused by a lack of the latest technology [and] no investments from shareholders because they aren't sure because of a fear of a low rate of return. t[he t]raining of [the] smes and suppliers to have a well-established scm [means that] the challenges might be reduced.” (interviewee 10) from the observations of the informants, the food processing smes in dar es salaam need to work on building strong relationships with their suppliers through strengthening trust and by sharing reliable information with suppliers. moreover, to ensure that the distortion of information is avoided, improvements in technology are essential to facilitate the timely sharing of information. as suggested by kembro, näslund and olhager (2017), technology helps the partners to share real time information with each actor in the supply chain. the same is supported by bian, shang and zhang (2016) who found that sharing real time information with their business partners helps to minimize real times problems, reduce costs, improve productivity and enhance the firms’ profitability. 5. discussion of the findings the findings from the interviews reveal that the food manufacturing smes in dar es salaam face difficulties in five areas. these areas are the failure to maintain long-term relationships with their suppliers, poor quality materials, poor transportation, and issues in storage and production capacities. these will be elaborated on in the section below:  relationship issues: the majority of the interviewees suggested that food processing smes have difficulties managing long-term relationships with their suppliers due to a lack of transparency, trust, poor coordination and the untimely sharing of information between partners. the same was reported by katunzi and zheng (2010) who found that the smes were reluctant to share information with their partners due to a fear of competition. furthermore, mollel (2015) reported poor quality information and untimely information sharing to be the major issues impacting on the partner relationships.  poor transportation: the interview informants emphasized that smes had difficulty when it came to deliver the goods to the customers on time due to transportation issues. this finding is consistent with that of ruteri and xu (2009) who reported that poor transportation infrastructure stood in the way of meeting customer demands.  storage issues: the interviewees suggested that the storage facilities were poor in the food manufacturing smes of dar es salaam. having poor storage facilities is dangerous as it puts the consumers’ health at risk. ruteri and xu (2009) reported a similar account and emphasised that good storage facilities are necessary to avoid putting the health of the consumers as well as the processors at risk.  production capacities: the respondents concurred that the production capacities are poor in the food processing smes of dar es salaam. this could be a result of having unreliable suppliers which makes it hard to have a continuous line of production. in addition, due to the outdated technologies being used by the processors extensively, it becomes hard to achieve a higher level of productivity. this is as most processors rely heavily on manpower-based machines which result in difficulties in production. this result concurs with that of ruteri and xu (2009) who reported that the extensive use of manpower was the reason for the impecunious production in the tanzanian food sector. having detailed the findings, the next section will provide the study recommendations, limitations, implications and conclusions. 6. recommendations, limitations, implications and conclusion 6.1 recommendations based on the above findings, food processors must improve the srm in their firms by maintaining long-term relationships with their suppliers. this can be achieved through being transparent, improving information flow and www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 32 having quality suppliers. through long-term relationships with their suppliers, issues such as inferior raw materials, increased lead times, excessive production cost and the bullwhip effect can be avoided. al-shuaibi (2016) recommends that long-term relationships with their suppliers improve their supply chain performance by obtaining quality materials which enhances both their productivity and customer satisfaction. additionally, processors need to adopt the latest technology which will improve their production capacity, the storage of goods and result in a reduction in costs by eliminating the excessive use of manpower. sophisticated technologies such as blockchains help firms to enhance their product safety, advance inventory management and reduce the unwanted costs that enhance the supply chain effectiveness of firms (cole, stevenson and aitken, 2019). in terms of transportation issues, the government of tanzania needs to address infrastructure issues to help the smes to move their products swiftly to the customers in order to meet their demands on time. 6.2 limitations of the study this study has investigated an area that has been inadequately documented in the food processing smes in tanzania. the findings are limited to only food processing smes in dar es salaam and thus the results cannot be generalised to other regions of tanzania. further examination of the factors impacting srm needs to be conducted in other regions of tanzania. this research used only interviews to obtain views from scm and sme experts. the use of a mixed method approach can help researchers to achieve triangulation by comparing views from multiple sources such as experts and sme owners. due to the time limitations, only a few participants were able to participate in the study. a higher sample size can assist the researchers in getting auxiliary views about the srm problems which will enhance the overall understanding of srm issues. 6.3 implications of the study this study has implications related to practitioners, policymakers and future researchers. for practitioners, the findings of this study reveal that srm is weak in the food processing smes in dar es salaam and areas such as information quality, relationship management and product quality have to be improved. for policymakers, this study reveals that support is needed from the government in terms of financial aid and improving the infrastructure to enable the smes to function well. for researchers, this study reveals the issues that the food processing smes in dar es salaam face. it will be interesting for researchers to conduct a quantitative study and to extend to other regions outside of tanzania as this study was only based in dar es salaam. 6.4 conclusion in this research, a clear picture of the implementation of srm in food manufacturing smes in dar es salaam has been provided. issues, as well as recommendations, have been provided to help smes to overcome srm related issues. this study, therefore, serves as a useful reference for smes and scm experts in tanzania on how to implement srm and improve scm performance efficiently. references al-shuaibi, k. 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(2019). exploring the dual nature of supplier relationship commitment on buyer behaviors. international journal of operations & production management, 40(2), 196-220 https://doi.org/10.1108/ijopm-03-2019-0226 copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). https://doi.org/10.1108/bpmj-07-2017-0196 https://doi.org/10.1108/ijopm-03-2019-0226 american international journal of business and management studies vol. 1, no. 1; 2019 published by american center of science and education, usa 38 asset quality and deposit money banks performance in nigeria mbatabbey joy ogboru department of banking and finance faculty of management sciences rivers state university, port harcourt email: mbatabbeyjoy@gmail.com abstract this study investigate the relationship between asset quality and deposit money banks performance in nigeria over a period of 30 years ranging from 1986 to 2016, utilizing time series data collected from the nigeria deposit insurance corporation annual reports and accounts, cbn financial stability report and cbn statistically bulletin for various years. the variables of study includes return on asset (roa) proxy for deposit money bank performance in nigeria, ratio of non-performing loan to total loan (npl), ratio of liquid assets to total assets (lat) and ratio of liquid assets to short term liabilities (las) as measures of asset quality. the study utilizes both the descriptive and econometric techniques to analyze the time series data. the result shows that there is a short run relationship between asset quality and deposit money bank performance in nigeria. also, the co-integration result reveals the presence of a long run relationship between asset quality and deposit money bank performance in nigeria while the granger causality result shows evidence of causality between asset quality and deposit money bank performance in nigeria. based on this we conclude by saying that maintaining sound assets quality position is critical to the long term performance, survival and sustainability of dmbs in nigeria. . keywords: asset quality, deposit money banks return on assets, liquid assets to short term liabilities introduction the issue of poor assets quality or in other words non-performing assets has gained increasing attention in the academia for some decades now. deteriorating asset quality was a permanent characteristic of banking institutions in nigeria. this was not unconnected with weak credit policies and practices, insider abuses and unstable macroeconomic environment. non-performing assets (npa) reached alarming levels in the late 90s sometimes in excess of fifty percent (50%) of gross credit. this led to the collapse of more than 30 banks in 1998, several community banks, primary mortgage institutions and finance companies. in 2009 the non performing assets ratio of 10 banks including the intervened banks averaged 54.2 percents (oni, 2012). going by this, nigeria as a nation has so far witnessed series of banking crises. these series of failure experienced in the nation’s banking sector over this periods can be captured by the number of failed financial banks, spate of poor assets, the debt and capitalization requirement, erosion of depositors and investors fund and the general effects on the economy (iwedi, 2017). these crises (1936-1968, 1968-2000, 2000-2004, and 2004-2011) led to the closing down of over 58 deposit money banks (cbn, 1968, ndic, 2002, nzotta, 2004, adeyemi, 2011 and ohwofasa&mayuku, 2012 and iwedi, 2017). however, vast of studies on the effect of credit risk or non performing loan and performance of banking institutions in nigeria have well been documented from both theoretical and empirical perspectives with the help of regression estimation techniques. but to the best knowledge of the researcher very fragmented studies of citable significance have dealt on the issue of asset quality and deposit money banks (dmbs) performance in nigeria. among such works are the scholarly works of abata, (2014), and lucky &nwosi, (2015) that studied assets quality and performance of fifteen selected commercial banks quoted on the nigeria stock exchange. based on this gap, this work is carried out to investigate the effects of asset quality on performance of twenty two (22) deposit money banks in nigeria using the estimation of the ordinary least square (ols) technique. since the ols technique have become very popular estimation techniques in investigating the link and the velocity of adjustment of variables under study. therefore, it is important we used this estimation tool to bridge the knowledge gap and to find another perspective. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 39 literature review asset quality conceptually, in the banking industry, asset quality refers to the review or an evaluation, which assesses the credit risk associated with any particular assets that normally requires the payments of interest like investment and loans portfolios. ombaba (2013) defined asset quality as the general risk attached to various assets held by financial institution. it is commonly used by financial institution to determine how many of their assets are at financial risk and how much allowance for potential losses they must make. the most common assets of banks requiring a strict determination of asset quality are loans and advances. increasing loan quality will increase the return of financial institution loans and reduce the costs of failure, but at the same time it will be attained at a cost that requires banks’ attention to manage (khalid, 2012). the support of asset quality is an essential feature of bank (gulia 2014). asset quality of the bank is one of the main issues whenever research on banks is conducted (chisti 2012). how efficient and effective is the bank management in monitoring and controlling credit risk can also have an effect on the kind of credit rating given. conceptual framework of profitability profitability connotes a situation where the income generated during a given period exceeds the expenses incurred over the same length of time for the sole purpose of generating income banwo (1997), sanni (2006). the fundamental requirements here are that the income and the expenses must occur during the same period of time (matching concept) and the income must be a direct consequence of the expenses. the period of time may be one week, three months, one year etc. sabo (2007). it is not immaterial whether or not the income has been received in cash nor is it compulsory that the expenses must have been paid in cash. the term profit can take either its economic meaning or accounting concept which shows the excess of income over expenditure viewed during a specified period of time. theoretical literature agency theory the agency problem was developed by coase (1960), jensen and meckling (1976) and fama and jensen (1983). the theory states the relationship between principals such as a shareholders, and agents such as a firm’s senior management. the principal delegates work to an agent. the theory attempts to deal with firstly, the agency problem where there is a conflict of interest between a company's management and the company's stockholders, and secondly, that the principal and agent settle for different risk tolerances. there are two main agency relationships in a firm that are normally in conflict; those between the company’s management and stockholders and between the stockholders and the debt holders. these agency conflicts have implications on corporate governance and business ethics. such relationships have expensive agency costs that are incurred so as to sustain an effective agency relationship. incentive fees paid to agents to encourage behavior consistent with the principal’s goals are common examples of agency costs bowie and edward (1992). market power theory market power theory emanated from bain (1951). this theory stresses that an increase in market power results to a monopoly, profits (athanasoglou, brissimis& delis, 2005). the theory is based on the premise that concentration of the market is a best measure for market power since more concentrated markets exhibit superior market imperfections facilitating various entities to set prices for their products and services at levels which is less favourable to their clients or customers (punt and rooij, 2001). the theory also affirms that companies with a large market share and sound differentiated products and services can easily earn monopolistic profits and succeed or win against their competitors (nkegbe&yazidu, 2015). the market power theory assumes that extra profits results from a higher market concentration which allows commercial banks to collude and earn supernormal profits which arise due to the firms portfolio of differentiated products that also increases the market share and market power in determining prices for products (mirzaei, 2012). efficiency theory the efficiency theory was formulated by demsetz (1973) as an alternative to the market power theory. the efficiency theory presupposes that better management and scale efficiency results to higher concentration thus greater and higher profits. accordingly, the theory posits that management efficiency not only increases profits, but also results to larger market share gains and improved market concentration (athanasoglou, brissimis& delis, 2005). the efficiency theory also states that a positive concentration profitability relation may be a sign of a positive connection relating to efficiency and size. the theory postulates that positive association between the concentration www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 40 and profit arise from a lower cost which is mainly achieved through production efficient practices and increased managerial process (birhanu, 2012). empirical literature lucky and nwosi (2015) examined the relationship between asset quality and the profitability of the fifteen (15) quoted commercial banks in nigeria from 1980 – 2013. the objective was to investigate the relationship between camels criteria for asset quality and the profitability performance of nigerian commercial banks. secondary data were sourced from annual reports of the quoted commercial banks. return on investment (roi) was modeled as the function of percentage of non-performing loans to total loans (npl/tl), percentage of nonperforming loans to total customers’ deposit (npl//tcd), percentage of loan loss provision to total loans (llp/tl) and percentage of loan loss provision to total asset (llp/ta). multiple regressions with econometric view statistical package were used as data analysis method. the ordinary least square properties of augmented dickey fuller test, co-integration and granger causality test were employed to determine the short and long –run relationship between the dependent and the independent variables. findings from the regression result proved that percentage of non-performing loans to total loans and percentage of nonperforming loans to total customers’ deposit have positive relationship with return on investment while percentage of loan loss provision to total loans and percentage of loan loss provision to total asset have negative relationship with return on investment of the commercial banks. the unit root test shows stationarity of the variables in order of 1(1), the co-integration reveal long run relationship between the variables while the granger causality reveals no causal relationship among the variables. the model summary proved that the independent variables can explain 65.5% variation on the dependent variables while the f-statistics of 12.508477 and the probability of 0.000008 proved that the model is significant. the study concludes that there is significant relationship between asset quality and the profitability of the commercial banks. lis, et al. (2000) found that gdp growth and bank specific characteristic (bank size and capital) had negative effect on bank assets quality while credit growth, collateral, net interest margin, debt-equity, market power and regulation regime had a positive impact on bank assets. cantrell (1994) pin pointed that asset quality is one of the main concerns in the formula for evaluating the top one hundred u.s. banks stated in u.s. abata (2014) examined assets quality and bank performance of six largest banks quoted in nigeria stock exchange using secondary data sourced from the annual reports of the commercial banks for fifteen years (1999 – 2013). the study adopted the use of ratios as a measure of bank performance and asset quality since it is a verifiable means for gauging the firms level activities while the data were analyzed using the pearson correlation and regression tool of the spss 17.0. the findings revealed that assets quality has a statistically relationship and influence on bank performance. swamy (2015) revealed that private sector credit was found not to be significant in affecting the non-performing assets contrary to the general perception and similar in the case with rural branches implying that aversion to rural credit is falsely founded perception. bad debts are dependent more on the performance of the industry than other sectors of the economy. furthermore, capital adequacy and investment activity significantly affect the profitability of commercial banks apart from other accepted determinants of profitability; assets size has no significant impact on profitability. literature gap so far we have reviewed the literature on the effect of asset quality and profitability of banking institution in different countries. some of the studies reviewed were cross-country while others were country-specific. however, vast of studies on the effect of credit risk or non performing loan and performance of banking institutions in nigeria have well been documented from both theoretical and empirical perspectives with the help of regression estimation techniques. but to the best knowledge of the researcher very fragmented studies of citable significance have dealt on the problem of asset quality and deposit money banks (dmbs) performance in nigeria. such as abata, 2014 and lucky &nwosi, 2015 who only studied assets quality and performance of selected commercial banks quoted on the nigeria stock exchange. therefore, the study is embarked on to examine the effect of asset quality on performance of deposit money banks in nigeria using the estimation of the ordinary least square technique. since the ols technique have become very popular estimation techniques in investigating the nature of the link and the velocity of adjustment in each of the variables under study. therefore, it is important we used this estimation tool to bridge the knowledge gap and to find another perspective. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 41 research methodology the study adopted the quasi-experimental research design. target population is the specific population from which information is required. the population of this study comprised of all the financial institutions operating in nigeria. the data for this study are time series data ranging from 1986 – 2016. the data consist of yearly data of one dependent variables of return on assets and three independent variable of banking system assets quality indicators. model specification following the previous works of abata, (2014) and swamy, (2015) we model the relationship between asset quality and profitability of deposit money banks in nigeria as follow: (3.1) to have the estimable version of above equation, equation (10) can be rewritten to have (3.2) where roa = return on assets npl=non-performing loans to total loans las =liquid assets (core) to total assets lsa =liquid assets (core) to short term liabilities  00 = constant  1  3 = coefficients of independent variables  it = error term techniques of analysis ordinary least square regression analysis ordinary least squares (ols)is a method for estimating the unknown parameters in a linear regression model. hutcheson (2011) defined ordinary least square (ols) regression as a generalized linear modeling technique that may be used to model a single response variable which has been recorded on at least an interval scale. this method minimizes the sum of squared vertical distances between the observed responses in the dataset and the responses predicted by the linear approximation. unit root test a unit root test is a statistical test for the proposition that in a autoregressive statistical model of a time series, the autoregressive parameter is one. (econtermsy(t), where t a whole number, modeled by: y(t+1) = ay(t) + other terms where a is an unknown constant, a unit root test would be a test of the hypothesis that a=1, usually against the alternative that |a| is less than 1. mackinnon critical value. cointegration test cointegration is a statistical property of time series variables. in a situation where two or more series are individually integrated (in the time series sense) but some linear combination of them has a lower order of integration, then the series are said to be cointegrated. according to (c t eviews 2010) cointegration refers to a www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 42 scenario where linear combination of non stationary variables is stationary. for these non-stationary time series variables, there is a possibility of estimation by differencing in cases where the differences are stationary. granger causality test in conducting an econometric study, the direction of causal relationship among variables is determined according to the information obtained from the theory. in this study, granger causality test was used in order to test the hypotheses regarding the presence and the direction of the causality between assets quality and profitability of deposit money banks. data presentation, analysis and discussion of findings table ols result output between assets quality and return on assets variable coefficient std. error t-statistic prob. c 6.097605 3.563955 1.710909 0.0986 npl 0.015289 0.036380 0.420267 0.6776 lat -0.100918 0.045771 -2.204820 0.0362 las 0.009531 0.083706 0.113865 0.9102 r-squared 0.195479 mean dependent var 2.116129 adjusted r-squared 0.106087 s.d. dependent var 3.204590 s.e. of regression 3.029842 akaike info criterion 5.174812 sum squared resid 247.8585 schwarz criterion 5.359843 log likelihood -76.20959 f-statistic 12.18776 durbin-watson stat 1.939832 prob(f-statistic) 0.000693 source: e view 9.0 output the objective of this study is to investigate the effects of asset quality on deposit money bank performance in nigeria (measure by roa). the regression model explains our hypothesis and coefficient of deformation (r 2 ) of 0.1955 and adjusted (r 2 ) of 0.106. this indicated that the regression has low explanatory power. however, the values of r 2 and adjusted r 2 show that 20 percent of the variations in the criterion variable (return on assets) is attributable to the predictor variable selected by the model and involve ratio of non-performing loan to total loan (npl), ratio of liquid assets to total assets (lat) and ratio of liquid assets to short term liabilities (las). though the r 2 and adjusted r 2 is low but it is significant judging from the significant f. statistics, which is equally considerable the implication is that the regression model for this study is well specified and does not suffer any misspecification problem. further, the result from the model can be relied upon in making useful inference with respect to return on assets (roa). the durbin watson test is use for testing presence of auto-correlation which has a value of 1.94. the dw table shows the upper and lower value as 1.31 and 1.68 respectively. this shows that there is no presence of auto-correlation among the variable since the durbin watson computed does not fall within the dw tabulated. under table 4.8 the results will reject the null hypothesis since it has a residue relationship on deposit money bank performance (roa) in nigeria. this mean that ratio of non-performing loan to total loan are significant in explaining the performance of deposit money banks. the result shows that the ratio of liquid assets to total asset of the bank is statistically significant in their influence on return on assets. lat has negative relationship with return on assets (roa). this indicates that return on assets (roa) and ratio of liquid assets to total assets move in opposition direction. the coefficient shows that a percentage increase of ratio of liquid asset to total assets will lead to about o.10 decrease in return on asset (roa). the output of this could be attributed to the unprofitable/volatile deposits and reserves which do not stay long in banks vault. deposits in the bank vaults can be erratic and vulnerable that is subject to withdrawer without notification. this result is in line with finding of ikpefan (2013), abata (2014); lucky & nwosi, (2015) and vighneswara (2015). finally, the ratio of liquid assets to short term liabilities has insignificant effect on return on assets of 5% level of significance. the result shows that there is a positive relationship between ratios of liquid assets to short term liabilities though insignificant. table 4.4 stationarity test for assets quality and return on asset variables adf stat @ 1 st difference critical value @ 1% critical value @ 5% order of integration roa -5.397653 -3.6852 -2.9705 i(1) npl -5.573627 -3.6852 -2.9705 i(1) lat -6.011578 -3.6852 -2.9705 i(1) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 43 las -4.599397 -3.6852 -2.9705 i(1) source: e-view 9.0 output the study conducted stationarity test using the augmented dickey fuller unit root test. the results are summarized on table 4.6 for each of the variables under study. comparing the critical value at both 1% and 5% with the adf statistics, the result indicates that all the variables are stationary at first differencing. hence, the variables are all integrated serious of order 1(i). this implies that the absolute values of the adf test statistics are all greater than the critical values at 5% level of significance. having stationarized the series, the data can now be subjected to a test to ascertain whether these series are co-integrated or not by employing the johansen co-integration procedure to estimate the long run equilibrium relationship between the predictor and criterion variables. 4.5 econometric analysis and hypotheses testing table 4.7 johansen co-integration test output between assets quality and return on assets eigenvalue likelihood ratio 5 percent critical value 1 percent critical value hypothesized no. of ce(s) 0.626201 48.37381 47.21 54.46 none * 0.369605 19.83675 29.68 35.65 at most 1 0.198525 6.455884 15.41 20.04 at most 2 0.001315 0.038146 3.76 6.65 at most 3 source: e-view 9.0 output *(**) denotes rejection of the hypothesis at 5%(1%) significance level l.r. test indicates 1 cointegrating equation(s) at 5% significance level since the data are of order 1(i), we now apply the johansen co-integration techniques to ascertain the existence of long-run co-integrating relationship. the co-integration test is based on the likelihood ratio and the critical value. the result is presented in table 4.7 above and from table 4.7 it can be seen that the observed likelihood ratio of 48.374 is greater than the critical value of 47.21 at 5% level of significance. therefore from the table it is clear that the test indicate at most 1 co-integrating equation. this result means that there is a long run equilibrium relationship between return on assets (roa) and bank asset quality indicators in nigeria. the finding of this study is in line with the work of lucky and nwosi (2015) and vighneswara (2015) and in contrary with this finding of khalied (2012) and li & chiu (2004) who find no evidence of co-integration between bank performance asset qualities. table 4.6 granger causality test output assets quality and return on assets null hypothesis: obs f-statistic probability npl does not granger cause roa 29 1.77927 0.19031 roa does not granger cause npl 0.11710 0.89000 lat does not granger cause roa 29 2.60432 0.09471 roa does not granger cause lat 3.59150 0.04320 las does not granger cause roa 29 1.04864 0.36593 roa does not granger cause las 3.35894 0.05174 lat does not granger cause npl 29 0.92660 0.40960 npl does not granger cause lat 0.62885 0.54176 las does not granger cause npl 29 1.99824 0.15750 npl does not granger cause las 1.25612 0.30281 las does not granger cause lat 29 0.02567 0.97468 lat does not granger cause las 3.31366 0.05361 source: e view 9.0 output www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 44 the result of the pairwise granger causality test conducted with a maximum log of 2 is presented in table 4.9 below from result; the null hypothesis is rejected if the probability of f-statistics given in the test result is less than 0.05. from table 4.9 the result shows that at 5% level of significance. ratio of non-performing loan to total loan (npl) does not granger cause bank performance (roa) just as roa does not granger npl. this implies that the level of npl in the banking sector cannot influence return on assets of banking institutions in nigeria vice versa. this is in line with the work of lucky and nwosi (2015). also the result as shown in table 4.5 reveal that there is causality having from ether lat to roa or roa to lat at 2 years lagged periods. this evidence is confirmed by the probability value at both instances were less than 0.05 and 0.10 measured at 5% and 10% significance level. this suggests that an increase in the ratio of liquid assets to total asset (lat) will raise the performance of bank in nigeria and vice versa. on the other hand, increase in roa of nigeria banks will in turn translate into a rise in liquid assets of nigeria banks. also, increased performance of banks can boost liquidity of nigeria banks which in turn increase the credit creation ability of the nigerian banks. finally, the results reveal the case of a unidirectional causality flowing from ratio on assets (roa) to liquids asset to short term liabilities of nigeria. the implication of this is that an increase in ratio on assets (roa) can boost banks liquidity to meet short term obligation as they come due. our finding collaborate the findings (kpefan 2013), the study cannot accept the null hypothesis of no causal affect between asset quality and dmb performance in nigeria. by inference therefore, the results shows that asset quality granger cause and influence bank performance in nigeria. table 4.7 serial correlation test for asset quality and return on asset breusch-godfrey serial correlation lm test: f-statistic 0.649016 probability 0.531141 obs*r-squared 1.530113 probability 0.465308 source: e-view 9.0 output the results of the breusch-godfrey serial correlation lm test as presented in table 4.3 above indicate that there is problem of serial correlation among series. this evidence is confirmed by their respective f-statistic and observed* statistic together with the probabilities values reported to be well above the conventional level of significance. therefore the hypothesis of no serial correlation will have to be accepted. table 4.8 heteroskedasticity test for asset quality and return on asset white heteroskedasticity test: f-statistic 0.971848 probability 0.465188 obs*r-squared 6.059577 probability 0.416549 source: e-view 9.0 output the heteroskedasticity test results are presented in table 4.9, 4.10 and 4.11 above. from the tables above it shows that the presences of homoscedasticity among the variables are overcome. this is confirmed by their respective fstatistic and observed* statistics together with the probabilities values reported to be well above the conventional probabilities value. table 4.9 stability test for asset quality and return on asset ramsey reset test: f-statistic 0.121277 probability 0.730458 log likelihood ratio 0.144263 probability 0.704079 source: e-view 9.0 output similarly, the ramsey reset functional form test, reported on table 4.5 above revealed that model was properly specified and is in the appropriate form. the f-statistic and observed* r-squared statistics revealed probabilities of 0.730 and 0.704 respectively and these are well above the conventional levels of acceptance. thus we reject a null hypothesis of inappropriate functional form. we have no reason to worry about mis-specification problem. discussion of finding as earlier discussed, the study is an attempt to examine the effect of asset quality on deposit money bank performance. the result of the study discovered that in the long run there is a significant relationship between asset quality and deposit money bank performance in nigeria. this explicitly rules out the acceptance of the null hypothesis of no evidence of co-integration between the variable of study. this submission is line with the submission of lucky & nwosi (2015). following the consistency of the ordinary least square (ols) result and notwithstanding the contentions of current theoretical thoughts, the results of regression technique is not sufficient to establish causality, this we cannot immediately conclude that asset quality or its variables (npl, lat and las) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 45 does significantly and positively influence deposit money bank performance in nigeria measured by return of asset (roa). it is in this regard that the third hypothesis was postulated. as identified in third hypothesis which was formulated in the null form of no causality between asset quality and deposit money bank performance is rejected in place of the alternative. this is confirmed by the probability value of the result of the study finding is in line with the findings of lucky & nwosi (2015). but generally, the models were discovered to be statistically significant and asset quality of banks were discovered to account for variation in deposit money banks performance in nigeria which goes in line with findings from scholars like abata (2014); vighneswara (2015) and lucky & nwosi (2015). conclusion and recommendations conclusion conclusively, it can be deduced that there is a significant relationship existing between asset quality and dmbs performance in nigeria. this agrees with the fact that good assets quality is relevant to the deposit money banks (dmbs) performance. furthermore, maintaining sound assets quality position is critical to the long term performance, survival and sustainability of dmbs in nigeria. recommendations the following recommendations are made in this study: i managers of banks should encourage activities that will promote dmbs liquidity which will be used to meet customers run on the banks and other short term obligation. ii managers of banks should continue practice prudent credit risk management to safeguard assets and protect interests of the investors. iii banks should from time to time review their credit pokey to further reduce the incidence of bad loans. references abata, m. a., (2014). assets quality and bank performance: a study of commercial banks in nigeria. research journal of finance and accounting, 5 (18), 39 – 44. achou, f. t. & tegnuh, n. c. (2008). bank performance and credit risk management. master degree project school of technology and society, university of skovde press. adeyemi, b. (2011). bank failure in nigeria: consequences of capital inadequacy, lack of transparency and non-performing loans. banks and bank systems, 6(1), 99-109. chisti, k.a., (2012). the impact of asset quality on profitability of private banks in india. journal of african macroeconomic review 2(1), 126-146. ezeohua, a.e., (2011). banking consolidation, credit crisis and assets quality in a fragile banking system. some evidence from nigerian data. journal of financial regulation and compliance, 19(1), 33 44. flamini v., mcdonald, c. & schumacher, l. (2009). the determinants of commercial bank profitability in subsaharan africa, imf working paper no 15. gujarati, d. n. (2004). basic econometrics 4th edition. tata mcgraw-hill publishing company limited. gulia, y. 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(edition). performance evaluation and ratio analysis of pharmaceutical company in bangladesh” master’s thesis (unpublished), university west, bangladesh www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 46 ifeacho, c., & ngalawa, h., (2014). performance of the south african banking sector since 1994. journal of applies business research, 30(4), 23-45. ikpefan, o.a., (2013). capital adequacy, management and performance in the nigeria commercial banks (19862006). african journal of business management 7(30), 2938-2950. iwedi, m., (2017). bank failure in nigeria: evidence of prudential regulator laxity. frontiers in management research, 1(4), 141-150. jackson, o., (2011). the impact of credit risk management on financial performance of commercial banks in kenya. african journal of management policy, 3(7), 179-217. kargi, h. s., (2011). credit risk and the performance of nigeria banks. european journal finance management, 7(5), 67-99. khalid, a.c., (2012). the impacts of assets quality on profitability of private banks in india: a case study of jk, icici, hdfc and yes banks: journal of african microeconomic review, 2 (1), 1 – 22. kinthinji, a. m., (2010). credit risk management and profitability of commercial banks in kenya. african journal of management policy, 3(7), 139-257. kolapo, t. f., ayeni r. k., & oke, o., (2012).credit risk management and banks performance. australian journal of business and management research, 7(9), 201-221. lucky, a.l. & nwosi, a.a., (2015). asset quality and profitability of commercial banks: evidence from nigeria. research journal of finance and accounting, 6(18), 26-34. manoj, p.k., (2010). financial soundness of old private sector banks (opbs) in india and benchmarking the kerala based opbs: a camel’ approach. muhammed, a.,(2012). credit risk and the performance of nigerian banks. interdisciplinary journal of contemporary research in business, 2(3), 342-364. musyoki, d., & kadubo, a. s., (2011).the impact of credit risk management on the financial performance in kenya. international journal of business and public management, 14(9), 302-317. nzoka, f.k., (2016). the effect of assets quality on the financial performance of commercial banks in kenya. unpublished master of science thesis submitted to university of nairobi. ohwofasa, b.o & mayuku, j.g, (2012). determinants of bank distress and effect on nigerian economy, 19862010: an empirical analysis. european journal of humanities and social sciences, 17(1), 865-875. ombaba k.b.m., (2013). assessing the factors contributing to non performance loans in kenyan banks, european journal of business and management, 5(32), 13-20. omoh g., (2015). cbn releases guidelines for new banking model. vanguard newspaper. retrieved 29 november 2016. onaolapo, a. r. (2012). analysis of credit risk management efficiency in nigerian commercial banking sector. far east journal of marketing and management, 9(6),447-498. oni, s.a., (2012). regulation and supervision of financial institutions: the nigeria experience. cbn economic and financial review 50 (4) 107-123. oni, s.a., (2015). circular on the review of the universal banking model (pdf). retrieved 29 november 2016. poudel, r. p. s., (2012).the impact of credit risk management in financial performance of commercial banks in nepal. international journal of arts and commerce, 6(1), 23-41. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 47 sanusi, l., (2010). the nigerian banking industry: what went wrong and the way forward convocation lecture, bayero university kano. swamy, v., (2015). modeling bank asset quality and profitability: an empirical assessment. economics. kiel institute for the world economy discussion papers no 27. thachappilly, g. (2009). profitability ratios measure margins and returns: profit ratios work with gross, operating, pretax and net profits”. investors. john wiley & sons (asia) pre ltd. thiagarajan, s., ayyappan, s. & ramachandran, a. (2011). credit risk determinants of public and private sector banks in india, european journal of economics, finance and administrative sciences, 3(4), 45-58. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 2; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 11 a study of monetary integration in west africa and its implications on trade on developing country (africa) rabnawaz khan school of finance and economics jiangsu university, zhenjiang jiangsu, zhenjiang 212013, people’s republic of china e-mail: khan.rab@stmail.ujs.edu.cn jin xinxin school of literature art jiangsu university, zhenjiang jiangsu, zhenjiang 212013, people’s republic of china e-mail: 1048186766@qq.com abstract it shows the monetary investigation in west countries the big flow in economy by the gross value change effects, also the value of debt policy with debt management strategies to control the budgetary risk of long-term economy from sustainability. the intellectual policies of inflation, gdp, trade, and services and merchandise trade has affected on the west african country’s monetary policies. the implication of trade by a lag of exchange rate indicators has a positive and significant effect. the estimated results reflect the dynamic implication of trade with liquidity and proper monitoring policies. the gdp, gross value (gva), debt policies, equity of public administration, trade in service and merchandise trade is positive and significant, all are significant. we suggest the optimum control of liquidity with trade service policy recommendations in different countries. the research method was based on 5 countries from the 16 countries of western african and elaborated by their individual indicators with the least square method. the gross value of debts and public administration controlled the development aim of an entire state with strategic and planned environment for state and reduce the level of inflation in small and enterprise section and the results analyzed the policy makers implement planned in implication of trade with domestic currency and long run endogeneity. the results analyzed the monetary policies affecting the level of growth of an individual country. keywords: monetary, west african countries, trade, economy. 1. introduction we have increased the regional interaction the economy by the priority of free trade and growth. according to negotiating forum (nf) the continental free trade area (cfta) is the path of trade and investment which convened for cfta. the investment of incorporate of 53 african countries, represent 1 billion people with $3 trillion gdp. the policy of implication of west african countries controlled by regional economic community (rec’s) likewise west economic and monetary union (waemu) is the main building block of achievement of free trade and monetary implication.(k. ahmed, bhattacharya, shaikh, ramzan, & ozturk, 2017; aydin, 2019; kong & khan, 2019; mengyunet al., 2018) the highest level of intraregional trade in west african countries is low when it compares to the level of a custom union trade in waemu and eu’s with 25-60 percent. fig 1. mailto:khan.rab@stmail.ujs.edu.cn mailto:1048186766@qq.com www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 12 figure 1: intra-regional export for wemu and asean: sources: uncta, 2015 second the monetary policies and implication of trade is satiability of cfa franc zone in african countries in the term of macroeconomic. (bekun, emir, & sarkodie, 2019; grossman g, 1995) the important issues some countries unstable and have taking weak attention of historically monetary institutional framework. however, the currencies depreciate in an external environment in the region’s stability and legitimate to achieve the competitiveness of individual policies. figure 2: franc stability, sauce: hallet, 2008 the global fixed exchange rate has benefited to foreign trade and taxation policies with achieving macroeconomic stability.(abid, 2017; dong, wang, & guo, 2016; j. du & zhang, 2018) the research showed the competitiveness challenges of gdp, trade services, and merchandise trade. the region economic communities in west countries have directly infect the economy by different strategic policies. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 13 the prior research implication based on economic development and south african country’s economic policies and didn’t mention the (adom & kwakwa, 2014) strategic policies regarding individual expect of foreign exchange rate, federal economic development trade and effected issues of gdp by cfa.(adom & kwakwa, 2014) therefore, this research is most import issues weighted and determined the strategic policy with cpia debt policies, inflation, gdp deflator, trade services, trade (gdp),(g. du, liu, lei, & huang, 2018; riaz et al., 2018) merchandise trade and merchandise export. we base the second section of this research on the literature. we base the third section of this research on the method. 4th section showed results and analysis and final section held with recommendation and conclusion. 2. literature we base prior research on implemented policies and strategic changes in sub-saharan countries and highlighted the issues of economic development with individual effects. the convergence member of countries showed i.e. inflation, growth, per capita and currency union. (coleman, 2010; harvey & cushing, 2015)the common stock of macroeconomic policies more in under developing countries, which makes a common strategic policy for individual states. several theories in literature is showing the impact of policy regarding the monitoring policies, which created on asset prices, patents, development and growing of economy. the systematical approach of the theories effects on economics variables.(button, martini, scotti, & volta, 2019; osabutey & jackson, 2019) the first view is liquidity approach emphasized the increasing liquidity, asset prices increase, and it acts as a link in the transmission of liquidity assets on the economic activities with the wide range of development skills and determined policies of an individual government.(bensassi & jarreau, 2019; tsao et al., 2019) the other expects of low and stable inflation cause of lack of monitoring policies in stabilizing the high level of investment.(keho, 2017; yaya, ling, furuoka, rose ezeoke, & jacob, 2019) 2nd the presented a dynamic equilibrium of monitoring policies based on the bubble in asset prices, in addition poor monetary policy design such as rate rules of sustainable long-term inflation. 3rdthe trend survey of effect on money and monetary policy on asset prices including the exchange rate the monetarist theory effects on uncertainty, government policies and economic growth. the high-quality boom of assets price, growth of monetary supply and investment. (asongu, folarin, & biekpe, 2019; mikayilov, hasanov, & galeotti, 2018; riaz et al., 2018)therefore, the prior of research implicated the trade in big rule and hold the effect of a portfolio of a financial institution regarding huge investment and development policies. 4th the policies of investment in a different channel by self-crating the huge gap in monetary policies, where the different price channel has tagging different prices level, credit ratio, exchange rate cause of the intellectual policies of inflation, gdp, trade and services and merchandise trade has affected on the west african countries monetary policies. the rate of a channel determined the effects on price and exchange rate (k. ahmed, bhattacharya, m., shaikh, z., ramzan, m., & ozturk, i 2017; cham, 2016). the exchange rate channel, other asset price channels, and the credit channel. since the present study surveys the impact of monetary policy on the exchange rate, it determines the level of intensity in financing. (al-mulali, ozturk, & solarin, 2016; apergis & ozturk, 2015) . the countries competitiveness will need to ensure the macroeconomic stability, which improved the business climate of trade, reduce the hard infrastructure stability and technology with transfer infrastructure gap.(bo, 2015; schwerhoff & sy, 2017; zhao & kim, 2009) the investment of trade and strategic policies of economic development such as skills has increased agriculture as well with adept policies, training and extension program and build capabilities of domestic firms.(acheampong, 2018 awad & abugamos, 2017; harvey & cushing, 2015) the structural transformation will require leverage of the ict sector of productivity, financial tie and domestic macroeconomics frameworks. 3. data, model and results we base this research paper research method on liner regression between gross value, cpia debt policies, public administration with regional trade, gdp per capita, service in trade, trade of an individual,(harding, 2007; im, pesaran, & shin, 2003; zhang, liao, & hao, 2018) merchandise trade and export of low income economy. it shows the stability of model the strategic policies,, so the results conducted by the regression. in a first step unit root is taking for the stationary and non-stationary level of intimal of 5 countries from the 16 west african countries. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 14 table 1. indicators indicators (benin, burkina faso, ghana, guinea, guineabissau) indicator wb symbol gross value added at basic prices (gva) (current us$) ny.gdp.fcst.cd gva cpia debt policy rating (1 = low to 6 = high) iq.cpa.debt.xq cpiad cpia quality of public administration rating (1=low to 6=high) iq.cpa.padm.xq cpiaq inflation, gdp deflator (annual %) ny.gdp.defl.kd. zg igd gdp per capita (current us$) ny.gdp.pcap.cd gdppc trade in services (% of gdp) bg.gsr.nfsv.gd.zs ts trade (% of gdp) ne.trd.gnfs.zs tr merchandise trade (% of gdp) tg.val.totl.gd.zs mtg merchandise exports to lowand middle-income economies within region (% of total merchandise exports) tx.val.mrch.wr.zs mel it indicates table 1 the gross values of different indicators as per indicator codes. the strategic policies have been transiting with 9 indicators and individually defined with the period of 1960-2018. however, the export level of merchandise. (perron, 1988; sinha & shahbaz, 2018) results and analysis the results and analysis were analyzed using the liner method. in 1st stage mean deviation of individual variables have been taking by skewness and kurtosis, and the deviation analyzed by mean and standard deviation. the mean deviation is greater from the standard deviation. the individual indicator shows a significant effect on each individual variable(cheng, ren, wang, & yan, 2019; im et al., 2003; saqib, ahmad, & amezcua-prieto, 2018; zhao & kim, 2009). table 2. mean deviation cpiad cpiaq gdppc gva igd mel mtg tr ts mean 3.25714 3 3.08571 4 422.502 2 4.85e+ 09 13.9884 1 18.4213 7 40.7366 6 49.1624 2 12.7690 1 median 3.5 3 341.527 5 2.36e+ 09 6.38697 4 12.6578 4 39.5120 5 46.9411 1 12.7851 5 maximum 4.5 3.5 2378.16 5.98e+ 10 123.061 2 88.2146 8 93.1964 1 132.050 2 27.3494 8 minimum 1 2 68.4247 5 1.53e+ 08 6.34567 7 0.36662 5 4.53936 3 6.32034 3 4.26148 1 std. dev. 0.81978 0.40799 356.543 8.64e+ 20.8678 18.5417 15.2425 19.6215 4.24076 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 15 6 5 3 09 8 1 4 3 4 skewness 0.74088 1 0.64428 6 2.69987 6 4.18352 1 2.62944 2 1.52885 3 0.39060 3 0.86074 1 0.70782 8 kurtosis 2.59803 2 2.66245 3 12.4324 8 22.1229 5 10.7893 9 4.85654 2 3.59937 4 4.83443 7 4.13222 3 jarquebera 6.87516 5.17520 3 1274.80 8 4356.94 5 934.830 9 136.494 1 10.4628 6 68.0331 1 22.3174 8 probability 0.03214 2 0.0752 0 0 0 0 0.00534 6 0 0.00001 4 sum 228 216 109428. 1 1.16e+ 12 3553.05 6 4715.87 10550.8 12683.9 2081.34 8 sum sq. dev. 46.3714 3 11.4857 1 3279776 9 1.78e+ 22 110173. 5 87667.6 8 59942.4 6 98946.1 1 2913.42 observatio ns 70 70 259 240 254 256 259 258 163 the given results of analysis have interoperated the distribution t-factors within between valuation. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 16 table 3. covariance covariance analysis: ordinary t-statistic probability cpiad cpiaq gdppc gva igd mel mtg tr ts cpiad 0.685562 cpiaq 0.250355 0.153018 9.670279 ---- gdppc 80.13973 66.1267 176071 1.881582 3.493724 ---- 0.0645 0.0009 ---- gva 3.87e+09 3.29e+09 5.63e+12 1.97e+20 2.800963 5.934168 25.77055 ---- 0.0068 0 0 ---- igd -0.379726 1.222435 1808.744 7.36e+10 289.5489 -0.214 1.482909 2.078473 2.571124 ---- 0.8312 0.1431 0.0417 0.0125 ---- mel 4.212973 1.085542 1030.478 3.36e+10 -16.18827 302.9732 2.426221 1.281843 1.131174 1.101121 -0.434467 ---- www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 17 0.0181 0.2046 0.2623 0.275 0.6654 ---- mtg 3.394529 1.364002 1517.276 5.06e+10 23.7466 39.62843 136.398 2.975628 2.483048 2.584455 2.575627 0.955278 1.577552 ---- 0.0041 0.0157 0.0121 0.0124 0.3431 0.1197 ---- tr -0.120382 0.812654 2488.352 7.59e+10 63.69064 -17.78276 152.6474 272.7775 -0.069875 1.006384 3.053553 2.748993 1.846842 -0.491921 10.27479 ---- 0.9445 0.3181 0.0033 0.0078 0.0695 0.6245 0 ---- ts 0.717598 0.461766 965.8295 3.52e+10 3.87425 9.645411 14.46673 14.38365 20.8171 1.53567 2.125966 4.637605 5.225046 0.396578 0.971193 2.238991 1.543421 ---- 0.1296 0.0374 0 0 0.693 0.3352 0.0287 0.1277 ---- www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 18 table 2 the significant relationships analyzed by the probability level of linear value, where the highest mean deviation is directly affecting the monetary integration and implication of trade in african countries. the integration of value has been analyzed by the cpiad, igd and ts, where the gross value at the basic rate, inflation of gdp with trade service, merchandise trade, export and the quality of public administration in debt value and interpreted the monetary policies of africa and implication on trade. table 3 figure 3: mean and covariance table 4. equity test for equality of variances between series method df value probability bartlett 8 59193.83 0 levene (8, 1820) 75.12375 0 brown-forsythe (8, 1820) 43.85331 0 category statistics mean abs. mean abs. variable count std. dev. mean diff. median diff. cpiad 70 0.819786 0.706122 0.671429 cpiaq 70 0.407995 0.331429 0.314286 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 19 gdppc 259 356.5433 234.0249 218.1158 gva 240 8.64e+09 4.52e+09 3.82e+09 igd 254 20.86788 13.7503 12.14635 mel 256 18.54171 13.93338 13.22127 mtg 259 15.24254 11.83501 11.81549 tr 258 19.62153 14.58696 14.49539 ts 163 4.240764 3.173404 3.173305 all 1829 3.53e+09 5.93e+08 5.02e+08 bartlett weighted standard deviation: 3.13e+09 error! filename not specified. figure 4: least limitation fig 3 and the highest mean deviation of igd and ts are indicated the highly effects of domestic trade in private sectors, its mean if the investment of individual countries will rise in private sector so effect on the monitoring policy. table 4 table 5.observation autocorrelation partial correlation ac pac q-stat prob **| . | **| . | 1 -0.223 -0.223 3.1455 0.076 .*| . | .*| . | 2 -0.116 -0.174 4.0065 0.135 **| . | **| . | 3 -0.224 -0.318 7.2805 0.063 . |*. | . | . | 4 0.17 -0.003 9.195 0.056 . | . | .*| . | 5 -0.052 -0.113 9.376 0.095 . | . | .*| . | 6 -0.002 -0.093 9.3762 0.153 . | . | . | . | 7 -0.008 -0.014 9.3805 0.226 . | . | .*| . | 8 -0.006 -0.079 9.3832 0.311 . | . | . | . | 9 -0.003 -0.039 9.3838 0.403 . | . | . | . | 10 0.001 -0.028 9.3838 0.496 . | . | . | . | 11 -0.003 -0.048 9.3847 0.586 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 20 table 5-6 is indicated the actual effects of fitted and residual effect by the level of actual intensity. the foreign trade computed by the debt policies and quality of public administration which is the part of monitoring policies. the trade service and merchandise trade with in economic growth with exports. table 7 is indicated the indicators different policies with sources of inflation and gdp per capita, the highlighted part of trade service and investment, likewise, foreign investment under the stated law implement the rules and policies of cpia quality and debit policies. fig 4 table 6. indicated observation cpiad,cpiaq(-i) cpiad,cpiaq(+i) i lag lead . |******** | . |******** | 0 0.7564 0.7564 . |******* | . |******* | 1 0.6706 0.7213 . |****** | . |******* | 2 0.581 0.6862 . |***** | . |******* | 3 0.5078 0.6511 . |**** | . |****** | 4 0.4219 0.625 . |*** | . |****** | 5 0.3469 0.5988 . |*** | . |****** | 6 0.2846 0.5637 . |** | . |***** | 7 0.2368 0.5305 . |** | . |***** | 8 0.1927 0.5044 . |** | . |***** | 9 0.1576 0.4637 . |*. | . |**** | 10 0.1315 0.3886 . |*. | . |*** | 11 0.1053 0.292 . |*. | . |** | 12 0.0702 0.2079 . | . | . |*. | 13 0.0351 0.0967 . | . | . | . | 14 0 0 . | . | . | . | 15 0 0 . | . | . | . | 16 0 0 . | . | . | . | 17 0 0 . | . | . | . | 18 0 0 . | . | . | . | 19 0 0 . | . | . | . | 20 0 0 . | . | . | . | 21 0 0 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 21 . | . | . | . | 22 0 0 . | . | . | . | 23 0 0 . | . | . | . | 24 0 0 . | . | . | . | 25 0 0 . | . | . | . | 26 0 0 . | . | . | . | 27 0 0 . | . | . | . | 28 0 0 . | . | . | . | 29 0 0 . | . | . | . | 30 0 0 . | . | . | . | 31 0 0 . | . | . | . | 32 0 0 table 4 is indicated the covariance of indicator and their relationship of individual indicators. likewise, gva, cpiad, gdppc and tr with mtg have shown the significant effect on investment and implemented policies. so therefore, the relationship of igd and ts the implanted policies and its implication of trade in africa. table 7. maximum factors factor method: maximum likelihood f1 communality uniqueness cpiad 0.332776 0.11074 0.88926 cpiaq 0.598787 0.358546 0.641454 gdppc 0.955697 0.913357 0.086643 gva 1 1 0 igd 0.308166 0.094966 0.905034 mel 0.137412 0.018882 0.981118 mtg 0.308655 0.095268 0.904732 tr 0.327268 0.107104 0.892896 ts 0.549849 0.302334 0.697666 factor variance cumulative difference proportion cumulative f1 3.001197 3.001197 --1 1 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 22 total 3.001197 3.001197 1 model independence saturated discrepancy 3.877421 7.577025 0 chi-square statistic 248.155 484.9296 -- chi-square prob. 0 0 -- bartlett chi-square 230.7066 455.8843 -- bartlett probability 0 0 -- parameters 18 9 45 degrees-of-freedom 27 36 -- warning: heywood solution (uniqueness estimates are non-positive). results should be interpreted with caution. table 8 shows the padroni test of individual indicators of cpiad and igd with gva within 6-1 ranking, the computed results is indicated the stationary issue in nonstationary level. the probability of test is indicated the turn over period 1960-2018. table 9 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 23 table 8. correlate cpiad cpiaq gdppc gva igd mel mtg tr ts cpiad -3.22e-15 0.573707104 -0.087368372 -2.83e-15 -0.129501948 0.246595646 0.248323602 -0.117709958 0.006977153 cpiaq 0.573707104 -4.66e-15 -0.169391678 -2.78e-15 -0.000874664 0.077150599 0.113747569 -0.070178457 -0.070515985 gdppc -0.087368372 -0.169391678 2.90e-09 3.33e-16 -0.041192064 0.009764396 0.014630985 0.046287995 -0.021006338 gva -2.83e-15 -2.78e-15 3.33e-16 -4.44e-16 3.89e-16 -5.55e-17 0 7.22e-16 1.11e-15 igd -0.129501948 -0.000874664 -0.041192064 3.89e-16 4.44e-16 -0.097001772 0.024374437 0.12577333 -0.119543142 mel 0.246595646 0.077150599 0.009764396 -5.55e-17 -0.097001772 -1.11e-16 0.152526961 -0.106828207 0.045897037 mtg 0.248323602 0.113747569 0.014630985 0 0.024374437 0.152526961 -2.00e-15 0.690359979 0.101778013 tr -0.117709958 -0.070178457 0.046287995 7.22e-16 0.12577333 -0.106828207 0.690359979 -6.66e-16 0.010929393 ts 0.006977153 -0.070515985 -0.021006338 1.11e-15 -0.119543142 0.045897037 0.101778013 0.010929393 1.55e-15 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 24 table 9. fitness summary goodness-of-fit summary factor: untitled model independence saturated parameters 18 9 45 degrees-of-freedom 27 36 -- parsimony ratio 0.75 1 -- absolute fit indices model independence saturated discrepancy 3.877421 7.577025 0 chi-square statistic 248.155 484.9296 -- chi-square probability 0 0 -- bartlett chi-square statistic 230.7066 455.8843 -- bartlett probability 0 0 -- root mean sq. reside. (rmsr) 0.176065 0.362026 0 akaike criterion 2.986999 6.352763 0 schwarz criterion 2.083792 5.148487 0 hannan-quinn criterion 2.630626 5.877599 0 expected cross-validation (ecvi) 4.439921 7.858275 1.40625 generalized fit index (gfi) 0.672501 0.488161 1 adjusted gfi 0.454168 0.146935 -- non-centrality parameter 221.155 448.9296 -- gamma hat 0.126405 0.066538 -- mcdonald non-centrally 0.17768 0.029979 -- root mse approximation 0.357747 0.441416 -- www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 25 incremental fit indices model bollen relative (rfi) 0.317688 bentler-bonnet normed (nfi) 0.488266 tucker-lewis non-normed (nnfi) 0.343164 bollen incremental (ifi) 0.517055 bentler comparative (cfi) 0.507373 4. conclusion the above research is proved that investment in these western african countries not only to develop the individual region or society, it creating effect on the entire african state with huge monitoring polices. the gross value of debts and public administration is controlled the development objective of entire state with strategic and planned environment for state and reduce the level of inflation in small and enterprise section. the monitoring policies in developing countries is one of the important issues and influence factor in each individual state. therefore, the impact of monetary policies on gdp per capita reflect the exchange rate in developing countries and generalized method of covariance by the probability level of linear value, where the highest mean deviation is directly affecting the monetary integration and implication of trade in african countries. the integration of value has been analyzed by the cpiad, igd and ts. the above results estimated the coefficient of all indicators with 95% confidence interval. in addition, wald test confirm the validity of the instrument by absence of serial autocorrelation in 1st order. the estimation shows the monetary integration in african states. therefore, the functioning of the foreign exchange and their implication in trade constantly shows the significant effects on proxy monitoring policies. the results reflect the debt policies, public administration with regional trade, gdp per capita, service in trade, trade of individual, merchandise trade, and export of low income economy. the stability of model is indicated the strategic policies so the results is conducting by the regression. it has necessary for the individual state to reduce the economy dependency in export and oil sources, to prevent the equity of public administration, trade in service and merchandise trade. the fluctuation of monetary policies and implication review the sector of currency policies in trade and investment. furthermore, the above per-capita results are heighted the trade services and merchandise trade with different level of gdp. the gross development product need strategic techniques for development and entire export so therefore the one corner has been solving with monitoring policies and premeditated planed. references abid, m. 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2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 41 job insecurity in private education sector considering covid-19 pandemic: bangladesh panorama md. ali imran lecturer department of business administration ccn university of science & technology, cumilla, bangladesh ikbal ahmed lecturer department of cse ccn university of science & technology, cumilla, bangladesh abstract job insecurity is one of the vexed questions here in the covid-19 pandemic situation. private sector employees are agonizing mostly due to this problem. in the midst of july within three months of the crisis, about 13 percent of people have become unemployed in the country due to the covid-19 pandemic. the educational institutions are closed in bangladesh from 17 march 2020 due to this crisis. so the private education sector job holders are in a precarious situation in terms of their job security. in this study, we investigate the vacillation of job security for private education employees. for this purpose, we questioned 100 private education sector employees such as school, college and university to find out the actual scenarios. most of the private educational institution depends on its own income from the student‟s tuition fees; hence the trouble to manage it for the deadlock condition and their employees are also in a financial dilemma. though some of them are started online programs in the true picture, they will suffer as the ballgame advancing. bangladesh's government announces thirty thousand core incentives to face economic hazards. the particular employees in this stratum are benefited from trivial brink. some lay off strategy can save both the victimized party. keywords: job insecurity, private educational sector, covid-19, unemployment. 1. introduction on january 8, 2020, a novel coronavirus was officially announced as the causative pathogen of coronavirus disease 2019 (covid-19) by the chinese center for disease control and prevention. the pandemic covid-19 has spread all over the world. this virus can contaminate people easily. due to this, countries have been closed down every activity and shopping for anything but necessity commodities. the covid-19 outbreak is one of the worst global pandemics for decades. the international labor organization (ilo) predicted around 24.7 mil-lion jobs will be disappeared due to covid-19. like the other developed and developing counties, bangladesh is also one of them who will be affected higher than anyone. the educational institutions in bangladesh are closed from 18 march, 2020 to minimize probable health risk. that opens the risk of job insecurity in private education sector employees those institutions are depends on its own income. according to guy ryder, director general of the ilo, the world is unanimously addressing the world economic crisis where the worst advancement can be averted and resolved through dynamic leadership. the corona virus (covid-19) crisis has resulted in an unprecedented labor market shock and unemployment crisis. millions of jobs have been put at risk as a result of the unparalleled social distancing measures enforced across bangladesh. about 13 percent people have become unemployed in the country due to covid-19 pandemic, according to a survey of bangladesh institute of development studies (bids). in the field of private education sector the employees can be categorized in different layers such as kindergarten, primary school, high school, colleges, higher education employees and other sectors in private education. most of the employees in these private education sectors are getting no salary or lesser percentage of salary for the current situation. some of them are in a mental hazard of losing their jobs. the covid-19 pandemic, however, is a crisis of a completely different magnitude and one that will require a response of unprecedented scale. the covid-19 pandemic has brought in a paradigm shift in the www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 42 understanding of human rights jurisprudence. like many other human rights, the right to private education sector job security is now continuously being rethought and renegotiated within the economic priorities. education is the backbone of a nation and education sector employees are the support to this backbone. without the support to this backbone we cannot go far as a nation. as we know 3.8% of total employments in bangladesh are from government services. a great number of congregate employments are from private sector. this is not different for education sector in bangladesh. there are over 7,500 approved non-mpo (monthly payment order) educational institutions in the country with 2, 00,542 teachers and staff combined approximately. in the higher education sector there are 107 private universities in bangladesh. there are private owned medical colleges. thousands of employees are working there. most of the employees are not treated properly how they should be treated as a respectful employee in this deadlock situation. many of nonmpo employees are reported as they are not getting any salary from the outset of standstill conditions whereas many are at the risk of job sack. some of employees get half and few are getting a portion of their stipulated salary. there are number of private education sector employees conducting online classes. in higher education ugc (2018) provides logistic support to resume online classes. many of the private education sector employees conducting their classes through zoom, google meet or using many other applications. private universities, schools and colleges are perusing the online examination to minimize the session losses. they are using modern technologies and putting hard labor in this prospect. but most of them are not going smoothly in terms of their job security. according to study bangladeshi educational sector employees are served lesser in compare to other countries in the world. the government and the concern authority should pay attention and impose extra care to these noble professionals otherwise the nation will suffer in the long run. fear of covid-19 spread out in bangladesh complete shutdown of education institutions perceived job insecurity in private education sector figure1. the moderation model hypothesized 2. objectives of the research the primary objective of the study is to find out the impact of covid-19 on private education job sector. the secondary objectives of this study are the following discussion: to find out the initiatives should take by government and different stakeholders in bangladesh to protect the employees‟ lives and rights”; and to write down a few future strategies to minimize the impact of this kind of pandemic or emergencies in the future. there has not been any job insecurity study relating to covid 19 pandemic in private education sector in bangladesh. as it is known almost all the studies conducted in bangladesh are related to other economic sector employees. no one is paying heeds to these deprived employees but some are leading miserly and challenging life here in this pervasive world. therefore, the study primarily aims at evaluating the job insecurity in the private education sector from the „employee‟ perspective. the basic objectives regarding job insecurity in private education sector are:  to analyze the present scenario of job security in the emergency due to covid19 pandemic in private education precinct.  to evaluate the employees job sustainability in the advancement of the pandemic.  determining the relationship between employee perception and actual scenario in this private education sector. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 43  to explore the job satisfaction of private employees in terms of financial and socioeconomic structure of bangladesh.  to suggest some policy measures for improving employees job security. 3. data collection strategy in this study two types of data are used to perceive the job insecurity in the private education sector employees due to emergencies like covid 19 pandemic. we use both the primary and secondary data. in terms of collecting the primary data we make a questionnaire having 20 questions to find out the sustainability and socio economic condition of the employee in private education sector. we reached them through the google docs as the country was lockdown and also to maintain the social distancing. they eagerly participated and provided their important opinion to conduct this study. data sources primary data secondary data figure 2. research data sources we use the five point likert scale method to construct the questionnaire. we investigate the situation constructing some physical question. to ascertain the actual scenario we discussed with the private education sector employees and faculty members. for this aspect we adopted proper physical distancing procedure, especially we conducted through the social networking platform like facebook, messenger, twitter and whatsapp. to understand the impact of covid-19 on the private education job sector in bangladesh, the secondary information also been used. the previous literature review, newspapers, and scholarly reports have been used to compile this study. for the data collection, online media has been searched regularly from february 2020 to august 2020 for collecting the stories relating to the covid-19 effect on private education sector employees. the main reason for using the newspaper information is there is not enough information available in the similar research field, except the form of newspaper. moreover, the newspaper information is supportive to develop the theoretical postulates. for the western media outlets google news searching strategy has been used. and, for the local newspapers i.e. prothom alo, financial express, dhaka tribune, daily star etc. have been regularly viewed. after the initial screening, the relevant stories have been stored as pdfs at the analytical software. for the article review the google scholar is used to find out the relevant articles and citations. 4. literature review although the actual fact that the covid-19 job insecurity episode and related confinement measures implemented by governments across the planet passed within the first two quarter of 2020, there's burgeoning research on this subject, as researcher have sought to use any possible data analysis and evidence to know better and mitigate the adverse consequences of the pandemic. given the lag in collection and publication of official job market statistics and lack of clarity on the state of the unsecured employment, many voluntary targeted surveys have also been distributed. investigate on the labor economics literature, several new research studies have sought to supply a preliminary assessment of the impact of the covid-19 crisis on jobs and workers. baldwin and weder di mauro (2020) provide a guideline of the previous literature on the financial consequences of the pandemic. in a study of www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 44 primary assessment employing a large-scale household survey coibion, gorodnichenko, and weber (2020) highlight that job losses within us are significantly understated in new unemployment claims. the reason what by historic standards a large decline within the employment to population ratio has not been mirrored by the same increase within the percent. the authors attribute this discrepancy to the reason that speed of inactivity has risen, with newly non employed people are not actively seeking work. béland, brodeur, and wright (2020) build three indices using us data to research the short term impacts of covid-19 on employment and wages investigating on the mirrors paper on eu job market during pandemic. they classify jobs in step with their exposure to disease, proximity to coworkers and also the capability to perform remote work. their analysis confirms, exploiting state-level variation, that the pandemic has caused a negative short-term increase in unemployment and reduce within the labor participation rate and work period. the author‟s show that occupations that rely upon physical proximity to others are more affected, in contrast to occupations possibly be performed remotely. the us evidence warns that the general physical crisis will magnify marketplace inequalities, as men, younger workers, immigrants, the self-employed and fewer educated workers are more likely to be negatively littered with covid-19. adams-prassl, boneva, golin, and rauh (2020) as leverage evidence from real time surveys from germany, the united kingdom and therefore the us to point out that the employments impacts of covid19 differ significantly across countries and employee characteristics, exacerbating eu jobs highly unsecured due to covid-19 social distancing inequalities. their investigation is predicted on identifying the share of tasks by occupation that may be done remotely, which is very predictive of job sack. they show that the negative consequences of the corona virus outbreak on current and expected job loss those with less secure work arrangements and therefore lower skilled. workers on short time work schemes are marginally victimized by the pandemic, focusing the essentials of the institutional framework underpinning labor markets in numerous countries. mongey, pilossoph, and weinberg (2020) investigate the characteristics of workers in jobs likely to be initially laid low with broad social distancing and later by narrower policies tailored to jobs with low risk of disease transmission. the authors use online data to construct a measure of the likelihood that jobs may be performed from home and a measure of low physical proximity to others at work. they confirm that less educated workers, those with lower income and possession of assets relative to income and renters face higher vulnerability. the study further confirms a negative relationship between working from home jobs and declining employment, using march 2020 official labor pool data. mcguinness, redmond, and delaney (2020) also face the difficulty which irish workers can potentially work from home. they highlight how teleworking is critical not just for continued economic performance, but also assist control another spike in virus cases and alleviate child care pressures caused by school. the authors stated approximately 14% of employees in ireland currently work from home in some formal capacity, mostly within the education, ict and finance sectors, while this figure falls to 6% for „essential‟ employees and couple of those within the accommodation and food service sectors. results from their econometric model indicate that men, irish nationals, older workers, full time employees and people in higher paid occupations have most probability of performing from home. baert, lippens, moens, sterkens, and weytjens (2020) focus on career outcomes and career aspirations due to covid-19 crisis. belgian employees reported that about 21% fear for the job sack where 14% are at the risk of losing their job in recent times. study ascertains that approximately 26% of migrants will face the covid-19 wave in the economy as the risk of their promotion prospect. emphasizing, the study shows that most of them will affected individually in terms of their job insecurity and further job placement. gasparro et al. (2020) presented the correlation among the italian employees fear of covid-19 and its affects to their job department. the fear to the pandemic impacted to their mental health which directly affects their work environment. it causes the perceived job insecurity among the employees and they face some depressive symptoms. in their study they focus on the job insecurity due to covid-19 pandemic and the relationship with the mental stress of their job losing. finally, sen, antara, sen, and chowdhury (2020) they emphasizes on the apparel worker in bangladesh who are in a deep sea losing their jobs at the very outset of the pandemic. the apparel workers are truly in the highest level of vulnerable position in bangladesh. in normal condition they have some miserable life but situation get worsen and millions are losing their job due to the covid-19 pandemic crisis. in this study they showed that around 45.7% of order cancelled due to pandemic crisis. reportedly 5.9% say all of their foreign order are cancelled which caused the situation worsen. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 45 5. underlying theory 5.1 past research-maslow’s hierarchy of needs theory abraham maslow introduced the hierarchy of needs theory in 1943. though the theory proposed a sequential hierarchy of five basic needs which are all-pervasive (shahrawat & shahrawat, 2017), at the heart of the theory there is an aspiration to build up an affective and empathetic working condition to motivate the employees to retain in organizations. this theory was based upon the premise that higher level needs are not important and are not manifested until lower-level needs are satisfied. the most basic needs of individuals are labeled as physiological needs and included such items as food, water, sex, sleep and other bodily needs (martin & frost, 2011). the next most important level of needs is safety. this included items such as security and protection from physical and emotional harm in the work environment which must be without fear and enjoyable (robbins & judge, 2007). the third level of needs is social needs. this level of need included affection, love and belongingness which can be dubbed as desire for social belonging (martin & frost, 2011). the fourth level of needs is esteem needs. this level included self-respect, status, prestige and recognition emanated from effective and efficient leadership in the work environment (martin & frost, 2011). the highest level of need is self-actualization. self-actualization is the drive to become what one is capable of becoming and achieving their potential level of achievement in the career ladder (robbins & judge, 2007). the needs represented by maslow‟s hierarchy can be applied to the work environment as a way to motivate employees. in gist, pay and work hours can contribute to satisfying physiological needs. safe working conditions, company, benefits and job security help fulfill safety needs. friendly supervision and professional associations relate to social needs. job title and social recognition help fulfill esteem needs. finally, a challenging job, opportunities for creativity and advancement in the organization can mean to fulfill self-actualization needs (shahrawat & shahrawat, 2017). the challenge for organizations is to consider these employee needs as they implement work environmental practices (martin & frost, 2011). an underlying premise of the current study is a secured and healthy working condition that is central to motivating the employee to stay longer with an organization. muslow‟s theory provides a robust theoretical basis for testing such a premise, along with an additional framework for testing whether quality education is affected by employee retention, which itself should be dependent on enjoyable working condition of the educational organization. based on the theory, sound working condition in the private education institutes should positively influence faculty retention practices. finally, enhanced retention practices should influence as a mediating variable to influence quality education as well as directly influence quality education itself. if we cannot retain our teacher & employees involved in private education sector we cannot hope for quality and skillful education from them. day after tomorrow there must be flip flop condition which is not up to scratch in our private education systems. as higher percentages of students are involved in private education sector we cannot hope for scholarly generation in the education field without committing secured and skillful private sector employees. talking with the private education sector employees physically we wants to discover that the government and the concerned authority are not taking any notable steps to minimize the outcome created in these emergencies. they want a unique job policy and financial structure from the government. the special scheme to fight emergencies like covid 19 pandemic the government can initiate some special schemes. from owner side they want some mental and financial support and sustainable job policy that will be applicable in any hazards. figure 3. maslow‟s hierarchy of need theory www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 46 5.2 job insecurity in different layers of private education sector in a recent study conducted by bangladesh bureau of statistics (bbs) it is found that 76.1% of total employment is from private sector. among them a notable number are working in the private education sector. the educational institutions are closed for 6 months that means all the activities in most of the institution are closed. though many school colleges & university started their distance learning through online classes but there are lots of challenges to make it successful. specially most of the students & teachers are not trained to the technology. the internet problem in the rural area makes it difficult. most of the students do not have well equipped devices to make it happen whereas some have economical adversity. in our recent study we noticed that only 25-30% private sector educational institutions are conducting their online classes others are in a standstill situation. many kindergarten, school and colleges are totally stopped their activities due to pandemic situation. they cannot afford any salary to their employees for 6 months. in a report from renowned newspaper i.e prothom alo we came to know that many school and colleges employee are not getting salary from march from when the educational institutions are closed. they are in a threat to lose their job as well. the higher education sectors like private universities are in a little better position rather than the primary school, high school and colleges. most of the universities started their distance learning through online classes. some are conducting online examinations through different technologies. figure 4. job risk level in private sector due to covid-19 as the economy of the country are not in the fullest stream there also some adversities. most of the universities are paying 50-60 percent of the total salary we found according to our face to face questionnaire. the admission & tuition fee earnings are not satisfactory to be in content position as their financial structure designed www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 47 with them. many of them thinking to cut down the expenses through job sack in order to cope up with the situation which put the employee in an unsecured phenomenon. from the above discussion and the graph presented in the above we come to know that some private sectors are in very high risk and some are in high risk in terms of their job security. private education sector employees are in a high risk to their job sustainability (cedefop, 2020). 6. data analysis and findings the employee‟s job place environment is reported in figure-05 data was collected from 100 employees. after collecting data, it is found that there is none who is strongly disagree or strongly agree. there were two questions about the environment. first question was on the employee‟s satisfaction with his job place environment and the other was on the standard facilities in his work place. in both questions, they hesitate about the telling their own institutions. the two figures show that a large number of employees remained neutral. it shows that most employees are somehow in pressure not to tell about the environment and standard facilities of their institutions. although 38.1% employees are satisfied with the job environment, the same numbers of employees are not satisfied with the facilities they enjoy. it shows that the authority is unwilling to provide standard facilities for the employees. that‟s why, 28.6% employees are agreeing with the standard facilities. figure 5. the percentage of the employees about own job place environment figure-06 shows the satisfaction about their salary. there are two charts, left-side chart shows about the salary structure and second shows whether their salary is given in time or not. about the salary structure 14.3% employees are strongly disagree that there is salary structure but it is not satisfactory level. the highest rate is 42.9% employees are disagreed about these criteria. it is clear that the employees are not satisfied about their present salary structure. in the right-side figure, the highest rate 33.3% employees are disagreed and 23.8% are strongly disagreeing about their salary in time. so, the employees who are serving in private education sector are not satisfied about their salary and also about their institution. figure 6. the ratio of number of the respondents about their salary structure www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 48 due to covid-19 pandemic, many sectors are in the verge of destruction. covid-19 has a great negative impact on education sector. many institutions are facing financial crisis. they can‟t run their institutions smoothly. the figure-07 in the left side shows that a good number of respondents are agreeing on the point that their institutions are facing challenges due to the pandemic. it is seen that 66.7% employees are agree on this point while only a negligible number i.e 4.7% employees are disagreed. the figure-07 in the left side shows the percentage of the employee who are agree that challenges in his/her institution due to pandemic and also about the job sack. we note that we seem to have 66.7% employee are agree about that there are challenges in the institution and few numbers are disagree. the figure in the right side shows that a large number of employees i.e. 47.5% employees have no idea whether they have a chance to be sacked or not. but 19% employees are agreed that they may be sacked. on the contrary, 9.5% employees are strongly disagreed on this point. it shows that their institutions have vast resources and no problem to run. the situation may be reverse also. the authorities may be more humane. figure 7. the ratio of the number of the respondents about the institutional policy the governmental support for the private education sector from the perspective of employee is reported in figure-08. in this pandemic situation, the employees feel the necessity of the support for the government for the private education sector and also for them. the left side figure shows that the highest percentage is 57.1% employees are agreed and 38.1% are strongly disagreeing about the finding of any support from the government. the right-side figure shows the similarity of the percentage of the employees who are agreeing about the necessity of the government support for the private educational institution. figure 8. the ratio of the number of the respondents about the government support 7. result and discussion results show that employees at risk of losing their jobs showed higher levels of perceived stress and negative feelings and lower levels of positive feelings compared to employees not at risk of losing their jobs. results also showed that 19.05% of the group at risk of job sack where 47.61% in the neutral position. it shows that most employees are somehow in pressure not to tell about their problems. as this study was carried out within the first five months of the pandemic panorama, results of the study reflect the immediate, short term reaction. however, our www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 49 results need to be treated with caution as we are unaware of the long term impact of the economic crisis in bangladesh and its potential impact on our sample. results showed no spillover effects of the negative consequences of job insecurity on employees working in proximity but not currently at risk of losing their job. this could be time-related as secondary effects of insecurity might need more time to develop. for example in the study of lang et al. (2012) musculoskeletal problems of employees that survived a downsizing of staff were stronger relative to musculoskeletal sickness absences measured for an extended period covering two subsequent years after downsizing, suggesting that negative effects may be more pronounced later on. the satisfactory level in salary structure here in pandemic circumstances showed higher percentages of discontentment which is 42.9% in true picture. 33.3 % are emphasizes on they are not getting their salary in time and they are getting the partial amount in this emergency period. in the contrary they should get the extra care in this crisis moment. but the 42.9% strongly disagreed on the point of festival bonuses and 33.4% on the side of getting no incentives from the authority. a great percentage of respondents (nearly 43%) opine that there are pecuniary uncertainties if the quadrangle advances. 66.7 percentages urges on academic and institutional challenges due to covid 19 pandemic. an inflated number of employees (57.1%) longing for the structured financial rules and regulation from the government side whereas 38.1% are strongly agreed on this point. approximately 58% of employees want a unique job policy for the private education division employees and 28. 6% strongly agreed on this point to enhance their job security. from the above discussion and result analysis we can urge that the private education sector artisan wants a healthy turnover in their job environment focusing on emergencies like covid 19 pandemic. they crave for a secured job sector where the sustainability will revamp the quality education. as they are the builder of a nation the government and owners can work hand in hand to improve policy and job structure to protect their right. by ensuring so we can build an intellectual nation who will serve the nation and help to procure a developed country by 2041. 8. recommendation covid 19 pandemic teach us some lessons that we should look forward for sustainable economic structure. the government and the concern authority should prepare for the emergency situation like covid 19 pandemic. this disaster shocked the whole economy. the world bank estimates that the gdp growth will fall to 1.6% in 2019-20 fiscal years where the gdp growth in last year was 8.15% according to bbs. the private education sector is not out of this problem. for the corresponding pandemic situation the job security in this sector are at a risk. some recommendations to protect these employees benefit are mentioned below:  ameliorate the communication and transparency: communication is very crucial following the pandemic, in order to reduce employees‟ uncertainty and their level of stress. in this context, a communication plan should be developed in order to provide clear information to employees about what will happen after covid-19, what are the main actions that will be taken to resume organizational operations, and the potential impact of these actions on employees work. providing clear and transparent information about the organization‟s future plans may reduce the fear of the unknown and job insecurity.  prevention of stigma stigmatization can be minimized by providing accurate and timely covid-19 information (bai & ng, 2004) and training (brooks et al., 2020) to employees during and after the pandemic outbreak. furthermore, organizations should construct workplace policies that avail stigma prevention providing true information. social connection through online meeting and cooperation among the employees maintaining the technologies can fulfill these criteria.  online training & online classes “training on conducting online classes” and “outcome based educations (obe)” can help both the employees and students to fight against the adversities. online training conducted by the ugc (2018) can help the employees in earning confidence and thinking of unknown future. the students will be encouraged by these kinds of activities to normalize in online classes and the whole picture of education system. they can minimize the job insecurity in private education sector adopting quality online classes. i think interactive online classes are the major solution to this quandary. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 50  social support social support can enhance the mental condition of the employee which directly affects the education environment. if they get the trust and believe from their surroundings it will enhance the quality education through distance learning. the employee will feel secured as per their job concern.  management of teleworking and prevention of social isolation in order to prevent the negative outcomes of teleworking on employees‟ mental health during covid-19, organizations should develop proper strategies to support employees during organizational changes. the study of greer and payne (2014) put forward some strategies identified by teleworkers, that may help to overcome the challenges of teleworking. teleworking like conducting online classes and taking examination through modern technologies can normalize the scenarios in financial aspect which is the main concern for the owner in current situation. the employees can perform teleworking which will normalize this division and prevent social isolation problem.  providing some special incentives and technological support in this pandemic the job market become unstable in the whole world especially in the private sector. though the different countries adopting different financial schemes. the private education sectors are overlooked in bangladesh. the margins of financial support to this sector are very little. the government and the instinctive authority can adopt some special incentives for the employees. the technological support like free devices and internet for both the employee and students can lay out the problem in this section.  constructing unique job policy and financial structure the private education sector now facing the problem is job instability due to financial crisis. we know that all of the private educational institution depends on its own earnings. these types of crisis are never happened before and they are not use to it how to handle this problem. though some of them is going smoothly where most of them facing vice-versa. the owner and the concern authority should come forward to protect the employees‟ right implementing some special financial structure and job policy to fight against the emergencies.  the owners can diversify their earnings in this current unsecured world the ultimate problem is the financial cataclysm faced by the private sector. the private education department cannot come out from this setback. most of the employees in this precinct are getting no salary or partial salary. this make these employees unsecured and they are thinking of job sack where worst situation come by in near future. it makes them to rethink and fear to uncertainty. the owner can invest in diversified business and expand their wings. they should not depend only to their student‟s tuition fees. this diversification will help them to confront against adversities like covid 19 pandemic in future. 9. conclusion the covid-19 pandemic has resulted in unprecedented economic ramifications and job loss. due to the rapidlychanging nature of the pandemic, those currently employed may be experiencing heightened job insecurity and financial concern and the present finding show that greater job insecurity due to covid-19 among those currently employed in private education sector employees. in this article, we have argued that the covid-19 pandemic can be considered a career shock that will have a major impact on people's work and careers in private education tract. as mentioned earlier, the concept of private higher education in bangladesh is relatively a new phenomenon in the education sector which was entirely within the public domain before the 1990s. as a nascent sector, it has been suffering from myriads of management problems. particularly, working conditions prevailed in these universities are not up to that level which is pleasant for the faculty members due to many of ill managerial policies (joarder & sharif, 2011). the results of this study reveal that this factor is considerably important to maintain a steady faulty retention policy and job certainty in the entire private education section. there have been several studies report that turnover intentions of the faculty member in these private universities, nonmpos school and colleges and private owned educational institutions in bangladesh are significantly high which is responsible for reducing quality education. in this respect, the present study has offered important evidence that faculty working condition and job security in the private education in developing context can have significant influence on employee retention as well as on quality education in the private education belt in bangladesh. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 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(2018). annual report, university grand commission, dhaka. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 1; 2019 published by american center of science and education, usa 48 debt financing and corporate finance performance: a dynamic investigation from nigeria quoted firms uzokwe grace onyinyechi department of banking and finance, rivers state university, port harcourt nigeria abstract there are two components of corporate capital. this paper examined the effect of debt financing on the financial performance of quoted firms in nigeria stock exchange using time series data from 2000-2017. the objective was to examine the controversial findings of scholars on the effect of capital structure on corporate performance of firms. return on assets and return on equity was modeled as the function of debt equity ratio, debt ratio, equity ratio, total liability ratio and long term debt ratio. multiple regressions with the aid of statistical package for social sciences were used as data analysis techniques. model one found that a correlation coefficient (r) of .872 this implies that a very strong correlation exists between return on assets and explanatory variables. the coefficient of determination (r²) is .678 which shows that 67.8% of the variation in return on assets is attributable to the variations in the financial leverage. also, the fvalue calculated of 8.338 has a correlation corresponding value of .004 which implies a good model utility. the test of significance conducted as shown in the tables above states that roa has a calculated value of 242.032 and a corresponding significance value/probability value of .014. the positive sign of t-value (1.653) shows the direction of the variables. this therefore implies that when a financial leverage is well used, this leads to a better, reliable and fairer financial result that is objective and represent the true state of affairs in the food and beverage companies proportionately. model two found that a correlation coefficient (r) of .772 this implies that a very strong correlation exists between return on assets and explanatory variables. the coefficient of determination (r²) is .639 which shows that 63.9% of the variation in return on equity is attributable to the variations in the financial leverage. also, the fvalue calculated of 7.644 has a correlation corresponding value of .004 which implies a good model utility. the test of significance conducted as shown in the tables above states that roe has a calculated value of 568.906 and a corresponding significance value/probability value of .003. the positive sign of t-value (3.310) shows the direction of the variables. this therefore implies that when a financial leverage is well used, this leads to a better, reliable and fairer financial result that is objective and represent the true state of affairs in the food and beverage companies proportionately. we recommend that management of the firms should work very hard to optimize the capital structure in order to increase the returns on equity and assets and that management of nigerian firms should increase their commitments into capital structure in order to improve earnings from their business transaction. keywords: debt financing, corporate finance performance, financial leverage, return on assets, return on equity, nigeria quoted firms. introduction every corporate organization exists to maximize shareholders wealth. this operational philosophy depended on internal factors of the firms such as financing decision and external factors such as monetary and macroeconomic variables. financial leverage is traditionally viewed as the use debt component capital structure, through the use of fixed income securities, such as loans and bonds. it has a significant influence on the company’s ability to achieve its ultimate goal, such as maximizing the shareholders wealth (taani, 2012). generally, increased in leverage results increase in return and risk (tally, 2014). however, the use of leverage is associated with two different possible outcomes either positive such as maximizing the profit or negative such as minimizing the profits. financing leverage is determined by profitability, corporate size, liquidity, cash flows, tax and dividend policy (rajin, 2012). it is measured in terms of debt equity ratio, long term debt to total debt, total debt as percentage to of total asset and short term debt to total debt (rehman, 2013). financial leverage is intended to earn more on the fixed charges funds than their costs (tally, 2014). the effect of financial leverage in maximizing the return of the www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 49 shareholders’ is based on the assumptions that the fixedcharges funds such as the loan and debentures can be obtained at a cost lower than the firm’s rate of return on net assets (damouri, 2013). according to the trade off theory (kraus & litzenberger, 1973) the optimal capital structure is determined by balancing the positives & negative effects of financial leverage. in other words, balancing the benefits of debt financing, that includes: tax savings, reducing agency cost, with the cost associated with the debt, that include direct and indirect bankruptcy costs. furthermore, the use of financial leverage is proven to be beneficial when the investment made by the leverage earn returns more than the cost of debt. these disadvantages are relatively small as compared to the tax shield that associates the use of financial leverage. on the other hand, financial leverage may have a negative impact if the investment that has been made did not achieve sufficient returns having no recognizable income to shield, meaning that returns is lower than the cost of debt the company will be at a higher risk due to the level of debt they undertook, resulting in reducing the overall value of the company. the ambiguity in the theories further deepens the controversies on the relationship between financing leverage and firms’ value. the applicability of the theories can better work in the business environment where the degree of market imperfection is less compared to the high degree of market imperfection such as the financial market of the developing countries like nigeria where the market is characterize with information asymmetric and risk that can affect the performance of the firms contrary to theories. financial leverage have the advantages of tax shield benefits and the risk level associated with the debt financing makes it less expensive than equity financing., from investors point of view investing in debt securities is less risky than investing in publicly trading stocks, as debt securities is not subjects to the risks associated with the stock market, through debt financing the company is no longer affected by changes in the interest rate that occur in the market, the cost of issuing long-term securities such as: bonds & loan contracting is lower than the cost of stock issuing while the disadvantages includes increase in the company’s financial risk, the nature of some of the types of debt financing (bonds) requires the company to have a large amount of money at maturity, as a result of the high risk that associate the use of the use of debt securities, the company becomes subject to more restrictions and obtaining long-term loans may be difficult for small companies that are new in the market. while the effect of financial leverage has well been documented in literature, empirical findings remain controversial , inconclusive and difficult to be adopted for policy making, therefore this study investigated the effect of financial leverage on the financial performance of quoted nigeria firms. literature review theoretical review in the theory of firm's capital structure and financing decisions, the pecking order was first suggested by donaldson in 1961 and it was modified by myers and majluf (1984). it states that companies prioritize their sources of financing (from internal financing to equity) according to the principle of least effort, or of least resistance, preferring to raise equity as a financing means of last resort. hence, internal funds are used first, and when that is depleted, debt is issued, and when it is not sensible to issue any more debt, equity is issued. pecking order theory tries to capture the costs of asymmetric information. it states that companies prioritize their sources of financing according to the law of least effort, or of least resistance, preferring to raise equity as a financing means of last resort. according to myers (1984), due to adverse selection, firms prefer internal to external finance. when outside funds are necessary, firms prefer debt to equity because of lower information costs associated with debt issues. these ideas were refined into a key testable prediction by shyam-sunder and myers (1999), that the financing deficit should normally be matched dollar-for-dollar by a change in corporate debt. as a result, if firms follow the pecking order, then in a regression of net debt issues on the financing deficit, a slope coefficient of one is observed. fama and french (2002) tested some qualitative predictions of the pecking order theory as against the qualitative predictions of the tradeoff model. in their findings, they suggested that more profitable firms are less levered and it is consistent with the pecking order. and also, those firms with greater investment opportunities are less levered as predicted by the tradeoff theory. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 50 the trade-off theory refers to the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. trade-off theory allows the bankruptcy cost to exist. it states that there is an advantage to financing with debt (namely, the tax benefit) and that there is a cost of financing with debt (the bankruptcy costs and the financial distress costs of debt). the marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing. empirically, this theory may explain differences in d/e ratios between industries, but it doesn't explain differences within the same industry. the agency theory concerns the relationship between the principal (shareholders) and the agent of the principal. this suggests that the firm can be viewed as a nexus of contracts (loosely defined) between resource holders. an agency relationship arises whenever one or more individual, called principals, hire one or more other individuals, called agents, to perform some service and then delegate decision-making authority to the agents. the agency theory concept was initially developed by berle and means (1932), who argued that due to a continuous dilution of equity ownership of large corporations, ownership and control become more separated. this situation gives professional managers an opportunity to pursue their interest instead of that of shareholders jensen and runback, (1983). in theory, shareholders are the only owners of a company, and the task of its directors is merely to ensure that shareholders’ interests are maximized. more specifically, the duty of directors is to run the company in a way which maximizes the long term return to the shareholders, and thus maximizes the company’s profit and cash flow elliot, (2002). the free cash flow (fcf) theory considers the internal source of a firm’s funds. however, fcf has costs associated with the way firms’ managers’ deal with fcf. the focus of the fcf theory is how to balance cash flow and the costs of fcf. scott (1981) stated that if a firm has enough cash flow to pay for their expenses, particularly debt, it will be able to survive. he argued that firms’ managers will be able to use the firm’s history of cash flows to predict the firm’s health and future performance. he linked this with the ability of current cash flows to predict future financing status. jensen (1986) introduced the fcf theory and its relationship with agency costs. he clarified the effect of cash flow and fcf on firms’ performance. he argued that even if cash flow has a positive effect on corporate performance, fcf might have a negative effect on corporate performance. in the case of fcf, a firm’s manager might waste it or and invest it in negative net present value (npv) projects. the role of debt in reducing the costs of fcf was first explained by harris and raviv (1990). debt can reduce the agency costs of fcf because debt financing ensures that management is restricted to making efficient investment decisions. furthermore, debt prevents managers from pursuing individual objectives, as this would increase the firm’s default. as a result, according to this theory, high leverage would have a positive relationship with profitability. however, other studies have shown a negative relationship between debt and fcf. for example, hart and moore (1995) argued that long-term debt controls the ability of a firm’s management to finance future investments. they stated that firms with high debt will find it hard to raise capital because new security holders will not want to have lower priority than existing creditors. firms with low debt will attract new security holders because security holders will be the first priority to the firm. hart and moore (1995) believed that there is an optimal debt–equity ratio and mix of senior and junior debts if management undertakes unprofitable and profitable investments. the market timing theory is one of the most recent theories discussing capital structure. it suggests that managers, depending on their definition of firm value, tend to issue equity when they feel that the market overvalues their company (boudry, kallberg & liu 2010). baker and wurgler (2002) examined the effect of market timing on capital structure and found that low leverage firms are those that raise funds when their market valuations are high, while high leverage firms are those that raise funds when their market valuations are low. thus, firms with low leverage are expected to be of high value. however, although issuing equity is often a result of good financial performance, it is not necessarily the reason for better financial performance, as this theory suggests. rather, firms may use debt until the market overvalues their firm, and then will issue equity to obtain benefits from the firm’s rising share price. this theory contrasts with theories such as the pecking order and trade-off theories. recent studies of mansor and bhatti (2011) and of mansor, bhatti and khan (2012) have showed that the reaction of islamic mutual funds’ performance relative to their conventional peers and to their benchmarks either in bullish or bearish markets is similar. during bullish times, they both have positive return, but during bearish markets they have www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 51 negative returns. however, the study of mansor and bhatti (2011) has proven that the return performance of the islamic mutual funds is slightly better than the return performance of the conventional mutual funds during the bullish market. these findings support the idea of market timing theory from the perspective of financial firms. empirical review rehman (2013) studies the relationship between financial leverage and financial performance in listed sugar companies of pakistan. the results shows positive relationship of debt equity ratio with return on asset and sales growth, and negative relationship of debt equity ratio with earning per share, net profit margin and return on equity. this negative relationship between debt equity ratio and earnings per share (eps) support the fact that as debt increases, the interest payment will also rises, so eps will decrease. rajin (2012) investigates the influence of financial leverage on shareholders return and market capitalization, evidence of telecommunication sector companies in india. he found out that the nature of relationship and the state of influence of the financial leverage on shareholder’s return and market capitalization individually indicates positive relationship between financial leverage and shareholder return but negative relationship between financial leverage and market capitalization. ujah and brusa (2013) suggest that financial leverage and cash flow impact the degrees to which firms manage their earnings. they continue that it depends on economic group or industry a firm belongs to their degree and extent of managed earnings varies. obradovich and gill (2013) indicates that larger board size negatively impacts the value of american firms and ceo duality, audit committee, financial leverage, firm size, return on assets and insider holdings positively impact the value of american firms. pandey (2010) says that the variance and covariance and therefore beta depend on three fundamental factors such as; the nature of business, the operating leverage and financial leverage. enuju and soocheong (2005) examine the effect of financial leverage on profitability and risk of restaurant firms. they find that financial leverage does not influence the restaurant firms’ profitability. it is noteworthy that the sign of financial leverage is positive meaning that more leveraged firms had more profits on average even though it was not statistically significant. nazir and saita (2013) studies financial leverage and agency cost, an empirical evidence of pakistan. the study found out that general and admin expense into to sales ratio is negatively related to all four leverage ratio. taani (2012) investigates impact of working capital management policy and financial leverage on financial performance. the study shows that firm’s working capital management policy, financial leverage and firm size have significant relation to net income and also no significant impact on return on equity (roe) and return on assets (roa). akbarian (2013) examines the investigation effect of financial leverage and environment risk on performance of firms of listed companies in tehran stock exchange. the result shows that there is a negative relation between financial leverage and dividend per share and between market risk and economic risk with free cash flow per share positive significant. it also indicates that financial leverage, market risk and economic risk with return of equity have positive significant relationship. alcock, et al (2013) examines the role of financial leverage in the performance of private equity real estate funds. the results indicates that funds overall are unable to deliver significant positive out performance on the basis of managerial skill that is unrelated to the exposure to the variation in the underlying market return. it also reveals that the impact of transaction costs, fees and other market frictions that are especially prevalent in the direct real estate investment industry, given the relatively low level of liquidity of the underlying assets. it further shows that excess fund return were approximately proportional to the excess market return, implying that these fund offers their investors effective exposure to the performance of the underlying property markets. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 52 akhtar, (2012) conducted a study aiming to discover the impact of leverage on corporate financial performance, answering whither the “companies with high rates of profitability are seeking to increase leverage, using a sample from the oil & energy companies sector, to measure the effect of leverage on the different performance measures, including: rate of return on assets index, return on equity, the number of times to cover benefits and debt, the ratio of dividends to equity, net operating profit, growth in sales, and earnings per share. the study concluded that the use financial leverage results in improved financial situation, in another words showing that there is a positive relationship between leverage & the performance of the companies. subai'i (2012) also studied the relationship between financial leverage & return on assets in the kuwaiti economic sector, having a sample that consisted of fifty-four companies from the kuwaiti public shareholding companies. the study results showed that there is positive relationship between financial leverage & return on investment for all of the economy sectors. al-tally (2014), have also researched the effect of financial leverage on firms financial performance in saudi arabia’s public listed companies. the study sample was 57 publicly trading firms listed in saudi stock exchange for the years 2002-2010. independent variable used in the study was financial leverage & zakat whereas financial performance was used as dependent variable. to discover the relationship among the variables several techniques were used including: maximum & mean factor analysis, standard deviation, anova and spss software. the overall results concluded that positive relationship between financial leverage and performance. the studies mentioned above provided empirical evidence supporting the theory of the financial leverage positive effect on the performance of the company; however other studies that have been conducted on different samples showed different results. jameel (2013), where he concluded that the financial leverage negatively affects the accounting performance measures and the market value of the firms and this impact extends for several subsequent years. the objective of the study was to examine the impact of financial leverage on the different performance measures, and to discover which one of them would be the more affected by financial leverage. testing the hypothesis on a sample that was extracted from firms listed at palestinian security exchange (consisting of twenty publicly listed corporations during the period 2004-2011), using the multi regression model, and return on assets (roa) return on equity (roe), return on sales (ros), and sales growth as accounting performance measures, and tobin’s q to measure & represent the market value of the company. hashemi and zadeh (2012), also concluded from their study that companies that have high leverage will distribute less profits to shareholders when compared to companies with low leverage, as result of the reversed correlation between financial leverage & dividend policy. the above was concluded when they conducted a study aiming to test the effect of financial leverage on dividend policy, using multiple regressions on a sample of 74 public joint stock companies of the companies listed on tehran stock market in the period between 2003-2010. tanni, (2012) tested the effect of working capital polices & financial leverage on the performance of 45 jordanians firms listed in the ase stock exchange. aiming to find the relationship between debt, size, and profitability using the spss statistics to determine the nature of the relationships mentioned above, test of correlation, anova, and multiple regression analysis were performed. the finding indicated that firm’s working capital management policies, financial leverage, and size have a significant relationship to the net income, roe, and roa. furthermore, the study concludes that that working capital polices and size has a positive effect on profitability/ performance, while financial leverage has a negative effect on profitability. research methodlogy the study adopted quasi experimental research design; relevant data were sourced from annual reports and financial statement of 10 selected firms in nigeria stock exchange from 2000 to 2017. model specification in this study, the independent and dependent variables will be used in an equation called multiple regressions. this study is a time series study that covers 1990-2016. cp = f(fl) 3.1 disaggregating equation 1 to achieve the objective of the study, we have the following regression models www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 53 roa = f (der, dr, er, tlr, ltdr) ` 3.2 roe = f(der, dr, er, tlr, ltdr) 3.3 transforming the equations above, to a testable form, we have the following equation roa =   ltdrtlrerdrder 543210 3.4 roe =   ltdrtlrerdrder 543210 3.5 where roa = return on assets roe= return on capital employed der = debt equity ratio dr = debt ratio er = equity ratio tlr = total liability ratio ltdr = long term debt ratio 0 = regression intercept  = error term statistical approach the statistical approaches used in this study include: (i) coefficient of determination (r 2 ): this is used to measure the extent to which the independent variables in the model can explain changes on the dependent variable. (ii) correlation coefficient (r): this measures the strength and the extent to which the dependent and the independent variable are related. (iii) t-test: this is used to measure the significance of the independent variables to the dependent variable and the hypothesis was tested at 5% level of significance and at 95% confidence interval. the hypothesis for this test is stated as follows: null hypotheses; h0: β = 0, (statistically not significant) alternate hypotheses; h1: β  0. (statistically significant) and the decision rule states that “h0” should be rejected when t-statistics is greater than the critical value. but when the t-statistics is lower than the critical value, the “h0” is accepted with its conclusion. (iv) f-test: this is used to find out the overall significance of the regression model at 5% level of significance. the hypothesis for this test is stated as: null hypotheses; h0: β1 –β6 = 0 (all slope coefficients are equal to zero) alternative hypotheses: h0: β1 –β6  0 (all slope coefficients are not equal to zero) the decision rule for this test is that “h0” should be rejected when f-statistics is greater than the critical value of f. but when the f-statistics is lower, then the “h0” is accepted while the h1 is rejected. (v) test for autocorrelation the durbin watson statistics is used in this research to test for the presence of autocorrelation. when there is presence of autocorrelation, the first order autoregressive scheme will be employed to correct it. the hypotheses states that: www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 54 h0: p = 0 (there is serial independence in the errors) h1: p > 0 (there is first order (ar) positive autocorrelation. when the durbin watson statistics (dw-stat) is lesser than lower durbin watson (dl), the null hypothesis (h0) is being rejected but if the durbin watson statistics is greater than the upper durbin watson (du), the null (h0) is then accepted. analysis and discussions of findings the chapter deals with the presentation and analysis of the data collected. to test the hypotheses of this study, a multiple regression model is used. this is deemed as suitable due to the nature of the variables which are continuous rather than dichotomous categorical variables. the table that follows contains the data extracted from the financial statement of the quoted food and beverage firms which was used in running the regression and obtaining the results of the study. multiple regressions have been used to estimate the relation between the independent variables of the study. the technique of ordinary least square was used to estimate the regression coefficient in the model of the study. presentation of results test of colinearity and autocorrelation of the variables table i: tolerance and variance inflation factor (vif) tolerance vif der .905 1.104 dr .726 1.378 er .746 1.340 tlr .834 1.198 ltdr .823 1.215 source: spss 20.0 the tolerance value and the variance inflation factor (vif) are two advanced measures of assessing multicollinearity between the independent variables of the study. in table 4.2, the variance inflation factors are consistently smaller than ten indicating complete absence of multicollinearity (neter et al; 1996 and johansen, 1999). this shows the appropriateness of fitting the model of the study within the four independent variables. in addition, the tolerance values are consistently smaller than 1.5 thus further substantiating the fact that there is no multicollinearity between independent variables (tobachmel and fidell, 1996). table ii: durbin watson and autocorrelation test variables eigen value condition index constant der dr er tlr ltdr 1 5.912 1.000 .00 .00 .00 .00 .00 .00 2 .046 11.290 .06 .06 .00 .77 .00 .00 3 .024 15.703 .70 .70 .00 .06 .10 .01 4 .013 21.342 .09 .09 .07 .01 .58 .03 5 .003 44.193 .02 .02 .90 .10 .11 .27 6 .001 70.018 .12 .12 .12 .06 .22 .70 durbin watson model 2.402 source: spss 20.0 the table above illustrated a co linearity and autocorrelation; the results found that the eigen values that correspond with the highest condition index and variance constants are less than 0.5 rule of the thumb. the durbin watson statistics of 2.402 shows the absence of multicolinearity, portraying a significant relationship between the dependent and the independent variables in the model. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 55 table 4 correlation matrices of coefficient of the variables roa der dr er tlr ltdr roa 1.000 der .186 1.000 dr .184 .169 1.000 er 0.43 .091 .357 1.000 tlr -.164 -.063 -.122 .300 1.000 ltdr .056 -.169 .333 .144 -.121 1.000 source: spss 20.0 when explanatory variables in the model have correlation of sufficient magnitude to negatively impact the model especially beta weight (via standard errors and statistical significance levels associated with beta weight), we say there exists collinearity or multi collinearity. according to gujarati (2004).if multicollinearity is perfect in the sense of (exact linear relationship among variables), the regression coefficients of the x variables are indeterminate and their standard errors are infinite. if multicollinearity is less than perfect, as in (explanatory variable are intercorrelated but not perfectly), the regression coefficients, although determinate, possess large standard errors (in relation to the coefficients themselves), which means the coefficients cannot be estimated with great precision or accuracy. a prior correlation analysis was carried out of the variables in order to detect multicollinearity problems and mitigate against the possible effects it could have on the study. gujarati (2004), explained the existence of collinearity if the pair-wise correlation coefficient is high, and established a threshold of 0.5 and below to explain the acceptability of use of the variable in the model. the researcher therefore set a margin of below 0.5 (-0.5) to show weak linear correlation (positive or negative) between variables, hence higher degree of acceptability for use in the model due to weak possibility of multi-collinearity. between 0.5 (-0.5) to 0.8 (-0.8) indicates a moderate collinearity and 0.8 to 1.0 strong multicollinearity and low acceptability to include the variables within the same models. there is no clear method to employ to eliminate multicollinearity, but expansion of observations, aggregating similar variables, and eliminating redundant variables from the equation, and so on, may reduce the problem of multicollinearity. however, variables need not to be eliminated from the model due to multicollinearity problems, because each explanatory variable has a special piece of information about the dependent variable. table 5 effect of financial leverage on return on assets variables coefficient der dr er tlr ltdr unstandardized beta .556 -47.872 -10.984 -97.310 .256 std error .799 120.830 176.097 423.200 .388 standardized beta .157 -0.50 -.008 -0.037 .256 t-statistics .695 -3.96 -.062 -.230 -.162 sig. t .495 .730 .956 .840 -.898 constant α0 242.032, t = 1.653, t-sig =.114, r .872, r2 = .678, adj r2 = .453 f ratio = 8.338, f.sig = .004 source: spss 20.0 interpretation table 5 above shows a correlation coefficient (r) of .872 this implies that a very strong correlation exists between return on assets and explanatory variables. the coefficient of determination (r²) is .678 which shows that 67.8% of the variation in return on assets is attributable to the variations in the financial leverage. also, the fvalue calculated of 8.338 has a correlation corresponding value of .004 which implies a good model utility. the test of significance conducted as shown in the tables above states that roa has a calculated value of 242.032 and a corresponding significance value/probability value of .014. the positive sign of t-value (1.653) shows the direction of the variables. this therefore implies that when a financial leverage is well used, this leads to a better, reliable and fairer financial result that is objective and represent the true state of affairs in the food and beverage companies proportionately. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 56 table 6 correlation matrices of coefficient of the variables table 6 roe der dr er tlr ltdr roe 1.000 der .57 1.000 dr -.115 .169 1.000 er .052 .091 .357 1.000 tlr -004 -.063 -.122 .300 1.000 ltdr -.343 -.169 .333 .144 -.121 1.000 source: spss 20.0 as explained in table 3 above when explanatory variables in the model have correlation of sufficient magnitude to negatively impact the model especially beta weight via standard errors and statistical significance levels associated with beta weight), we say there exists collinearity or multi collinearity. according to gujarati (2004) if multicollinearity is perfect in the sense of exact linear relationship among variables, the regression coefficients of the x variables are indeterminate and their standard errors are infinite. if multicollinearity is less than perfect, as in explanatory variable are inter-correlated but not perfectly, the regression coefficients, although determinate, possess large standard errors in relation to the coefficients themselves, which means the coefficients cannot be estimated with great precision or accuracy. a prior correlation analysis was carried out of the variables in order to detect multicollinearity problems and militate against the possible effects it could have on the study. gujarati (2004), explained the existence of collinearity if the pair-wise correlation coefficient is high, and established a threshold of 0.5 and below to explain the acceptability of use of the variable in the model. the researcher therefore set a margin of below 0.5 (-0.5) to show weak linear correlation (positive or negative) between variables, hence higher degree of acceptability for use in the model due to weak possibility of multi-collinearity. between 0.5 (-0.5) to 0.8 (-0.8) indicates a moderate collinearity and 0.8 to 1.0 strong multicollinearity and low acceptability to include the variables within the same models. there is no clear method to employ to eliminate multicollinearity, but expansion of observations, aggregating similar variables, and eliminating redundant variables from the equation, and so on, may reduce the problem of multicollinearity. however, variables need not to be eliminated from the model due to multicollinearity problems, because each explanatory variable has a special piece of information about the dependent variable. table 7: effect of financial leverage on return on equity variables coefficient der dr er tlr ltdr unstandardized beta -.061 -2.661 1.674 -2.864 -5.374 std error .938 10.465 2.538 6.262 3.411 standardized beta -.014 -.062 .158 -.104 -.360 t-test -9.465 -8.254 6.660 -.457 -1.576 sig. t .009 .002 .007 .652 0.031 constant α0 568.906, t = 3.310, t-sig =.003, r .772, r2 = .639, adj r2 = .477 f ratio = 7.644, f.sig = .009 table 7 above shows a correlation coefficient (r) of .772 this implies that a very strong correlation exists between return on assets and explanatory variables. the coefficient of determination (r²) is .639 which shows that 63.9% of the variation in return on equity is attributable to the variations in the financial leverage. also, the fvalue calculated of 7.644 has a correlation corresponding value of .004 which implies a good model utility. the test of significance conducted as shown in the tables above states that roe has a calculated value of 568.906 and a corresponding significance value/probability value of .003. the positive sign of t-value (3.310) shows the direction of the variables. this therefore implies that when a financial leverage is well used, this leads to a better, reliable and www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 57 fairer financial result that is objective and represent the true state of affairs in the food and beverage companies proportionately. the results reveal a positive relationship of 5.5% between the value of debt equity ratio and return on assets and a positive relationship of 2.5% between long term debt ratio and return on assets but negative relationship of 47.8%, 10.9% and 97.3% between debt ratio, equity ratio and return on assets. the positive impact of the variables confirms the a-priori expectation of the results and validates the agency theory, the stakeholders’ theory and the tradeoff theory as formulated by mayer in 1983. the positive impact confirm the findings of akhtar, et al (2012) whose result shows that there is a general perception that a relationship exists between the financial leverage and the performance of the companies’ most of the financial performance indicators have positive relationship among leverage and the financial performance when compare with debt to equity ratio while the gearing ratio indicates negative relationships with the leverage indicators. however, equity ratio, total liability ratio and long term debt ratio have positive and significant impact on return on equity of the selected food and beverage firms. this finding is expected and confirms corporate theories such as the agency theory and the stake holders’ theory. it validates existing empirical findings such as akhtar, (2012) that the use financial leverage results in improved financial situation, in another words showing that there is a positive relationship between leverage & the performance of the companies, subai'i (2012) that there is positive relationship between financial leverage & return on investment for all of the economy sectors, al-tally (2014 that positive relationship between financial leverage and performance and the findings of krivogorsky et al (2009) but contradict the findings of enuju and soocheong (2005) that financial leverage does not influence the restaurant firms’ profitability, nazir and saita (2013) that general and admin expense into to sales ratio is negatively related to all four leverage ratio, akbarian (2013) that there is a negative relation between financial leverage and dividend per share and between market risk and economic risk with free cash flow per share positive significant, rao et al. (2007) also confirm the negative relationship between leverage and performance result, jelinek (2007) that firm experiencing an increase in financial leverage during a five year period gradually compared to those which had high leverage degree in the same period has performed less earnings management and the findings of alcock, et al (2013) that funds overall are unable to deliver significant positive out performance on the basis of managerial skill that is unrelated to the exposure to the variation in the underlying market return. the result implies that the more quoted manufacturing firms mix their equity and debt properly, the more return to be generated on equity, assets and investments. the study reveals that the performance indicators of the sampled quoted food and beverage firms can be explained by the influence of financial leverage in addition, nigerian quoted firms performed remarkably well within the period of the study as shown by the data computed from the financial statement. leverage has significant effect on their profitability. conclusions and recommendations this study investigates the effect of financial leverage on the profitability of quoted food and beverage firms in nigeria. the problem of the study therefore emanated from at least two reasons: first, the reform in the nigerian financial market was aimed at simplifying the source of both equity and debt capital for better performance of the quoted firms. for instance the deregulation of interest rate and the financial market was aimed at reducing the cost of capital which is the prerequisite for corporate profitability, second, to validate existing studies on the relationship between financial leverage and profitability of food and beverage firms. in view of the above, the study hypothesized a no significant relationship between measures of financial leverage and two profitability indicators of the quoted food and beverage firms namely; return on equity and return on assets. the findings of the research are based on the result of the tested hypotheses. the result of the study reveals that financial leverage measures have a significant effect on the profitability of the quoted food and beverage firms. in accordance with the research finding that financial leverage explain the variables of quoted firm’s profitability, the study concludes as follows. firstly, both empirical and statistical evidence on the effect of financial leverage on the two profitability indicators namely return on equity and return on assets of the quoted food and beverage firms have significant effect on profitability. from the financial leverage measures, debt equity ratio, debt ratio have negative impact on return on assets, while equity ratio, total liability ratio and long term debt ratio have positive impact on the dependent variable. debt equity ratio and long term debt have positive impact on return on capital employed while debt ratio, equity ratio and total liability ratio have negative impact on the dependent variable. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 58 secondly, the study also concludes that concludes that financial leverage measures of the quoted food and beverage firms fluctuates over the period covered in the study. this may be because of management attempt to formulate optimal capital structure of the firms. recommendations  the management of the firms should work very hard to optimize the capital structure in order to increase the returns on equity and assets. they can do that through ensuring that their capital structure is optimal.  the management of nigerian firms should increase their commitments into capital structure in order to improve earnings from their business transaction.  there is need to caution against the apparent benefits of greater leverage simply as a device for controlling managerial opportunistic behavior. first, debt and equity represent different constituencies with their own competing, and often mutually exclusive, goals. second, as the level of debt increases, the capital structure can change from one of internal control to one of external control.  investors and stakeholders of the quoted food and beverage firms should also  consider the leverage level of any firm before committing their hard earned money as the strength of a firm financing mix determine the quantum of their returns. references abdallah b., (2012). trends in working capital management and its impacts on firm's profitability and value. journal of studies and business research issue. 2(2), 12-30. akbarian, s., (2013). the investigation effect of financial leverage and environment risk on performance firms of listed companies in tehran stock exchange. 8(3), 249 – 255. akhtar, s; 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(2012). the effect of financial leverage and cash flow volatility on earnings management texas a & m international university. zhao, b., wijewardana, w. p., ( 2012 ). financial leverage, firm growth and financial strength in the listed companies in sri lanka', procedia social and behavioral sciences 40(4), 709-715. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 1; 2019 published by american center of science and education, usa 60 financial deepening, financial intermediation and nigerian economic growth: time variant analysis uzokwe grace onyinyechi department of banking and finance rivers state university port harcourt nigeria abstract this study examines financial deepening, financial intermediation and nigerian economic growth. the main purpose is to examine the relationship between financial deepening and nigerian economic growth while the specific objectives are to examine the impact of interest rate, capital market development, rational savings, credit to private sector and broad money supply on the growth of nigerian. secondary data of the variables were sourced from the publications of central bank of nigeria (cbn) from 1981-2017. nigerian real gross domestic product (rgdp) was used as dependent variable while broad money supply (m2), credit to private sector (cps), national savings (ns), capital market capitalization (camp) and interest rate (intr) was used as independent variables. multiple regressions with e-view statistical package were used as data analysis techniques. cointegration test, augmented dickey fuller unit root test, granger causality test was used to determine the relationship between the variable in the long-run and short-run. r 2 , f – statistics and β coefficients were used to determine the extent to which the independent variable affects the dependent variable. it was found from the regression result that broad money supply, credit to private sector have position effect on the growth of nigerian real gross domestic product while national savings, capitalization and interest rate on nigeria real gross domestic product. the co-integration test revealed presence of long-run relationship among the variables, the stationary test indicated stationarity of the variables at level. the granger causality test found bi – variant relationship from the dependent to the independent and from the independent to the dependent variables. the regression summary found 99.0% explained variation, 560.5031, f – statistics and probability of 0.00000. from the above, the study concludes that financial deepening has significant relationships with nigerian economic growth. we recommend that government and the financial sector operators should make policies that will further deepen the functions of the financial system to enhance nigerian economic growth. keywords: financial deepening, financial intermediation, nigerian economic growth, time variant analysis introduction the role of the financial sector in any economy is that of financial intermediation by channeling savings from the area of surplus to that of deficit. this function bridges the savings and investment gap and enhances the realization of macroeconomic goals; it is also the transmission mechanism for the realization of government monetary and macroeconomic policies. there is strong perception of economic growth to be associated with the financial sector development through other sectors such as the real sector (azege, 2014). financial deepening is to improve economic performance through increase competitive efficiency within the financial market thereby indecently benefiting non-financial sectors of the economy (nzoth & okeseke, 2009) theoretically, the main stream economists such as schumpeters (1911), goldsmith (1969), shaw (1973) and mckirion 1973 emphasizes the importance of the financial system in economic growth, for instance, the industrialization process in england was promoted by the development of the financial sector which increase access to financial services such as profit financing (odenum & udeajam 2010). financial deepening is refers to the measures of providing financial services with wider choice of services geared to the development of all level of society (olofin, 2010). the size is usually measured by the monetization ratio and intermediation ratio of the financial system. monetization ratio include money based indicators or liquidity liabilities such as broad money supply to gross domestic product (m2/gdp), intermediation ratios consists of indicators concerning bank-based measures like bank credit to the www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 61 private sector (cp/gdp), (gns/gdp) and capital market based ratio such as the capitalization ratio of stock market (nnanna, 2011).the level of financial deepening reflects the soundness of the financial sector and the ability with which credit are created with respect to lending and deposit rates (ndebbio, 2004). financial deepening theory defined the positive role of financial system on economic growth by size of the size of the sectors activity. well functioning financial institutions enhance overrall economic efficiency, create and expand liquidity, mobilized savings, promote capital accumulation, transfer resources from the traditional non-growth sector to the modern growth inducing sectors and encourage a competent entrepreneur respond development needs of the economy (shitta, 2012). the essence of emphasize on the development of the nigerian financial sector is in the theory of financial repression which posited that efficient utilization of resource via highly organized development and liberal financial system will enhance economic growth. this is the so-called supply led theory of finance-growth nexus. one of the oldest debate in economic has remain the relationship between financial development and economic growth. its root can be traced to schumpeter (1912) when he posited that finance is prominent to economic growth while robbinson (1952) argued that economic growth promote finance. over the years, nigerian government has embarked on structural and institutional policy reforms in the financial sector to deepen the operational efficiency of the institution for the realization sets monetary and macroeconomic goals, for instance the deregulation of interest rate in 1986 was aimed at reducing the cost of fund and allocate financial resources to preferred investors and sectors (anyanwu, 2010). the banking sector consolidation aimed at repositioning the banking sector to be an active player in the global financial market rather than a spectator (toby, 2006), while the internationalization of the nigerian capital market was aimed at attracting foreign real and portfolio investors (onoh, 2007). the extents to which these policies have affected financial deepening for the realization of macroeconomic goals remain a knowledge gap and attract empirical research. however, despite the growing literature on financial sector reforms and economic growth, the effect of various measures of financial deepening on economic has not been captured in previous studies, therefore this study intend to examine the relationship between financial deepening and nigerian macroeconomic growth. literature review financial development and growth theory one of the oldest debates in economics has remained the relationship between financial development and economic growth. its root can be traced to schumpter (1912), when he posits that finance is paramount for economic growth. however, robinson (1952) argues that economic growth promotes financial development. financial markets provide an economy with vital services comprising, for example, the management of risk and information, and the pooling and mobilization of savings (gries et al., 2011). theoretically, the linkage between finance and economic growth may take different forms. on the one hand, the financial sector may affect growth through the accumulation channel and the allocation channel. the accumulation channel emphasizes the finance-induced growth effects of physical and human capital accumulation (pagano, 1993). the allocation channel focuses on the financed-induced efficiency gains in resource allocation that enhances growth (king and levine, 1993). following these considerations, causality runs from finance to growth (supply-leading hypothesis). on the other hand, financial development may also be stimulated by economic growth. for instance, in a growing economy, the private sector may demand new financial instruments and an improved access to external finance. financial activities then simply expand in step with general economic development (robinson, 1952), positing the so-called demand-following hypothesis. additionally, finance and growth may be mutually dependent. the real sector may provide the financial system with the funds necessary to enable financial deepening, eventually allowing for a capitalization on financial economies of scale which in turn facilitates economic development (berthelemy and varoudakis, 1996). the latter hypothesis postulates bidirectional causality. countries with better-developed financial systems are therefore expected to grow faster over long periods of time. following more skeptical views (lucas, 1988), the financial and real sector may also be independent of each other, thereby naturally putting emphasis on other factors that may determine economic development (insignificant causation). supply leading hypothesis the supply-leading hypothesis suggests that financial deepening spurs growth. the existence and development of the financial markets brings about a higher level of saving and investment and enhance the efficiency of capital www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 62 accumulation. this hypothesis contends that well-functioning financial institutions can promote overall economic efficiency, create and expand liquidity, mobilize savings, enhance capital accumulation, transfer resources from traditional (non-growth) sectors to the more modem growth inducing sectors, and also promote a competent entrepreneur response in these modern sectors of the economy. the recent work of dernirguc-kunt& levine (2008) in a theoretical review of the various analytical methods used in finance literature, found strong evidence that financial development is important for growth. to them, it is crucial to motivate policymakers to prioritize financial sector policies and devote attention to policy determinants of financial development as a mechanism for promoting growth. demand following hypothesis the demand-following view of the development of the financial markets is merely a lagged response to economic growth (growth generates demand for financial products). this implies that any early efforts to develop financial markets might lead to a waste of resources which could be allocated to more useful purposes in the early stages of growth. as the economy advances, this triggers an increased demand for more financial services and thus leads to greater financial development. some research work postulate that economic growth is a causal factor for financial development. according to them, as the real sector grows, the increasing demand for financial services stimulates the financial sector. it is argued that financial deepening is merely a by-product or an outcome of growth in the real side of the economy, a contention recently revived by ireland (1994) and demetriades and hussein (1996). according to this alternative view, any evolution in financial markets is simply a passive response to a growing economy. empirical review agu & chukwu (2008) in his effort to ascertain the direction of causality between “bank based” financial deepening variables and economic growth in nigeria found that financial deepening variables and economic growth were positively co-integrated and that there was only one co-integrating vector indicating a stable and sustainable long run equilibrium relationship in the full information maximum like-hood (fml) multivariate johnson. arestis and demetriades (1996), in particular, using twelve countries as case study, show that the direction of causality depends on the variable used and that each country exhibit different results. these results do not exhibit a pattern for developed or developing countries which confirms the hypothesis that institutional considerations and policies of countries do play a role in the relationship between finance and growth. arestis and demetriades (1996) show that king and levines causal interpretation is statistically fragile and that cross-sectional datasets cannot address the question of causality in a satisfactory way. arestis and demetriades 1997), using time series analysis, later conclude that the evidence favors a bidirectional causality relationship between financial development and economic growth. moreover, murinende and eng (1994) find evidence of such bi-directionality in the case of singapore, as do demetriades and hussein (1996) for 16 developing countries. likewise, luintel and khan (1999), who investigate the finance-growth nexus in a multivariate var model, find bidirectional causality between financial development and economic growth in all their sample countries. ndebbio (2004), using an ordinary least square regression framework, finds that financial sector development weakly affect per capita growth of output. he attributed the result to shallow finance and the absence of wellfunctioning capital markets. the finding of nnanna (2004) was more disturbing. he, also using ordinary least square regression technique, concluded that financial sector development did not significantly affect per capita growth of output. nzotta and okereke (2009) based on two stages least analytical framework for a period starting from 1986 t0 2007, concluded that financial deepening did not support economic growth in nigeria. however, afangideh (2009), using three stage least square estimation technique on a data spanning 1970 to 2005, found that a developed financial system alleviates growth financing constraints by increasing bank credit and investment activities with resultant rise in output. the finding of agu and chukwu (2008) is quite different from other authors on nigeria. they employed the augmented granger causality test to ascertain the direction of causality between financial deepening and economic growth in nigeria between 1970 and 2005. their findings revealed evidence to support both demandand supply-leading hypotheses, depending on the financial deepening variable that is used, in addition to the existing literature on finance and economic growth, this study sets to investigate the path of finance-growth nexus in nigeria. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 63 darrat and al-sowaidi (2010) assess the role of information technology and financial deepening in qatar, a fast growing economy. the study employs vector-error-correction modeling technique with its attendant short-run causal dynamics and found that real economic growth in qatar is robustly linked over the long-run to both financial deepening and information technology and concluded that financial development, rather than it, is more critical for enhancing economic growth over the short-run horizon. ardic and damar (2006) analyze the effects of financial sector deepening on economic growth using a provincelevel data set for 1996-2001 on turkey. the period covered was associated with a weakly regulated and relatively unsupervised expansion of the banking sector which led to the 2001 financial crisis. the results indicate that a strong negative relationship between financial deepening, both public and private, and economic growth exists. the study argues that it is possible that financial development may not always contribute to economic growth, and the conditions under which such a contribution takes place should be investigated further. guryay, et al., (2007) examine the relationship between financial development and economic growth. the study employed ordinary least squares technique to show that there is insignificant positive effect of financial development on economic growth for northern cyprus. they posit that causality runs from growth to financial development without a feedback. wadud (2005) examines the long-run causal relationship between financial development and economic growth for three south asian countries namely india, pakistan and bangladesh. he disaggregated financial system into “bankbased” and “capital market based” categories. the study employed a cointegration vector autoregressive model to assess the long-run relationship between financial development and economic growth. the empirical findings suggest that the results of error correction model indicate causality running from financial development to economic growth. waqabaca (2004) examines the causal relationship between financial development and growth in fiji using low frequency data from 1970 to 2000. the study employed unit root test and co-integration technique within a vicariate var framework. empirical results suggest a positive relationship between financial development and economic growth for fiji with causality running from economic growth to financial development. he posits that this outcome is common with countries that have less sophisticated financial systems. nzotta and okereke (2009) examine financial deepening and economic development in nigeria between 1986 and 2007. the study made use of time series data and two stages least squares analytical framework and found that four of the nine variables; lending rates, financial savings ratio, cheques/gdp ratio and the deposit money banks/gdp ratio had a significant relationship with financial deepening and concluded that the financial system has not sustained an effective financial intermediation, especially credit allocation and a high level of monetization of the economy. agu and chukwu (2008) employ the augmented granger causality test approach developed by toda and yamamoto (1995) to ascertain the direction of causality between “bank-based” financial deepening variables and economic growth in nigeria between 1970 and 2005. their co-integration results suggest that financial deepening and economic growth are positively co-integrated. in the toda-yamamoto sense, the study finds that the nigerian evidence supports the demand-following hypothesis for “bank based” financial deepening variables like private sector credit and broad money; while it supports the supply-leading hypothesis for “bank-based” financial deepening variables like loan deposit ratio and bank deposit liabilities. thus, the study concludes that the choice of bank-based financial deepening variable influences the causality outcome. shittu (2012) examines the impact of financial intermediation on economic growth in nigeria with time series data from 1970 to 2010. employing cointegration test and error correction model, he finds that financial intermediation has a significant impact on economic growth in nigeria. azege (2004) examines the empirical nexus between the level of development by financial intermediaries and growth. the study employed data on aggregate deposit money bank credit over time and gross domestic product to establish that a moderate positive relationship exist between financial deepening and economic growth. he concludes that the development of financial intermediary institutions in nigeria is fundamental for overall economic growth. olofin and afangideh (2010) examine the financial structure and economic growth in nigeria by using annual data from 1970 to 2005. small macro econometric model to capture the interrelationships among aggregate bank credit www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 64 activities, investment behaviour and economic growth given the financial structure of the economy was developed. they adopted three stage least square estimation techniques, while counter factual policy stimulations were conducted. the results of these tests indicate that a developed financial system alleviates growth financing constraints by increasing bank credit and investment activities with resultant rise in output. one major outcome of this study is that financial structure has no independent effect on output growth through bank credit and investment activities, but financial sector development merely allows these activities to positively respond to growth in output. odeniran and udeaja (2010) examine the relationship between financial sector development and economic growth in nigeria. the study employs granger causality tests in a var framework over the period 1960-2009. four variables, namely; ratios of broad money stock to gdp, growth in net domestic credit to gdp, growth in private sector credit to gdp and growth in banks deposit liability to gdp were used to proxy financial sector development. the empirical results suggest bidirectional causality between some of the proxies of financial development and economic growth variable. specifically, the study finds that the various measures of financial development granger cause output even at one per cent level of significance with the exception of ratio of broad money to gdp. additionally, net domestic credit was equally found to be driven by growth in output, thus indicating bidirectional causality. the variance decomposition shows that the share of deposit liability in the total variations of net domestic credit is negligible, indicating that shock to deposit does not significantly affect net domestic credit. okoli (2010) examines the relationship between financial deepening and stock market returns and volatility in the nigerian stock market for the period 1980-2009. the study employs the popular garch (1, 1) model. four modeled equations were estimated and analyzed. financial deepening was represented by two variables, the ratio of the value of stock traded to gdp (fd1t) and the ratio of market capitalization to gdp (fd2t). empirical results revealed that financial deepening (fd1t) measured as the ratio of value of stock traded to gdp do not affect the stock market and there is no news about volatility. but financial deepening (fd2t) measured as the ratio of market capitalization to gdp affect the stock market. it indicated that financial deepening reduces the level of risk (volatility) in the stock market. result also recorded that the conditional volatility of returns is slightly persistent. sulaiman, et al., (2012) critically explore the effect of financial liberalization on the economic growth in developing nations with its assessment focusing on nigeria with annual time series data from 1987-2009. the study employs co-integration and error correction model (ecm) by making gross domestic product as a function of lending rate, exchange rate, inflation rate, financial deepening (m2/gdp) and degree of openness as its financial liberalization indices. co-integration result confirms the existence of long run equilibrium relationship while the ecm results show a very high r2 in both the over-parameterized model (95%) and parsimonious model (91%). the study therefore concludes that inancial liberalization has a growth-stimulating effect on nigeria. johannes et al. (2011) using johansen cointegration established positive relationships between financial development and economic growth in the long run and short run for cameroon for the period 1970-2005 for cameroon at 5% level of significance. the result agreed that financial sector development cause economic growth in the long run and the short run. economic growth is as a result of financial sector development. azege (2004) examines the empirical relationship between the level of development by financial intermediaries and growth. the study employed data on aggregate deposit money bank credit over time and gross domestic product to establish that a moderate positive relationship exist between financial deepening and economic growth. he concludes that the development of financial intermediary institutions in nigeria is fundamental for overall economic growth. wadud (2005) examines the long-run causal relationship between financial development and economic growth for 3 south asian countries namely india, pakistan and bangladesh. the study employed a cointegrated vector autoregressive model to assess the long-run relationship between financial development and economic growth. the results indicate causality between financial development and economic growth but running from financial development to economic growth. odhiambho (2004) investigates the role of financial development on economic growth in south africa. the study uses three proxies of financial development namely; the ratio of m2 to gdp, the ratio of currency to narrow money and the ratio of bank claims on the private sector to gdp against economic growth proxied by real gdp per capita. he employed the johansen-juselius cointegration approach and vector error correction model to empirically reveal www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 65 overwhelming demand-following response between financial development and economic growth. the study totally rejects the supply leading hypothesis. waqabaca (2004) examines the causal relationship between financial development and growth in fiji using low frequency data from 1970 to 2000. the study employed unit root test and cointegration technique within a bivariate var framework. empirical results suggest a positive relationship between financial development and economic growth for fiji with causality running from economic growth to financial development. he posits that this outcome is common with countries that have less sophisticated financial systems. unalmis (2002) investigates the direction of causality between financial development and economic growth in turkey using granger non-causality in the context of vec model. the study finds that in the long run, there exists bidirectional causality between financial deepening and economic growth. adam (2011) examines how efficient the financial intermediation process has been in nigeria’s growth performance. the study employed the 2sls approach. the empirical results show that financial intermediation process is sub-optimal and caused by high lending rate, high inflation rate, low per capita income, and poor branch networking. samson & udeaja (2010) examined financial sector development and economic in nigeria. the study unlike most early studies; the major empirical results show that financial deepening does not have influence on economic growth. the var results indicate that changes in net domestic credit impact on economic growth while per capital output also influences net domestic credit and economic growth. changes in deposit liabilities appear to have no major impact on economic growth. more recently, samson & elias (2012) examine the relationship between financial sector development and economic growth in nigeria. it tests the competing financial growth nexus hypothesis using granger causality tests in var framework over the period 1969 to 2009. research methods documentary evidence constitutes the instrument of data collection as the study is based on secondary data. the data is time series collected from the central bank of nigeria statistical bulletin. the data for the study is the aggregate of banking sector credits, market capitalization and foreign direct investment to financial sector and real gdp from 1981-2017. this period is regarded as period of financial liberalization and control. the variables for aggregate banking sector credits, market capitalization, foreign direct investment to financial sector and real gdp met the requirement for the quantitative data available for the study periods of 1980 to 2014. based on this, the hypothesis was tested using vector error correction model. this study is interested in the long run predictive effect of financial sector development on economic growth. the advances in econometric techniques however, enable recent researchers to use techniques such as stationarity tests (i.e. unit root test), cointegration test and causality test in their analysis to reanalyze the traditional regression applied in earlier studies. the steps used in this analysis are discussed below. model specification rgdp = f(cps, ns, capm, intr) ………………………(1) transforming eqn(1) to empirical model rgdp = 0 m21 cps2 ns3 capm4 intr +  ………. 2 where: rgdp = nigerian real gross domestic product m2 = broad money supply cps = credit to private sector ns = national savings capm = capital market performance www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 66 intr = interest rate 0 = regression intercept 1 5 = coefficient of the independent variables to the dependent variable stationarity (unit root) tests we investigate the stationarity properties of the time series data using the augmented dickey fuller (adf) test. according to nelson and plosser (1982), chowdhury (1994) there exist a unit root in most macroeconomic time series. while dealing with time series, it is necessary to analyze whether the series are stationary or not. since regression of nonstationary series on other non-stationary series leads to what is known as spurious (bogus) regression causing inconsistency of parameter estimate. the null hypothesis of a unit root is rejected against the one sided alternative if the t-statistics is less than the critical value. otherwise, the test fails to reject the null hypothesis as a unit root at 5% significance level. co-integration test next, we employ johansen multivariate co-integration test. co-integration is the existence of a long run equilibrium relationship among time series variables. johansen (1988, 1991) pointed out that a linear combination of two or more nonstationary time series may be stationary. if such a stationary linear combination of two or more nonstationary time series exists, the non-stationary time series are said to be cointegrated and may be interpreted as long-run relationship among the variables. the lag length is one and is based on the akaike (1969) information criterion (aic). the lag is taken into account at mckinnon critical values at 5% level. if the residuals from the regression are 1(1) or 2(2), i.e stationary, then variables are said to be co-integrated and hence interrelated with each other in the long run. vector error correction (vec) technique we investigate the direction of causality for the hypotheses using vector error correction (vec) model based causality technique. the presence of co-integrating relationship forms the basis of the use of vector error correction model. eviews econometric software used for data analysis, implement vector autoregression (var)based co-integration tests using the methodology developed by johansen (1991,1995). the nonstandard critical values are taken from osterward lenun (1992). analyses, and discussions this section deals with the presentation, analyses and interpretation of data obtained from publications of central bank of nigeria. the purpose of the study is to investigate the effect of financial deepening on nigerian economic growth. in this study, financial deepening is measured as interest rate, credit to private sector, national savings, capital market proxy by market capitalization and broad money supply while nigerian economic growth is measured as real gross domestic product. presentation of regression results variable coefficient std. error t-statistic prob. c 12700.76 1692.484 7.504211 0.0000 m2 4.333063 0.830968 5.214474 0.0000 cps 1.081742 0.797931 1.355683 0.1869 ns -1394.199 140.6354 -9.913570 0.0000 capm -0.000619 0.001449 -0.427139 0.6728 intr -149.6007 88.60707 -1.688360 0.1033 r-squared 0.990808 mean dependent var 13623.61 adjusted r-squared 0.989040 s.d. dependent var 22098.76 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 67 s.e. of regression 2313.500 akaike info criterion 18.49827 sum squared resid 1.39e+08 schwarz criterion 18.77310 log likelihood -289.9723 hannan-quinn criter. 18.58937 f-statistic 560.5031 durbin-watson stat 1.038689 prob(f-statistic) 0.000000 interpretation of regression result the summary of the relationship between financial deepening using multiple regressions using the ordinary least square analysis is as shown in the table above. the coefficient of r 2 and adjusted r 2 measures the explanatory power of the multiple regression models. from the results there is a high coefficient of determination of 0.990808 r 2 and 0.98040 adjusted r 2 (99.0% and 98%). this implies that the variables in the equation are useful for explaining the level of economic growth to the power of 99.0% and 98.0% between 19802013. the standard error of the estimate also known as the residual standard deviation has values stable for the analysis of the results. the f-statistics is found to 560.5031 with probability of 0.00000 implies that the model is significant at the 5% level, the durbin watson (dw) statistics of 1.038689 shows that there is no problem of serial correlation in the regression models. this is a case of positive serial correlation. this also indicates that the multi-colenarity which other presents in cross-sectional data seems to be non-existence in the models. the estimation results from the regression model indicate that broad money supply; credit to private sector has positive relationship with nigerian real gross domestic product while national savings, capital market and interest rate have negative effect on nigerian real gross domestic product. stationarity test (adf level) variables adf statistics mackinon critical value 1% 5% 10% order of integration rgdp -4.641147 -3.679322 -2.967767 -2.622989 1(1) m2 -3.392431 -3.679322 -2.967767 -2.622989 1(1) cps 4.737006 -3.679322 -2.967767 -2.622989 1(1) ns 7.353168 -3.679322 -2.967767 -2.622989 1(1) capm -5.937106 -3.679322 -2.967767 -2.622989 1(1) intr -3.093153 -3.679322 -2.967767 -2.622989 1(1) source: computed by researcher from e-view 7.0 the stationarity test shows that the variables are stationary; this implies that the null hypothesis of non stationarity is rejected and alternate accepted. johansen’s co-integration test hypothesized trace 0.05 no. of ce(s) eigenvalue statistic critical value prob.** none * 0.927383 182.5713 95.75366 0.0000 at most 1 * 0.782402 111.7624 69.81889 0.0000 at most 2 * 0.750892 70.58449 47.85613 0.0001 at most 3 * 0.509753 33.05808 29.79707 0.0203 at most 4 0.304525 13.81126 15.49471 0.0883 at most 5 * 0.137886 4.005928 3.841466 0.0453 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 68 discussion of findings the achievement of economic growth has been one of the major policy thrust of nigerian government since 1960, this is because economic growth signify the well being of the economy and the people. government recognizes that financial sector can facilitate and enhance the realization of the policy through efficient and effective functioning of the financial market. from the findings of this study, financial deepening in nigeria has significant effect on the growth of nigerian economy, represented by nigerian real gross domestic product. findings reveal that the positive value of 4.433063 as parameter for money supply and 1.081742 as parameter for credit to private sector reveal that an increase of 1% in the variables will lead to increase in real gross domestic product by 4.3% and 1.08%, this finding is expected in the result as theories such as financial intermediation theories has noted that an effective and efficient financial sector is required to achieve economic growth. the finding is also expected because of the various reforms nigerian government has put in place over the years to increase the operational functioning of the financial market such as the financial sector reforms. the findings consolidate the opinions that finance granger cause economic as oppose to the opinion that economic growth granger cause finance. it also validates the demand leading hypotheses as opposed to the supply leading hypotheses. however, findings reveal that with negative coefficient of -1394.199 as parameter for national savings, the negative value of 0.000619 as parameter for capital market development and negative coefficient of 149.6007 as parameter for capital market development indicates that an increase of 1% will lead to decrease in nigeria real gross domestic product by 1394%, 149% and 001%, this finding is contrary to the expectation of the result as the variables are expected to add positively to the growth of nigerian economy. the negative effect of the variables can be traced to the marginal performance of the financial sector such as the financial dualism that contracts deposit mobilization of the formal financial market. it can also be blamed on the financial sector crises within the period of this study, for instance the banking sector crises within the period have the capacity of affecting negatively the economic growth of the country. it can also be traced to monetary and macroeconomic instability within the period of this study. conclusion and recommendations conclusions from the findings in the study, the following conclusions were drawn;  there is positive and significant relationship between broad money supply and the growth of nigerian economy. this finding confirms the a-piroi expectation.  there is positive but insignificant effect between credit to private sector and the growth of nigerian economy.  national savings have negative and significant relationship with the growth of nigerian economy, this findings is the expectation of the results.  capital market development proxy by all share price index has negative but insignificant relationship with nigeian economic growth. this finding is contrary to the study expectation.  interest rate have negative but insignificant relationship with the growth of nigerian economy, the findings is contrary to the expectation of the results.  that 99.0% and 98% variation in nigerian real gross domestic product can be explained by variation in the independent variables in the model. recommendations from the conclusions above, the study makes the following recommendations:  there should be structured monetary and macroeconomic policies that will enhance the performance of the financial system to achieve economic growth.  policies that antagonize the operational efficiency of the financial system should be abolished to enhance the performance of the financial market.  the monetary authorities and operators in the financial market should come up with policies that will enhance the operational performance of the financial system for economic growth.  the financial institutions such as the banking should effectively perform its financial intermediation function to enhance economic growth.  there should be expansionary monetary policy with guided deregulation to enhance availability of investment fund for economic growth. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 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(2007). does financial development precede economic growth? robinson and lucas might be right. applied economics letters, 14, 15–19. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 2; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 28 effect of alternative dispute resolution dimensions on employees’ performance in nigeria work organizations: a theoretical perspective augustine augustine ele department of business management faculty of management sciences university of calabar calabarnigeria p.m.b 1115 e-mail: elenoble2000@yahoo.com anono vitien auquasama department of business management faculty of management sciences ebonyi state university, abakaliki, nigeria e-mail: anonoauqua@gmail.com abstract this research work focused on the effect of alternative dispute resolution dimensions on employees’ performance in nigeria work organizations using a theoretical perspective. the information was sourced from text books, journal articles and internet materials. the study revealed that alternative dispute resolution dimensions or mechanisms such as mediation, arbitration, facilitation, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance and communication has a positive and significant effect on employees’ performance in nigeria work organizations. it also found that alternative dispute resolution has a significant influence on employees ‘performance in the workplace. and there is also a substantial correlation between alternative dispute resolution and employees’ performance in nigeria work organizations. the study recommended that management as well as administrators should adopt adr mechanisms/dimensions in resolving disputes or conflicts among parties in nigeria work organizations in order to reduce cost, save time or avoid delay and being fast in reaching a consensus agreement as well as compromise. keywords: alternative dispute resolution, work organizations, disputes, employees’ performance, nigeria. 1. introduction the origin of alternative dispute resolution (adr) movement started in 1970 that was launched in united states when the american bar association sponsored the national conference on the causes of popular dissatisfaction with the administration of justice. and the conference concluded that the pressure on the congested legal system can be eased by using alternative forms of dispute resolution. it begins as a social movement to resolve community-wide civil rights disputes through mediation, arbitration and as a legal movement to address increased delay and expense in litigation arising from an overcrowded court system. the acronym adr has become a strategic or fundamental concept of conflict resolution management strategy following this conference and adr has grown rapidly and has evolvedfrom experimentation to institutionalization with the support of the american bar association, academics, courts, the u.s. congress and state governments (onuorah, 2019). adr help to fosters communication, creativity and cooperation, to resolve workplace conflict. alternative dispute resolution approaches seek to involve the disputing parties in the resolution of their conflict, thereby increasing the probability that each of them will be more satisfied with the result than a situation in which a manager or a trial judge imposes a decision on the disputing parties (onuorah, 2019). but individual differences possibly will cause misunderstanding and conflicts between individuals and groups in nigeria work organizations due to disagreements in one opinions and interest. mailto:elenoble2000@yahoo.com www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 29 adr dimensions, measures or mechanisms are generally spawned or created and administered by the management of work organizations, in contrast to more traditional dispute resolution instruments that are either generated jointly by managers and union representatives under collective bargaining or imposed by government authority (lipsky, avgar & lamare, 2017). the application of these adr methods as well as practices also represents an explicit recognition by management of the organizational central role that conflict plays in the workplace, something that organizations are often reluctant to do. these developments, thus, represent a substantial shift in the way in which many work organizations have come to view and to deal with workplace disputes as well as conflicts situations (lipsky et al, 2017). dispute or conflict in today’s world is a continuous process and inevitable in every organization, and there is need to find out how to work out harmonious or agreeable resolution to it without letting it escalate (oni-ojo & roland-otaru, 2013). and this can be done successfully through the introduction as well as the application of alternative dispute resolution methods in settling disputes or conflicts among members and organizations in nigeria. disputes among workers in an organization is inevitable. if it is managed properly, it will bring catalyst for change and can have a positive effect on employee performance in organization. but if it is not managed properly it will negatively affects both employee satisfaction in addition to job performance (onuorah, 2019). he further stated that the inability of managers to view and manage workplace disputes systematically has thus rendered conflict dysfunctional in many organizations. this is evidenced by the high occurrence of strike action, unhealthy competitive or conflict between and among sub-units and individuals within an organization, sabotage at workplace, slow work, labour turnover, absenteeism, lack of productivity, general inefficiency, high rate of industrial accident, low morale, withholding of vital knowledge and a host of others that are being perpetrated by workers in workplaces (onuorah, 2019). critical examples are the situational issues of academic staff union of universities (asuu) strike action of 5th november, 2018, that lasted for 4 months, to february, 2019; nlc agitation on new minimum wage since 2018-2019, medical doctors’ strike action, another asuu strike which started february, 2020 till date and other unions industrial actions in nigeria. thus, suitable methods to resolve dispute or conflict need to be addressed and employed in order to resolve conflicts and to produce a better and harmonious working environment. the ability to resolve conflicts successfully is probably one of the most vital social skills and conflict resolution that can be taught of like any other skills in which alternative dispute resolution dimensions or strategies are (aiza, morni, bohari & sahari, 2013). these dimensions or methods of alternative dispute resolution are mediation, arbitration, facilitation, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance, and communication. the effects of dispute or conflict can either be positive or negative, even disastrous, depending on how one confronts it. conflict can assist to raise and address problems, energizes work to be on the highest or best suitable issues as well as aiding people to learn how to gain benefits from their differences (aiza, morni, bohari & sahari, 2013; ajike, akinlabi, magaji & sonubi, 2015). nwadike (2019) dispute or conflict management is the engine room of every organization, since it provides a level play-ground for inters and intra-organizational communication yielded towards firms’ productivity as well as employees’ performance. 2. statement of the problem disputes are primarily an inevitable and systemic part of human existence that cannot be ignored or avoided in nigeria work organizations. over the years or decades, litigation has been the traditional technique of settling disputes that have not given head way in the work organizations. this is because the increasing growth of slow and costly court proceedings have deterred many organizations as well as employers and investors from choosing litigation to resolve their disputes. in spite of the enormous promises of courts reforms, organizations, employees and employers are increasingly looking to alternative dispute resolution, particularly towards arbitration in resolving their internal and external disputes and conflicts in the work place. the processes of litigation has become more expensive, time consuming, challenging and cumbersome and increases in the number of courts cases that have created congestion and delays in their settlement. the differences and complexity of court litigation as well as jurisdiction tends to differ tremendously in the adr approaches or mechanisms and methods in resolving disputes. these methods of arbitration, mediation, negotiation, conciliation, collaboration, compromise, mini-trial and expert determination have not be inculcated in detail in the management of disputes between managers and workers in the nigeria work organizations. increase in costs and delays in settling disputes has led disputants to prefer adr as internal mechanism or strategy in the work organizations in which litigation has not profound sufficient solutions to disputes as well as conflicts situations. but today the dimensions or methods of adr has been disdain and neglected in the settlement of disputes between individuals, groups and the organizations in nigeria. the unwillingness of management to adr mechanisms in resolving disputes in the nigeria work organizations has also posed a challenge. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 30 the processes of litigation has become more expensive, time consuming, challenging and cumbersome and increases in the number of courts cases that have created congestion and delays in their settlement. the differences and complexity of court litigation as well as jurisdiction tends to differ tremendously in the adr approaches or mechanisms and methods in resolving disputes. these methods of arbitration, mediation, negotiation, facilitation, conciliation, collaboration, compromise, mini-trial and expert determination have not be inculcated in detail in the management of disputes between managers and workers in the nigeria work organizations. increase in costs and delays in settling disputes has led disputants to prefer adr as internal mechanism or strategy in the work organizations in which litigation has not profound sufficient solutions to disputes as well as conflicts situations. but today the methods of adr has been disdain and neglected in the settlement of disputes between individuals, groups and the organizations in nigeria. the unwillingness of management to adr dimensions or mechanisms in resolving disputes in nigeria work organizations has also posed a challenge. therefore, this study seeks to examine the effect of alternative dispute resolution dimensions on employees’ performance in nigeria work organizations using a theoretical perspective. 3. theoretical framework the theoretical framework of this research work was anchored on frustration-aggression theory of conflict. this theory was developed by john dollard and his associates in 1939, and has been reformed or amended by other scholars such as leonard berkowitz (1962) and aubrey yates (1962). this theory appears to be the most common explanation for violent behaviour stemming from inability to fulfill needs. the theory used the psychological theories of motivation and behaviour as well as frustration and aggression. in an attempt to explain aggression to mean the difference between what people feel they want or deserve to what they actually get-the-want-getratio, and difference between expected need satisfaction and actual need satisfaction (david, 2006). this implies that where expectation does not meet attainment, the tendency is for people to confront those they hold responsible for frustrating their ambitions. the main explanation that the frustration-aggression theory provides that aggression is not just undertaken as a natural reaction or instinct, but it is outcomes of frustration and that in a situation where the legitimate desires of an individual is denied either directly or by the indirect consequence of the way organization or society is structured, the feeling of disappointment may lead such a person to express his anger through violence that will be directed at those he/she holds responsible or people who are directly or indirectly related to them. the assumptions of this theory were that aggression arises as a result of depriving or blocking of people efforts in attaining their personal goals leading to frustration; that the occurrence of aggressive bahaviour always precedes or presupposes the existence of frustration and existence of frustration always leads to form of aggression; it also assume that frustration causes aggression, but when the source (s) of the frustration cannot be challenged, the aggression gets displaced onto an innocent target; the theory also assume that while frustration prompts a behaviour or change in attitude that may or may not be aggressive, any aggressive behaviour is the direct result of frustration, making frustration not adequate or sufficient, but a necessary condition for aggression. this is to say that frustration creates a need to respond to, and some form of aggression is one possible outcome of frustration. in situations where feelings of frustration become widespread among the parties and the feeling is that people are getting less than they deserve, the most common advice is that government or political leaders can do is to find out what the expectations of such individuals and groups are and to seek ways of negotiating with them. however, in most situations, those in a position of authority believe that giving in to public demands or entering into negotiations is a sign of weakness, just in the cases of asuu and federal government as well as nlc and federal government in nigeria.however, a typical example of the manner in which frustration leads to aggression that in turn creates disputes can be seen in the ongoing crises in the niger delta area of nigeria. after waiting patiently and peacefully agitating for what the people of the region considered as a fair share of the oil wealth that is exploited from their land, youths now take the law into their own hands by vandalizing oil pipelines, kidnapping oil workers for large amount of money and generating problems for those they believe are responsible for their predicaments. the value of this theory in the study is that a particular frustration instigates aggression fundamentally against the expectations of the parties involved or the sources of frustration constituting the primary outcomes of aggression. the adr will assists to address the problems of individuals’ expectations denial by resolving disputes using the appropriate mechanisms of psychological motivational theories for frustration and aggression to be harmonized in a consensus manner in order to reach individual goals’ achievement or fulfillment in nigeria work organizations. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 31 4. review of related literature 4.1 the concept of adr alternative dispute resolution is frequently used to define a wide variety of dispute resolution mechanisms that are small of, or alternative to, complete court processes. it also refer to the whole thing from facilitated settlement negotiations in which disputants are encouraged to negotiate directly with each other preceding to some other legal processes such as arbitration systems or mini-trials that have attributes of a courtroom process. adr remains an enduring feature of the legal system in the society and as an adjunct to courtroom adjudication, that holds promise for an improved and qualitative access to justice for all citizens, while serving as an attractive feature for economic development (uwazie, 2014). adr refers to any means of settling disputes outside of the courtroom involving early neutral evaluation, negotiation, conciliation, mediation, and arbitration (block, 2016). it all encompassing term which refers to multiple non-judicial methods of handling conflict between parties such as mediation, arbitration, neutral evaluation, negotiation, and conciliation (block, 2016). dispute is inevitable among humans or man be it at home, church or in organization, especially when there is an interaction between two or more individuals, groups or organizations, and this is mainly caused by differences in individuals’ perception, goal, interest, ideas, feelings, values, etc., that conflict with each other affairs (john-eke & akintokunbo, 2020). disputes arises when there is a change in situations where change is seen as a threat to be confronted and efficient and effective management of disputes is fundamental to the development of any society, but the prevailing situations in nigeria work organizations constitute a setback of this truth (emerole & ukah, 2018).adr is used normally use to denote procedures and mechanisms for conflict resolution that provide alternatives either to litigation or resort to administrative tribunals established under statute in such areas as equal opportunities and employment discrimination (teague, roche, gormley & currie, 2015). the adoption of adr practices and conflict management systems is seen as a function of proactive and strategic decisions and not simply a reaction to external and internal pressures (lipsky, avgar, lamare & gupta, 2012; in teague, roche, gormley & currie, 2015). 4.2 conflicts in nigeria work organizations conflicts are inevitable part of organizational life since the goals of different shareholders such as managers as well as workers are often incompatible, and it is an unpleasant fact in any organization as far as people compete for jobs, resources, power, recognition and security (hotepo et al, 2010). organizational conflict can be regarded as a dispute that occurs when interests, goals or values of different individuals or groups are incompatible with each other (henry, 2009; hotepo et al, 2010). conflicts or disputes are part of human nature and it is extremely essential to study it not only for theoretical purposes but also for organizational practice (ikeda, veludo-de-oliveira & campomar, 2005; in hotepo, et al 2010). conflict is one of the most significant threats to sustainable development in addition to poverty alleviation and world security (oni-ojo & roland-otaru, 2013). they further stated that there is a close relationship between development and conflict. conflict is a process in which one party suggests that its interests are being opposed by another party, and it is an inseparable part of people’s life as well as a perpetual gift of nature or life in the nigeria work organizations (omisore & abiodun, 2014). oni-ojo and roland-otaru (2013) the conflict situations in nigeria today particularly in nigeria but also at the international scene. the devastating effects of these conflicts such as killings, agitations for resources control, kidnappings of innocent citizens and foreigners’ alike, political protest, destruction of lives and properties, ethnics and tribal violence have become a source of major concern to the government. most of these conflicts arise as a result of social political, economic, religious, cultural, or ethnic and environmental differences. conflict is a reality across organizational boundaries and affects individuals, groups and disciplines. conflict can initiate productive change and vitality if well managed. the consequences of conflict will inevitably be determined by how well it is managed. if not properly managed, it may cause unquantifiable damage to the organizations (ekwoaba, 2016). oniojo and roland-otaru (2013) there have been various cases of conflict in nigeria since her independence in 1960. the niger delta crisis in nigeria, for instance which started as some form of agitation for resource control has escalated to higher proportions. there are also other centers of tension in the country which began from very fundamental agitations. the net effect of disputes and conflicts in nigeria and other african nations is the upsurge in insecurity which threatens human development. in organizations, there have been a lot of disputes, for instance, asuu strikes, nlc strikes demanding for increased in salaries and wages, medical doctors strikes actions, and other unions’ industrials actions in nigeria. 4.3 the process of adr in the nigeria work organizations adr processes are utilized or applied to resolve disputes among employees or between employees and the organization (oni-ojo, iyiola & osibanjo, 2014). the process of adr normally starts with general preparation for www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 32 the disputes to be settled. it involves consultations, invitations sent by management or managers to the appropriate parties involved the gathering of information through investigation, selection of date for the disputes to be settled or resolved. the appointment of the right caliber of participants is followed by a call for silence in the conference hall or office of the organization for effective and efficient resolution. silence is the representation of the sanctity and dignity of the parties involved in the disputes (natukunda-togboa, 2017). the process of adr is also characterized by openness. it is usually conducted in the open as a means of ensuring that subsequent disputants in the organizations learn the process and value systems of the adr. for instance, the process of resolving disputes between asuu and the federal government. and this is why junior workers are advice to listen and observe the seniors in the organizations in order to study the environment and its situations. the adr seeks to promote the application of non-violent approaches to conflict management and dispute resolution. 4.4 measures or dimensions of adr in nigeria work organizations adr methods vary and their processes overlap each other but are all premeditated or planed as alternatives to litigation and also complement each other, which are the most generalpractice of adr. the variety of adr methodologies allows for adaptability to address issues between parties (block, 2016). theseapproaches include mediation, arbitration, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance, communication, etc. the key factor is that all these methods are designed to assist the parties resolve their differences in a manner that is creative and most suited to the particular dispute. i. mediation: mediation is an informal alternative to litigation. this is a collaborative process where a mediator works with the parties to come to a mutually agreeable solution (findlaw, 2019). mediation is usually non-binding. it is a significant method for resolving disputes between managers and workers in the work organizations. mediation involves the use of a neutral third party (i.e., the mediator) to act as a facilitator of settlement discussions (oni-ojo, iyiola & osibanjo, 2014). a mediator does not decide the controversy, but guides negotiations and helps the parties to reach their own agreement. in a typical mediation, the parties personally participate in joint sessions and in private caucuses that the mediator holds with each party and its lawyer. mediation generally involves a neutral third person to facilitate dispute resolution process. the case of nigeria workers suggests that the introduction of in-house mediation can lead to a fundamental change in the way in which disputes are handled and conflict is managed and it also provides a number of important insights that inform our understanding of how such a change can occur (osabiya, 2015). he further stated that the origin of this system lies in the values of human resource managers who saw mediation as a means of improving employment relations and breaking down barriers between management and unions in nigeria work organizations. lipsky, avgar and lamare, (2017) argue that an organization use of either mediation or arbitration to resolve workplace disputes is a function of both its strategic approach to adr and its commitment to the use of such practices. by distinguishing between an organization’s underlying strategic orientations and its commitment to adr. ii. arbitration: arbitration is one of the oldest methods for the resolution of disputes between parties (agarwal, 2001). this is a process similar to an informal trial where an impartial third party hears each side of a dispute and issues a decision; the parties may agree to have the decision be binding or non-binding. it is a simplified version of a trial involving limited discovery and simplified rules of evidence (cornell law school, 2019). the arbitration is leaded and decided by an arbitral panel. to make this panel, both parties must agree and select one arbitrator from each side, and the two arbitrators will select the third party. arbitration hearings normally stays between a few days to a week, and the panel only meets for a few hours per day. the panel then deliberates and issues a written decision, or arbitral award. this method has long been used in labour relations, construction and securities regulation, but is now gaining popularity in other business disputes. for the first time in history of nigeria that arbitration and other forms of adr is given constitutional right and backing as a method of resolving disputes in the work organizations (oddiri, 2004). she specifically stated that section 19(d) of the constitution of the federal republic of nigeria (cfrn), provides for the resolution of disputes by arbitration, mediation, conciliation, negotiation and other mechanisms. iii. facilitation: this is an informal process in which a third party (often someone familiar to the disputing parties, such as a manager) attempts to facilitate communication and the development of an interest-based resolution to the dispute. it involves the process when neutral third party enters into discussions with the parties in order to help the disputing parties resolve the disputes towards consensus agreement. in this www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 33 method, the facilitator focuses majorly on the salient issues or points to improve their chances of reaching an agreement or settlement. iv. conciliation: this is an informal process in which a passive third party is positioned between the disputing parties to create a channel for communication. this is generally done by conveying messages between parties who are unwilling to meet face to face, to identify common interests and to eventually re-establish direct communication. conciliation is the process by which one or more independent person(s) selected by the parties to an agreement generally by mutual consent, either at the time of making the agreement or subsequently when a dispute has arisen between them, to bring about a settlement of their dispute through consensus between the parties by employing various persuasive and other similar techniques (agarwal, 2001). this involves the process of having confidence and faith with the disputing parties. conciliation is an effective means of alternative dispute resolution and can be usefully deployed for organizations, society as well as domestic disputes. v. negotiation: negotiation is a process in which two or more parties hold discussionsin an attempt to develop agreement on matters of mutual concern and benefit (oddiri, 2004). it can also be seen as a process through which multiple parties work together on the outcome of a dispute (oni-ojo, iyiola & osibanjo, 2014). according them, the main elements of negotiation include interdependence, perceived conflict, interaction, and agreement. alternative dispute resolution (adr) consists of a variety of methods to early intervention and dispute resolution. negotiation allows the parties to meet face to face in order to settle the disputes and it also give them the opportunity to control the process and the resolution stages. many of these methods include the use of a neutral individual such as a mediator who can assist disputing parties in resolving their disagreements. adr increases the parties' opportunities to resolve disputes prior to or during the use of formal administrative procedures and litigation that can be very costly and timeconsuming. this is a voluntary and informal process by which the parties to a dispute reach a mutually acceptable agreement (agarwal, 2001). this implies that the parties seek out the best options for each other which culminate in an agreement. at their option, the process may be private. in this process, they may or may not use counsels and there is no limit to the argument, evidence and interests, which may be canvassed. vi. collaboration: this involves the process in which individuals directly confront disputes with favourable attitude that encourages solving the problem at hand as well as generating the best possible solution (inyang, 2008). a win/win strategy based on problem solving where the interests of all parties can be met. this approach results in maintaining strong interpersonal or inter-group relationships, while ensuring that all parties achieve their interests. the win/win approach to dispute management is one in which the problem is viewed as external to the persons involved. the opposing parties collaborate to seek a highquality solution that meets their mutual needs while preserving their relationship. the collaborative approach to conflict is to manage it by maintaining interpersonal relationships and enduring that all parties to the conflict achieve their interests. this attitude toward conflict is one in which the individual acts not only on behalf of his or her self-interest, but on behalf of the other party’s interests as well. upon recognizing that a conflict exists, the individual utilizes appropriate problem solving methods to resolve it. this is a win/win approach, in which the stance of both the parties toward conflict management is win/win. vii. compromise: compromise is an attempt to manage conflict by expecting each person to give up something. this is the mini-win/mini-lost strategy based on a solution that partially satisfies the interests of the parties involved. this approach results in the parties’ attempting to win as much as possible while preserving the interpersonal or inter-group relationships as much as possible. the compromise approach to conflict is to assume that a win/win solution is not possible and adopt a negotiating stance that involves a little bit of winning and a little bit of losing, with respect to both the interests and the relationships of the involved parties. persuasion and manipulation dominate the style. the objective is to find some expedient, mutually acceptable solution that partially satisfies the interests of the parties involved. through compromise, managers try to resolve disputes by convincing each party in the conflict to sacrifice some valuable objectives in order to gain others. decisions reached by compromise are not like to leave conflicting parties feeling frustrated or hostile (anele, 2014). management or employee having compromising style acts to serve as intermediary in concern with self and others, which means a reciprocal relationship to make a mutually acceptable decision (abbas & karage, 2015). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 34 viii. mini-trial: the resolution of disputes through this alternative dispute resolution method is called minitrial. it is relatively a new tool for the resolution of disputes among workers and management in an organization (agarwal, 2001). this is also called exchange of information. mini-trial method is a form of evaluative mediation system, which is a non-binding adr process that assists the parties to a dispute to gain a better understanding on the issues in the conflicts and it enables them to enter into negotiation of settlement on a more informal basis. it is intended to facilitate the exchange of information among members/parties to reach a settlement or agreement. mini-trial is often meaningfully employed after negotiation has failed. ix. expert determination: this is a voluntary process in which a neutral third party or outsider, who is usually expert in the field in which the conflicts or disputes arises, and gives a binding determination on the issues in dispute. it is fast, less costly and private method of resolving disputes. adr allows for more sensitivity towards cultural issues, as well as complete confidentiality of the proceedings in minimizing the publication of questions to claims of title and very real damage to valuation arising from litigation (block, 2016). alternative dispute resolution allows interested parties to explore options, beyond traditional judicial intervention, to handle both local and global commercial and intellectual property disputes. x. good governance: this method of adr use the system of running the affairs of management and workers in positive and progressive manners that are beneficial to the management and the workers of the organizations, which will delivers the public goods. it is characterized by democratic system or participation in decision making, maintenance of law and policies and order, accountability and transparency, responsiveness on the part of the managers, due process, the management policies, competence, division of work, etc. good governance helps to defuse tensions and remove problems as they resolve disputes in the organizations (natukunda-togboa, 2017). here, decision makers make the right decisions as at and when due. xi. communication: this involves the process of sharing and exchanging information between individuals, groups and potential parties in settling a dispute situation. it also involves the process of interacting and relating with others, meaning that parties to a dispute situation still talk. this exchange and sharing of information can help to remove doubt, suspicion and contribute to the process of confidence building in peace keeping among workers and management in an organization. communication is an essential elements of peace building and peace education. it relates to the presence and sharing of accurate information about a dispute or conflict situation, being able to discuss about feelings and concerns of parties, talking about what disputants would like to exchange and discussing the nature and type of dispute, touching on the positions, interests, needs and fears of parties involved. here, communication assumed increased significance following the asuu strike action of 5th november, 2018, that lasted for 4 months. the role of communication in conflict prevention and crisis management stems from the fact that most disputes as well as conflicts have to do with perceptions, assumptions, stereotypes and attitudes, which have been industrialized by disputant parties and others (natukunda-togboa, 2017). wilson (2019) revealed that poor communication between individuals and groups, personality clashes, poor management policies, scarcity of resources, and non-implementation of service circulars, are the major causes of the conflicts in public hospitals of port harcourt, rivers state. 4.5 the concept of employees’ performance employees’ performance can be defined as an art of assessing an organization through measuring the output with the corresponding input equivalence (nwadike, 2019). she further stated that continuous performance is the objective of any organization because only through this, can organizations grow and progress. specifically, it has been argued that more emphasis needs to be placed on early responses to individual employment disputes and the increased use of alternative dispute resolution processes in order to increase employees’ performance in an organization (osabiya, 2015).performance is a cornerstone of productivity and individual performance contributes to the accomplishment of organizational objectives. performance is the function of ability in a multiplicative relationship with motivation, and the elements of performance consist of effectiveness, efficiency, economy, quality, productivity and behavioural performance. however performance can be seen as the way of job or task is done by an individual, a group or an organization to improve its corporate objectives. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 35 4.6 empirical review onuorah (2019) conducted a study on conflict management and organizational performance in nigeria public organization in anambra state. the study was designed to examine the influence of collective bargaining and alternative dispute resolution on organizational performance in anambra state teaching hospital. survey research design was adopted in the study. the population was 1752. sample size was 337 determined through the application of borg and gall (1973) statistical formula. primary data were engaged using a structured questionnaire as the instrument for the study. the study adopted descriptive analysis of multiple regression analysis and correlation analysis using spss version 21 to test and analyze the data. the study revealed that collective bargaining has a significant influence on organizational performance. alternative dispute resolution has a significant effect on organizational performance. the study recommended that management should adopt collective bargaining in managing conflicts in their organization as they are found to be effective in managing conflicts in organization and management should also employ alternative dispute resolution management strategies in their policy formulation as that will ensure that conflicts that may occur within the organization are quickly resolved without disrupting the activities of the organization. the study concluded that conflict management has a positive significant effect on organizational performance in public organizations in anambra state. nwadike (2019) had a study on conflict management strategy and performance in the nigerian breweries plc in south-east, nigeria with particular reference to the nigerian breweries plc in onitsha, owerri, enugu and aba. the objectives of the study were basically to investigate the effect of accommodating strategy, avoiding strategy, collaborating strategy and compromising strategy on organizational performance. the study adopted the survey research design. the population of the study was 1752 respondents of the nigerian breweries, plc in the south-east zone of nigeria. a sample of 337 respondents was drawn from the population using borg and gall (1973) formula, while the questionnaire response rate was 300(80.65%). the hypotheses were tested by the use of pearson moment correlation coefficient and multiple regression analysis through spss computer software version 21. the study revealed that accommodating strategy had a significant positive effect on organizational performance of brewery companies in nigeria, and that avoiding strategy had a significant negative effect on organizational performance. the study also revealed that collaborating strategy had a significant positive effect on organizational performance, and that compromising strategy had a significant positive effect on organizational performance. the study recommended that management of organizations should adopt collective bargaining in managing conflicts in order to be effective in solving organizational problems, and that organizations should try to adopt an inclusive collaborating strategy in conflict management and at the same time strive to involve union leadership/employee representatives in vital decisions that affect the workforce. ekwoaba (2016) had a study on conflict management in government hospitals in mainland local government area of lagos state. a sample size of 100 respondents was randomly selected. the data obtained was analyzed using descriptive statistics such as frequencies, simple percentage with the used of statistical package for social sciences (spss) version 15. the study revealed that causes of conflict includes poor working conditions; poor government remuneration; non-fulfillment of promises by management and government; delay in payment of bonuses and allowances; inadequate medical facilities and infrastructures; disagreement between management and workers’ representative on management style and refusal of government to implement collective agreement. it is suggested that the negative effects of conflict can be addressed by adopting appropriate mechanisms, styles and strategies of collective agreement implementation; collaboration between management and workers representatives; prompt payment of salaries as well as joint decision making between management and employees. osabiya (2015) conducted a study on conflict management and resolution in nigeria public sector. the study adopted experimental survey design. percentages and frequencies were used to analyze the responses collected from the respondents. the study adopted descriptive statistics. the population of the study was 170 employees. the study revealed that conflict can be resolved through compromise between the employees and management. that leadership styles adopted can also lead to conflict in theorganization. the study recommended that workers should be involved in decision-making process in nigeria public service so as to reduce the rate of disputes or conflict. it was concluded that there should be effective communication network between the workers and the management. wilson (2019) examined empirical analysis of the causes and effects of workplace conflicts in public hospitals in rivers state, nigeria, 2009-2014, using university of port harcourt teaching hospital (upth) and braithwaite memorial hospital (bmh). the population was 240. the sample size was 224 respondents from the two hospitals. the data was presented using table with percentages of frequency. the study found that poor communication between individuals and groups, personality clashes, poor management policies, scarcity of resources, and non-implementation of service circulars, are the major causes of the conflicts in the public hospitals. the study also revealed that conflicts have a significant impact on the operations of the upth and bmh. the study www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 36 recommended that strategies should be adopted to reduce workplace conflict and enhance productivity in rivers state public hospitals. said, mori, bidrul, ali, yusof and mat (2016) had a study on the relationship between workplace conflict and job performance using staff in terengganu higher learning institution as a case study. the study adopted convenience sampling technique. the study adopted pearson correlation coefficient and multiple regression analysis to test hypotheses. the study revealed that conflict in communication, organizational structure and personality affect job performance in an organization. the study also revealed that communication is the major factor that affect conflict and job performance. the study also showed that there was a moderate positive relationship existing between communication and job performance. the study recommended that the organization should increase their level of communication in order to reduce the conflict among employees so that employees can perform well in their jobs. mayowa (2015) carried out a study on industrial conflict and its management strategies in selected manufacturing companies. the study revealed that the causes of conflict in manufacturing companies in lagos state, nigeria include poor means of communicating grievances to top managers, unfavorable economic and industrial policies, poor employee compensation and welfare among others. the study concluded that managers should combine strategies such as bargaining, collaboration and avoidance when dealing with industrial conflict to maintain cordial and productive labour-management relationship. hotepo, asokere, abdul-azeezand ajemunigbohun(2010) had a study on empirical study of the effect of conflict on organizational performance in nigeria. the study adopted cross-sectional survey research design and the population was 96 managers. the research revealed that limited resources is the major cause of conflict and that conflicts have both negative and positive effects on organization, but when managed properly, the positive effects can be used to encourage organizational innovativeness and build cooperation among the employees. the study also revealed that the most used means of managing conflict among managers in nigerian service industry is bargaining, collaboration, and avoidance. and concluded that when conflicts are properly managed in organizations, it will lead to the attainment and achievement of organizational goals and objectives. 5. methodology the methodology of this research work was drawn on a theoretical-based approach by sourcing out information from journals, text books, internet materials, and other related sources of information. the study is also supported by experience and observation of the researchers on effect of alternative dispute resolution dimensions or methods on employees’ performance of nigeria work organizations using a theoretical perspective. 6. discussion of findings the study revealed that adr has a positive and significant influence on employees’ performance in nigeria work organizations, since conflicts or disputes are resolve without delay and wasting of time. the finding is supported with the findings of onuorah (2019) which revealed that alternative dispute resolution has a significant effect on organizational performance, and advice that management should also employ alternative dispute resolution management strategies in their policy formulation as that will ensure that conflicts that may occur within the organization are quickly resolved without disrupting the activities of the organization. his study further revealed that collective bargaining has a significant influence on organizational performance. ekwoaba (2016) also revealed that causes of conflict includes poor working conditions; poor government remuneration; non-fulfillment of promises by management and government; delay in payment of bonuses and allowances; inadequate medical facilities and infrastructures; disagreement between management and workers’ representative on management style and refusal of government to implement collective agreement. he advised that the negative effects of conflict can be addressed by adopting appropriate mechanisms, styles and strategies of collective agreement implementation; collaboration between management and workers representatives; prompt payment of salaries as well as joint decision making between management and employees. the study also revealed that the various adr dimensions or methods such as mediation, arbitration, facilitation, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance and communication has a positive and substantial effect on employees’ performance as well as the overall corporate performance of nigeria work organizations.the result agreed with the findings of nwadike (2019) which revealed that accommodating strategy had a significant positive effect on organizational performance of brewery companies in nigeria, and that avoiding strategy had a significant negative effect on organizational performance. she also found that collaborating strategy had a significant positive effect on organizational performance, and that compromising strategy had a significant positive effect on organizational performance.wilson (2019) found that www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 37 poor communication between individuals and groups, personality clashes, poor management policies, scarcity of resources, and non-implementation of service circulars, are the major causes of conflicts in the public hospitals. hotepo, asokere, abdul-azeez and ajemunigbohun (2010) also revealed that limited resources is the major cause of conflict and that conflicts have both negative and positive effects on organization, but when managed properly, the positive effects can be used to encourage organizational innovativeness and build cooperation among the employees. they also revealed that the most used means of managing conflict among managers in nigerian service industry is bargaining, collaboration, and avoidance. mayowa (2015) revealed that the causes of conflict in manufacturing companies in lagos state, nigeria include poor means of communicating grievances to top managers, unfavorable economic and industrial policies, poor employee compensation and welfare among others. osabiya (2015) revealed that conflict can be resolved through compromise between the employees and management. said et al (2016) revealed that conflict in communication, organizational structure and personality affect job performance in an organization. they also revealed that communication is the major factor that affect conflict and job performance, and that there was a moderate positive relationship existing between communication and job performance. 7. implications of the study the study will contribute to effective resolution of disputes among parties with the implementation of adr dimensions and its due process without delay and wasting of time. adr dimensions or mechanisms such as mediation, arbitration, facilitation, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance and communication have a significant effect on employees’ performance in nigeria work organizations. arbitration, mediation, communication, collaboration as well as negotiation have positive influence on employees’ relationship with management in the nigeria work place. adr methods or mechanisms help to enhance employees’ performance and productivity in the work organizations continuously. 8. conclusion the fact has been appropriately established in this study that adr dimensions or mechanisms such as mediation, arbitration, facilitation, conciliation, negotiation, collaboration, compromise, mini-trial, expert determination, good governance and communication, if properly applied in the settlement of disputes among parties, will enhance employees’ performance/productivity as well as organizational performance. this is because, if organizations do no employ adr methods in resolving conflicts between employees and management or among workers, employees’ performance and productivity may continue to decline.therefore, the establishment of the national industrial court of nigeria adr centre and its associated rules is seen as a welcome development and a positive departure from the previously regime of inflexible approach to disputes’ issues in nigeria work organizations. adr dimensions as well as mechanisms have long been incorporated in some advanced jurisdictions of the world and our country cannot be exempted, but it has existed long ago specifically in the traditional mode of dispute resolution. adr is a proactive and corrective measure employed in the settlement of disputes and conflicts without litigation or outside the courtroom or systems in the nigeria work organizations. adr has a significant influence on organizational and employees’ performance in the nigeria work organizations. the adr mechanisms or methods such as arbitration, mediation, negotiation, collaboration, compromise, good governance, communication, facilitation, expert determination, mini-trial, etc. if applied appropriately would have significant effects on the peaceful existence of the nigeria work organizations. adr is a critical pillar for good governance, given its contributions and vital roles play in complementing formal legal systems in nigeria by enhancing access to quick justice in terms of costs and time. the study also concluded that arbitration, mediation as well as negotiation have positive influence on employees’ relationship with management in the work place. 9. recommendations based on the findings, the study recommended that:  management as well as administrators should adopt adr mechanisms/ dimensions in resolving disputes or conflicts among parties in nigeria work organizations in order to reduce cost, save time or avoid delay and being fast in reaching a consensus agreement and compromise.  management, mangers as well as expert should adopt the various mechanisms of adr in resolving disputes between management and workers of the work organizations depending on the situation or circumstances, since there is no one best method in solving organizational conflicts and problems.  management, managers as well as legal experts should adopt or apply the various adr dimensions/mechanisms/methods based on the nature and type of the disputes in the organization, etc. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 38 references abbas, s. m. s. & karage, a. i. 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(2014). alternative dispute resolution and peace building in africa. united kingdom: cambridge scholars publishing. uwazie, e. e. (2011). alternative dispute resolution in africa: preventing conflict and enhancing stability. a publication of the african center for strategic studiesafrica security brief, 16, 1-6. wilson, g. (2019). empirical analysis of the causes and effects of workplace conflicts in public hospitals in rivers state, nigeria, 2009-2014.international journal of research in arts and social sciences, 7(2), 230-239. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 1; 2019 published by american center of science and education, usa 20 macroeconomic variables and private investment: a two dimensional study from nigeria economy mrs. fortune bella charles m sc department of banking and finance, rivers state university, rivers state, nigeria charles ugochukwu okoro m sc. department of accountancy ken saro-wiwa polytechnic, bori rivers state abstract the study investigated the impact of macroeconomic variables on private investment in nigeria for the period 1990 to 2016. to achieve these objectives, the study tests for the study modeled private equity and private real investment as the function exchange rate, financial sector development, and interest rate, openness of the economy, real gross domestic product, inflation rate and broad money supply. ordinary least square method of data analysis was used. from model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. the coefficient of determination (r 2 ) proved that the independent variables can explain 62 percent variation on private real investment; the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. the effect of macroeconomic variables on private equity investment was presented in model two. the study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. the r 2 proved that the independent variables can predict 66.9 percent variation on private equity investment. the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. we conclude that macroeconomic variable have significant effect on private investment in nigeria. we recommend that interest rate must be able to encourage higher private investment by increasing the real interstate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. policies should be formulated by investors and government to discourage factors that affect negatively private investment. keywords: macroeconomic variables, private investment, nigeria economy, interest rate, money supply. introduction the neoliberal view by galbis (1979) emphasizes the importance of financial deepening and high interest rates in stimulating growth through investment. the proponents of this approach, mckinnon (1973) and shaw (1973) offered a theoretical and empirical foundation for the relationship between financial factors and investment in developing countries. they argue that developing countries suffer from financial repression and that if these countries were liberated from their repressive conditions, savings, investment and growth would be induced to increase. the underlying assumption of the model is that saving is responsive to interest rates, thus higher saving rates would finance a higher level of investment, leading to higher growth gemech and struthers, 2003). financial repressive policies such as interest rate ceiling, minimum/maximum lending rates, quantity restrictions on lending, bank reserve requirements, capital controls, interalia, cause real interest rates to be negative and unstable especially in the presence of high inflation in an economy. according to their argument, a repressed financial sector discourages both saving and investment because the rates of return are lower than what could be obtained in a competitive market. as www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 21 a result, financial intermediaries do not function at their full capacity and fail to channel saving into investment efficiently, thereby hampering the development of the whole economic system (reinert et al., 2008). mckinnon and shaw proposed that financial liberalization, which involves the removal or elimination of restrictions and controls on financial markets and financial institutions associated with higher real interest rates would stimulate saving and investment by reducing the financial constraint of firms and stimulate financial intermediaries to become more efficient, these will help to improve the efficiency of financial intermediation in a country, and contribute more to private sector investment thereby resulting in higher economic growth rates (hermes and lensink, 2005). thus in the neoliberal view, investment is positively related to the real rate of interest. the reason for this is what mckinnon calls the conduit effect where a rise in interest rates increases the volume of financial savings through financial intermediaries and thereby raises investible funds. the above theories and analysis on factors that determine investment are appealing but failed to explain the case of the developing countries like nigeria. for instance nigerian business environment is rated one of the most challenging in the world, there are various issues of policy conflict and policy mismatch. increase in fiscal policy when there is contractionary monetary policy can affect macroeconomic variables and domestic real and portfolio investment. there are many studies on factors that determine investment, some of the studies focused on one type of investment. for instance lucky and uzah (2016) examined monetary policy transmission mechanism and domestic real investment in nigeria. this study examined macroeconomic factors that determine real and portfolio investment in nigeria. literature review theory of investment keynesian theory of investment in the general theory, keynes (1936) emphasized the central role of investment as the driving force of influencing aggregate output, employment, and short run fluctuations in economic activity. the theory emphasizes that investment is the result of firms harmonizing the expected return on new capital, referred to as the marginal efficiency of capital (mec), and with the cost of capital, which depends primarily on the real interest rate. the theory maintains that at lower rates of interest, more capital projects appear financially viable while higher interest rates lead to some projects being postponed or cancelled since the cost of borrowing to finance investment become higher. to the keynes since investment is volatile and dependent on firms’ expectations of the profitability of investment, so long as the expected yield on their investment exceeds the real interest rate, new investment will take place. keynes rejected the notion that investment was based exclusively on technological conditions of capital productivity, but emphasized monetary factors and finance and uncertainty as the basic determinants of investment (fazzari, 1989). the rigid accelerator theory the simplest theory of investment demand is the rigid accelerator model formulated by clark (1917). in its simplest form, the rigid accelerator theory of investment states that investment is proportional to the increase in output which is proxy by changes in demand in the coming period. thus, the accelerator model relates investment to changes in demand and proposes that an increase in a firms output will require a proportionate increase in its stock of capital. the theory basically assumes that firms‟ desired capital-output ratio is roughly constant and net investment takes place when output is expected to increase. in effect, the theory implies that the level of output or the changes in aggregate demand determines investment or the change in capital stock. mathematically, this proposition of the theory is expressed as kt* = σy, where σ is the desired capital-output ratio which is assumed to be constant, kt* is the desired capital stock in period t, and yt is the level of output in the same period. the mckinnon-shaw hypothesis the neoliberal view by emphasizes the importance of financial deepening and high interest rates in stimulating growth through investment. according the work of mckinnon and shaw (1973), which offered a theoretical and empirical foundation for the relationship between financial factors and investment in developing countries, developing countries suffer from financial repression and that their liberation from these repressive conditions, investment, savings and growth would be induced to increase. the important assumption of the model is that saving is responsive to interest rates, thus a higher saving rates would finance a higher level of investment, leading to higher growth (gemech and struthers, 2003). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 22 according to their argument, a repressed financial sector discourages both saving and investment because the rates of return are lower than what could be obtained in competitive market. as a result, financial intermediaries do not function at their full capacity and fail to channel saving into investment efficiently, thereby hampering the development of the whole economic system (reinert et al., 2008). empirical review yamori (1995) using instrumental variable technique from the period 1975-1988; delke (1996) reported results consistent with the hypothesis of feldstein-horioka for japanese data. similarly, palley (1996) tested the causal relationship between saving and investment over the sample period 1973-1995 using granger causality test for united state. the results showed that investment has a negative effect on personal saving and independent of government saving. also, personal saving negatively affects government saving, thereby concurring with the keynesian paradox of thrift thereby disputing f-h puzzle. ozmen and parmaksiz (2003) used johansen cointegration technique and engle and granger two-step residual-based approach to cointegration to test for the feldstein-horioka puzzle for uk economy in the period 1948-1998. the authors concluded that there exist a long run relationship between saving and investment, thereby lending support to the feldstein-horioka puzzle. payne (2005) employed engle-granger and error correction model (ecm) to study the relationship between saving and investment in mexico over the period 1960-2002. the results showed that savings and investment are cointegrated, thereby indicating low capital mobility in accordance with f-h hypothesis. however, the coefficient of error correction model is positive and statistically significant with a binding intertemporal budget constraint and an adjustment parameter of 0.242. narayan (2005) studied the relationship between investment and saving for the period 1960-1999 by applying autoregressive distributed lag (ardl) model and granger causality test for japan. the author found long run relationship between saving and investment which suggest that there must be granger causality in at least one direction. therefore, the granger causality test results suggest bidirectional causality relationship between saving and investment. thus, lending support to feldstein and horioka (1980) hypothesis. singh (2008) examined the long run relationship between saving and investment to determine the degree of capital mobility using two-step residual-based test, autoregressive distributed lag (ardl) model and granger causality test from the period 1950-51 to 2001-02. the results revealed long run relationship between saving and investment in india, supporting the feldstein-horioka hypothesis. mishra et al. (2010) studied the dynamic relationship between savings and investment in india for the period 195051 to 2008-09 by employing johansen cointegration technique and granger causality test via vector autoregressive framework. the authors found the presence of long run equilibrium relationship between saving and investment in india. the granger causality test revealed directional causal relationship between the variables under study. seth (2011) applied engle-granger and error correction model (ecm) to investigate the long run relationship between saving and investment for india from the period 1980-2008. the results showed long run relationship between savings and investment. the results also revealed long run equilibrium relationship between corporate savings and corporate investment. the former supports low capital mobility into india, whereas the latter revealed that corporate sectors dependency on their fund for investment. tang and lean (2008) applied rolling windows bounds test to empirically investigate the relationship between savings and investment over the period 1960-2007 for malaysia. the study showed that savings and investment are not cointegrated implying that capital is internationally mobile over the same period. shahbaz et al. (2010) analyzed savings and investment correlation through the application of autoregressive distributed lag (ardl) bounds testing for cointegration through error correction model (ecm) for pakistan from period1976-2006. the authors reported long run relationship among savings, domestic investment, inflation, real exchange rate, and financial development which invariably indicate inadequate capital mobility in the country. adebola and dahalan (2012) investigated the relationship between savings and investment nexus for tunisia from the period 1970-2009 by employing autoregressive distributed lag (ardl) model and granger causality test. the www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 23 authors found the existence of long run relationship when investment is taken as dependent variable. the results of granger causality test revealed two-way relationship justifying the low capital mobility as suggested by fh hypothesis. empirical studies also emerged from a panel of oecd countries. krol (1996) examined the relationship between saving and investment using data for 21 oecd countries covering the period 1962-1990 by employing fixed effects estimates. the results reject the idea that capital is highly mobile internationally. jansen (1996) re-examined the relationship between savings and investment for 23 oecd countries spanning the period 1951-1991 using error correction model (ecm). the author revealed evidence of cointegration between saving and investment which invariably indicating an in capital mobility within the oecd. another study by hussein (1998) for 23 oecd countries over the period 1960-1993 to test the feldstein-horioka hypothesis by applying dynamic ordinary least square (dols). the results revealed that international capital mobility in 18 out 23 is very low, while the results suggest a moderate change in canada, denmark, finland, greece and sweden. kasuga (2004) investigated the relationship between savings-investment nexus for 23 oecd and 79 non-oecd countries spanning 1980-1995. the author employed ordinary least square (ols) and instrumental variables. the results revealed that if domestic saving increases net worth, it increases domestic investment. therefore, the study suggests that the impact of domestic saving depends on financial system and their development. pelgrin and schich (2008) applied a panel error correction model (ecm) to analyze the long run relationship distinctly from the short run adjustment via the autoregressive distributed lag (ardl) model in addition to dynamic fixed-effects estimator (dfe), pooled mean group (pmg) estimator and mean group estimator (mge) for 20 oecd countries from 1960-1999. the authors found that saving and investment have long run cointegration relationship that is consistent with the interpretation that a long run solvency constraint is binding for each country. raoet al. (2010) applied the bludell and bound systems gmm method and structural breaks tests of mancinigriffoli and pauwels to test the feldstein-horioka from the period 1960-2007 for a panel of 13 oecd countries. the results evidenced that the feldstein-horioka hypothesis is valid in the pre-bretton woods period and international capital mobility was negligible even though there has been a significant improvement in international capital mobility in the oecd countries. last but not least, another group of studies examine if the puzzle also holds in country groups other than the oecd countries. mamingi (1997) tested the savings and investment correlation by employing ordinary least squares and fully modified least squares for 58 developing countries over the period 1970 1990. the author revealed that many developing countries are financially integrated in the long run. the results further showed that saving and investment correlation for low-income countries is higher than those for middle-income countries, using japan and 10 other asian countries data by employing johansen framework covering the period 1950-1999. sinha (2002) revealed long run relationship between savings and investment for myanmar and thailand. the study also showed that the growth of the saving rates granger causes the growth rate of investment rates for malaysia, singapore, sri lanka and thailand. however, causality runs from investment rates to saving rate for hong-kong, malaysia, myanmar and singapore. chakrabarti (2006) re-examined the relationship between saving and investment by employing multivariate heterogeneous panel cointegration for the panel of 126 countries spanning 1960-2000. the author found a significant positive association between the ratio of gross domestic investment to gdp and the ratio of gross domestic saving to gdp ranging from 0.58 to 0.81. the evidence of cointegration and a significant positive correlation between saving and investment may indicate a low degree of financial integration in the world capital markets, which is the basis for the fh hypothesis. telataret al., (2007) studied the relationship between savings and investment for 10 european countries over the period 1970-2002 by applying a markov-switching model which allowed data to be drawn from two different states-high capital mobility and low capital mobility-and extent it to allow variances to change among different regimes. the authors found a low correlation between savings and investment for belgium, denmark, finland, france, italy and sweden. while, no single switching point in the regime of capital mobility measuring the degree of correlation between national savings and national investment was reported for the remaining countries. kim et al. (2007) applied generalized least square (gsl) estimation by iterating the seemingly unrelated regression (sur) system using the newly computed covariance and system equation estimates for big three (china, malaysia, and korea), asean countries and greater china (hong kong, taiwan, and china) covering the period 1980-2002. the www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 24 authors concluded that the saving-investment correlation in east asia steadily decreases over time but is still higher than that of the oecd countries. ketenci (2012) used gregory and hansen and johansen approach to cointegration to measure long run relationship between savings and investment for 23 eu countries for the period 1995-2009. the author showed that there is evidence of cointegration in all cases except for estonia and portugal. the low level saving-retention coefficient estimated in the presence of structural breaks revealed high capital mobility in most of the countries under study disputing the feldstein-horioka hypothesis. dixit and pindyck (1994) suggested that increased uncertainty caused by exchange rate variations reduces investment given the irreversibility of investment projects and, hence, increases the value option of delaying expenditures. jayaraman (1996) in his cross-country study on the macroeconomic environment and private investment in six pacific island countries observed a statistically significant negative relationship between the variability in the real exchange rate and private investment. thomas (1997) in his study of 86 developing countries examined data on terms of trade, real exchange rates, and property rights and concluded that while factors including credit availability and the quality of physical and human infrastructure are important influences, uncertainty in the foreign exchange rate was negatively related to private investment in sub-saharan countries. gómez (2000) in a study titled exchange rate volatility effects on domestic investment in spain argue that there is no unique expected exchange rate effect on investment, its sign and importance remaining as a mainly empirical question. bakare (2011) carried out an empirical analysis of the consequences of the foreign exchange rate reforms on the performances of private domestic investment in nigeria adopting the ordinary least square multiple regression analytical method. the multiple regression results showed a significant but negative relationship between floating foreign exchange rate and private domestic investment in nigeria. the findings and conclusion of the study support the need for the government to dump the floating exchange regime and adopt purchasing power parity which has been considered by researchers to be more appropriate in determining realistic exchange rate for naira and contribute positively to macroeconomic performances in nigeria. kanagaraj and ekta (2011) examined the level of foreign exchange exposure and its determinants in indian firms and it was found that only 16 percent of the firms had exchange rate exposure at 10 percent level of significance. about 86 percent of the firms are negatively affected by an appreciation of the rupee which confirms that indian firms are net exporters. on the determinants of exchange rate exposure, the study reveals that export ratio is positively and hedging activity is negatively related to the exchange rate exposure of pure exporter firms. nazar and bashiri (2012) investigates the relationship between real exchange rate uncertainty and private investment in iran for the period of 1988 to 2008 by using quarterly data and applying bivariate generalized autoregressive conditional heteroskedasticity (bivariate garch) model in the iranian economy. the study reveal that real exchange rate uncertainty significantly influences private investment and has a negative effect on it and that private investment uncertainty affects the level of private investment, negatively. lucky and kingsley (2016) examined factors that determine nigerian capital formation. the objective was to test jhingans propositions for sources of capital formation in nigeria. time series data were sourced from central bank of nigeria (cbn) statistical bulletin. nigerian gross fixed capital formation (gfcg/gdp) was modeled as the function of broad supply (m2/gdp), credit to private sector (cps/gdp), gross national savings (gns/gdp), commercial banks lending rate, exchange rate (exr), inflation rate (infr), external debt (extd/gdp), public expenditure (pex/gdp), government revenue (gr/gdp), terms of trade (tt/gdp) and operating surplus (ops/gdp). cointegration test, augmented dickey fuller unit root test, granger causality test and vector error correction model were used to test the dynamic relationship between the variables. findings proved that m2/gdp, gns/gdp, exr, extd/gdp, tt/gdp have negative and insignificant effect on capital formation while cps/gdp, lr, infr, pex/gdp, gr/gdp and ops/gdp have positive and insignificant effect. the model summary revealed 86.0% explained variation and f-statistics 12.38458 probability of 0.000004. the study concludes that the variables have significant impact on nigerian gross fixed capital formation and confirm the jhingan’s proposition. adelowokan adesoye & balogun (2015) examines the effect of exchange rate volatility on investment and growth in nigeria over the period of 1986 to 2014. the vector error correction method, impulse responses function, cointegration and augmented dickey fuller (adf) test for stationarity were employed to capture the interactions between the variables. the results confirm the existence of long run relationship between exchange rate, investment, www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 25 interest rate, inflation and growth. finally the results show that exchange rate volatility has a negative effect with investment and growth while exchange rate volatility has a positive relationship with inflation and interest rate in nigeria. chowdhry and wheeler (2008) in an empirical analysis studied the relationship between volatility of exchange rate for the four developed countries of canada, japan, united state and united kingdom. using a number of variables this study applied vector auto regressive (var) approach and found that shocks to exchange rate volatility have positive and significant impact on flow of fdi. akeju (2014) examined the impact of real exchange rate on terms of trade and economic growth which relies on cointegration techniques and error correction model using annual data covering from 1980-2012. it was revealed that a real exchange rate moves along the same direction with terms of trade in the long run. rasaq (2013) examined the impact of exchange rate volatility on the macro economic variables in nigeria and findings shows that exchange rate volatility has a positive influence on gdp, fdi and trade openness with a negative influence on the inflationary rate in the country. ndikumana (2014) searched the implications of monetary policy for domestic investment through its impacts on bank lending to the private sector and interest rates in subsaharan african countries, the study based on a sample of 37 sub-saharan african countries over 1980-2012, the study found that monetary policy affects domestic investment negatively indirectly through the bank lending or quantity channel, as well as directly through the interest rate or cost of capital channel. zulkefly abdul karim (2010) searched the impacts of monetary policy on institutions‟ investment in malaysia, the study used dynamic neoclassical framework in an autoregressive distributed lagged (ardl) mode, the study showed the impact of monetary policy on institutions investment spending, the study also reveal that the impact of monetary policy channels to the institutions investment are heterogeneous, therefore the small institutions that faced financial constraint responded more to monetary tightening as compared to the large institution. tobias and mambo (2012) searched the impacts of monetary policy on private sector investment in kenya during (1996-2009) by tracing the impacts of monetary policy through the transmission mechanism to explain how investment responded to changes in monetary policy, they founded that government domestic debt and treasury bill rate are inversely related to private sector investment, while money supply and domestic savings have positive relationship with private sector investment consistent with the islam model. lucky and uzah (2017) examined the effects of monetary policy transmission mechanisms on the domestic real investment in nigeria, time series data were sourced from central bank of nigeria statistical bulletin from 1981 to 2015. domestic real investment was modeled as the function of percentage of credit to private sector to gross domestic product, naira exchange rate per us dollar, maximum lending rate, monetary policy rate, prime lending rate, net domestic credit, savings rate and treasury bill rate. granger causality test and johansen co-integration test in the vector error correction model (vecm) setting were employed. durbin watson, β coefficient, r-square (r2) and f-statistics were used to determine the relationship between the dependent and independent variables as formulated in the regression models. the result proved that cps/gdp, mlr, mpr, ndc and sr have positive relationship with nigeria real domestic investment while exr, plr, and tbr have negative relationship with domestic real investment. the cointegration test proved the present of long run relationship between monetary policy variables and domestic real investment. the adf test prove that the variables are stationary at first difference, the granger causality test proved both bi-directional, uni-directional and independent relationship running from the independent variables to the dependent variable and from the dependent variable to the independent variables. the error correction model proved that the speed of adjustment is adequate while the parsimonious error correction model proved that mpr and sr have positive relationship while exr and plr have negative relationship. from the regression summary, the study concludes that monetary policy transmission mechanism has significant relationship with nigeria domestic real investment. research methodology the research objectives were addressed using empirical analysis of macroeconomic variables that determine corporate investment in nigeria. private real investment and private traded equities on the floor of nigerian stock exchange as dependent variable. the required data was sourced from central bank of nigeria statistical bulletin from 1990-2016. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 26 model specification the model specified in this study is based on the classical monetary theory of interest rate and investment. pei = f(exr,fd,intr,ope,rgdp,ifr,m2) pei = 0 xre1 fd2 ntri3 ope4 rgdp5 ifr6 27m  1 pri = f(exr,fd,intr,ope,rgdp,ifr,m2) pri = 0 xre1 fd2 ntri3 ope4 rgdp5 ifr6 27m  2 where pei = private equity investment pri = private real investment exr = exchange rate fd = financial sector development intr = interest rate ope = openness of the economy rgdp = real gross domestic products ifr = inflation rate m2 = broad money supply  = error term stationarity (unit root) tests the study investigates the stationarity properties of the time series data using the augmented dickey fuller (adf) test. according to nelson and plosser (1982), chowdhury (1994) there exist a unit root in most macroeconomic time series. non stationary time series will have a time varying mean or a timevarying variance or both. if a time series is non stationary, we can study its behaviour only for the time period under consideration, and cannot generalize it to other time periods, and hence remain of little practical value if we intend to forecast (gujarati, 2003). it should be noted that a time series is a set of observations on the values that a variable takes at different times (daily, weekly, monthly, quarterly, annually, etc). stationary test therefore checks for the stationarity of the variables used in the models. if stationary at level, then it is integrated of order zero which is 1(0). thus, test for stationarity is also called test for integration. it is also called unit root test. stationarity denotes the non existence of unit root. etyiyy t m i tt     1 1 121  3 where: ty = change time t 1 ty = the lagged value of the dependent variables t = white noise error term if in the above  =0, then we conclude that there is a unit root. otherwise there is no unit root, meaning that it is stationary. the choice of lag will be determined by akaike information criteria. decision rulet-adf (absolute value) > t-adf (critical value) : reject ho (otherwise accept h1) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 27 note that each variable will have its own adf test value. if the variables are stationary at level, then they are integrated of order zero i.e 1(0). note that the appropriate degree of freedom is used. if the variables are stationary at level, it means that even in the short run they move together. the unit root problem earlier mentioned can be explained using the model: y= yt-1 + i 4 where; yt is the variable in question; i is stochastic error term. equation (a) is termed first order regression because we regress the value y at time “t” on its value at time (t1). if the coefficient of yt-i is equal to 1, then we have a unit root problem (non stationary situation). this means that if the regression. y= yt-1 + i 5 where y and i are found to be equal to 1 then the variable yt has a unit root (random work in time series econometrics). if a time series has a unit root, the first difference of such time series are usually stationary. therefore to salve the problem, take the first difference of the time series. the first difference operation is shown in the following model: y=(l-1)yt-1i 6 yt-1 + i 7 (note:  =1-1= 0; where l =1; yt = yt yt-i) 8 integrated of order 1 or i (i) given that the original (random walk) series is differenced once and the differenced series becomes stationary, then the original series is said to be integrated of order i or i (1). integrated of order 2 or i (2) given that the original series is differenced twice before it becomes stationary (the first difference of the first difference), then the original series is integrated of order 2 or 1(2). therefore, given a time series has to be differenced q times before becoming stationary it said to be integrated of order q or i (q). hence, non stationary time series are those that are integrated of order 1 or greater. the null hypothesis for the unit root is: ho: a = 1; the alternative hypothesis is hi: a < 1. we shall test the stationarity of our data using the adf test. co-integration test (the johansen test) it has already been warned that the regression of a non stationary time series on another non stationary time series may lead to a spurious regression. the important contribution of the concept of unit root and co-integration is to find out if the regression residual are stationary. thus, a test for co-integration enables us to avoid spurious regression situation. if the residuals from the regression are 1(1) or 2(2), i.e. stationary, then variables are said to be cointegrated and hence interrelated with each other in the long run. this approach is based on conducting unit root test on residual obtained from the estimated regression equation. if the residual is found to be stationary at level, we conclude that the variables are co-integrated and as such as long-run relationship exists among them. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 28 tijt j i iit i i tot tatawta 1 11        9 granger causality test one of the objectives of this study is to investigate the causality between the independent and the dependent variables. granger causality test according granger (1969) is used to examine direction of causality between two variables. causality means the impact of one variable on another, in other-words; causality is when an independent variable causes changes in a dependent variable. the rationale for conducting this test is that it enables the researcher to know whether the independent variables can actually cause the variations in the dependent variable. thus, granger causality test helps in adequate specification of model. in granger causality test, the null hypothesis is: no causality between two variables. the null hypotheses is rejected if the probability of f* statistic given in the granger causality result is less than 0.05. the pair-wise granger causality test is mathematically expressed as: 111 1 11 1 uxyxy t x n i t y n i ot        10 1 v 1y xxdp1 n 1i 1yt y 1 dp n 1i o dp t x        11 where xt and yt are the variables to be tested white ut and vt are the white noise disturbance terms. the null hypothesis 011  yy dp , for all i’s is tested against the alternative hypothesis 01 x and .01 ydp if the coefficient of x 1 are statistically significant but that of ydp1 are not, then x causes y. if the reverse is true then y causes x. however, where both co-efficient of x 1 and ydp1 are significant then causality is bi – directional. data analysis method the method of data analysis to be used in this study is the simple linear regression using ordinary least square method. this approach, which is a quantitative technique, includes tables and the test for the hypotheses formulated by using ordinary least square with econometric view regression analysis at 5% level of significance. results and discussions the tables below have details of the dynamic effect of macroeconomic variables and private investment in nigeria. table i: dynamic effect of macroeconomic variables on private investment: private real investment variable coefficient std. error t-statistic prob. rgdp 2.082194 1.228528 1.694870 0.1073 ope 0.174101 0.303387 0.573860 0.5732 m2 -0.662831 0.227875 -2.908749 0.0094 intr 1.370468 0.727841 1.882923 0.0260 ifr -0.310196 0.216799 -1.430804 0.1696 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 29 fd 1.012108 0.651230 1.554149 0.1376 exr -0.167041 0.054051 -3.090413 0.0063 c 66.88343 23.53590 2.841762 0.0108 r-squared 0.621715 mean dependent var 90.00923 adjusted r-squared 0.474605 s.d. dependent var 21.47513 s.e. of regression 15.56606 akaike info criterion 8.575723 sum squared resid 4361.442 schwarz criterion 8.962830 log likelihood -103.4844 hannan-quinn criter. 8.687196 f-statistic 4.226175 durbin-watson stat 0.995530 prob(f-statistic) 0.006391 private equity investment variable coefficient std. error t-statistic prob. ope -3.152819 1.298010 -2.428964 0.0252 rgdp -1.539837 5.232390 -0.294289 0.7717 m2 -0.935558 0.957003 -0.977592 0.3406 intr -2.389049 3.109726 -0.768251 0.4518 ifr 0.804723 0.897337 0.896790 0.3811 fd 5.962534 2.779894 2.144878 0.0451 exr 1.061988 0.222540 4.772128 0.0001 c 102.1102 95.58864 1.068225 0.2988 r-squared 0.758691 mean dependent var 105.0785 adjusted r-squared 0.669788 s.d. dependent var 115.9589 s.e. of regression 66.63471 akaike info criterion 11.47752 sum squared resid 84363.51 schwarz criterion 11.86147 log likelihood -146.9466 hannan-quinn criter. 11.59169 f-statistic 8.533908 durbin-watson stat 0.938425 prob(f-statistic) 0.000094 source: extract from e-view 9.0 from model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. the coefficient of determination (r 2 ) proved that the independent variables can www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 30 explain 62 percent variation on private real investment; the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. the effect of macroeconomic variables on private equity investment was presented in model two. the study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. the r 2 proved that the independent variables can predict 66.9 percent variation on private equity investment. the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. the positive effect of the variables confirms the a-priori expectation of the study and various reforms in the nigerian economy to attract foreign real and portfolio investment. empirically it confirm the findings of adelowokan adesoye & balogun (2015) confirm the existence of long run relationship between exchange rate, investment, interest rate, inflation and growth and that exchange rate volatility has a negative effect with investment and growth while exchange rate volatility has a positive relationship with inflation and interest rate in nigeria. rasaq (2013) that exchange rate volatility has a positive influence on gdp, fdi and trade openness with a negative influence on the inflationary rate in the country. ndikumana (2014) that monetary policy affects domestic investment negatively indirectly through the bank lending or quantity channel, as well as directly through the interest rate or cost of capital channel. zulkefly abdul karim (2010) that the impact of monetary policy channels to the institutions investment are heterogeneous, therefore the small institutions that faced financial constraint responded more to monetary tightening as compared to the large institution. tobias and mambo (2012) that government domestic debt and treasury bill rate are inversely related to private sector investment, while money supply and domestic savings have positive relationship with private sector investment consistent with the islam model. table ii: adf unit root test variable adf stat mackinnon value 1% 5% 10% prob. order of integration remark pri -4.729164 -3.724070 -2.986225 -2.632604 0.0009 i(i) stationary pei -1.725512 -3.752946 -2.998064 -2.638752 0.4059 i(0) not stationary ope -8.642427 -3.724070 -2.986225 -2.632604 0.0000 i(i) stationary rgdp -6.857014 -3.724070 -2.986225 -2.632604 0.0000 i(i) stationary m2 -5.359404 -3.724070 -2.986225 -2.632604 0.0002 i(i) stationary intr -4.153126 -3.711457 -2.981038 -2.629906 0.0035 i(i) stationary ifr -5.804288 -3.724070 -2.986225 -2.632604 0.0001 i(i) stationary fd -4.560431 -3.808546 -3.020686 -2.650413 0.0020 i(i) stationary exr -6.888586 -3.737853 -2.991878 -2.635542 0.0000 i(i) stationary source: extract from e-view 9.0 from the table, all the variables are stationery at first difference and integrated in the order of 1(i), we accept alternate hypothesis except private equity investment. table iii: cointegration test: trace test: private real investment hypothesized trace 0.05 no. of ce(s) eigenvalue statistic critical value prob.** www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 31 none * 0.999924 364.1848 125.6154 0.0000 at most 1 * 0.955999 155.6037 95.75366 0.0000 at most 2 * 0.885879 86.88569 69.81889 0.0012 at most 3 0.611499 39.13480 47.85613 0.2549 at most 4 0.375376 18.33471 29.79707 0.5415 at most 5 0.301734 7.981377 15.49471 0.4674 at most 6 0.003628 0.079953 3.841466 0.7773 private equity investment hypothesized trace 0.05 no. of ce(s) eigenvalue statistic critical value prob.** none * 0.994167 337.3117 159.5297 0.0000 at most 1 * 0.969372 208.7053 125.6154 0.0000 at most 2 * 0.847933 121.5593 95.75366 0.0003 at most 3 * 0.638880 74.47340 69.81889 0.0202 at most 4 * 0.588725 49.00978 47.85613 0.0388 at most 5 0.451685 26.79747 29.79707 0.1067 at most 6 0.274106 11.77485 15.49471 0.1680 at most 7 0.139845 3.766064 3.841466 0.0523 source: extract from e-view 9.0 the table above shows the co-integration results of the variables; it shows at least two cointegrating equations in model one and four cointegrating equation in model two. this indicates the presence of long run relationship between the variables in the time series. the null hypotheses of no cointegration are rejected and the alternate accepted. table iv: normalized cointegration test: private real investment pei rgdp ope m2 intr ifr exr 1.000000 8.084933 -0.269303 1.239984 -2.571665 0.811905 -0.123045 (0.03993) (0.00413) (0.00490) (0.01587) (0.00395) (0.00125) private equity investment pri ope rgdp m2 intr ifr fd exr 1.000000 0.134291 67.91182 6.059239 24.50820 -6.391699 -18.22613 -2.232333 (0.18116) (1.84531) (0.23791) (0.52915) (0.19363) (0.54170) (0.05376) source: extract from e-view 9.0 from the table, model one found that openness of the economy, interest rate and exchange rate have negative long run effect on private real investment while real gross domestic products, broad money supply and inflation rate have www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 32 positive long run effect on private real investment. financial deepening was eliminated in the model due to the insignificant effect on private real investment in the previous results. model two revealed that openness of the economy, real gross domestic products, broad money supply and interest rate have positive long run effect on private equity investment while inflation rate, financial deepening and exchange rate have negative long run effect on private equity investment. table v: granger causality test: private real investment null hypothesis: obs f-statistic prob. ope does not granger cause pri 25 3.91712 0.0367 pri does not granger cause ope 1.99542 0.1621 rgdp does not granger cause pri 25 2.23044 0.1335 pri does not granger cause rgdp 1.47896 0.2518 m2 does not granger cause pri 25 0.24676 0.7837 pri does not granger cause m2 0.86216 0.4374 intr does not granger cause pri 25 0.70304 0.5069 pri does not granger cause intr 0.72839 0.4951 ifr does not granger cause pri 25 0.31345 0.7344 pri does not granger cause ifr 0.24184 0.7874 fd does not granger cause pri 25 1.95776 0.1673 pri does not granger cause fd 0.12008 0.8875 exr does not granger cause pri 25 2.61825 0.0977 pri does not granger cause exr 1.33744 0.2850 private equity investment rgdp does not granger cause pei 25 4.89035 0.0187 pei does not granger cause rgdp 1.93215 0.1709 ope does not granger cause pei 25 1.97295 0.1652 pei does not granger cause ope 0.40675 0.6712 m2 does not granger cause pei 25 1.16322 0.3327 pei does not granger cause m2 3.22333 0.0412 intr does not granger cause pei 25 0.19881 0.8213 pei does not granger cause intr 0.38062 0.6883 ifr does not granger cause pei 25 0.32198 0.7284 pei does not granger cause ifr 6.04796 0.0088 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 33 fd does not granger cause pei 25 0.04266 0.9583 pei does not granger cause fd 0.54564 0.5879 exr does not granger cause pei 22 2.57553 0.1054 pei does not granger cause exr 4.37035 0.0294 source: extract from e-view 9.0 from the table, model one proved uni-directional causality from openness of the economy to private real investment. other variables in the model have no causality. model two have uni-directional causality from real gross domestic product to private equity investment, from private equity investment to broad money supply, from private equity investment to inflation rate and from private equity investment to exchange rate. table vi: estimated error correction model variable coefficient std. error t-statistic prob. c 61.67099 6.786586 9.087189 0.0698 d(pri(-2)) 1.110710 0.127279 8.726601 0.0726 d(pri(-1)) 1.465196 0.206280 7.102945 0.0890 d(pri(-3)) -0.531717 0.195600 -2.718394 0.2244 d(m2(-1)) -2.172671 0.384825 -5.645867 0.1116 d(m2(-2)) 3.109482 0.332386 9.355034 0.0678 d(m2(-3)) 10.09627 1.240691 8.137617 0.0778 d(ifr(-1)) -6.617139 0.795251 -8.320817 0.0761 d(ifr(-2)) -1.800661 0.243833 -7.384804 0.0857 d(ifr(-3)) -1.350795 0.279543 -4.832146 0.1299 d(fd(-1)) -13.76491 1.760872 -7.817095 0.0810 d(fd(-2)) -33.26903 4.380346 -7.595068 0.0833 d(fd(-3)) 4.912709 0.355352 13.82492 0.0460 d(exr(-1)) -0.238797 0.063297 -3.772648 0.1650 d(exr(-2)) -4.052002 0.522179 -7.759791 0.0816 d(exr(-3)) -4.437919 0.512569 -8.658191 0.0732 d(rgdp(-1)) 11.97662 2.858124 4.190378 0.1491 d(intr(-1)) 12.43416 1.378582 9.019535 0.0703 d(intr(-2)) 6.939735 0.872340 7.955309 0.0796 d(ope(-1)) 1.122627 0.189212 5.933158 0.1063 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 34 d(ope(-3)) -5.109912 0.601508 -8.495164 0.0746 ecm(-1) -1.540626 0.172322 -8.940399 0.0709 r-squared 0.999449 mean dependent var 12.77913 adjusted r-squared 0.987874 s.d. dependent var 25.11979 s.e. of regression 2.766156 akaike info criterion 3.650343 sum squared resid 7.651617 schwarz criterion 4.736468 log likelihood -19.97895 hannan-quinn criter. 3.923501 f-statistic 86.34610 durbin-watson stat 1.969954 prob(f-statistic) 0.084678 private equity investment c 13.48995 38.10975 0.353976 0.7412 d(pei(-1)) 1.233222 0.778601 1.583894 0.1884 d(rgdp(-2)) 0.164366 2.357362 0.069725 0.9478 d(rgdp(-3)) -0.277705 1.797497 -0.154496 0.8847 d(ope(-1)) 0.182172 0.456118 0.399395 0.7100 d(ope(-2)) 0.072823 0.574272 0.126809 0.9052 d(ope(-3)) -0.097954 0.593885 -0.164938 0.8770 d(m2(-1)) -0.177295 0.609113 -0.291071 0.7855 d(m2(-2)) -0.279461 0.299462 -0.933210 0.4035 d(m2(-3)) -0.054750 0.428185 -0.127865 0.9044 d(intr(-1)) -0.384271 1.036109 -0.370879 0.7295 d(intr(-2)) -0.169910 0.868934 -0.195538 0.8545 d(intr(-3)) -0.343503 0.889287 -0.386267 0.7190 ifr -0.444788 0.516950 -0.860409 0.4381 fd 0.510249 0.893614 0.570995 0.5986 exr -0.148439 0.130436 -1.138019 0.3186 ecm(-1) -0.039495 0.954548 -0.041376 0.9690 r-squared 0.909374 mean dependent var -3.619524 adjusted r-squared 0.546868 s.d. dependent var 16.61566 s.e. of regression 11.18484 akaike info criterion 7.627815 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 35 sum squared resid 500.4024 schwarz criterion 8.473381 log likelihood -63.09206 hannan-quinn criter. 7.811324 f-statistic 2.508581 durbin-watson stat 2.348027 prob(f-statistic) 0.193265 source: extract from e-view 9.0 the parsimonious error correction model shows that the macroeconomic variable can explain 99 and 90 % variation on the private real and equity investment the model summary shows that the model is significant. however, the durbin watson statistics justifies that there is no autocorrelation problem among the variables in the time series. the macroeconomic variables shows that narrow money supply is negatively related to the private real and equity investment at lag 1 but positive at lag 2 and lag 3, interest rate is negatively related at lag 2 while broad money supply is negatively related at lag 1 and positive at lag 2. model one found speed of adjustment of 154 percent while model two found speed of adjustment of of3 percent annually. conclusion and recommendations this study investigated the impact of macroeconomic variables on private investment in nigeria for the period 1990 to 2016. as such the study sought to investigate other determinants of private investment in nigeria. from model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. the coefficient of determination (r 2 ) proved that the independent variables can explain 62 percent variation on private real investment; the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. the effect of macroeconomic variables on private equity investment was presented in model two. the study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. the r 2 proved that the independent variables can predict 66.9 percent variation on private equity investment. the fstatistics found that the model is significant while the durbin watson statistics proved the presence of serial autocorrelation. we conclude that macroeconomic variables have significant effect on private real and equity investment in nigeria. recommendations there is need to increasing the real interest rate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. by this, the higher real interest rate would increase private savings which would also increase capital accumulation and hence private investment. investment related activities should be encouraged in order to promote private investment. ensuring macroeconomic growth in the economy will undoubtedly enhance investment by the private sector. economic policies to reduce inflation need to be practiced. in other words nigerian inflation rate should be kept at a manageable level since uncertainty arising from persistent levels of inflation impedes the rate of private investment in the country. this can be done by reducing money supply. availability of funds ensures an 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(2002). saving-investment relationships japan and other asian countries. japan and world economy, 14,1-23. tang, c.f. and lean, h.h. (2008). the savings and investment nexus: evidence from rolling windows bounds test. asian business and economics research unit, discussion paper 66. tobias, o., and manbo, c., (2012). the effect of monetary policy on private sector investment in kenya. journal of applied finance & banking, 2(2), 239-287. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 1, no. 1; 2019 published by american center of science and education, usa 1 systemic risk and dynamics of stock prices: a short and long run analysis from nigeria capital market mrs. fortune bella charles m sc department of banking and finance rivers state university, rivers state, nigeria charles ugochukwu okoro, m sc. department of accountancy ken saro-wiwa polytechnic, bori rivers state, nigeria abstract this study examined the effect of systemic risk on the dynamics of stock prices in nigeria capital market. the objective was to investigate the dynamic effect of systemic risk on stock prices traded on the floor of nigeria stock exchange. time series data was sourced from central bank of nigeria statistical bulletin from 1990-2017. stock prices were modeled as the function of prices risk, liquidity risk, interest rate risk and exchange rate risk. multiple regression with ordinary least square properties of co-integration was used to examine the relationship between the dependent and the independent variables. the study found price and liquidity risk have positive effect on stock price while interest rate and exchange rate risk have negative effect on stock prices of equities traded on nigeria stock exchange. it concludes that systemic risk has significant effect on stock prices and recommends, among others, that the management of the capital market should ensure that the operating environment is risk minimum to ensure appreciable stock prices by developing strategies and policies aim at managing the systematic risk in the operating environment and engage a regular environmental impact assessment on systemic risk, to avert it’s negative effect on stock prices. keywords: systemic risk, stock prices, short and long run, nigeria, capital market introduction the history of risk taken can be traced to the existence of man. relocating a tribe from one place to another in order to find food and hunting dangerous animals have been daily decisions in the pre-civilization era. the decisions at that time have been most probably based on historic data and gut feeling. this immeasurable justification on decisions stayed mostly the same also on the historic era until the concept of probability was invented. while the gamblers that lived in ancient greece had the concept of numerals and could determine the number of possible outcomes they strongly believed that the outcome of games was determined by gods. zigrand (2014) opined that the concept of modern arithmetic, numbers and symbols, came from hindus during the dark ages and that it made the analysis of games possible in the 16th century. there has been aged long divergence among behavioral finance scholars on the factor that determine stock prices. the fundamentalist argue that the value of a corporation’s stock is determined by expectations regarding future earnings and by the rate at which those earnings are discounted on time. the technical school of taught on the other hand, opposes the fundamentalists’ arguments, and postulate that stock price behaviour can be predicted by the use of financial or economic data. the behavioural school of finance holds different view from the above schools of thoughts and opined that market might fail to reflect economic fundamentals under three conditions, which are: the first behavioural condition is irrational behaviour. it holds that investors behave irrationally when they do not correctly process all the available information while forming their expectations of a company’s future performance. the second is systematic patterns of behaviour, which hold that even if individual investors decided to buy or sell www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 2 without consulting economic fundamentals, the impact on share prices would be limited. as in inegbedion (2009), the third is limits to arbitrage in financial markets ascertain that when investors assume that a company’s recent strong performance alone is an indication of future performance; they may start bidding for shares and drive up the price. some investors might expect a company that surprises the market in one quarter to go on exceeding expectations. the macroeconomic approach attempts to examine the sensitivity of stock prices to changes in macroeconomic variables. the approach posits that stock prices are influenced by changes in money supply, interest rate, inflation and other macroeconomic indicators. according to afego (2012), the random walk theory is a component of efficient market hypothesis. it states that current price of any security, fully reflects the information content of its historical sequences of price. it is built on the premises that investors react instantaneously to information advantage, they have thereby eliminating profit opportunities the main premise in finance is that there is a connection between risk and return. higher risk is assumed to lead to higher return on stocks with rationale pricing of stocks. empirical study by galati and moessner (2010) concluded that despite the wealth of research on systemic risk and stock prices, there is still no consensus on the definition of systemic risk. empirical validity of theories on factors that determine stock price is based on financial market of the developed countries with high degree of perfection while nigeria financial market is emerging and characterized with high level of imperfection. from the above, this paper examined the effect of systemic risk on the stock prices of nigeria firms. literature review concept of systemic risk systematic risk, also known as un-diversifiable risk volatility or market risk, affects the overall market, not just a particular stock or industry. according to pandey (2005) this type of risk is both unpredictable and impossible to completely avoid. it cannot be mitigated through diversification, only through hedging or by using the right asset allocation strategy. systemic risk evolves along with the development of financial markets, regulations and collective behavior of market participants and it may be prompted by regulatory arbitrage. systemic risk arises from: excessively risky activities of a single or a group of traders, an aggressive type of organizational culture (driven towards short-term profits), a collective failure of management in the bank (or across the financial system), which leads to inertia and the inability to respond to changed economic circumstances and high (over)exposure of banks to the same type of risk (symmetric shock) in the system as a whole. a systemic risk literature review by galati and moessner (2010) concludes that despite the wealth of research on the subject, there is still no consensus on the definition of systemic risk. as in the case of financial stability, there are many systemic risk definitions, but it remains difficult to operationalize them. nevertheless, the operationalization would be most useful from the perspective of conducting macro-prudential supervision, aiming at systemic risk prevention. this narrative informs that, systemic risk can have a macroor microeconomic dimension. nier (2009) indicates that macro-systemic risk arises when the financial system becomes exposed to aggregate risk, resulting from, e.g. growth of correlated exposures. micro-systemic risk arises when the failure of an individual institution has an adverse impact on the financial system as a whole (default of a sifi). concept of stock prices stock price is the cost of purchasing a security on an exchange. it is affected by a number of things including volatility in the market, current economic conditions, and popularity of the company. according to ronen and yaari (2008), the invention of double entry book keeping in the 14th century led to company’s valuation which is based upon ratios such as price per unit of earnings (from income statement), price per unit of net worth (from balance sheet) and price per unit of cash flow (cash flow statement). the next advance was to price individual price shares rather than the whole company. a price per dividend was the next advancement. analysts find it appropriate to use discounted cash flow that is based on time value of money to estimate the intrinsic value of share rather than price per dividend of share prices. theoretical framework the capital asset pricing model the capm is a model for pricing an individual security or a portfolio. the capm model was developed independently by william sharpe (1964) and parallel work was performed by lintner (1965) and mossin (1966) these model marks the birth of asset pricing theory. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 3 derivation of the capm the capm is a simple linear model that is expressed in terms of expected return and expected risk. the model states that the equilibrium returns on all risky assets are a function of their covariance with the market portfolio. under the assumptions of the capm, if a risk-free asset exists, every investor’s optimal portfolio will be formed from a combination of the market portfolio and the risk-free asset. the precise combination of the market portfolio and the risk-free asset depends on the degree of investors risk aversion. since investors can choose the combination of the market portfolio and the risk-free asset, then the equation of the relationship connecting a risk-free asset and a risky portfolio is: e (ri) = r ƒ + im m rfrme   2 )(  1 where; e (ri) : expected return on i th portfolio. r ƒ : return on the risk free asset e (rm) : expected return on market portfolio im : the covariance between asset i and the market portfolio 2 m: the variance of the market portfolio based on the equation (3) the original capm equation can be derived as follows: e(ri) = r ƒ + [ e(rm) – r ƒ] βi 2 equation 4 is known as capital asset pricing model and it could be shown graphically as the security market line (sml) which means the sml fundamentally graphs the results from the capital asset pricing model (capm) formula. the x-axis represents the risk (beta), and the y-axis represents the expected return. the market risk premium is determined from the slope of the sml. the sml model states that stocks expected return is equal to the risk-free rate plus a risk premium obtained by the price of risk multiplied by the quantity of risk. in a wellfunctioning market nobody will hold a security that offers an expected risk premium of less than [e (rm)-r ƒ] i. if we think e (rm) – rf as the market price of risk for all efficient portfolios, than, it represents the extra return that can be gained by increasing the level of risk on an efficient portfolio by one unit. the quantity of risk is often called beta, and it is the contribution of asset i to the risk of the market portfolio. in other words, it is the correlation of the asset i's return with the return on the market portfolio. if everyone holds the market portfolio, and if beta measures each security’s contribution to the market portfolio risk, then it’s no surprise that the risk premium demanded by investors is proportional beta. according to the capm the total risk of a security could be divided between systematic and unsystematic risk. the systematic risk is the portion of the security return variance that is explained by market movements such as fiscal changes, swings in exchange rates and interest rate movements. on the other hand, the unsystematic risk is the variability in return due to factors unique to the individual firm, such as r&d achievements and industrial relations problem. the relevant measure of the risk of an asset is its contribution to the systematic risk of an investor’s portfolio defined by its beta rather than the inherent variance in the assets total return. if the beta of an asset is larger (smaller) than 1, then the standard deviation of an asset changes more (less) than proportionately in reaction to changes in market conditions. thus, an asset whose beta is greater (less) than 1 has a relatively greater (smaller) contribution to the risk of a portfolio. while beta does not measure risk in absolute terms, it is a crucial risk indicator, reflecting the extent to which the return on the single asset moves with the return on the market. assumptions of the capm the capm rests on several assumptions. the most important are as follows: all investors are rationally risk-averse individuals whose aim is to maximize the expected utility of their end of period wealth. therefore, all investors operate on a common single-period planning horizon. all investors are pricetakers; so that, no investor can influence the market price by the scale of his or her own transactions. asset markets are frictionless and information is freely and simultaneously available to all investor. all investors have homogeneous expectations about asset returns, this mean that all investors arrive at similar assessments of the probability distribution of returns expected from traded securities. this says that investors will not be trying to beat www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 4 the market by actively managing their portfolios distributions of expected returns are normal. all securities are highly divisible, i.e. can be traded in small packages. all investors can lend or borrow unlimited amounts of funds at a rate of interest equal to the rate of risk-free securities. investors pay no taxes on returns and there are no transaction costs entailed in trading securities, so expected return is only related to risk. let (m, r m) denote the point corresponding to the market portfolio m. all portfolios chosen by a rational investor will have a point (, r ) that lies on the so-called capital market line , t mr + rf=r m f   3 the efficient portfolio it tells us the expected return of any efficient portfolio, in terms of its standard deviation, and does so by use of the so-called price of risk. , m rf mr  4 the slope of the line, which represents the change in expected return r per one-unit change in standard deviation. if an individual asset i (or portfolio) is chosen that is not efficient, then we learn nothing about that asset. it would seem useful to know, for example, how frir , the expected excess rate of return is related to the market portfolio. the following formula involves just that, where m,i denotes the covariance of the market portfolio with individual asset i: theorem (capm formula) for any asset i ),r(r mi fif rr   5 where m im 2i ,     6 is called the beta of asset i. this beta value serves as an important measure of risk for individual assets (portfolios) that is different from ;2 i it measures the systematic risk part of risk. more generally, for any portfolio p = (α1… αn) of risky assets, its beta can be computed as a weighted average of individual asset betas: rf)-mr(rf-r p 7 where    n i ii m 1 2 1 p pm =     8 before providing the above theorem, we point out a couple of its important consequences and explain the meaning of the beta. for a given asset i,  2 i tells us the risk associated with its own fluctuations about its mean rate of return, but not with respect to the market portfolio. for example if asset i is uncorrelated with m, then βi= 0 (even presumably if  2 i is huge), and this tells us that there is no risk associated with this asset (and hence no high www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 5 expected return) in the sense that the variance  2 i can be diversified away assets and form a portfolio with equal proportions thus dwindling the variance to 0 so it becomes like the risk-free asset with deterministic rate of return rf, so, in effect, in the world of the market you are not rewarded (via a high expected rate of return) for taking on risk that can be diversified away. βi as a measure of non diversifiable risk, the correlated-with-the-market part of risk that we can’t reduce by diversifying. this kind of risk is sometimes called market or systematic risk. it is not true in general that higher beta value βi implies higher variance  2 i, but of course a higher beta value does imply a higher expected rate of return: you are rewarded (via a high expected rate of return) for taking on risk that cannot be diversified away; everyone must face this kind of risk. portfolio of asset i and the market portfolio m; (α, 1-α), with α € [0, 1], the rate of return is thus r(α) = αri + (1-α) rm. asset it is assumed not efficient; its point lies in the feasible region but not on the efficient frontier. thus as α varies this portfolio’s point traces out a smooth curve in the feasible (,r) region α  ((α), r (α)) parameterized by α, where. r(α) = α r i + (1α) r m 9 = α ( r i r m) + r m, 10 i., ) -(1 2 + m) (1 + )( 22 i 22 m   11 mm 222 i 22 m) im,(2i.), 2 m + (   12 when α = 0 ( (0), r (0)) = (m, r m) and when α = 1, ((0), r (0))= (i, r i). thus the curve touches the capital market line at the market point (m, r m), but otherwise remains off the capital market line but (of course) within the feasible region where it also hits the point (m, r m) and therefore when α = 0 the curve’s derivative. 0)( )(   d rd 13 is identical to the slope of the capital asset line at point m. the slope (the price of risk) of the line is given by (2). we thus conclude that when α = 0 m tmt d rd f     )( )( 14 the composition rule from calculus yields     dd drd d rd /)( /)( )( )(  15 differentiating (3) and (4) and evaluating at α = 0 yields mmim mtt dd drd i   /,(/)( /)( 2   16 from (5) we deduce that m rmt mmim mtt fi      /,( 2 17 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 6 solving for r i then yields the capm formula for asset i, r i – rf = βi ( r m – rf), as was to be shown. for the more general portfolio result, observe that rp-rf = -rf + i n i ir  1  18 )( 1 rfri n i i    19 )( 1 fii n i i rr    20 )( 1 fmi n i i rr    capm formula for single asset i 21    n i iirfmr 1 )(  22 note that when βp = 1 then pr = ;mr the expected rate of return is the same as for the market portfolio. when βp > 1, then pr > mr ; when βp < 1, then pr < mr . also note that if an asset i is negatively correlated with m, m,i < 0, then βi < 0 and ri< rf; the expected rate of return is less than the risk-free rate. effectively, such a negatively correlated asset serves as insurance against a drop in the market returns, and might be viewed by some investors as having enough such advantages so as to make it worth the low return. investing in gold is thought to be such an example. estimating the market portfolio and betas these estimates are computed using sample means, variances and covariance as follows: n time points such as the end of each of the last 10 years k = 1, 2… n. rak and rs&pk denote the k th such sample values for rate of return yielding estimates.    n k rak n ar 1 1 23    n k pksps r n r 1 && 1 24 the variance  2 s&p is then estimated by ).ˆ()ˆ( 1 & 1 && atrrr n y pks n k pspks    25 the beta value is then estimated by taking the ratio x/y. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 7 more on systematic risk with the capm formula in mind, for a given asset i let us express ri as ri = rf +βi( r m – rf ) + i, 26 where i= ri – rfβi ( r m rf), 27 a random variable, is the error term. note how we replaced deterministic rm with random rm in the capm to do this. our objective is to determine some properties of the error term. it is immediate form the capm formula that e(i) = 0. moreover cov (i, rm) = 0 as is seen by direct computation and the definition of βi: cov (€i, rm) = cov (ri – rf – βi ( r mr f),rm) 28 = cov (ri – βi ( r m –rf),rm) 29 = cov ( r i, rm) – βicov(r m – rf, rm) 30 = cov ( r i, rm) – βicov (rm, rm) 31 = m2 2m im, im,     32 = im,im,  33 = 0 34 so the error term has mean 0 and is uncorrelated with the market portfolio. it then follows by taking the variance of both sides of (6) that  2 i = β 2 i  2 m + var (i) 35 we conclude that the variance of asset i can be broken into two orthogonal components. the first, β 2 i  2 m, is called the systematic risk and represents that part of the risk (of investing in asset i) associated with the market as a whole. the other part, var (i), is called the nonsystematic risk. nonsystematic risk can be reduced (essentially eliminated) by diversification, but the systematic risk, when β 2 i>0, cannot be diversified away. solving for  in terms of r in the capital market line yields the inverse line for efficient portfolios. m rfmr rfr    36 using the capm formula r pr f = βp( r m-rf) and plugging into this inverse line formula, we conclude that for any efficient portfolio p, p = βpαm; there is only systematic risk for efficient portfolios, no nonsystematic risk. this makes perfect sense: clearly m has only systematic risk since βm = 1.it is known that all efficient portfolios are a mixture of m and the risk-free asset (e.g., they all have points on the capital market line). since the risk-free asset is deterministic it does not contribute to either the variance or the beta of the portfolio, only m does; so all of the risk is contained in m which is just pointed out is pure systematic risk. arbitrage pricing theory the arbitrage pricing theory (apt) is another model of asset pricing based on the idea that equilibrium market prices should be perfect, in such a way that prices will move to eliminate buying and selling without risks (arbitrage www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 8 opportunities). the basis of this theory is the analysis of how investors construct efficient portfolios and offers a new approach to explaining the asset prices and also states that the return on any risky asset is a linear combination of various macroeconomic factors that are not explained by this theory. it is probably safe to assume that both the capm and apj will continue to exist and will be used to price capital assets. assumptions of the apt asset markets are perfectly competitive and frictionless; all investors have homogeneous expectations that returns are generated randomly according to a k-factor model. investors have monotonically increasing concave utility functions; the number of assets existing in the capital market from which portfolios are formed is much larger than the number of factors. there are no arbitrage opportunities. pricing assets consider an asset with price p = x0 at time t=0, payoff (random) q – x1 and expected payoff q = e (x1) at time t=1. then by definition r = (e(x1) – x0)/x0 = ./) ppq  solving for p yields p = ),1/( rq  37 which expresses the price as the discounted payoff (present value) if using r as the discount rate. but since r =rf + β( r m-rf) from the capm formula, we conclude that )(pr )(1 formulacapmofversionicing rmrr q p ff    38 we can re-express this formular by using r = (q – p)/p = (q/p) – 1, then computing con(r,rm) = cov((q/p) – 1, rm 39 = cov((q/p), rm 40 = mrmqcov p 2/),( 1  41 obtaining mrmqcov p 2/),( 1   41 plugging into the pricing version of capm formula yields . )()/),(( 1 1 2 rfrmrmqcov p r q p mf    42 solving for p yields . 1 )()/),(( 2 2 f m m r rfrmrmqcov q p      43 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 9 this equation is interesting, since it expresses the price as the present value of an “adjusted” expected payoff. if the asset is uncorrelated with the market, then the price is exactly ),1/( rfq  m m rfrrmqcov 2 )(),((   44 yields a lower price if the asset is positively correlated with the market and a higher price if the asset is negatively correlated with the market empirical review izova, bollerslev, osterrieder, tauchen (2011) investigated the relationship between risk and return using, fractional cointegration based on daily data for the s&p 500 and the vix volatility index. their series were divided into different components. the findings indicated that the relationship between volatility and the volatilityrisk reward is strongly direct and positive. they also found that fractionally cointegrated var. in addition they find that corresponding the qualitative conceptions from that same theoretical and their study represent variance risk premium estimated as the long-run equilibrium relationship within the fractionally co integrated system results in non-trivial return predictability over longer inter-daily and monthly return horizons. pollet, kräussl, jegadeesh (2010) investigated the risk and returns of pe investments and lpes using the market prices of fofs that invests in unlisted private equity funds. their findings indicate that the market expects for pe to earn abnormal return is approximately 0.5 percent and for lpes is approximately close to zero after fees. private equity fund returns are negatively related to the credit expand and positively related to gross domestic product growth. in addition they find that both listed and unlisted pe has betas near to one. chudhary, chudhary (2010) examined the relationship between stock returns and systematic risk based on capital asset pricing model (capm) in the bombay stock exchange. the sample search is 287 top companies of bombay (bse) stock exchange that the data were collected over thirteen years period from january1996 to december 2009. their findings (about intercept and slop of capm equation states that intercept should be equal from zero and slop should be excess returns) rely on negate hypotheses of capital asset pricing model and offer evidence against the capm. in addition, this paper investigated whether the capm adequately captures all -important determinants of returns including the residual variance of stocks. the results represent that residual risk has no effect on the expected returns of portfolios. mccurdy and morgan (2011) investigated equilibrium model for the inter-temporal evolution of the basis in foreign currency markets. the weights are specified in a hedged by the prices of futures and spot contracts position and by internal and external interest rates. evaluating this hedged position using inter temporal asset pricing model, leads to a testable equilibrium model of the futures basis. systematic risk will be commensurate to the conditional covariance of the basis with a generalized discount factor. empirical implementation uses a conditional (capm) in which both the quantity and the price of covariance risk are free to vary over time. however, for this application, the estimated inter-temporal risk is insignificantly different from zero the risk in the futures market offsets that in the spot, providing an effective hedge. aduda et al. (2012) found out that, macro-economic factors such as stock market liquidity, institutional quality, income per capita, domestic savings and bank development are important determinants of stock market development in the nairobi stock exchange. there is no relationship between stock market development and macroeconomic stability inflation and private capital flows. the results also show that institutional quality represented by law and order and bureaucratic quality, democratic accountability and corruption index are important determinants of stock market development because they enhance the viability of external finance. they concluded that there is a relationship between stock market developments and stock market liquidity, institutional quality, income per capita, domestic savings and bank development. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 10 methodology this study used the ex post facto research design. this is because the study attempts to explore the cause nature that affects relationships, where causes already exist and cannot be manipulated. the choice of model for this research is the ordinary least squares because it provides satisfactory results for estimates of structural parameters. this method involves decision on whether the parameters are statistically significant and theoretically meaningful. it also verifies the validity of estimates and whether they actually represent economic theory. however, due to conventional reasons, we used e-view statistical package in the analysis for a reliable result. the researcher used only the secondary source of data due to the nature of information. the data were generated from the publications by from cbn statistical bulletin of various years, and stock exchange fact-book. in an attempt to examine the impact of exchange rate on profitability of manufacturing firms in nigeria (1990-2017); the research adopted multiple regression analysis in order to test the three objectives. thus sp = f (pr, liqr, intr, exr) 45 sp = α0 + α1pr + α2liqr + α3intr + α4exr + µ 46 where: sp = stock prices pr = price risk proxy by volatility of real inflation liqr = liquidity risk proxy by volatility of money supply intr = interest rate risk proxy by volatility of real interest rate exr = exchange rate risk proxy by volatility of naira exchange rate per us dollar µ = error term therefore, a priori expectation (α1>α2>α3,> α4,>0) 47 stationarity (unit root) tests the study investigates the stationarity properties of the time series data using the augmented dickey fuller (adf) test. according to nelson and plosser (1982), chowdhury (1994) there exist a unit root in most macroeconomic time series. non stationary time series will have a time varying mean or a timevarying variance or both. if a time series is non stationary, we can study its behaviour only for the time period under consideration, and cannot generalize it to other time periods, and hence remain of little practical value if we intend to forecast (gujarati, 2003). it should be noted that a time series is a set of observations on the values that a variable takes at different times (daily, weekly, monthly, quarterly, annually, etc). stationary test therefore checks for the stationarity of the variables used in the models. if stationary at level, then it is integrated of order zero which is 1(0). thus, test for stationarity is also called test for integration. it is also called unit root test. stationarity denotes the non existence of unit root. etyiyy t m i tt     1 1 121  48 where: ty = change time t 1 ty = the lagged value of the dependent variables t = white noise error term www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 11 if in the above  =0, then we conclude that there is a unit root. otherwise there is no unit root, meaning that it is stationary. the choice of lag will be determined by akaike information criteria. decision rule t-adf (absolute value) > t-adf (critical value) : reject ho (otherwise accept h1) note that each variable will have its own adf test value. if the variables are stationary at level, then they are integrated of order zero i.e 1(0). note that the appropriate degree of freedom is used. if the variables are stationary at level, it means that even in the short run they move together. the unit root problem earlier mentioned can be explained using the model: y= yt-1 + i 49 where; yt is the variable in question; i is stochastic error term. equation (a) is termed first order regression because we regress the value y at time “t” on its value at time (t1). if the coefficient of yt-i is equal to 1, then we have a unit root problem (non stationary situation). this means that if the regression. y= yt-1 + i 50 where y and i are found to be equal to 1 then the variable yt has a unit root (random work in time series econometrics). if a time series has a unit root, the first difference of such time series are usually stationary. therefore to salve the problem, take the first difference of the time series. the first difference operation is shown in the following model: y=(l-1)yt-1i 51 yt-1 + i 52 (note:  =1-1= 0; where l =1; yt = yt yt-i) 53 integrated of order 1 or i (i) given that the original (random walk) series is differenced once and the differenced series becomes stationary, then the original series is said to be integrated of order i or i (1). integrated of order 2 or i (2) given that the original series is differenced twice before it becomes stationary (the first difference of the first difference), then the original series is integrated of order 2 or 1(2). therefore, given a time series has to be differenced q times before becoming stationary it said to be integrated of order q or i (q). hence, non stationary time series are those that are integrated of order 1 or greater. the null hypothesis for the unit root is: ho: a = 1; the alternative hypothesis is hi: a < 1. we shall test the stationarity of our data using the adf test. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 12 co-integration test (the johansen test) it has already been warned that the regression of a non stationary time series on another non stationary time series may lead to a spurious regression. the important contribution of the concept of unit root and co-integration is to find out if the regression residual are stationary. thus, a test for co-integration enables us to avoid spurious regression situation. if the residuals from the regression are 1(1) or 2(2), i.e. stationary, then variables are said to be cointegrated and hence interrelated with each other in the long run. this approach is based on conducting unit root test on residual obtained from the estimated regression equation. if the residual is found to be stationary at level, we conclude that the variables are co-integrated and as such as long-run relationship exists among them. tijt j i iit i i tot tatawta 1 11        54 granger causality test one of the objectives of this study is to investigate the causality between the independent and the dependent variables. granger causality test according granger (1969) is used to examine direction of causality between two variables. causality means the impact of one variable on another, in other-words; causality is when an independent variable causes changes in a dependent variable. the rationale for conducting this test is that it enables the researcher to know whether the independent variables can actually cause the variations in the dependent variable. thus, granger causality test helps in adequate specification of model. in granger causality test, the null hypothesis is: no causality between two variables. the null hypotheses is rejected if the probability of f* statistic given in the granger causality result is less than 0.05. the pair-wise granger causality test is mathematically expressed as: 111 1 11 1 uxyxy t x n i t y n i ot        55 and 1 v 1y xxdp1 n 1i 1yt y 1 dp n 1i o dp t x        56 where xt and yt are the variables to be tested white ut and vt are the white noise disturbance terms. the null hypothesis 011  yy dp , for all i’s is tested against the alternative hypothesis 01 x and .01 ydp if the coefficient of x 1 are statistically significant but that of ydp1 are not, then x causes y. if the reverse is true then y causes x. however, where both co-efficient of x 1 and ydp1 are significant then causality is bi – directional. vector error correction (vec) technique the presence of co-integrating relationship forms the basis of the use of vector error correction model. e-views econometric software used for data analysis, implement vector auto-regression (var) based co-integration tests using the methodology developed by johansen (1991, 1995). the non-standard critical values are taken from osterward lenun (1992). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 13 results and discussion of findings table i: presentation of level series result variable coefficien t std. error t-statistic prob. pr 3.143241 0.360824 2.396983 0.0054 liqr 0.673035 0.590774 1.139242 0.0074 intr -1.829224 1.626006 -1.124980 0.2733 exr -1.649833 1.549582 -1.064696 0.2991 c 51.64218 34.57035 1.493829 0.1501 r-squared 0.786098 durbin-watson stat 2.365587 adjusted r-squared 0.545763 prob(f-statistic) 0.024421 f-statistic 3.993920 table ii: diagnostic test coefficient uncentered centered variable variance vif vif pr 0.130194 1.017090 1.012920 liqr 0.349014 1.527845 1.115794 intr 2.643896 1.069012 1.044450 exr 2.401204 1.876702 1.145503 c 1195.109 2.453434 na table iii: test of unit root sp t-statistic prob.* augmented dickey-fuller test statistic -5.352753 0.0002 test critical values: 1% level -3.711457 5% level -2.981038 10% level -2.629906 pr t-statistic prob.* augmented dickey-fuller test statistic -5.890783 0.0001 test critical values: 1% level -3.737853 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 14 5% level -2.991878 10% level -2.635542 liqr t-statistic prob.* augmented dickey-fuller test statistic -4.618607 0.0011 test critical values: 1% level -3.711457 5% level -2.981038 10% level -2.629906 intr t-statistic prob.* augmented dickey-fuller test statistic -6.354402 0.0000 test critical values: 1% level -3.752946 5% level -2.998064 10% level -2.638752 exr t-statistic prob* augmented dickey-fuller test statistic -5.698327 0.0001 test critical values: 1% level -3.724070 5% level -2.986225 10% level -2.632604 table iv: cointegration test hypothesized trace 0.05 no. of ce(s) eigenvalue statistic critical value prob.** none * 0.801051 91.90307 69.81889 0.0003 at most 1 * 0.636167 56.37951 47.85613 0.0065 at most 2 * 0.562561 34.13619 29.79707 0.0149 at most 3 * 0.449156 15.94619 15.49471 0.0427 at most 4 0.120607 2.827520 3.841466 0.0927 table v: normalized cointgration test www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 15 sr pr liqr intr exr 1.000000 -23.33280 83.09287 -112.8707 69.60283 (7.29967) (13.4946) (26.0309) (21.3629) table vi: error correction model error correction: d(sr) d(pr) d(liqr) d(intr) cointeq1 -0.173825 -0.295014 0.062647 0.017755 (0.29462) (0.07001) (0.06632) (0.03444) [-0.59000] [-4.21361] [ 0.94463] [ 0.51547] c -1.097063 5.909431 0.655582 0.372893 (31.7356) (7.54180) (7.14369) (3.71020) [-0.03457] [ 0.78356] [ 0.09177] [ 0.10050] r-squared 0.707868 0.943769 0.754404 0.690037 adj. r-squared 0.415736 0.887539 0.508807 0.380075 sum sq. resids 192439.3 10867.99 9750.913 2630.227 s.e. equation 138.7225 32.96663 31.22645 16.21798 f-statistic 2.423110 16.78393 3.071722 2.226195 log likelihood -125.5894 -95.41278 -94.27394 -80.51589 akaike aic 13.00851 10.13455 10.02609 8.715799 schwarz sc 13.55564 10.68168 10.57322 9.262930 mean dependent -0.854762 3.900476 -3.780952 0.021429 s.d. dependent 181.4857 98.30452 44.55503 20.59809 determinant resid covariance (dof adj.) 1.24e+12 determinant resid covariance 6.39e+10 log likelihood -380.4368 akaike information criterion 41.18445 schwarz criterion 43.77089 table vii: estimated error correction model variable coefficient std. error t-statistic prob. c -21.91316 28.11665 -0.779366 0.4558 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 16 d(sp(-1)) -0.707197 0.372778 -1.897099 0.0903 d(pp(-1)) -0.487469 0.428622 -1.137295 0.2848 d(pp(-2)) -0.771063 0.450238 -1.712567 0.1209 d(pp(-3)) -0.762335 0.425431 -1.791909 0.1067 d(liqr(-1)) -1.732736 1.024718 -1.690939 0.1251 d(liqr(-2)) -2.767740 1.051625 -2.631871 0.0273 d(liqr(-3)) -0.633063 0.635972 -0.995426 0.3455 d(intr) -2.412426 1.761922 -1.369202 0.2041 d(exr) 1.044424 4.496768 0.232261 0.8215 ecm(-1) -0.410690 0.393671 -1.043230 0.3241 r-squared 0.816098 mean dependent var 0.848000 adjusted r-squared 0.611763 s.d. dependent var 186.0282 s.e. of regression 115.9117 akaike info criterion 12.64503 sum squared resid 120919.6 schwarz criterion 13.19268 log likelihood -115.4503 hannan-quinn criter. 12.75193 f-statistic 3.993920 durbin-watson stat 2.365587 prob(f-statistic) 0.024421 table viii: granger causality test null hypothesis: obs f-statistic prob. pr does not granger cause sp 22 1.61549 0.2279 sp does not granger cause pr 0.48833 0.6220 liqr does not granger cause sp 25 2.99209 0.0430 sp does not granger cause liqr 0.37445 0.6924 intr does not granger cause sp 25 1.02109 0.3782 sp does not granger cause intr 0.91251 0.4176 exr does not granger cause sp 25 0.35297 0.7069 sp does not granger cause exr 1.52981 0.2409 source: extract from e-view 9.0 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 17 analysis and discussion of findings from table i, the value of the intercept which is 51.64218 shows that stock prices of quoted firms in nigeria will experience 51.64218 unit increases when all other variables are held constant. the coefficient of price risk is 0.143241. this shows that price risk is positively related to stock prices of quoted firms in nigeria that a unit increases in price risk is followed by an increase in stock prices in nigeria. the coefficient of liquidity risk is 0.673035. this shows that liquidity risk is positively related to stock prices of quoted firms in nigeria, that a unit increase in liquidity risk is followed by an increase in stock prices traded on the floor of nigeria stock exchange. furthermore, the value of interest rate risk shows a negative relationship with stock prices of quoted firms in nigeria with a value of -1.829224 this implies a unit increase in stock prices in nigeria is been followed by an increase in interest rate risk in nigeria. the ols result indicates that price fluctuation has a positive relationship with stock prices again the p-value shows that the coefficient is statistical significant. therefore, we reject the null hypothesis and conclude that price fluctuation has significant impact on stock prices in nigeria within the year under-review. the coefficient of exchange rate risk shows that exchange has negative and insignificant effect on stock prices within the period covered in the study. the probability value is greater than the critical level of 0.05 at 5% level of significant, we accept null hypothesis that exchange rate risk have no significant effect on stock prices. ftest: if the f-calculated is greater than the f-tabulated (f-cal > f-tab) reject the null hypothesis (h0) that the overall estimate is not significant and conclude that he overall estimate is statistically significant. from the result, fcalculated (3.993920) is greater than the f-tabulated (1.94), that is, f-cal > f-tab. hence we reject the null hypothesis (h0) that the overall estimate has a good fit which implies that our independent variables are simultaneously significant. goodness of fit test (r 2 ): the (r 2 ) shows the amount of the variation in the dependent variables (stock price) that are explainable by the explanatory variable. the (r 2 ) which measures the overall goodness of fit of the entire regression shows the value of 0.786098= 78.6% approximately 80%. this indicates that the independent variables accounts for about 80% of the variation in the dependent variable. durbin watson statistics: the computed dw is 2.365587, at 5% level of significance with three explanatory variables and observations, the tabulated dw for di and du are 1.16 and 1.64 respectively. the value of dw is greater than the lower limit. therefore, we conclude the there is evidence of positive first order serial correlation. the augmented dickey-fuller (adf) was employed to test for the existence of unit roots in the data using trend and intercept. the test results were presented in table ii. the result shows that none of the variables; was stationary at levels using augmented dicey fuller test. this is because their critical values were greater than adf test statistics in absolute value at 5 percent level of significance. however, all the variables considered became stationary after first difference since their adf test statistics were greater than their critical values in absolute value. the results show that the series are integrated of the same order; i (1) with the application of both adf test. therefore, the variables are fit to be used for the analytical purpose for which they were gathered johansen co-integration test determines whether there exist long-term relationship occurs in variables or not. the test envisages that there can be just one relationship between variables in long term. in most cases, it two variables that are i (1) are linearly combined, the combination will also be i(1). more generally, if variables with differing orders of integration are combined, then the combination will have an order of integration equal to the largest. the model with lag 1 was chosen with the linear deterministic test assumption and the result is presented in table iii. under the johansen co-integration test, co-integration is said to exist if the values of computed eigen values are significantly different from zero or if the trace statistics is greater than the critical value at 5 percent level of significance, the results of the co-integration in table iii above indicated 3 cointegrating equation, the critical value at 5 percent level of significance in only of the hypothesized equations. similarly, the computed eigen value is significantly different from zero in one of the hypothesized equations. hence, 3 of the hypothesized equations satisfy this condition and therefore the null hypothesis of 3 co-integration equations among the variables is accepted in at least all equation. therefore there is long run relationship between the variables used for the analysis in nigeria within the period under study 1990-2017. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 1, no. 1; 2019 18 normalized cointegration test presented in table iv found that price risk and interest rate risk have negative long run effect on stock price while liquidity risk and exchange rate risk have positive run effect on stock prices traded on nigeria stock exchange. table v and table vi presented the error correction model of the variables. evidence from the result shows the large explained variation (table iv) while the coefficient of error correction model prove that adjustment speed of 41 percent. the causality results prove that the variables have no causal relationship except bidirectional relationship from liquidity to stock prices. the positive findings of the study confirm the findings of izova, bollerslev, osterrieder, tauchen (2011) that the relationship between volatility and the volatility-risk reward is strongly direct and positive. the findings of pollet, kräussl, jegadeesh (2010) that the market expects for pe to earn abnormal return is approximately 0.5 percent and for lpes is approximately close zero after fees and the findings of aduda et al. (2012) that macro-economic factors such as stock market liquidity, institutional quality, income per capita, domestic savings and bank development are important determinants of stock market development in the nairobi stock exchange. conclusion and recommendations this paper applied multiple regression analysis to study the effects of systematic risk on stock prices in nigeria. the analysis covered firms listed in the nse from 1990 to 2017. by means of multiple regressions analysis of stock price to sensitivity of the price changes, liquidity changes, interest rate and exchange risk. from the findings of the study, we conclude that price risk and liquidity risk have positive effect on stock prices while interest rate risk and exchange rate risk have negative effect in stock prices. from the regression summary, we conclude that systemic risk significantly affects stock prices in nigeria. we make the following recommendations: 1. the management of the capital market should ensure that the operating environment is risk minimum to ensure appreciable stock prices by developing strategies and policies aim at managing the systematic risk in the operating environment and engage a regular environmental impact assessment on systemic risk, to avert its negative effect on stock prices. 2. liquidity risk can be properly managed by formulating optimal liquidity strategy, therefore the study recommends the need for management to ensure optimum liquidity that balance cash inflow and cash outflow and policies should be formulated to manage the systematic risk within the operating environment to enhance good stable stock price. 3. exchange rate risk can be managed by formulating policies that will leverage the firms the challenges of depreciating naira exchange rate. therefore the study recommend that the macroeconomic factors that results in depreciating naira exchange rate should be well managed and financial policies should be formulated by the regulators of the nigerian capital market to manage equity price risk of the manufacturing firms. references aduda, j. (2012). the determinants of stock market development: the case for the nairobi stock exchange. international journal of humanities and social science, 2(9), 2221-0989. afego, (2012). weak form efficiency of the nigeria capital market. an empirical analysis (1984-2009). choudhary, k., & choudhary, s. (2010). testing capital asset pricing model: empirical evidences from indian equity market. eurasian journal of business and economics, 3(6), 127-138 dupernex, s. (2007). why might share prices follow random walk? student economic review, 21, 167-179. granger, c.w.j. (1969). investigating causal relations by econometric models and cross spectral methods. econometrica 37, 24-36. gujarai,d.n.,(2003)basic econometrics, fourth edition,irwin/mcgrawhill. new york inegbedion, h.e. 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(2011). intertemporal risk in the foreign currency futures basis. canadian journal of administrative sciences / revue canadienne des sciences de l'administration 16(3) 172-184. moessner, r.(2010). central bank swaps line effectiveness during the euro area sovereign debt crisis. journal of international money and finance 35, 167-178. mossin, j, (1966). equilibrium in a capital asset market. econometrica, 34(4), 189-211 nelson, c.r. and c.i. plosser, (1982). trends and random walks in macroeconomic time series: some evidence and implications. journal of monetary economics, 10, 139162. nier, (2009). market discipline, disclosure and moral hazard in banking. journal of financial intermediation 15, 333–62. pandey, i.m (2005). financial management (9th ed.). new delhi: vikas publishing house pvt ltd sharpe, w.f. (1964). capital asset prices: a theory of market equilibrium under conditions of risk, journal of finance. zigrand, j.-p. (2014). systems and systemic risk in finance and economics. systemic risk centre special paper, 1(3), 109-126. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 2, no. 1; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 35 evaluating the influences of employees training and development on organizational performance of deposit money banks obabuike ikeni nkpurukwe department of business administration federal university wukari taraba state, nigeria e-mail: obason@ymail.com jonathan peter ozah department of business administration federal university wukari taraba state, nigeria e-mail: ozah4real2010@ymal.com andy fred wali department of business administration federal university wukari taraba state, nigeria e-mail: andim4u@gmail.com abstract the aim of this study was to empirically examine the association between staff training& development and organizational performance of deposit money banks in rivers state. the study applied cross sectional survey design in structured questionnaire to collect data from 66 personnel of designated positions of any accessible branch of the 22 deposit money banks. spearman’s rank correlation coefficient tool was employed with the help of spss version 21.0, in statistically analyzing data. results revealed that staff training and development have positive and significant relationship with organizational performance. consequently, the study concludes that staff training and development are strategic assets in equipping employees with the necessary tools to improve productivity. the research recommends that banks that want to improve productivity are encouraged to invest more on staff training and development; particularly mentoring and job orientation. keywords: employee training, development, organizational performance, money deposit banks. 1. introduction the nigeria banking sector has witnessed tremendous changes in the last two decades and noticeably responsible for these are; increased competition among players (banks), increased adoption of information & communication technology (ict), increased clients ‘yearnings for quality service, and more stringent rules from regulatory agencies (edeh & nwaji, 2018). more than ever before, banks are faced with the challenge of re-thinking their service strategies and processes in order to cope with the current sophisticated knowledge economy era. this entails that banks that want to compete favorably must key into current computerized-based information operation; which puts huge responsibility on management to deploy resources to this effect (sultana, irum, ahmed, & mehmood, 2012). in order to do so, banks have to obtain and utilize her human resources effectively. in so doing, management need to pay special attention to worker training and development as these programmes have been empirically proven in helping organizations improve performance (sultana, irum, ahmed, & mehmood, 2012; edeh & nwaji, 2018; harvey, 2002). according to nassazi (2013) it is the responsibility of human resource personnel to enhance the work performance of the employees; therefore, continuously engaging workers with relevant training and re-training programmes is one of the major steps that most organizations need to achieve this. evidently, as workers are a crucial resource to the organization, it is pertinent to optimize the contribution of them to the organization's goals as a means of sustaining effective performance. this therefore calls for bank managers to ensure an adequate deployment of resources to develop technically and socially competent work-force capable of career development into not only specialist departments or management positions, but also, delivering superior service to customers www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 36 (edeh & nwaji, 2018). succinctly speaking, while the human resource is the intellectual property of the firm, talented workers have been proven to be a good source of gaining competitive advantage; and training is the only way of developing organizational intellectual property through building workers competencies. stressing the conception of training and development (sultana, irum, ahmed, & mehmood, 2012). stated that training is an organized programme designed to aid workers' performance through the imposition of job skills and knowledge. failure of most banks in recent years was attributed to lack of workers' training and development, as the job remains boring, uninteresting, and sometimes difficult to untrained personnel. development refers to teaching managers and professionals, the skills needed for both present and future jobs. staff training and development are therefore a mixture of activities aimed at improving the performance of personnel in organization for the attainment of continuous improvement in workers’ productivity and expertise (kamoche, 2002). plethora of studies has been conducted in this research area. ekwueme (2019) studied employee training& development and succession planning of deposit money banks in abia state. the author adopted on-the-job training activities such as coaching and mentoring as dimensions. devanna, fombrun, & tichy (2010), accessed human resource management by developing a framework for training and development. the authors considered both onthe-job and off-the-job training dimensions. however, with respect to this studies and other related ones, this research introduced organization policy as a moderating variable which seems new in literature, in to our framework, which has mentoring and job orientation as dimensions of staff training& development. these variables were assessed in order to ascertain their impact on worker productivity as it relates to deposit money banks in rivers state. in the last decade, there have been numerous customer complaints regarding different services of commercial banks, ranging from online services to those of the banking hall. it is evident as customers in some instance have demonstrated their dissatisfaction at various banking halls by angrily exchange words with front line employees such as salesperson, customer care representatives, tellers’ personnel, etc. other observable online issues are mobile transfer complications, pos network failure, atm related problems, etc. (oni, mukaila, & musa, 2016). such actions in most cases result to switching to other banks with the associated negative word-of-mouth. these and other factors have contributed to the failure of banks in recent years. it is against these contemporary issues this research was undertaken to examine whether staff training and development could be a workable solution to these issues by improving worker productivity through mentoring and job orientation. 2. conceptual framework of the study and research hypotheses the research is on staff training & development and marketing organizational performance of deposit money banks in rivers state. the independent variable which is employee training & development has mentoring and job orientation as dimensions. on the other hand, the dependent variable which is organizational performance was measured with profitability. below is the model specification: op = f (std) (of) --------------------------------------------model 1 op = (p) --------------------------------------------model 2 etd = (m, jo) --------------------------------------------model 3 (p) =f (m, jo) (op) --------------------------------------------model 4 where: op = organizational performance etd = employee training & development of = organizational factor m = mentoring jo = job orientation p = productivity op = organizational policy www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 37 below is the conceptual framework for this study source: research desk, 2020 as adopted from ekwuem, 2019; devanna, fombrun, & tichy (2010) the research tested the following hypotheses in course of the study: ho1: mentoring does not significantly affect productive of deposit money banks in rivers state. ho2: job orientation does not significantly affect productivity of deposit money banks in rivers state. ho3: organizational policy does not moderate the relationship between staff training & development of deposit money banks in rivers state. 3. literature review 3.1 theoretical foundation this research was anchored on the resource-based view (rbv) theory. the origin of the rbv can be traced to the work of penrose (1959) who opined that the firm can be conceived as an administrative organization that possess a combination of productive resources(both physical and human). physical resources include land, machines and/or equipment together with human resources (worker skills and competencies), can provide the firm out-pace competitors. in this sense, there is a close relationship between the knowledge that workers in the organization acquire and services obtained from those resources (makhija, 2003). the rbv focuses specifically on the internal mechanisms that involve human resources and capabilities, and these assets are used to improve the competitive position of the firm. according to wiklund & shepherd (2003) competitive advantage does not emerge from industry dynamics, but from the processes of accumulation and utilization of resources within the firm. the authors stressed that the strategic value of the organizations' human resources and capabilities can be increased by the difficulty of acquiring, imitating or substituting them. invisible assets, like employee knowledge, trust, reputation may not be transacted or easily replicated by competitors, as they are usually found in organization’ sustainable competitive advantage and culture (amit & shoemaker, 1993). with respect to the rbv, bank managers can leverage on the gains from investing in workers' training & development programmes, and therefore build distinctive competitive advantage. hence, the rbv is a suitable underpinning theory for this research. 3.2 employee training and development literature on training& development are numerous and researchers are yet to agree on a unified definition of the concepts, as both are important concepts in improving organization’s perfomance. the more organizations seek excellence, the more employees‟ training and development become imminent. riyaz (2004) defined training as organizational effort aimed at helping a worker acquire basic skills required for the efficient execution of the functions for which they were hired. cascio (2002) defined training as consisting of planned programs designed to employee training & development organizational performance mentoring (m) job orientation (jo) productivity (p) organizational factors organizational policy (op) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 38 improved performance at both individual and group levels. in addition, aina (1992) is of the view that training is the acquisition of the competence which permits workers to perform at an optimum standard. the author further holds that training as an experience, discipline, and systematic programmes, which causes people to acquire new skills and knowledge and predetermined behaviours. in a similar fashion, staff development is concerned with developing the skill of an employee over his or her career with the firm. staff development is a dynamic process, ideas, and practices that help workers advance in their job career (isiaka, 2011). more so, staff development is the process of helping employees improves their administrative and decision-making abilities and competencies (bankajo, 1996). the author further opined that staff development contributes organizational success by helping employees to meet the organization's present and future needs. kamoche (2002) reiterates that staff development is a process that engages employees ready for a rise in the organizational hierarchy. what the author refers to as a rise is simply promotion, and it entails a sense of selffulfillment. it is important that every organization draws out plans on staff development programmes; as no organization can continue to survive and grow in a dynamic business environment that forget to deploy resources for staff development (kamoche, 2002). 3.3 organizational performance the concept of organizational performance in the behavioural science literature has not been clearly established and scholars have yet to come to terms on its definition. sultana, irum, ahmed, & mehmood (2012) saw organizational performance as how well a firm is doing in terms of making profit, return on investment, and retention of employees as well as having a good reputation from their host community. the concept can be measured based on the attainment of objectives and/or goals that were set at the beginning of the business year or quarterly depending on the calendar or policy of the firm. more so, richard, devinney, yip, & johnson (2009) opined that organizational performance can be categorized in three specific areas of business outcomes. they include: financial performance (profits, return on assets, return on investment, etc.); product market performance (sales, market share, etc.); and shareholder return (total shareholder return, economic value added, etc.). from the foregoing, it can be deduced that when a business makes progress by achieving stated goals or objectives; then they are believed to be performing. in the case of deposit money banks, performance can be measured through increased customer patronage or sales with huge amount of deposit, retention of talented workers, and the opening of more branches in different but strategic locations within or outside a particular geographical location. it is crucial to state that this study measured organizational performance with productivity. agnes (2009) was of the view that productivity is the quantity of work that is achieved within a period of time by means of the factors of production. bhatti et al. (2007) mentioned in this regard that organizational productivity is a measure of performance that encompasses both efficiency and effectiveness. it is the correlation that exists between the quantity of inputs and outputs from a clearly defined process. bhatti & qureshi (2007) in their view opined that organizational productivity is an indication of how efficient essential resources are utilized to attain specific goals in terms of quantity and quality within a given time frame. 3.4 employee training, development and organizational performance many researchers have been carried out in the area of training & development and organizational performance. khan et al. (2011) in their study found that on the job training, training design along with the style of its delivery have significant effect on organizational performance. according to a study conducted by falola, osibanjo, & ojo (2014) it was revealed that there exists a strong relationship between training and development, employees’ performance and competitive advantage. the authors recommend that bank management should always train their staff in order to develop new ideas that will keep improving and retaining employee performance. tahir et al. (2014) identified in their study that training and development are strategic windows in improving organizational performance. thus, it is vital for organization to invest in staff training for improved performance. training and development would provide opportunities to employees to make a better career life and get better position in organization. in doing so, organizations efficiency would be increased. employees are the resources and assets of organization and if they are skilled and trained would perform better than those who are unskilled and untrained. http://www.whatishumanresource.com/ http://www.whatishumanresource.com/ http://www.whatishumanresource.com/ www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 39 3.5 moderating effect of organizational policy on employee training, development and organizational performance as identified by tahir et al. (2014) in their study that training and development are strategic windows in improving organizational performance. thus, it is vital for organization to invest in staff training for improved performance. however, organizational policy has been reported to set constraints as to how and what amount of resources should be deployed in staff training and development (cascio, 2002). the author was of the view that organizational policy is critical in developing and implementing staff training and development. this goes a long way to affect organizational performance. it is therefore imperative to note that effective staff training and development is possible where organizational policy makes provision for such activities or requirement. 4. methodology due to the nature of this research as to the need for questionnaire distribution for data collection, this research adopted cross-sectional survey design. the population for this study consists of staff of deposit money banks in rivers state. according to central bank of nigeria (cbn, quarterly report, 2018), there are 22 deposit money banks in nigeria. due to the number of banks and their branches in the state, this research considered at least one accessible branch of the 22 banks. positions targeted in these organizations for questionnaire administration are branch managers, marketing head, and operations head. this suggested that 3 persons in the 22 banks responded to questions in the research instrument, which gave a total of 66 respondents. principally, two sources of data namely: primary and secondary; were considered. in addition, instrument for this study was validated by consulting research experts in the field of management sciences. on the other hand, cronbach’s alpha tests were carried out in order to evaluate the consistency of the instrument. a benchmark of 70% was used against the results of the reliability tests. data for the study were analyzed at two levels. first; at the primary level, descriptive statistic tools such as tables, pie chart, percentages were adopted. second; at the secondary level, spearman’s rank correlation coefficient was used in testing the 3 hypotheses as proposed earlier in the study. it is crucial to state that while partial correlation was used in testing the moderating effect (variable); however, all analyses were carried out with spss (version 21.0). 5. data presentation and discussions 5.1 questionnaire distribution and retrieval a total of 66 copies of questionnaires were administered to personnel of deposit money banks in rivers state. out of the 66 copies, 58 were retrieved, but only 55 were usable i.e. completely filled. table 1. questionnaire distribution and retrieval questionnaire frequency percentage (%) distributed 66 100 retrieved 58 88 not retrieved 8 12 retrieved usable 55 83 source: field survey data, 2020, spss output. table 2. reliability test results variables cronbach’salpha mentoring 0.779 job orientation 0.834 productivity 0.791 source: field survey data, 2020, spss output. the table above shows the results of the reliability test. as can be noticed, since the various test results are more than 0.70 (70%) which happens to be the criterion for acceptance of the instrument. hence, the research instrument is reliable. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 40 5.2 testing of hypotheses hypothesis one h01: mentoring has no significant effect on productivity of deposit money banks in rivers state. table 3. correlation analysis between mentoring and productivity correlation mentoring productivity spearman's rho mentoring correlation coefficient 1.000 .789** sig. (2-tailed) . .001 n 55 55 productivity correlation coefficient .789** 1.000 sig. (2-tailed) .001 . n 55 55 ** correlation is significant at the 0.05 level (2-tailed). source: field survey data, 2020, spss output. decision: the above table shows a spearman rank correlation coefficient of 0.789 and probability value of 0.001. since the pv which is 0.001 <0.05 we reject the null hypothesis and accept the alternate hypothesis. this result indicates that there is a positive and significant relationship between mentoring and productivity of deposit money banks in rivers state. hypothesis two h02: job orientation has no significant effect on productivity of deposit money banks in rivers state. table 4. correlation analysis between job orientation and productivity correlations job orientation productivity spearman's rho job orientation correlation coefficient 1.000 .841** sig. (2-tailed) . .001 n 55 55 productivity correlation coefficient .841** 1.000 sig. (2-tailed) .001 . n 55 55 **correlation is significant at the 0.05 level (2-tailed). source: field survey data, 2020, spss output. decision: the above table shows a spearman rank correlation coefficient of 0.841 and probability value of 0.001. since the pv which is 0.001 <0.05 we reject the null hypothesis and accept the alternate hypothesis. this result indicates that there is positive and significant relationship between job orientation and productivity of deposit money banks in rivers state. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 41 hypothesis three ho3: organizational policy has no moderating effect on the relationship between staff training & development and organizational performance of deposit money banks in rivers state. table 5. correlation analysis of the moderating effect of organizational policy on the relationship between employee training, development and organizational performance correlations staff training & development organizational performance spearman's rho staff training &development correlation coefficient 1.000 .553** sig. (2-tailed) . .001 n 55 55 organizational performance correlation coefficient .553** 1.000 sig. (2-tailed) .001 . n 55 55 **correlation is significant at the 0.05 level (2-tailed). source: field survey data, 2020, spss output. decision: the above table shows a spearman rank correlation coefficient of 0.553 and probability value of 0.001. since the pv which is 0.001 <0.05 we reject the null hypothesis and accept the alternate hypothesis. this result indicates that organizational policy has a positive and moderate influence on the relationship between staff training & development and organizational performance of deposit money banks in 6. discussion of findings result from hypothesis one showed a correlation value of 0.789. this indicates that mentoring has a positive and significant relationship with productivity. therefore, the null hypothesis was rejected in favour of the alternate hypothesis. the finding however was in line with the findings of khan et al. (2011) when they found that on the job training, training design along with the style of its delivery have significant effect on organizational performance. also, the study conducted by falola, osibanjo, and ojo (2014) agrees with ours.it was revealed in their study that there exists a strong relationship between training, development, and organizational performance. more so, result from hypothesis two showed a correlation value of 0.841. this revealed a positive and significant relationship between job orientation and productivity of deposit money banks in rivers state. therefore, the null hypothesis was rejected in favour of the alternate hypothesis. this result is with accordance with the study of tahir, yousafzai, jan, and hashim (2014) who identified in their study that training and development are strategic windows in improving organizational performance. thus, it is vital for organization to invest in staff training for improved performance. training and development would provide opportunities to employees to make a better career life and get better position in organization. in addition, hypothesis three showed a correlation value of 0.553. this revealed a positive and moderate effect of organizational policy on staff training & development and organizational performance. the result corroborate's with cascio's (2002) argument when the author stated that organizational policy has been reported to set constraints as to how and what amount of resources should be deployed in staff training and development. he went on to state that organizational policy is critical in developing and implementing effective staff training and development. 7. conclusions, managerial implications and contribution to knowledge in recognition of the findings of this research and other related ones, it is therefore important to state that the responsibilities of the human resource manager have become critical to the survival of the organization. this is evident due to the strategic importance of staff training and development to help equip employees with the necessary tools to carry-out assigned tasks. continues training of bank staffs a vital ingredient that prepares them with expertise to take-up the day-to-day job challenges in the work place. more so, with adequate staff development programmes, banks can reap from increased employee skills and productivity. in line with the rbv, it is instructive www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 42 to mention that effective and continues mentoring and job orientation can be thought of as strategic resources banks could use in building sustainable competitive advantages in service delivery that are unique and difficult to imitate. in view of the above conclusions and implications, this research has successfully solved some of the identified contemporary problems in the banking sector. also, with the use of alternative variables as combined in our framework, this research has added to the stock of literature in the area under review. references agnes, s. (2009). thesis on efficiency and profitability studies and their accounting interrelations in food industry, university of debrecen, hungary. amit, r., & schoemaker, p. j. (1993). strategic assets and organizational rent. strategic management journal, 14(1), 33-46. aina, s. (1992). personnel management in nigeriaa work-centered approach. edition f. communication ikeja p. 75. banjoko, s. a. (1996). human resource management: an expository approach, saban publishers lagos p. 71. bhatti, k.k., & qureshi, t. m. (2007). impact of employee participation on job satisfaction, employee commitment and employer productivity. international review of business research, 3(2), 54-68. cascio, w. f. (2002). strategies for responsible restricting, the academy of management executive, 16, 80-91. cascio w.f., & sibley, v. (1999). utility of assessment center as a selection device. journal of applied psychology, 64, 107-118. devanna, m. a., fombrun, c., & tichy, n. (1984). a framework for strategic human resource management. in strategic human resource management, 31 – 51. edeh, o., & nwaji, c. (2018). employee training and organizational performance of selected deposit money banks in abia state, nigeria. international journal of management sciences, 6(2), 1-13. ekwueme, c.m., & jones, a. s. (2009). determinants of financial reporting quality evidence from listed manufacturing firms in nigeria: journal of global accounting. falola, h. o., osibanjo, a. o., & ojo, i. s. (2014). effectiveness of training and development on employees' performance and organisation competitiveness in the nigerian banking industry. bulletin of the transilvania university of braşov, 7(1), 161. harvey, m. (2002). human resource management in africa: alice’s adventures in wonderland. international journal of human resource management, 13(7), 1119 – 1145. ichniowski, c., shaw, k. & prennushi, g. (1997). the effects of human resource management practices on productivity: a study of steel finishing lines. american economic review, 87(3), 291-313. isiaka, s. b. (2011). motive for training and management development in the nigerian banking industry. asia social science, 7(3). jackson, t. (2002). reframing human resource management in africa: a cross cultural perspective. international journal of human resource management 13(7), 998–1018. kamoche, k. (2002). introduction: human resource management in africa. international journal of human resource management. 13(7), 993–997. khan, r. a. g., khan. f. a., & khan, m. a. (2011). impact of training and development on organizational performance, global journal of management and business research, 11 (7), 62-68. makhija, m. (2003). comparing the resource‐based and market‐based views of the firm: empirical evidence from czech privatization. strategic management journal, 24(5), 433-451. nassazi, a. (2013). effects of training on employee performance: evidence from uganda. oni, o., mukaila, a. & musa, m. (2016). accessing the impact of training and management development in the nigerian banking sector. international journal of business and social science, 4(5), 160-167. penrose, e. (1959). the theory of the growth of the firm, oxford: basil black well publisher. riyaz, r. (2004). trainning effectiveness in public and private sector commercial banks. a micro-level comparative study. management and change, 8(1) 49-67. richard, p.j., devinney, t.m., yip, g.s. & johnson, g. (2009). measuring organizational performance: towards methodological best practice. journal of management, 35(3), 718-804. sultana, a., irum, s., ahmed, k., & mehmood, n. (2012). impact of training on employee performance: a study of telecommunication sector in pakistan. interdisciplinary journal of contemporary research in business, 4(6), 646-661. tahir, n., yousafzai, i. k., jan, s., & hashim, m. (2014). the impact of training and development on employees performance and productivity a case study of united bank limited peshawar city, kpk, pakistan, international journal of academic research in business and social sciences, 4(4), 86-98. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 43 wright, p., & geroy, d. g. (2001). changing the mindset: the training myth and the need for word-class performance. international journal of human resource management, 12(4), 586–600. wiklund, j., & shepherd, d. (2003). knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses’. strategic management journal, 24, 1307–1314. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 3, no. 1; 2021 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 12 world trade after covid-19 pandemic shock – recovery or stagnation? marzina akhter student of ma in global trade management worms university of applied sciences, germany mba & bba in accounting & information systems, comilla university, bangladesh e-mail: morzina.cou1@gmail.com received: august 08, 2021 accepted: august 29, 2021 online published: september 26, 2021 doi: 10.46545/aijbms.v3i1.205 url: https://doi.org/10.46545/ aijbms.v3i1.205 abstract globalization has shorten the world & make the life easier. it also results liberalization of trade. hence, world trade or global trade acts as a coordinator of foreign trade of different countries. due to the behavioral and structural position, world trade is also responsible for spreading crises and infectious diseases. nowadays the world is facing a perilous situation for worldwide spreading of covid-19 pandemic. the acceleration of this pandemic causes the deceleration of the normal life of the nations. the leaders of most of the countries implement restrictive policies to protect their citizens from this pandemic, i.e., lockdown, travel restrictions. consequently, covid-19 produces an economic impact through the interruptions of personal income, world trade, and demand & supply chain. after the last financial crisis 2008-09, the world is again facing a destructive fall in world trade. the aim of this paper is to provide an overview of world trade during covid-19 and the present situation of this whether it is in stagnation or recovery. the paper uses secondary data from different journals, websites, newspapers and blogs for analysis purposes. this paper concludes that the world merchandise trade’s recovery is stronger than the world services trade. the reasons for sluggish world services trade is the restricted international travels & tourisms. there is no equal merchandise trade recovery for all the countries. some countries are winners & some are losers. keywords: world trade, covid-19, financial crisis, globalization. jel classification codes: f10, f60, g01. introduction world trade gives a platform to the countries to exchange their goods and services. the countries can avail themselves of getting products or services which are costly or not available to them domestically. when a person can buy five different products originally produced by five different countries from a super shop, he is taking advantage of world trade. so, trade acts as a hub of making connections between countries (koka, prescott, & madhavan, 1999). trade is an important part of growth & a fundamental portion of human social organization. after the second world mailto:morzina.cou1@gmail.com https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 13 war, the management process of social, political and economic factors recognized globalization which includes controlling of capital flow and liberalization of trade (khan, 2020; serrano & boguñá, 2003). consequently, this liberalization strategy has made the world smaller like a village. the most recent covid-19 has emerged from china in december 2019 and spreads as a pandemic to all over the world. as of may 1, more than 153 million people confirmed the covid-19 cases and 3.2 million people have died due to this cause. this pandemic has caused a long-term imbalance across income groups & discontinued availability of essential medicine and health services (world health statistics, 2021). it is not only a health disease but also affects the world economically, politically, socially, psychologically, and educationally. this causes a deglobalization with a shock in educational, tourism, investment and export & import sectors (hassani & dost, 2020). foe instances, most of the countries in the world have physically closed their educational institutions to reduce the spreading of this pandemic (salik & chowdhury, 2020). in the business organization rewards and recognition policies are important for employee engagement (baqir, hussain, waseem, & islam, 2020). due to this pandemic period companies fail to manage this. most of the cases they choose retrenching of the employees. there is an unusual economic ramifications and employees are losing their jobs (imran & ahmed, 2020). world trade is also hampered by this pandemic. globalized world trade (moving plants, animals and other materials) is also responsible for spreading infectious disease (relman, choffnes, & mack, 2010). due to this structure of the world trade system, it is not only a channel of exchanging goods and services but also can be a channel of spreading crises (glick & rose, 1999). for instance, the impact of this pandemic on trade has not just confined to one or two countries rather it spreads all over the world. as the third wave of covid-19 has started, this pandemic situation is continuing for a long time. the world is searching for solutions to retrieve from this. so, what is the recent development in world trade after this pandemic shock? is it recovering or in a stagnation situation? the aim of this study is to find out the answers of these questions. the analysis of this study is based on the secondary data. the data are collected from journals, published research articles, websites, blogs etc. overview of world trade as the concept of david ricardo, global trade or world trade can be recognized as a comparative advantage. a country can be in a comparative advantage position by making a specific goods or giving services at a lower cost than other countries (ruffin, 2002). for instance, the garment industry of bangladesh is in a comparative advantage position due to its lower labor costs. hence, world trade collaborates the specialization of different countries and makes an exchanging platform among these countries. the world trade organization (wto) acts as a media of setting rules and regulations for world trade. its aim is to help the nations doing their trade in a flexible, free and easier way. since 29th july 2016, it has 164 members and most of the trades have taken place under the rules and regulations of world trade. according to the former director-general roberto azevêdo of the wto, in 2016, 98 percent of world merchandise trade occurred under wto rules. world trade can play a vital role to accelerate national development, economic growth and job creation. in 2017, world merchandise recorded its highest growth in the last six years, the ratio of trade growth to gdp growth returned to 1.5, above the 1.0 ratio recorded in the years following the 2008 financial crisis. further, according to the statistical review report 2019 of the wto, the volume of world merchandise trade as measured by the average exports and imports, increased by 3% in 2018. developing economies also exported a total of us$ 8,779 billion in 2018 of which us$ 193 billion dollars were from least-developed countries. in summary, world trade https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 14 & gdp grew by 26% since 2008. world trade has been in a positive trend since the 1950s and from 1980-2002, it has tripled (ortiz-ospina, beltekian, & roser, 2018; barriel & dean, 2005). additionally, according to the statistical review report 2020 of the wto, in 2019 before the covid-19 pandemic situation the world trade declined in volume by 0.1% and merchandise trade fell by 3% due to political tensions and protectionist measures. so, the average trend of world trade before covid-19 is upward with exceptions in some cases. world trade during covid-19 pandemic most of the countries chose a lockdown process to protect their citizens from virus infections. this system causes significant shocks in demand and supply which impact almost all the sectors, i.e. liquidity crisis and resources & inventory breakdown of sme. according to wto (2018), the three leading players of merchandise trade in 2017 are china, us and germany. china alone covers 60% of demand and supply in the world. hence, the decline of china's world trade fall impacts the rest of the world’s trade. the world trade us government will be reduced by us$ 905 billion and us$ 2095 billion in short containment and long containment scenarios respectively (hassani & dost 2020). moreover, a causal relationship exists between covid-19 deaths and exports and imports of china. for the usa, both covid-19 deaths and cases have a direct causal relationship with exports and imports (zhang, dawei, majeed, & sohail, 2021). as it is mentioned above, since 2019, world trade has been facing challenges prior covid-19 pandemic. this pandemic has caused an extra massive impact on world trade. global trade decreased by 6% in 1q20 year on year, followed by a decrease of 21% year on year in 2q20. the volume of trade also dropped by 3% in 1q20 compared to 4q19 and continued its drop by 14% in 2q20 (ifc, 2020). the disruption of world trade has precipitously begun from the first half of 2020. purchasing managers’ indices (pmis) disclose new export orders of manufacturers and services have fallen straightly 27.1 and 21.7 respectively in april 2021 compared with a baseline value of 50. in may 2020, it slightly increased but remained below trend (wto, 2020). most of the economies show a downward merchandise exports. the year-on-year percentage change of merchandise exports of selected leading traders as of april 2020 is not positive for most of the countries. it is ranged from -2% to -61%. some asian economies have not experienced declines in exports but their imports are still negative. for instance, china experienced 14% down in imports and thailand experienced 17% down in imports (wto, 2020). there is no scope for services such as goods to produce, store or sell at later stages. consequently, there is no opportunity to recover the lost revenues for cancelled flights, restaurants meals or hotel bookings. international travels, cultural and recreational activities account for more than 40% of world services exports. the year-on-year monthly percentage change of services exports of selected leading traders as of march 2020 is also not positive for most of the countries. these are reduced tremendously. for instance, italy’s services exports fall by 40%.in a comparison of services exports of march 2020 with 2019, almost half of world services exports fall by 15%. more specifically, the leading services traders-us and uk, exports were reduced by 14% and 22% respectively. some countries showed growth due to their dominated it services, i.e., the services exports of india, ukraine and ireland were up by 1%, 3% and 8% respectively for the first quarter of 2020 (wto, 2020). the impact of covid-19 on other sectors also causes an impact for world trade as a consequence. this pandemic is considered as a threat and disaster for educational systems, tourism, health, financial system and economy of all countries (gruszczynski, 2020). for instances, this pandemic has not only affected china’s international trade but also severely affected https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 15 its air transportation sectors and tourisms such aschina’s economy is shrank by 6.8% in the first quarter of 2020 (ruiz estrada, park, & lee, 2020, kazunobu & hiroshi, 2020). the covid-19 pandemic has turned the world into a recession in economies all over the world. there is also a downward trend in container shipping. in may 2020, a seasonal index of container port throughput was down 8 percent year-on-year. on the other hand, global commercial flights (both passenger & air transport) were reduced by 74 percent between 5 january and 18 april 2020. consequently this caused a slowdown in merchandise trade and commercial services trade (wto, 2020). due to the world trade and other sector disruptions there is a negative impact of covid-19 on gdp. it fell by 2% which is below the benchmark of the world. the gdp of industrial countries and developing countries is reduced by 1.8% and 2.5% respectively (maliszewska, mattoo, & van der mensbrugghe, 2020). further, china’s gdp declined by 9.8% in the first quarter of 2020 in a comparison with the previous quarter. the united states and euro areas also recorded a decline in gdp by 1.2% and 3.8% respectively. these all the rates are equivalent to the annualized of -45%, -4.8% and -14.4% respectively for china, us and euro areas (wto, 2020). covid-19 pandemic and global financial crisis (gfc) the world is experiencing the most disrupted global pandemic after the great depression of the 1930s and global financial crisis of 2008 (mirza, rahat, naqvi, & rizvi, 2020). the financial crisis of 2008-2009 was the worst financial disruption since covid-19 pandemic. although the causes of the financial crisis 2008 and covid-19 pandemic are different, there are similarities in consequences. financial markets, world gdp, world trade and the economies of nations are being collapsed by both of these. but the depth of collapse is different. for instance, inflows of external private finance are estimated to fall by usd 700 billion compared to 2019. this impact is up by 60% compared to the gfc of 2008 (oecd, 2020). the economic growth rate of developing countries is expecting more negative and the developed countries growth rate is expecting -5.8% in 2020 while it was -3.4% in 2009 (unctad, 2020). further, in 2008-09 the pmi showed new exports of manufacturing was above 30 and in the first quarter of 2020 it is 27.1 with a baseline value of 50 (wto, 2020). the sharp fall of global trade in the first few months of this pandemic exceeded the situation of the 2008-09 global financial crisis (ifc, 2020). world trade after this pandemic shock the third wave of covid-19 pandemic, especially delta variant of india is shaking the world perilously. the world is searching for solutions to survive, i.e. the vaccination process. the countries also try to turn up their economies. the present situation of world trade is better than previous times of q4 2019 and 2020. one of the most leading players of world trade, i.e china's international trade’s growth rate is 28.2% year-on-year to 14.76 trillion yuan ($2.3 trillion) in the first five months of 2021. statistical data of the general administration of china (gac) shows that the country’s exports and imports had a growth of 30.1% & 25.9% year-on-year to 8.04 trillion yuan and 6.72 trillion yuan respectively between january to may 2021 (global times, 2021). in the first half of 2020, world trade experienced a sharp decline whereas it recovered faster than expected in the second half of the same year. the world merchandise trade growth is increased by 15% in the first quarter of 2021 relative to average of 2020.it is forecasted to increase of overall 8% for 2021 (wto, 2021). regional trade trends of exports & imports in q1 2021 increased by 12% & 7% for developed countries and by 18% & 22% for developing countries in comparison with q1 2020. the global trade is forecasted to increase by 16% for the second quarter of 2021 (unctad, 2021).figure 1 shows the trade trends of exports and imports of major trading https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 16 economies of q1 2021. china, india and south africa are in a relatively better situation than other major economies during q1 2021. figure 1. world trade trend of major economies for q1 2021 source: unctad the recovery of goods is stronger than services. world services trade is falling 9% yearon-year in the first quarter of 2021. it was 21% down for all over the year of 2020. this services trade remained sluggish due to the weakness in travel services. travel services are reduced by 62% in the first quarter of 2021. the new variants of covid-19 cause delayed recovery of international travel (wto, 2021). the cumulative change in world trade from the start of each recession i.e., 2020, 2015, and 2009 shows a faster recovery of 2020. recovery trend is faster than the previous trade recessions. (unctad, 2021) china india south africa usa european union goods (exports) 22% 45% 25% 14% 13% goods (imports) 20% 26% 36% 16% 14% services (exports) 3% 14% -1% 10% -1% services (imports) 27% 2% -26% 3% 7% -30% -20% -10% 0% 10% 20% 30% 40% 50% world trade trend of major economies for q1 2021 (q1 2021 relative to 2020 average) goods (exports) goods (imports) services (exports) services (imports) china india south africa usa european union goods (exports) 20% 10% -4% 7% 1% goods (imports) 25% 7% 31% 0% 6% services (exports) -23% 2% -37% -14% -13% services (imports) 22% -3% -62% -18% -6% -80% -60% -40% -20% 0% 20% 40% world trade trend of major economies for q1 2021 (q1 2021 relative to 2019 average) goods (exports) goods (imports) services (exports) services (imports) https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 17 conclusion globalization of trade makes the world easier. at the same time it also acts as a channel for spreading crises. due to this pandemic situation some countries may be gainful and some may be downfall in world trade. for instance, the countries which are specialized in making medical assistance goods or giving medical assistance services will be gainful in this pandemic. from the second half of 2020 the merchandise trade is in recovery whereas the services trade is in a sluggish position. the most relative reason for the slow recovery of services trade is the imposed restrictions on international travels and tourism. the interesting thing is that the developed countries lagged behind the developing countries in recovery of world merchandise trade. the better world trade averages of the east-asian countries increases the total world trade averages of the developing countries. the trend of world trade recovery of covid-19 pandemic is much better than the previous trade recessions. but this recovery trend is uneven. for examplechina has a higher global trade growth than the other asian countries. the uneven distribution of vaccines and the accurate solutions of cure for covid-19 is related to the slow economic recovery. the responsible organizations or authority should ensure an equal distribution of vaccines. the world has to discover the cure of this disease. these can lead the nations to normal life and consequently to a fast recovery of world trade as well as economy. references barriel, m., & dean, m. 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(2021). covid-19 and international trade: insights and policy challenges in china and usa. economic research-ekonomska istraživanja, 1-12. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (https://creativecommons.org/licenses/by/4.0). https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 52 analyzing the performance of mega construction projects in oman: a study of selected projects from oil & gas sector ahmed salim al saeedi phd research fellow binary university of management and entrepreneurship, malaysia asif mahbub karim phd dean and associate professor binary university of management and entrepreneurship, malaysia abstract this study investigates omani o&g project’s performance and analyzes the most common time and cost overrun causes. in addition, the effects of delays are examined further along with the key enablers for efficient project delivery. this study adopts a mix method of research to improve the level of credibility of the study. a sample of 160 respondents is employed following both quantitative and qualitative method where a well-structured questionnaire was used for interviews with the concerned personnel. following the quantitative method, this study revealed that 8% of the respondents, says the projects have completed on time where the response rate was 80%. besides, the qualitative part backed up this data as most of them have experienced delay of 3 months to 2 years of delay. for cost, 3% of the respondents have experienced projects finishing on budget and the interviewees have expressed that the average cost overrun is between 10%-30%. in terms of time overrun group factors, the top group time-overrun factors among all the three parties are management factors, where it is ranked first by all stakeholders. the sub-group factor that affects more is the project planning and control. poor understanding of scope of work during tendering factor is ranked first with main contractor and second with both the client and engineering firms. this factor is most factors that has similar ranking between all. as matter of fact is the only factor that exists between in the top 10 among all stakeholders. this study claimed that understanding the scope of work of the project properly and giving its time to be grasped by the contractors is one of the key solutions to tackle the top factor of this research. also, the sow must be detailed as possible to avoid any conflict between the parties, one of the recommended details to have wbs included. keywords: mega construction projects, oil & gas sector, delay, management factors, overrun group factors, oman. 1. introduction since oman is a developing country like any other neighboring country, many projects are in progress and many of them are yet to go underway. it also struggles with same phenomenon of overruns. mega construction projects in oman of public and private sectors suffer from time & cost overrun. oyegoke et al. (2017) listed five important projects that didn’t complete on the agreed date. one of them has a delay as many as over six years. in a case study conducted by (alnuaimi & almohsin, 2013)in construction projects, the delay was around 59% in 2007-2008 period and 42 % in 2009-2010.and for the years after 2011 till 2014, in 40 construction public projects, 38% of them suffered an over run in schedule (ruqaishi & bashir, 2014). for the oil and gas projects in oman, there is no formal record found indicating the performance of such projects, however, based on the following, the researcher is safe to say that there is significant time and budget overrun in o&g projects as well. furthermore, there are four levels of project being successful according to: level one is achieving the basic triangle of project management (time, budget, quality and scope) asking the question: has the project met these targets. second level has to do with aftermath of the project, has it been a bad experience for stakeholders (project team, client and others)? has there been many conflicts within, and has project resources been utilized properly? if the answer is no, according to the author even if the project met its level one targets, this might not be considered as successful one. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 53 end user satisfaction is the third level. the project has to solve the original problem to per customer needs otherwise it would be a failure, the following question must be answered: was the completed product is really the one the end user want? the last and not the least level is the organizational improvement according to the author. have the lessons learnt been captured and maintained properly in order to be used for future projects? will the same mistakes be repeated? 1.1 research objectives ▪ to identify the factors contributing to delay in mega construction projects in o&g sector. ▪ to identify consequences of delay in mega construction projects in o&g sector. ▪ to investigate the factors causing delay in mega construction projects in o&g sector. ▪ to assess consequences of delay in mega construction projects in o&g sector. ▪ to develop the practical frameworks of improving project performance in construction industries in oman. 2. literature review 2.1 project success and performance scholars and experts in project management have not reached on one agreement on what a project success is (chan et al., 2004; lientz and rea, 1995). a.ika (2009) and lientz & rea (1995) have pointed out the concept of project success a quite ambiguous and vague. mccoy (1996) claimed that it is important that to identify the “criteria” on which to consider a project is successful or not. de wit (1988) also claimed that “success criteria” has to do with project success while “success factors” is dealt with the project management success. cook-davies (2002) defined success criteria are those “measures” that the success of a project is “judged” against whereas success factors as “those inputs to the management system that lead directly or indirectly to the success of the project or business”. in one of project management journals, by (a.ika, 2009), where he reviewed articles between 1986-2004, one of the findings had been that the term "project success" has been used to mean more than just "iron triangle" . project success has involved many other factors like the client satisfaction with other stakeholders (just like what gary (r.heerkens, 2002)said. in addition, the author argued that it is not necessary if a project failed in terms of time and cost, to be considered as failure. he mentioned an example of sydney opera house where it miserably failed its basic targets of time and cost. however, this project has turned out to be one of the best projects in australia and attracts many tourists every year. ika (2009) has drawn distinction between project management success and project success, where he considered pms is all about the iron triangle while ps as the more comprehensive meaning which covers more than the iron triangle. 2.2 overall time and cost factors for oil and gas the average delay in oil and gas projects ranges from 5-20% (salama, et al., 2008), however it is been found that the average of delay in some iranian petrochemical plants were around 63% of the planned (naimi, et al., 2008) and only four projects have been completed on time out of thirty four projects, and that is huge. in terms of budget, it has been found that average of cost overrun is 18% among 200 projects studied in oil and gas business (rui, et al., 2016). although it has been mentioned construction projects are all similar, the assumption is that the main causes of time overrun in oil and gas projects are different from the rest (salama, et al., 2008). moreover, it has been found that in execution phase, the time slippage occurs more than other phase of the project (salama, et al., 2008)and the construction phase out of the execution phase is the main concern in a project cycle (pham & hadikusumo, 2014).also, according independent project analysis (ipa) 2011 78% of oil and gas projects especially the upstream one suffered either from time or cost overrun (ey report in 2014, eygm limited) and in the same report, it reveals that middle east region has a more delay percentage than the mentioned above percentage. there is a real necessity to analyze the oil and gas project performance, one for the cliché that says time means money, second there has been limited studies. 64% of o&g mega projects facing cost overrun and 73% in schedule in the world, where middle east is the worst region in that department: 87% proportion of projects suffers from time overrun and 89% in cost (ey report in 2014). 2.3 features of mega projects in oil and gas oil and gas mega projects have similar features to other type of industries with perhaps additional uniqueness. o&g mega projects sites are more likely to be constructed on harsh extreme conditions and isolated areas and often there is more lack of competent resources for project delivery. also, construction phase in these projects starts even before the design is completed (chanmeka et al., 2012). in addition, interfaces in mega o&g projects are huge and cannot be underestimated. the risks are even greater in those projects and must be sometimes managed by a higher level of authority than the project team (jergeas, 2008). there is a high tendency that the o&g project will go over a few changes at early stage of its cycle till it settles down at later stage like execution phase. these changes may very well www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 54 affect the initial planned completion date and budget (olniran et al., 2015; loch, 2006; love et al., 2014).last feature but not the least in mega o&g projects is the technology. it has reached a high level of advancement and sometimes such technology has not been tested yet. (merrow, 2011). 2.4 major factors of budget performance as the author is going through literature review, have found that most of the past researchers that analyzing the causes of time overrun associate cost overrun in the same context, and giving the results as an overall factor of both. it is no coincidence, as it is known that time and cost overruns are correlated as shown in the triangle of project management: time, cost, and quality. based on books and literature reviews, cost overrun, and time overrun are correlated. studies by flyvbjerg, holm and buhl (2004) done on large projects revealed that when an execution phase of project delayed by one year the cost overrun increases by approximate 4.64 %. moreover, studies like (sambasivan & soon, 2006), (motaleb & kishk, 2010)and (memon, et al., 2011) where they studied effects of delays, they found that the top two effects are: time overrun and cost overrun. this suggests highly of correlation between time and cost overrun. in other words, the moment a project is delayed, the budget of the projects increases. 2.5 cost overrun in oil and gas projects it has been found that average of cost overrun is 18% among 200 projects studied in oil and gas business (rui, et al., 2016). in developing countries like iran, in gas projects, (vafaiee, et al., 2010) found that the cost overrun reached up to 20%.a more scary stats, earlier report cited in paper of(olaniran, et al., 2015)from mackenzie, 2011 the average cost over in mega oil and gas project in europe around 91% and in asia 92%. these projects has an average of 2000 m usd a project in europe and 1400 11000 musd in asia. things have not improved much over the years, ey report in 2014 revealed that 64% of o&g mega projects faced cost overrun in the world, where middle east is the worst region in that department: 89% proportion of projects suffer from cost overrun. this also backs up the claim by (zadjali, et al., 2014) that cost overrun in developing countries is more severe and worse. 2.6 success factors or key enablers details sambasivan and soon (2006) have classified the success factors as per the stakeholder, client, owner, main contractor and consultant in malaysian construction sector. for the client, the authors recommend avoiding the contract to the lowest bidder, but rather, the contractor who could show “sufficient experience, technical capability, financial capability, and sufficient manpower to execute the project”. the second recommendation for the client is reduce the major changes in design especially during construction. such action leads usually to put the progress of work on hold till the new change is implemented. the third recommendation is that client should have enough fund and cash flow in order to make the progress payments to contractors on time, so that the contractor is able to procure the needed material and equipment to finish the construction project. as for the main contractor, (sambasivan & soon, 2006)have recommended the contractor not to take the construction contract from the beginning if they don’t have enough experience teams to execute the project. one of those professionals that an experience is a must to have is the construction managers. the last not the last recommendation for the main contractor, is the same of the client’s one: enough funding. the main construction contractor shall have enough cash flow during the all cycles of the project to make sure, not to delay progress because of money. sambasivan and soon (2006) urged the consultant to approve the necessary drawings and documents on timely manner and they should have close supervision on the work done to ensure consistency with drawings and standards. 2.7 engineering factors engineering factors has been part of the major factors of time and budget overrun in many of the past studies; it includes the specification, drawings, design etc. these articles are, not limited to: a. assaf and al-hejji (2005) found “late in reviewing and approving design documents by owner” as the top 2 factor causing time overrun. doloi et al. (2011) found 2nd top factor “non-availability of drawing/design on time”. le-hoai et al. (2008) found “design changes” one of the top five ranked. hwang et al. (2012) found third top factor contributing a delay is “design changes by owners”. alnuaimi and almohsin (2013) “change in initial design” is third important factor in commercial buildings in oman. some more recent papers are (jarkas & younes, 2014) found “frequent change/variation orders issued by the employer and lack of coordination among design disciplines” are the top third and fourth respectively (elawi et al., 2015).“redesigning-line services” is the second top factor in mecca construction projects. kalkkani and malek (2016) found 2nd top factor in indian projects are “drawing revision and clearances from consultant/client/pmc”. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 55 thus, as it is seen design issues are one of the main factors contributing to an expansion of the completion date of a project and could cause a cost overrun. the researcher suggested to reclassify the heading of all related to design and technical issues to be an engineering factor. the following a framework of design errors effects based on the discussed literature review above: figure 1. framework of design errors 2.8 finance factors in transition from engineering factors to finance ones, the first topic can be discussed further are the claims. as seen from last section in the literature review, change or variation order is mainly causes by changes in design, and although most of these changes are not desired to be at that time of the project cycle, owners is obligated to implement them for sake of completing the project in quality and timely manner. moreover, typically these changes are agreed by all parties especially between the owner and the main construction contractor afterwards, officially. also, it is seen from the past section that one of the effects of variation order is claims. explicitly found in (ali s. alnuaimi, et al., 2010)finding when they collected their data, claims were the second top effect of change order after the effect of time overrun of the project. also, in (desai, et al., 2015), it has been mentioned that claims is mainly originated from variation orders, and it is one their main outcome. moreover, claims has been found as one of the main factors of projects delays and cost overrun, these articles are, not limited to (alnuaimi & almohsin, 2013; memon et al., 2011). there are many types of claims, which will be discussed shortly, however it is needed to highlight that in oil and gas industry, the word “claims” which is often by the main contractor, is often known as those requested payments that were not originally fully agreed by the owner. 2.9 external factors external factors have been listed in the past studies, among the potential causes that could affect the project performance in terms of time and cost. a comprehensive agreement among all scholars and researchers that the external factors are unfamiliarity & changes with local laws, construction permits, social & cultural and weather conditions. those studies are, not limited to, (a.assaf & al-hejji, 2005),(doloi, et al., 2011), (jarkas et al, 2014), (sambasivan & soon, 2006)and (frimpong, et al., 2002). in more particular articles, the external factors has been ranked first in the overall top causes of time overrun for example (alnuaimi & almohsin, 2013)when they have done their study on the first period2007-08, weather conditions was ranked first factor contributing to delays of the rework accidents low quality cost overrun time overrun design errors www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 56 commercial buildings. a more recent paper by (alamri & amoudi, 2017) where they have studies the dams projects in oman, their finding revealed that “severe weather conditions” is also the top causes of time overrun for those projects. another external factor which has to do with the laws and permits, (elawi, et al., 2015) found “land acquisition” is the first ranked cause that contributes to delay the completion date of project in mecca-saudi arabia. figure 2. the framework of the study 3. methodology this study adopts a mix method of research to improve the level of credibility of the study. a sample of 160 respondents is employed following both quantitative and qualitative method where a well-structured questionnaire was used for interviews with the concerned personnel. the questionnaires were a normal word document paper given to respondents by hands, while some others by emails. the target population includes high experience key personnel in the project delivery like construction manager, project manager procurement manager, and engineering managers. convenience sampling technique was applied in this study. pilot study was completed before conducting the main survey among 15 samples that were excluded from the final survey then. the english version of questionnaire was translated from english to local language by a native language expert. 3.1 instrumentation for collecting the qualitative data, we used some interview questions which are “what is the current performance of mega projects in o&g sector”, “what are the major causes of mega projects failing to meets its target of schedule and budget?”, “what are the consequences of construction delays in mega projects in o&g sector?”, “what are the major causes of mega projects failing to meets its target of schedule and budget?”, and “what are the key enablers of successful performance in mega projects? semi-structured interviews have been conducted as second method for this study. for collecting the quantitative data, five likert scale was employed which range from “not important to=1” to “very important=5” and “never=1” to “always=5” which was administered by the researchers. the spss version 23 was used to analyze the quantitative data. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 57 4. findings 4.1 respondents’ characteristics table 1. respondents’ characteristics population percentage required sample size responses collected percentage client 214 52% 103 75 73% engineering 102 25% 50 44 88% main construction contractor 94 23% 46 41 89% total 410 100% 199 160 80% the total respondents were 177, but there are invalid number surveys were 17. therefore, the complete questionnaires were 160 which represents 80% response rate. 4.2 respondents profiles table 2. gender frequency percent male 154 96.3 female 6 3.7 total 160 100 table 3. education frequency percent diploma 13 8.1 bachelor 111 69.4 master 34 21.3 doctorate (phd) 2 1.2 total 160 100 table 4. work experience frequency percent less than 5 years 18 11.3 between 5 and 10 years 31 19.3 between 10 and 15 years 39 24.3 between 15 and 20 years 28 17.5 between 20 and 25 years 26 16.3 between 25 and 30 years 10 6.3 more than 30 years 8 5 total 160 100 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 58 as seen from the above tables 4.4 around 70% perctange of the repsondets are having more than 10 years of experince. this gives a good wieght to the found resutls. in addtions, repsondets who posses projects experince for more than 20 years, they resrpesnt aorund 28 % which is almost thrid. table 5. frequency distribution of respondents in iterms of positions, 25 of the respsondets are project managers who are the focal point of the project itself. they look into it as holistic veiw which gives the advantage of seeing everyhting, meaning, isssues and key enablers. the higher percentage of the respondents were discipline engineers, that electrical, instrument, mehcnical, commissioning, operation and others from all stackholders. 4.3 project performance table 6. project performance table 7. project variation www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 59 4.4 completed table 8. project completion the following section will answer the first question of research: ▪ what is the current performance of mega projects in o&g sector? the tables above show the performance of projects in terms of time and were derived from the responses of the questionnaires. the question was in the project profile section: “how much time overruns this project suffers”. the possible answers were in months, years or in percentage. 4.5 months and years as shown in the table, there is 42 project respondents suffered delay from 6 months and below and 2 projects within 8 months. the delay affected 17 respondents within 12 months behind the overall project schedule that is almost 11% of the sample. there are 14 projects couldn’t complete on time, and instead, they were delayed by 2-3 years. in other words, 9% of mega oil and gas projects participants in oman suffer a time overrun of 2 to 3 years. even worse, there were two projects that experienced a delay of 4 and 5 years respectively. although one seems to be a low number, however it is absurd to think that a project can exceed its planned target of schedule by 4 or 5 years. 4.6 completed on time a total of 13 projects have been indicated to be completed within agreed schedule. so, only 8% participants in o&g projects in oman have been successfully completed on time. in other words, there are 92% of participants have experienced project delay of different periods. as mentioned earlier in this study, there was a report from ey reports that indicated that middle east has an average of delay in o&g projects of 87%.this study revealed that is somewhat aligned with worlds reports, and it is proven by the data collected from the questionnaires. 4.7 cost the performance of projects in terms of cost, which were derived from the responses of the questionnaires. the question was in the project profile section. “how much cost overrun this project suffered”? the possible answers were in percentage or usd. 38 of project respondents experienced a cost overrun of 10% or less and 15 of them experienced between 11– 20 %. 19% of participants have found an average of cost overrun to be 21%-30% while 10.5 % of them have seen an average cost overrun of 31-50%. 2 projects have suffered cost overrun of 51% 60% and 71% 80% respectively. there is one project that suffered from an over budget of 100%, and that is huge. in terms of million us dollars, there are 4 projects have different values of cost overrun, it ranges from 100-200, and these values of runs is worth almost a new project at its own. there was one project where it was indicated to have saving when it is completed. 4.8 ranking of time only for different stakeholder (top 10) the following table answers part of the research question of ▪ what are the major causes of mega projects failing to meet its target of schedule and budget? www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 60 table 9. ranking of time overrun the above tables show the ranking of time overrun factors from the point of view of the main stakeholders who involved in project delivery. in attempt to analyze if there are similarities of these delay factors among the three parties, one could see that “poor understanding of scope of work during tendering (contractor)”is the most factor that is most agreed upon. it is ranked first with main construction contractor and ranked second for both the client and the engineering. it is astonishing that this delay factor has been agreed by the client and engineering firm and it is ranked it second. the above factor which has to do with full understanding of the project scope mainly from the main contractor point of view shows it high importance to deal with in order to reduce the risk of time overrun. “delay in start purchasing long lead items” is ranked second with main construction contractor and fifth or sixth with client, since they have the same mean number. “contractor poor procurement managements” is ranked fifth from the client point of view, and seventh or eighth from the main construction contractor. “ineffective planning and scheduling by the main contractor” is ranked first with client and the main construction contractor ranked it ninth.” poor monitoring and control” delay factor is ranked tenth with main construction contractor and seventh with client.” poor management of contractor’s schedule” is ranked ninth with the client and tenth with engineering firm. “poor site management and supervision (contractor)” is viewed a third most delay factor with engineering firm and viewed tenth from the client perspective. 4.9 correlation between the stakeholders and the ranking of the top 10 delay factors 50% of the highest 10 ranked time overrun factors exist between these two stakeholders. only10% of the top 10 has been agreed upon. there is 30% agreement between these two in ranking the top 10 delay causes. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 61 4.10 correlations between the stakeholders and the ranking of all possible delay factors the results showed the following: table 10. ranking of delay factors stakeholder spearman's rank sig. level main construction contractor and client /owner 0.72 0.95 main construction contractor and engineering 0.68 0.95 client /owner and engineering 0.74 0.95 the results showed that there is a high agreement between all stakeholders in ranking the time over factors where highest agreement is between client and engineering firm (0.74).despite the correlation between main construction contractor and engineering being high; it is still relatively lower than the two associations (0.68). the table shows also that the client interfaces stakeholder has the higher agreement than non-client stakeholder. it can be safely concluded that there is huge agreement in the ranking of time overrun factors among the involved stakeholders which make the results of the research more reliable. 4.11 kruskal wallis test and chi-square tests table11. at a glance performance of stakeholder’s perception factors asymp. sig. chi-square poor understanding of scope of work during tendering (contractor ) 0.045 3.4 ineffective planning and scheduling by the main contractor 0.01 13.6 delay in start of purchasing long-lead items 0.02 11.8 contractor poor procurement managements 0.01 13.2 poor site management and supervision(contractor) 0.181 3.4 poor management of contractor’s schedule 0.025 7.4 major changes in design during construction 0.02 12.7 delay in manufacturing long lead items 0.04 11.8 poor monitoring and control 0.02 12.1 shortage in material & equipment 0.795 0.45 slow decision making by owners 0.018 8.6 contractor's poor cash flow management 0.024 7.4 from the above table, it can be implied that there is no significance difference in the perception of the stakeholders (client, main cc, engineering) on the top 12 causes of time overrun (except for 2, poor site management and supervision (contractor), and shortage in material & equipment) since asymp sig is less than 0.05. 4.12 correlation among the top 12 times overrun causes table 12. relationship among overrun cause slow decision making by owners poor site manage ment and supervis ion(cont ractor) poor understa nding of scope of work during tendering (contract or) ineffectiv e planning and schedulin g by the main contractor poor mana geme nt of contra ctor’s sched ule poor monitor ing and control major change s in design during constru ction contrac tor's poor cash flow manage ment delay in start of purch asing longlead items contr actor poor procu remen t mana geme nts delay in manufa cturing long lead items shorta ge in materi al & equip ment 1 .311** 0.2 .255* .349** .358** .286* 0.18 .299** .349** .263* 0.14 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 62 slow decision making by owners 0.01 0.1 0.03 0 0 0.013 0.12 0.01 0 0 0.22 poor site management and supervision(c ontractor) .311** 1 0.2 0.11 .332** .317** 0.222 .247* 0.18 0.11 0.1 0.03 0.006 0.2 0.36 0 0 0.055 0.03 0.11 0.35 0.2 0.79 poor understanding of scope of work during tendering (contractor) 0.205 0.16 1 .237* .373** .465** .300** .315** .356** .313** .268* 0.19 0.073 0.16 0.04 0 0 0.009 0.01 0 0.01 0 0.1 ineffective planning and scheduling by the main contractor .255* 0.11 .237* 1 .729** .670** .387** .399** .353** .505** .420** 0.23 0.028 0.36 0 0 0 0.001 0 0 0 0 0.05 poor management of contractor’s schedule .349** .332** .373** .729** 1 .807** .407** .449** .376** .449** .399** .278* 0.002 0 0 0 0 0 0 0 0 0 0.02 poor monitoring and control .358** .317** .465** .670** .807** 1 .470** .457** .334** .485** .381** .278* 0.002 0.01 0 0 0 0 0 0 0 0 0.02 major changes in design during construction .286* 0.22 .300** .387** .407** .470** 1 .412** .463** .427** .433** .237* 0.013 0.06 0 0 0 0 0 0 0 0 0.04 contractor's poor cash flow management 0.181 .247* .315** .399** .449** .457** .412** 1 .446** .461** .365** .246* 0.117 0.03 0 0 0 0 0 0 0 0 0.03 delay in start of purchasing long-lead items .299** 0.18 .356** .353** .376** .334** .463** .446** 1 .563** .625** .382** 0.009 0.11 0 0 0 0 0 0 0 0 0 contractor poor procurement managements .349** 0.11 .313** .505** .449** .485** .427** .461** .563** 1 .692** .528** 0.002 0.35 0 0 0 0 0 0 0 0 0 delay in manufacturin g long lead items .263* 0.14 .268* .420** .399** .381** .433** .365** .625** .692** 1 .495** 0.023 0.24 0 0 0 0 0 0 0 0 0 shortage in material & equipment 0.142 0.03 0.2 0.23 .278* .278* .237* .246* .382** .528** .495** 1 0.221 0.79 0.1 0.05 0.02 0 0.041 0.03 0 0 0 **. correlation is significant at the 0.01 level (2-tailed). *. correlation is significant at the 0.05 level (2-tailed). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 63 4.13 overall group factors combining all three stakeholders ranking by group factors: table 13. highest ranked factors for time overrun the listed above table are the highest ranked group factors that causes time overrun in oil and gas mega projects in oman. these results were done by merging all responses from the client, main construction contractor and the engineering parties that are involved in the study. the first and two group delay factors are from management factors while the third one is from resources factors. the first subgroup factor in this study that causes o&g projects failing to meet its time target is the “project planning & control” which has the details in the below table: table 14. integrated means of stakeholders with ineffective planning project planning & control mean sd ineffective planning and scheduling by the main contractor 4.28 0.820 poor management of contractor’s schedule 4.15 0.833 poor monitoring and control 4.13 0.905 inadequate quality assurance control 3.95 0.837 again, this is the integrated means of all responses from all stakeholders which starts off with “ineffective planning “of the main construction contractor. it is clearly that is in the burden of the stakeholder of main construction contractor. the second delay factor under the group is the management of this plan which is the roles and accountability of client, in this research. in most past studies, such factor is under the responsibility of the consultant like mohammed (ruqaishi & bashir, 2014). table 15. integrated means of stakeholders with management issues management general mean sd poor understanding of scope of work during tendering (contractor) 4.39 0.83 poor site management and supervision (contractor) 4.15 0.74 slow decision making by owners 4.12 1.019 management of subcontractor 3.92 0.855 inappropriate construction methods implemented 3.88 0.868 conflicts among joint owners of the project (for joint-venture projects) 3.83 1.063 the second top delay group after the integration of all stakeholders’ responses is the general management factors shown in the above table. ruqaishi and bashir (2014) who wrote their article in oman, listed “poor understand of scope during tendering” under the roles of main construction contractor, and this research follow this same thing. such factor is ranked first in the time overrun management group factor of this study. as matter of fact, failure to understand the scope of the project especially from the main construction contractor is ranked first in overall delay factor among the 77 possible factors, which has a mean of 4.39.in addition, it is ranked first from the point of view of main construction contractor, and second from both engineering and the client perspective as mentioned earlier. in the second overall delay group, another delay factor is that is under the burden of the main construction contractor, which is “poor site management and supervision” that comes second in the ranking. this delay factor has been adopted yet again from (ruqaishi & bashir, 2014) and is ranked fifth in overall delay factor of this research. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 64 the third factor in this delay group factor is the “slow decision making by owners” which is obviously of the roles of the client. this factor is ranked 11th in the overall combined ranking and listed in the following articles of: odeh and battaineh (2002), salama et al. (2008), ruqaishi and bashir (2014) and oyegoke and kiyumi (2017). table 16. resource factors materials &equipments mean sd delay in start of purchasing long-lead items 4.25 0.881 contractor poor procurement managements 4.17 0.812 delay in manufacturing long lead items 4.15 0.954 shortage in material & equipment 4.13 0.869 slow delivery of materials 4.03 0.979 non-adherence of material specifications – provided by client –to drawings 3.95 0.951 quality and productivity of materials 3.95 0.884 low ability of contractor to provide imported material 3.83 0.999 construction plant and equipment breakdowns 3.83 0.978 poor inspection and testing of equipment and material at supplier site 3.78 0.974 the top third delay group factor found in this study is the resources factors, where the materials & equipment’s is ahead in ranking than the human resources. “delay in start of purchasing long-lead items” is the top factor in this group as shown in the above table and is ranked third in the integrated delay factor list that is heaving a mean of 4.25. this delay factor has been mentioned in (salama, et al., 2008) article that was done in o&g sector as well and it was not classified under which stakeholder it goes to. similarly for this research, procuring long lead items depend on what contract strategy and type it is, if it is epc, this goes to the contractor, if it is ep+c and reimbursement type, this responsibility is under the shoulder of the owners. “contractor poor procurement managements” comes next in this delay group and it is listed in (fallahnejad, 2012) article where he investigated o&g projects issues in iran. this factor is ranked fourth in the overall delay list, which has a mean of 4.17. “delay in manufacturing long lead items” is ranked third in this delay group and eighth in overall list that combines all stakeholder perceptions. this is factor has been listed in (pham & hadikusumo, 2014)article where they studied the o&g projects invitenam.“shortage in material & equipment” has been ranked important in the following articles: odeh and battaineh (2002), fallahnejad (2002), salama et al. (2008) and ruqaishi and bashir (2014).this delay factor is ranked tenth in the overall delay causes and has a mean of 4.13. table 17. integrated means of stakeholders with communication issues communication mean sd lack of communication between client and project team 4.03 1.039 poor interaction with vendors in the engineering and procurement stages 4.00 0.973 poor communication and coordination by contractor with other parties 3.97 1.013 lack of communication between designers and contractors 3.96 0.992 poor communication between site management and labor force 3.93 1.031 inadequate coordination among designers from different disciplines 3.87 1.018 as it was discussed in the literature review thoroughly, an evidence of that, in this study, communication subgroup delay factors appears second in the list from the client point of view. despite that it is ranked 21st (with a mean of 4 anyway) in overall delay factors, the client ranked it 13th with a mean of 4.14, which has “high” importance. in the same table such communication comes third in the communication factor subgroup. 4.14 overall delay factors table 18. overall delay factors question mean std. deviation order poor understanding of scope of work during tendering (contractor) 4.39 0.83 1 ineffective planning and scheduling by the main contractor 4.28 0.82 2 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 65 delay in start of purchasing long-lead items 4.25 0.881 3 contractor poor procurement managements 4.17 0.812 4 poor site management and supervision(contractor) 4.15 0.74 5 poor management of contractor’s schedule 4.15 0.833 6 major changes in design during construction 4.15 1.062 7 delay in manufacturing long lead items 4.15 0.954 8 poor monitoring and control 4.13 0.905 9 shortage in material & equipment 4.13 0.869 10 slow decision making by owners 4.12 1.019 11 contractor's poor cash flow management 4.08 1.004 12 poorly defined or vague scope of work (contracts) 4.08 0.937 13 insufficient data collection and survey before design 4.07 0.97 14 4.15 the least ranked delay groups table 19. least delay factors as shown the above table, the least ranked delay groups finance, contract management and external factors, respectively. this is compared to the other delay groups which some has been discussed earlier. it is listed at the end, because of they have lower mean values compared, and these values are still considered “high” important factors according to the classification in statistics. moreover, some factors that belong to those just mentioned delay groups, are still ranked top 15thoverall, like “contractor's poor cash flow management” and “poorly defined or vague scope of work (contracts)”, they are ranked 12th and 13th respectively. therefore, such issues should not neglect, but rather focused at. 4.16 time overrun group correlations table 20. time overrun group co relation at a glance management technical_design finance resources external management 1 .809** .697** .764** .511** 0.000 0.000 0.000 0.000 technical_design .809** 1 .701** .774** .516** 0.000 0.000 0.000 0.000 finance .697** .701** 1 .790** .595** 0.000 0.000 0.000 0.000 resources .764** .774** .790** 1 .685** 0.000 0.000 0.000 0.000 external .511** .516** .595** .685** 1 0.000 0.000 0.000 0.000 as shown in the above table, all the five independent group variables are highly correlated to each other. such strong relationship signifies its great relevance to the subject of schedule performance in mega o&g projects. management, technical & design, finance, resources and external factors are highly correlated to each other, with the first four time-overrun factor groups having a higher correlation coefficient. this is in line with the descriptive raking results that shows external factors are the bottom of the list. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 66 4.17 cost table 21. the integrated overall list of cost overrun factors question mean std. deviation order major changes in design during construction 4.13 0.793 1 poor management of contractor’s schedule 3.98 0.852 2 poor understanding of scope of work during tendering 3.97 1.014 3 variations and claims 3.97 0.829 4 inadequate main contractor experience 3.97 0.882 5 poorly defined or vague scope of work (contracts) 3.94 0.801 6 delay in start of purchasing long-lead items 3.93 0.936 7 clients' change orders — large quantities of extra work 3.9 0.817 8 poor communication and coordination within all stakeholders: 3.89 0.857 9 shortage in material & equipment 3.89 0.858 10 slow decision making by owners 3.88 1.03 11 the above table shows the integrated overall list of cost overrun factors in o&g mega projects in oman. failure to grasp the complete scope of the project at early stage comes third highest factor that causes an over run in the budget of the project. variations and lack of the experience of the contractors are ranked 4th and 5th respectively. table 22. consequences of delays question mean std. deviation order dispute 3.65 0.818 1 reduced profit 3.23 0.988 2 penalties 3.22 0.87 3 reduction in project quality 3.2 0.91 4 loss of reputation of main construction contractor: 3.16 1.027 5 arbitration: 2.95 1.075 6 litigation: 2.8 1.072 7 total abandonment 2.67 1.142 8 the research question that discusses the above topic was: ▪ what are the consequences of construction delays in mega projects in o&g sector? comparing the outcomes of the consequences or effects of time and cost overrun in projects between the three main stakeholders participated, dispute occurs more frequent that any other listed effects. dispute that takes place between the client and contractors that is seen the most frequent, comes first from the point of view of each stakeholder as shown in the table. “loss of reputation for the main construction contractor” is ranked second and fifth for both the client and engineering firms in the frequency list. engineering and owners have agreed that a “reduction in project quality” is one of effects of time and cost overrun in o&g projects in oman, and it is listed third from their point of view. this is a reminder of the iron triangle of project management that is quality is part of, and it is one of the projects drivers. “penalties” comes fourth in the list for the main construction contractor and the engineering firms and there is “reduced profit” in case of missing the project targets from the point of view of the client. when disputes cannot be resolved internally, that is within the stakeholder boundaries, arbitration process takes place, which is more frequent than going to the courts according to the main construction contractor and the client. “total abandonment” of projects is the least frequent as an effect of time and cost overrun in o&g projects in oman. 4.18 kruskal wallis test and chi-square tests table 23. factors of disputes and reputation factor asymp. sig. chi-square dispute 0.012 8.8 reduced profit 0.111 4.4 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 67 penalties 0.102 4.5 reduction in project quality 0.219 13.2 loss of reputation of main construction contractor 0.007 9.8 arbitration 0.055 5.8 litigation 0.118 4.2 total abandonment 0.113 4.3 4.19 spearman's rho correlation: between the effect variables table 24. at a glance the spearman’s rho correlation of factors from the above table, disputes and loss of reputation are the only ones that are less than 0.05, who could suggest that there is no significance difference at ranking from the point of view of the stakeholders. while there is minor difference with rest of effects, this could imply that disputes and loss of reputation of the main construction contractor are the great consequences that take place when projects are delayed and suffer from cost overrun, which have been concurred by all different stakeholders. 4.20 correlations between the stakeholders and the ranking of all possible effects the results showed the following: table 25. correlation between stakeholders stakeholder spearman's rank sig. level main construction contractor and client /owner 0.508 0.95 main construction contractor and engineering 0.346 0.95 client /owner and engineering 0.391 0.95 the results showed that there is a moderate agreement between all stakeholders in ranking the consequences where highest agreement is between client and main construction contractor firm (0.508). despite the correlation between main construction contractor and engineering being moderate, it is still relatively lower than the two associations (0.346), and this is the same with the correlation delay factors & stakeholders. the table shows dispute arbitration litigation total aband reduced profit penalties loss of reputation of main construction contractor reduction in project quality dispute: 1 .536** .385** 0.194 .373** .399** .583** .366** 0.000 0.002 0.124 0.002 0.001 0.000 0.004 arbitration: .536** 1 .560** .443** .337** 0.177 .516** .415** 0 0.000 0.000 0.006 0.166 0.000 0.001 litigation: .385** .560** 1 .640** .383** .292* .541** .509** 0.002 0.000 0.000 0.002 0.02 0.000 0.000 total aband 0.194 .443** .640** 1 .311* 0.118 .434** .603** 0.124 0.000 0.000 0.012 0.357 0.000 0.000 reduced profit .373** .337** .383** .311* 1 .565** .529** .508** 0.002 0.006 0.002 0.012 0.000 0.000 0.000 penalties .399** 0.177 .292* 0.118 .565** 1 .430** .341** 0.001 0.166 0.02 0.357 0.000 0.000 0.008 loss of reputation of main construction contractor: .583** .516** .541** .434** .529** .430** 1 .566** 0.000 0.000 0.000 0.000 0.000 0.000 0.000 reduction in project quality .366** .415** .509** .603** .508** .341** .566** 1 0.004 0.001 0.000 0.000 0.000 0.008 0.000 **. correlation is significant at the 0.01 level (2-tailed). *. correlation is significant at the 0.05 level (2-tailed). www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 68 also that the client interfaces stakeholder has the higher agreement than non-client stakeholder, which is again like time overrun factors and stakeholder’s correlation. 5. discussion 5.1 ineffective planning and scheduling by the main contractor based on the interviews, this is so related to understanding the scope of the project, if the contractor has grasped the sow fully and completely, the chances of have the scope planned properly is higher. ineffective planning might be derived from the fact some contractors focus on “commodities” not the critical path and that is dangerous, as found in one of the interviews. the risk is that when there is no priorities set in the plan of the project, there is a high chance that the project plan is slipped, since there is neither focus nor effectiveness. an example has been given is that; small foundation is very important piping completion and the latter is vital for instrumentation works and etc., so “sequential” activities are always there in o&g mega projects in oman, and such sequence is vital no matter how small the job is, in order to complete one work package and eventually the whole project. such issue has been agreed more than 5 interviewees, contractor discipline engineers are among them as well. 5.2 contractor poor procurement managements there is unmatched agreement among all interviewees (from different stakeholder) on this factor that there is a large room for improvement in the contractor procurement processes. procurement department in companies especially main construction contractors can be the decider and difference maker whether a project is meeting its targets or not. so, there is good number of contractors in oman that in order to procure anything even a shelve item, this process is taken too much time. negotiation before making the purchase order takes more than what it should be excessive period. this seems to find the cheapest buyer available in the market by the contractor, in order to save money and increase profit. most of the construction consumables materials in oman are imported so having those delivered to site is going to take time. plus, there is limited vendors for those items to be ordered from, a sometimes they will dictate the terms of delivery duration. 5.3 poor site management and supervision (contractor) the construction contractor sometimes doesn’t have enough number of supervisors who could cover all the activities in parallel at the same time. lack number of supervisors is an issue that has been agreed by most of the interviewees from different stakeholder. the competency and the skill of those supervisors sometimes are not up to the desired level. role of s supervisors is also forecasting the plan ahead, understand priorities and be proactive in order to anticipate any constraints that might come up that hinders the progress. some projects in oman, getting the right manpower needed is hindered by the labor local law where it limits number of expat in one contract. 5.4 major changes in design during construction even if the construction contractor could absorb some changes while construction, it will come a point where the contractor cannot take it anymore and those changes will affect the progress of the project. because, the contractor is supposed to spend the man-hours on the original plan of the project, instead, here is some change needs to be executed, so the original plan is put on hold. the probability of the changes in design during engineering phase is high, and that could be rooted from the fact that there are many interfaces involved in this stage. there are different vendors inputs are needed and client input and intervention as well. therefore, changes could not only come from the design company only, it could come from the vendors themselves, or the owner could make change after some particular document has been finalized. 5.5 shortage in material & equipment as seen before in the delay factor of “delay in start of purchasing long-lead items” and “contractor poor procurement managements” materials and equipment in oman are mostly ordered from abroad and most of the items for mega oil and gas projects are imported materials. so, this is one of issues and constraints in regard to “shortage in material & equipment” as being one of top time over factors found in this study. although the bigger the problem is that materials don’t reach site on time is due to the longer procurement processes especially from the contractor side, shortage of material in oman should not be neglected. most of contractor interviewees expressed their concern that even small, less complicated consumables items like electrical lugs and wooden plates, they have to import it from outside of oman. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 69 5.6 slow decision making by owners although this delay factor is ranked 11th overall and 7thfrom the point of view of the main construction contractor, this factor has been mentioned by the interviews a lot. the owners in oil and gas projects in oman play a vital role in delaying some business decision in projects which lead to cause projects to exceed the planned finish date. some of the issues in the factor as expressed in interviews. 5.7 contractor's poor cash flow management this factor is ranked 11th overall and 1st in the finance delay factor group. most of cash flow issues take place with main construction contractors, not much with engineering contracts. the main construction contractor bids low in his quotation in order to win the contractor, then after winning the bidding contract to install and construct the project and after some time, they found themselves have cash issues. 5.8 time and cost factors correlation most of interviews showed and confirmed that every time a project is exceeding its plan and schedule, the budget of the project is exceedingly as well. for the factors that affect both time and cost, most of the conducted interviewees have agreed that the top factors that cause project to delay, these same factors are causing cost overrun to the project as well. some of them have cited examples like the poor understanding of sow and major changes in design during construction. 5.9 how much of time and cost overrun most interviewees have revealed that the average delay of projects they have experienced along their career is between 6 months – 2 year. only one project manager have gone through two projects and stated that those two projects were on time. when the data of this research revealed to the interviewees, that only 8% of questionnaires participants have experienced on time completed projects, they have expressed that this is the hard truth of projects in oman; such low percentage is no surprise to them. 5.10 contract strategy and time and cost overrun from the interviews, it has been concluded that theoretically, ep+c contract strategy is faster to be executed for the following reason: a fast track project execution philosophy. in other words, the engineering phase starts, and before it ends, procurement process already got started, and before ep finishes all its deliverables, main construction contractor has been appointed and the construction activities can commence. there is overlap between all main phases of the execution of the project, engineering, procurement and construction. 5.11 research questions with findings this study has answered the research questions proposed at the beginning and below is the summary: ▪ what is the current performance of mega projects in o&g sector? 147 out of 160 respondents have experienced and reported time overrun in projects they were involved in. only 13 responses have showed there were some mega projects have completed on time that is 8%. for the budget, 70% of the respondents have experienced cost overrun in their projects up to 30%, and only 3% of the participants have seen the project budget in line with planned one. the second research question is: ▪ what are the major causes of mega projects failing to meet its target of schedule and budget? there is some agreement in the ranking of top 10-time overrun factors between the three main stakeholders and the agreement between the client and main construction contractor in those factors are more, compared to any other combination of parties. “poor understanding of scope of work during tendering” factor is ranked first with main contractor and second with both the client and engineering firms. this factor is most factors that has similar ranking between all. as matter of fact is the only factor that exists between in the 10 among all stakeholders. this signifies its importance and its frequent occur in mega o&g projects in oman. also, the main construction contractor is not shy away from admitting that this factor is vital, although it is under responsibilities, they could have easily said it is not our problem and start the blame game. for overall results combining the responses of all stakeholders in time overrun factors, the most ranked groups are of this study are, the management group followed by resources group. the above table shows the integrated overall list of cost overrun factors in o&g mega projects in oman. major changes in the engineering during the construction phase of a project tops this list followed by the management of the contractor’s schedule. failure to grasp the complete scope of the project at early stage comes third highest factor that www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 2; 2020 70 causes an over run in the budget of the project. variations and lack of the experience of the contractors are ranked 4th and 5th respectively. changes during construction has been ranked 7th in time overrun overall factors and 1st in the cost overrun. management of contractor’s schedule is second in the cost overrun and 6th in the time overrun factors. understanding the scope stg tendering is ranked first in time overrun and it is 3rd in the cost overrun factors. it is safe to conclude that, top factors that affect time, it also affects cost in the o&g projects in oman. for the third research question: ▪ what are the consequences of construction delays in mega projects in o&g sector? comparing the outcomes of the consequences or effects of time and cost overrun in projects between the three main stakeholders participated, dispute occurs more frequent that any other listed effects. dispute that takes place between the client and contractors that is seen the most frequent, comes first from the point of view of each stakeholder as shown in the table. the relationship between time versus contractor strategy, this thesis showed that ep+c contracts have more tendency to cause time overrun although in theory it should not as the client is present always of the execution phase (client interface engineers). 5.12 contribution of this research this study has revealed the key causes that contribute to time and cost overrun in mega projects of oil and gas sector in oman which have not been done before. ranking those causes brings more focus and attention by the main stakeholders running the project. elaboration in investigating the root causes of the time and cost overrun factor will help mitigates the risks involved in project delivery. a conceptual framework got generated by the researcher in the classification of factors that causes time and cost. this framework represents the holistic view of all causes which is unique among the literature on project management. shedding the light on the consequences of failing delivering the mega o&g project targets, is an eye opening for the project teams to be knowledgeable of how severe sometimes the consequences. 5.13 limitations and future studies forming the questionnaires was time consuming which took around 5 months. that is due to the large number of time and cost factors in the literature review. data collection period also was long. the results of this study did not differentiate contract strategies, contractor classification or type of organizations; rather it included all types of those. this research is first of its kind in exploring project performance key barriers and their key enablers in depth in oman. therefore, this study could be considered as foundation and a reference for more local studies to come in oil and gas projects which are highly recommended. comparatives studies could be done on time & cost factors with different type of oil and gas project categories: upstream, downstream, pipelines etc. future studies can take one or two major delay and cost overrun factor and look in depth its root causes and effect of mediocre project performance in oman oil and gas projects. examples are: design changes change order, construction claims, construction permits and ranking of cost overrun factors. references alnuaimi, a.s., & mohsin, m. 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(2014). factors causing project cost overrun in the telecommunications industry in oman. international journal of information technology project management, 5(3), 84-95. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies vol. 2, no. 1; 2020 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 44 role of women director on productivity performance: a study on listed private commercial banks of bangladesh naznin sultana chaity assistant professor school of business ahsanullah university of science and technology 141-142 love road, tejgaon industrial area, dhaka 1208, bangladesh e-mail: nschaity@gmail.com parul akhter associate professor school of business ahsanullah university of science and technology 141-142 love road, tejgaon industrial area, dhaka 1208, bangladesh e-mail: paru25.1980@gmail.com rifat parveen bokhari assistant professor school of business ahsanullah university of science and technology 141-142 love road, tejgaon industrial area, dhaka 1208, bangladesh e-mail: rifat.bokhari.sob@aust.edu abstract efficiency measurement and productivity performance analysis now become a point of interest for many researchers'. because it is established that efficient and productive banks could ensure superior performance by achieving the objective of wealth maximization. board of directors issues have also become an integral part of corporate governance studies. this study is conducted to know the bank efficiency and productivity change for the representation of women directors on board. this study examines the productivity and efficiency performance of twenty-two (22) listed private commercial banks in bangladesh based on the malmquist productivity index (total factor productivity) over the period of 2007 to 2016. a low degree of relationship found between women directors representation in a board and productivity performance. but, there are significant differences found in productivity performance among the different generation banks. keywords: women director, productivity changes, malmquist productivity index, total factor productivity, bank performance. 1. introduction efficiency and productivity analysis is considered as a central point to measure the business performance because it includes the productive process, business profitability, and market value of the companies (sheu & yang, 2005; sufian, 2011; sufian & kamarudin, 2014). bank efficiency is considered to be an important factor for economic growth in a country. it is established that efficient and productive banks could generate superior performance by achieving the objective of profit maximization through wealth maximization (jahan, 2019). efficiency and productivity change can be measured by two approaches – one is an econometric estimation of cost, production and the other one is a construction of index using of non-parametric approach (guarda & rouabah, 2009). the non-parametric approach is most popular among the researcher in the application of measuring the efficiency of financial institutions, i.e. banks. the bank is a multiproduct company with multiple inputs and outputs. malmquist productivity index (mpi) is a kind of productivity analysis (based on non-parametric data envelopment analysis techniques) shows both the changes in technological and efficiency from one time period to mailto:paru25.1980@gmail.com www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 45 another period (clarke, cull, d’amato, & molinari, 2000; bhattacharya, lovell, & sahay, 1997; isik & hassan, 2002; kirikal, 2005). this study is motivated to know bank efficiency and productivity change concerning the board of directors (bods). it is believed that board composition as a central aspect of corporate governance mechanism by academic researchers, investors, and policymakers. they believe that board members have a direct influence on determining firm value (claessens & yurtoglub, 2013). although it is said that management is responsible for operating efficiency, revenue efficiency, and cost efficiency, bods set objectives, monitor performance, ensure equitable distribution of resources and made management accountable to every action (uribe‐bohorquez, martínez‐ferrero, & garcía‐sánchez, 2019) studies on board aspects of gender diversity are also given equal importance now a day. women director in a board provides evidence of higher productivity and superior performance of an organization (depren & depren, 2016). thus, norway and spain have made mandatory to have at least 40% women for all listed companies and malaysia has imposed to have 30% women director in a board (von bergen, soper, & parnell, 2005; mohamed, clayton, & isa, 2015). it has been assumed that women are better at maintaining ethical standards strictly and strongly assume their responsibilities. women are also more sensitive to all the perspectives and needs of stakeholders (post & byron, 2015; campbell & mínguez‐vera, 2008; erhardt, werbel, & shrader, 2003). it is also a belief that women on the board will ensure more gender equality (campbell & mínguez‐vera, 2008). lee, lan, and rowley (2014) said that women directors could assist companies in retaining and developing relationships with investors, customers, and different stakeholders which leads to improving the performance of the company. based on these perspectives, this study is conducted to know the performance of the banking industry of bangladesh based on gender diversity (the presence of women in board structure). some studies found relating the board performance with efficiency estimation (erhardt, werbel, & shrader, 2003; campbell & minguez-vera, 2008; mahadeio, soobaroyen, & hanuman, 2012; post & byron, 2015; uribe‐bohorquez, martínez‐ferrero, & garcía‐sánchez, 2019) all those studies are mostly conducted in developed countries and cross-country perspectives. this paper contributes to the existing literature by showing the effect of representation of female directors in a board and bank performance in case of the developing counties like bangladesh. the rest of the paper is structured in the following ways. section two is the literature review and the subsequent section describes the methodology, data and variable measurement issues, and findings and analysis. 2. literature review and hypothesis development corporate governance aspects ensure the accountability of management by an effective monitoring system, building investor confidence, reducing agency costs, and improving organizational efficiency (organization for economic co-operation and development, 2015). there are number of studies conducted on showing the positive impact of corporate governance mechanism on corporate performance (mohan & chandramohan, 2018; yilmaz & buyuklu, 2016; alam & akhter, 2016; zelenyuk & zheka, 2006). the concept of gender-diverse board entails the perspective of age, gender, ethnicity, religion, professional background, skill, and technical know-how, experience, and values (van der walt & ingley, 2003). several kinds of literature are found on productivity analysis in the banking industry. one of the most recent studies found in kalluci (2018). this study uses the mpi technique in the albanian banking industry from 2006 to 2017. the study found that efficiency had improved in medium-size banks than the large and small banks. depren and depren (2016) studied the efficiency and total factor productivity of the turkish banking sector using dea and mpi techniques for the years 2014 and 2015. based on the production approach and intermediate approach, they found that overall performance is increased in terms of production approach but opposite found under the intermediate approach. varesi (2015) measured the albanian banking sector productivity using of malmquist dea method. the results showed that medium and small size banks were more productive than large banks. marković, knežević, brown, and dmitrović (2015) studied the productivity changes in bank of serbia using dea and mpi. studying from the period of 2007 to 2010, they claim that productivity in the banking sector was decreased. kao and liu (2014) also studied on banking industry using the mpi method to measure the performance of the taiwanese banking industry from 2005 to 2010. the results showed that the performance of the commercial bank has improved. sufianand and habibullah (2014) studied on impact of globalization on bank's productivity in the malaysian banking sector over the period of 1998 to 2007 using of mpi method. it was found that personal contacts, political globalization, and information flow have a significant impact on the bank’s total factor productivity. evaluated on total factor productivity and the impact of market development on bank efficiency in china over the https://onlinelibrary.wiley.com/doi/10.1002/csr.1659#csr1659-bib-0062 https://onlinelibrary.wiley.com/doi/10.1002/csr.1659#csr1659-bib-0012 https://onlinelibrary.wiley.com/doi/10.1002/csr.1659#csr1659-bib-0012 https://onlinelibrary.wiley.com/doi/10.1002/csr.1659#csr1659-bib-0080 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 46 period of 1999 to 2008. their study found that the productivity growth of chinese banks can be attributed to improvement in technical efficiency and technical change. sufian (2011) studied on malaysian banking industry over the period of 1995 to 2004 based on the mpi method. the study found that the banking sector exhibit decline in productivity due to technological efficiency. angelidis and lyroudi (2006) used the mpi on italian banks and found that the total factor productivity has increased during that period. isik and hassan (2002) examined the financial reforms in the banking industry of turkey using mpi for the period 1981 to 1990. the study opined that there were efficiency changes rather than technological advancement. chu-fen (2004) studied productivity changes in germany over the period of 1992 to 2000. they found that the foreign banks were more productive because of improvement in technology and efficiency. in bangladesh, researches related to efficiency and productivity analysis for the financial industry are found but in a limited number. jahan (2019) studied the productivity of private commercial banks is conducted over the period of 2011 to 2015 using mpi techniques. a comparative study is conducted between islamic banks and conventional banks and found that islamic banks showed less variability in the index than the conventional banks. baten, kasim, and rahman (2015) studied nationalized commercial banks (ncbs) and private commercial banks (pcbs) based on cost dea, profit dea, and mpi based on dea method. their study found that pcbs are efficient from the ncbs in terms of cost and profit. in bangladesh, the literacy rates for females are much lower than they are in developed countries, and positions of female directors are simply an ornamental post. hence, it is likely that views and opinions held by a female director are given less attention (ahmed & liza, 2013). this raises the question of whether female in the board is only a sign of symbolic effort or raises the productivity performance of any firm. studies of the presence of the female director and bank performance are hard to find in the case of bangladesh. based on this research gap, this study is conducted to know about the impact of women in board and productivity changes in private commercial banks (pcbs) of bangladesh. following hypotheses have been made based on the research gap – h 1: there is a change in the productivity performance of private commercial banks having women directors in their board structure. h 2: there is a gap in productivity performance among different generations of private commercial banks in bangladesh. 3. research methodology the malmquist productivity index (mpi) was first developed by malmquist in 1953 by stan malmquist and further it was developed by fare, grosskopf, lindren, and roos (1994); tatjé and lovell (1995); bjurek (1996); färe, grosskopf, and russell (1998); thrall (2000); kirer (2013). malmquist index measures the efficiency change over time. the mpi is another format of data envelopment analysis (dea). the dea is defined as the method used for efficiency analysis of a complex business unit with multiple inputs and outputs (yang, 2009). the mpi is calculated under the assumption of constant return to scale (crs) with output orientation. the input or output orientation is the same for the mpi method (coelli, 1996; thanassoulis, 2001). mpi methods have several advantages and mostly used in the case of financial industries. the index is used to identify productivity change of entity with multiple inputs and outputs. it does not need input/output prices (krikal, 2005). total factor productivity (tfp) change is another name uses for mpi. it is the outcome of the multiplication of two ratios of technical efficiency and technological change. technical efficiency change can be decomposing into two components scale efficiency change and pure technical efficiency change. all the components are calculated based on the geometrical average of mpi (fare, grosskopf, lindren, and roos (1994). the output-oriented crs based mpi following the fare, grosskopf, norris, and roos (1994) is as follows m0 measures the productivity from two different periods. 'x' stands for inputs and 'y' stands for output. the index uses technology for the 't' period and the next period 't+1'. to quantify the productivity change, mpi uses the distance function of a variable. further, this index is decomposed into two componentstechnical change and technical efficiency change. (1) (2) www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 47 in the above equation, the first ratio measures the technical efficiency (catch-up effect –‘c’) as of farrell and hersch (2005) for the period t to t+1. the second ratio (inside the bracket) is the geometric average of two ratios used to measure the change in technology – technical change (frontier –shift effect – ‘f’). productivity is increased if mpi > 1. it can be said that technical efficiency improvement (c > 1) and technical progress occurred (f > 1). productivity is decreased if mpi < 1 when technical efficiency decreases (c < 1) and technical progress has not occurred (f < 1). 3. productivity is stable if mpi = 1. it can be said that both technical efficiency and technical progress remain for the time being (depren & depren, 2016; thanassoulis, 2001). deap 2.1 is the computer program used to measure the mpi using dea methods developed by coelli (1996). 4. data collection, variable selection, and measurement issues in the case of bangladesh, a large data set is not readily available. it is very difficult to collect data because of market imperfection and a restrictive legal environment. in this respect, the non-parametric method is appropriate techniques to estimate the best practice firms (bhattacharya, lovell, & sahay, 1997). the population of this study is all the listed private commercial banks of bangladesh on the dhaka stock exchange (dse). the study period for the sample is considered from the years 2007 to 2016. the reasons for the selection of the period are: (a) corporate governance guidelines came in a structured way since 2006. all the listed companies have to comply with those guidelines. (b) in 2016, some major reforms were made in corporate governance guidelines subject to changes in the composition of bods and different committees. among the thirty (30) private commercial banks, only twenty-two (22) is selected based conventional banking perspective and ten years of data availability. dea based mpi technique requires the input and output variables to be specific. this specification for input variables and the output variable is crucial. for the present study, constant return to scale (crs) is assumed for measuring the efficiency. according to grifell-tatj`e and lovell (1995), mpi does not provide an accurate measure of productivity change with the non-constant scale. the advantage of the crs method is that the results are coincidental for the input and output-oriented approaches. table 1. input and output variables for mpi analysis input description board quality percentage of women director to the total number of directors percentage of women independent director to the total number of directors percentage of women director in the audit committee cost of fund total interest expense to total deposit capital intensity total assets to the total number of employees output growth percentage change in the book value of total assets profitability roa (net profit after tax to total assets) tobin’s q the total market value of the firm/ total asset value of the firm corporate governance aspect ‘board quality’ is considered for this study. under the board quality the percentage of women independent directors, the percentage of women directors in the audit committee, and the percentage of women directors are taken and all the values are equated to total members of the board of directors. for input prices/cost, two other variables, cost of fund (total interest expense/total deposit) and capital intensity (total asset/total number of employees), are considered. bank performances are measured here with three variables: growth (percentage changes in the book value of total assets), profitability (roa) and tobin's q (kumbhakar & lozano-vivaz, 2005; casu, girardone, & molyneux, 2004; wang & kumbhakar, 2009; robin, salim, & bolch, 2017). 5. findings and analysis the following table 2 shows the descriptive summary of the inputs and outputs variables of two hundred and twenty (220) observations for the twenty-two (22) pcbs over 10 years from the year 2007 to the year 2016. www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 48 table 2. descriptive statistics variables percentage of women director percentag e of women indp director percentage of women director in the audit committee cost of fund capital intensit y growt h roa (%) tobin’s q mean 10.77 1.16 4.92 0.73 61.84 20.54 1.58 3.28 std. dev. 9.88 4.52 11.44 6.73 29.82 11.15 1.18 3.93 minimum 0.00 0.00 0.00 0.00 4.64 -5.87 0.21 0.01 maximum 44.44 28.57 60.00 72.88 139.78 56.18 10.08 30.72 source: author’s calculation considering the corporate governance variables, board quality is measured through the presence of women directors on the board. the percentage of women directors to the total number of bods is about 10.77% and the percentage of women independent directors is only 1.16%. it is also found that there is no presence of women directors at all in the different bank whereas maximum women director is found about 44.44% in some cases. three output variables are considered here–growth in book value of total assets (growth), return on assets (roa) and tobin’s q. on average, 20.54% growth is observed in the pcbs of bangladesh over the study periods, whereas, roa is found, on average, at 1.58%, with a standard deviation of 1.18. tobin’s q is found 3.28% with a standard deviation of 3.93. cost of fund (cof) is measured using total interest expense to the total deposit. it is found that cof is, on average, 73.39% for all the pcbs with a standard deviation of 6.73. it is normal to have a high cof because a majority of the banks' funds are collected from using different deposits accounts. most banks' expenditures occurred due to interest given on deposit accounts. capital intensity (ci) is measured through the total assets to the total number of employees. all the pcbs are using, o average, and 61.84% of their assets per employee. table 3 shows the total factor productivity change (tfpch) along with its components efficiency change (effch) and technological change (techch), and two other subcomponents of efficiency change-pure technical efficiency change (pech) and scale efficiency change (sech). it has been found that the pcbs of bangladesh do not experience much improvement from the year 2007 to the year 2016. the mean tfpch/mpi is at found 1.0%. techch/mpi is characterized by the development of new products or technologies which result in improvement and shift the production frontier upfront. due to the stock market crisis, financial market development and banking crisis may not have the opportunity to develop new products and services to the pcbs. rather, pcbs are more concerned with their survival. conversely, reverse results are experienced in the case of effch. most of the banks improved their efficiency using their existing offers and services. the lowest value in techch was observed in 2009 and it may be attributed as the outcome of financial crises that took place at that particular time. the result of this study is similar to the findings of other studies in different countries (kalluchi, 2018). table 3. malmquist productivity index summary of annual means (year wise) year effch/ catch-up effect techch/ frontiershift effect pech sech tfpch/mpi 2007 1.087 0.961 1.011 1.075 1.045 2008 1.097 0.931 1.035 1.06 1.022 2009 0.892 1.532 0.0882 1.012 1.367 2010 0.95 1.185 0.994 0.955 1.125 2011 1.096 0.56 1.078 1.017 0.548 2012 0.768 0.967 0.96 0.8 0.743 2013 1.173 0.714 1.08 1.086 0.837 2014 1.043 1.155 0.983 1.061 1.204 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 49 2015 0.932 1.242 0.868 1.074 1.157 2016 1.118 0.859 1.144 0.978 0.96 mean 1.0156 1.0046 0.92412 1.0118 1.0008 std. dev. 0.125643 0.29034 0.303263 0.086518 0.239816 minimum 0.768 0.5 0.0882 0.8 0.548 maximum 1.173 1.532 1.144 1.086 1.367 source: author’s calculation to analyze the relationship between female director and productivity performance of pcbs, rank correlation is conducted. few studies are found employing spearman's rank correlation to show the rank similarity among different parametric and non-parametric methods. since all the methods are based on the same concept. this study uses the rank correlation to test hypothesis 1 – generalize the relationship between women on board and productivity performance. in table 4, it has been found that there is a low degree of correlation found between women director on board and productivity performance of pcbs in bangladesh. from the results, there is no relationship of consistency found among the pcbs rank in the case of bangladesh likewise mahbub (2016). the result from the rank correlation is shown in the following table – table 4. correlation between the percentage of women director and mpi source: author’s calculation in bangladesh, pcbs are classified into generations in the following ways, though banking laws do not mention specific generations in practice (ahmed & liza, 2013). table 5 shows the results of different generations of banks in bangladesh. table 5. generation-wise productivity performance change of private commercial banks banking generation 1st generation 2nd generation 3rd generation % of total women director tfpch/ mpi % of total women director tfpch/ mpi % of total women director tfpch/ mpi mean 10.39% 0.88 8.72% 1.01 12.23% 1.02 std. dev 7.12% 0.07 8.38% 0.08 10.30% 0.32 minimum 1.48% 0.82 0.00% 0.88 1.50% 0.81 maximum 20.95% 1.02 22.55% 1.10 29.83% 1.93 source: author’s calculation based on these generations of banks, it has been found that from 1 st generation to 3 rd generation the percentage of women directors was increased from 10.39% to 12.23%. the ratio of female director to total director is found lower in the case of second-generation banks. the 2 nd generation banks are holding only 8.72% of women directors. the productivity performance of all three generation banks is not improved in that significant way. but, it spearman's rho percentage of women director malmquist productivity index correlation coefficient .176 sig. (2-tailed) .432 n 22 www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 2, no. 1; 2020 50 is also found that with the increase of women director total productivity of the banks also increasing from 0.88 to 1.02 from 1 st generation to 2 nd generation pcbs. table 6. kruskal wallis test test statistics a,b chi-square 6.090 asymp. sig. 0.048 a. kruskal wallis test b. grouping variable: banking generation source: author’s calculation kruskal wallis test is conducted to know whether any relationship among the different generations of pcbs and productivity changes in bangladesh (hypothesis 2). from table 6, it is found that the chi-square test statistics of 6.090 with a significance level of 0.048 reject the null hypothesis. there is a gap in productivity performance among three generations of pcbs in bangladesh. 6. conclusion there are some implications of women director in a board, particularly in case of control and monitoring activities of management by reducing the agency cost and creating the value by increasing the firm performance (uribe‐bohorquez, martínez‐ferrero, & garcía‐sánchez, 2019. this study is conducted to examine the relationship between women director on board, efficiency, and productivity changes of private commercial banks in bangladesh. a low degree of relationship found with the presence of women directors on board, bank efficiency, and productivity changes. the generation-wise banking system shows significant differences among different generations. third generation banks are generating different results (superior performance and increased number of women directors on board) than the results of first-generation banks. the future direction of research could be extended by considering the impact of ownership structure, legal and social structure on productivity and efficiency analysis of the banking industry. references alam, f. m., & akhter, f. 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(2006). corporate governance and firm’s efficiency: the case of transitional country. ukrain. journal of production analysis, 25, 143-157. appendix banking generation first-generation: banks established between year 1982 to year 1990. second-generation: banks established between year 1991 to year 1998. third-generation: banks established between year 1999 to year 2011. fourth-generation: banks established after year 2011. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies vol. 3, no. 1; 2021 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 1 green banking: an indispensable step for the bank to save our environment noorjahan begum lecturer dept. of bba ccn university of science & technology, bangladesh md. mazharul islam bhuiyan lecturer dept. of bba ccn university of science & technology, bangladesh nushrat hashmi lecturer dept. of mathematics ccn university of science & technology, bangladesh nayan kumar sadhu lecturer dept. of bba ccn university of science & technology, bangladesh md. ali imran lecturer dept. of bba ccn university of science & technology, bangladesh abu obida rahid lecturer dept. of bba ccn university of science & technology, bangladesh ikbal ahmed lecturer dept. of cse ccn university of science & technology, bangladesh received: august 01, 2021 accepted: august 15, 2021 online published: august 20, 2021 doi: 10.46545/aijbms.v3i1.146 url: https://doi.org/10.46545/aijbms.v3i1.146 https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 2 abstract this research aims at keeping our planet safe which we are harming day by day by the advancement of modern civilization. in modern age, we are now vastly dependent on bank sector for our important activities. as a result, banks in bangladesh are performing digitalize and effective activities to maintain a sound economy due to emphasize public services for profits. in this study the authors found that profit should not be earned at the expense of the world's most pressing environmental problem which can be caused a climate change through global warming. western countries have already thought out of the box and introduced green banking for sustainable development. sampling framed and statistical tools used by researchers and reveals that green banking (gb) is not only corporate social responsibility (csr) but also in broader sense of corporate environmental responsibility (cer). it also explains the main objective of green banking is to keep the world livable without any significant damage. specifically, we already have seen the light. but we have to adopt this idea for all commercial bank either public or private. keywords: green banking, corporate social responsibility, corporate environmental responsibility, sustainable development, global warming. introduction nowadays climate change is the alarming issue and we are facing an alarming situation. the earth’s environment is being polluted in different forms which caused harms to the earth, resulting rapid change of the earth’s climate for the development of civilization. therefore, living creatures are confronting intense danger for their existence. banks cannot avoid the liability of environmental pollution. we have to find out the way to overcome these circumstances through bank. bank should introduce green innovation products and reducing projects which are not environment friendly for focusing to decrease the carbon emission. it is high time to think about corporate environmental responsibility (cer) which is wider than corporate social responsibility (csr). green banking is promoting as eco-friendly banking practices by combining its operational improvements and technology know-how in banking operations. it helps not only decrease of internal carbon footprint but also reduction of external carbon emission. bangladesh bank developed green banking policy in 2011 as well as it has already provided technical support for green banking adaptation. green banking helps both advances their own initiative and socially responsible behavior of other business. its activities include using all of the banks resources with responsibility and care and its main aims to avoid waste, less paper intensive, fully automation and give priority to choices that take sustainability into account. literature review marcel jeucken identified four steps of action that banks could take for sustainability in his book "sustainable finance and banking", 2001. defensive banking, preventative banking, aggressive banking, and sustainable banking are the four stages. the first three terms are described as banking's stages or attitudes toward environmental issues. in reality, his research is a forerunner in the field of green or socially responsible banking. thombre (2011) researched the "new face of banking: green banking." the effect of a bank's external activities on the economy is enormous, but impossible to quantify. green banking, according to bihari (2011), entails increasing corporate social responsibility (csr). it all begins with the goal of environmental protection, with banks determining if a proposal is environmentally sustainable and has some long-term effects before https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 3 funding it. only after the public safety requirements are met can a corporation be granted a loan. green banking may be done effectively with the help of technologies and strategy. according to verma (2012), indian banking is increasingly realizing the need for a change from the profit, profit, profit motive to the ‘planet, citizens, and profit' motive. banks should lead the way in implementing green banking for long-term growth. global change, which is one of the most researched and debated topics, has the greatest effect on the planet's atmosphere as a whole. (green banking policies of bangladesh bank) green banking in bangladesh: a comparative analysis was the subject of md. maruf ullah's (2013) study. banks agree that any small "green" effort taken today can help to create a greener world, and that each of them will contribute to a healthier global climate. overall, green banking is a great opportunity for citizens to become more aware of global change. chowdhury and dey (2016) have performed a study to analyze the green banking practices in bangladesh. they reported that bangladesh bank has simplified green banking by policy and strategy formulation and allocation of budget for green initiatives. they also reported the slow growth of green projects financing and proposed special packages for growth. chen, hossen, muzafary, and begum, (2018) have identified that the bank is a perpetual member of the economy because it is possible to work on a business relationship between rich and viable life practices. the groups play an indispensable role in this dramatic game such as brickfield, machine, paper, grammar school, business appraisers, directors, angry procedures and so on. carbon dioxide is polluted in the future environment. masud, kaium, hossain, and kim (2018) climate change is the most urgent issue in the global context. bangladesh is in the most vulnerable situation. bangladesh will go through significant losses if the situation does notchange. the assessment is that by 2050, the annual loss will be 2% and the gross domestic product 9.4% (gdp) by 2050 and 2100, while the country is liable for less than 0.35% of global carbon emissions. hoque, mowla, uddin, mamun, and uddin (2019) conducted research to determine the state of green banking practices among bangladesh's non-bank financial institutions (nbfis) and commercial banks. the author noticed that most banks and nbfis conduct green banking on a small scale and have no detail about it in their annual reports and websites. objectives of the study developed countries are living in harmony by sacrificing biosphere. though bangladesh has smallest involvement in industrialization but she is victim of world environment pollution. there is no profit of this progress of the civilization or advancement if there is no planet. the basic objectives regarding green banking are as follows:  to analyze the practices of green banking in bangladesh;  to promote environment friendly financing in the industry/project/business sector  to justify the prospects and problems of green banking practices in bangladesh  to ensure the use of organizational resources in favor of the environment and society; and  finally, to suggest recommendation for policy implication. methodology of the study the research is focused on a literature analysis as well as secondary data sources. secondary data was gathered from bangladesh bank websites from 2017 to 2019 as well as eight selected commercial banks' websites and reviews, among other sources. in addition, material is gathered from the company's business profile, daily journals, and numerous seminars and workshops. any https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 4 knowledge was also gathered from ‘youtube.' in addition, several papers and publications were examined in order to broaden the scope of the research. the information is studied using statistical data in terms of green banking policies and issues in bangladesh. we have looked at when and how banks are implementing green banking activities. limitation of the study  the major limitation of the study is that no primary data is involved in the study.  the data was not found in a structure way.  it was very difficult to get the full information due to maintaining confidential purpose. present situation on green banking in bangladesh green banking is a form of banking from which the country gets sound environment. bangladesh bank is pioneer bank which has ins and outs information on it to execute ‘green banking’. four refinance scheme of low interest launched by bangladesh bank for environment friendly factories. it means developing and promoting environmental friendly by some of the following steps which can be taken for going green in banking: 1) online banking 6) green loans i) paying bills online 7) green debit cards/ credit cards ii) remote deposit/ bkash 8) mobile banking iii) online fund transfer 9) green building iv) electronic statement 10) green mortgage v) automated clearing house 11) save papers 2) green accounts (solar atm service) 12) roof gardening 3) green financing 13) bio gas plant 4) power saving equipment’s 14) waste management 5) green marketing 15) green bond online banking: it is optimist news that at the end of fiscal year 2018, 57 banks have online branches out of 57 banks. bangladesh bank encourages to the banks that establish branches to assured maximum use of solar energy. table 1. online banking coverage particular fiscal year 2017 fiscal year 2018 fiscal year 2019 banks activity through online branches 75.10% 87.35% 89.50% no. of branches powered by solar energy 500 546 572 source: annual reports of the bangladesh bank, 2017-2019. electronic payment: interbank facilities electronic payments originating from various payments channel such as green card, automated teller machine (atm) and point of sale (pos). https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 5 nowadays 53 banks out of 57 banks are functioning card business, 51 banks operating interbank automated teller machine (atm) transaction and 51 banks implementing point of sale (pos) transaction in bangladesh. table 2. electronic payment coverage source: payment systems department, bangladesh bank, annual report 2017-2018. table 3. electronic payment coverage source: payment systems department, bangladesh bank, annual report 2018-2019. table 4. direct green financing in fy18 (fiscal year 2018) in million taka types of bank/fi scbs (06) dfi s (02) pcbs (40) fcbs (09) bank’s total fis (34) grand total % of total green finance category of green finance renewable energy 25.5 7.7 2605.9 192.6 2831.7 523.9 3355.6 4.7% energy efficiency 0.0 0.3 3156.0 0.0 3156.3 1080.6 4236.9 5.9% alternative energy 0.0 0.0 9.0 0.0 9.0 0.0 9.0 0.0% waste management 133.2 0.0 34914.6 0.0 35047.8 308.8 35356.6 49.6% recycling & recyclable product 271.8 0.0 3471.3 0.0 3743.1 124.1 3867.2 5.4% green brick manufacturing 821.7 36.0 9571.4 0.0 10429.2 560.1 10989.2 15.4% green establishment 280.8 0.0 10331.0 0.0 10611.7 658.3 11270.0 15.8% misc. 282.2 1.5 1845.1 0.0 2128.8 133.8 2262.6 3.2% total 1815.2 45.4 65904.3 192.6 67957.5 3389.6 71347.2 100% source: sustainable finance department, bangladesh bank annual report 2017-2018. terminal as on 30 june 2017 as on 30 june 2018 growth % card 1,19,43,650 1,37,34,605 1.0 atms 9,246 9,747 5.4 pos 36,288 41,130 13.3 terminal as on 30 june 2018 as on 30 june 2019 growth % card 1,37,34,605 1,72,39,902 25.5 atms 9,747 10,722 10.0 pos 41,130 52,846 28.5 https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 6 table 5. direct green financing in fy19 (fiscal year 2019) in million taka types of bank/fi scbs (06) dfi s (02) pcbs (40) fcbs (09) bank’s total fis (33) grand total % of total green finance category of green finance renewable energy 15.35 2.81 1921.36 216.5 7 2156.08 1286.3 4 3442.43 3.3% energy efficiency 0.0 0.0 3667.96 130.8 3 3798.78 232.81 4031.59 3.8% alternative energy 0.0 0.0 83.98 0.0 83.98 0.0 83.98 0.1% waste management 216.70 0.0 25571.3 5 128.0 5 25916.1 0 1443.3 0 27359.4 0 25.9% recycling & recyclable product 253.68 0.0 10852.6 0 2.40 11108.6 8 130.00 11238.6 8 10.7% green brick manufacturing 726.92 0.0 16172.2 7 0.0 16899.1 9 1686.7 3 18585.9 2 17.7% green establishment 0.00 0.0 13878.2 1 1873 5.31 32613.5 2 1689.6 9 34303.2 1 32.6% misc. 6.79 0.75 6169.16 0.0 6176.70 31.00 6207.70 5.9% total 1219.4 4 3.56 78316.8 8 1921 3.16 98753.0 4 6499.8 7 105252. 91 100% source: sustainable finance department, bangladesh bank annual report 2018-2019. environment friendly industry/ project/business bangladesh bank which is a guardian of all banks in bangladesh helps to other commercial banks to adapt green banking. if the industry/project/business is environment friendly then they sanction the loan for their industry/project/business operations. before making financing decision banks should take up environmentally responsible financing; weighting up environmental risks of project, and specifically supporting and cultivating development of forthcoming green initiatives and projects. it will minimize the structural cost of an industry/ project/business. prospects and problems of green banking practice in bangladesh prospects or anticipation of green banking: plethora of prospects of green banking focuses new era in banking sector. now these are discussed in below  creating public awareness: banks or financial institution arranged different programs like seminar, symposium, road show etc. to educate their personnel, clients, general public regarding the environmental issues.  green banking financing product: innovation of different types of product in green banking are new era which are prospects of green banking in bangladesh.  paperless banking: it is encouraging that a large number of banks have already adopted paperless banking with varying degree of adoption. it is recommended that those who have not adopted paperless banking they should have adopt it immediately.  proper evaluation: commercial bank should scrutinize projects profiles in terms of scale, nature and the magnitude of potential negative and positive environmental impacts. there https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 7 should be formal environmental and social risk policy to govern lending activities. banks should also apply quantitative approach for environmental risk rating.  post transaction monitoring: during the project execution and operations phases, banks must track post-lending output to ensure the best erm (environmental risk management) scheme. physical assessments of the manufacturing process should be conducted, as should the planning of a training curriculum, the determination of environmental liability, and the implementation of audit schemes, among other things. problems or challenges of green banking: there are some major problems ahead for green banking in bangladesh. these are as follows  lack of knowledge: lack of proper knowledge about technology is main problem of green banking.  lack of skill: employees are not skillful. so they are not well trained up about green banking.  lack of timely evaluation: timely evaluation is necessary for all organization, business or any institutions. proper evaluation can helps to get the exact result of the firm.  lack of paperless banking: in banking system, banks are still following the traditional of using paper for various transactions where it is no necessary adopting the green banking.  lack of carbon credit business: to safeguard the atmosphere, both nations are required to reduce greenhouse gas emissions and carbon emissions under the kyoto protocol. the gas emissions must be certified through qualified pollution reductions (cers), also known as carbon credit corporation, where banks are unable to follow any of these ecofriendly systems.  poor long run sustainable investment: investment with favorable impact on environment needs long run financing and usually has low rate of return. as a result this type of investment is not popular with the investors.  lack of innovative green product: the sample banks through their research and development are not exploring the diversified eco-friendly products to be offered to the potential loanees.  lack of infrastructural facilities for managing environmental risk: some banks have not yet developed any administrative set up to train up their employees to meet the environmental challenges arising out of advancing loans and financing environment sensitive projects.  equators principle: banks or financial institutions are running behind similar organization in other countries regarding compliance with standards set for them. bangladeshi banks or financial institutions are neither has adopted equators principle nor are signatory to the united nations environment programme finance initiative (unepfi).  lack of creating public awareness: banks and financial institutions have not held any seminars, symposiums, or road shows to teach their employees, customers, or the general public about environmental concerns. there should be an ongoing discussion with relevant stakeholders on environmental issues. ensure the use of organizational resources green banking concentrates all banks internal operation by going green. utilizing maximum renewable energy, automation and other measures to minimize carbon footprint and so on should adopt in an efficient manner. online correspondence ought to be widely utilized for office https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 8 management where possible. to save paper, employee should printing double side and also use one side spare paper as notepads. establishment of vitality proficient electronic as well as artificial intelligence equipment’s such as automatic shutdown of computers, fans, lights, air coolers etc. will help decline electricity consumption. instead of normal bulbs of the banks, energy saving bulbs should introduce. banks should give priority to use solar energy in the workplace. bank should find a way to spare vitality from corporate business make a trip and urge representatives to buy energy efficient cars (that consume less fuel) can reduce gas and petroleum consumption (bangladesh bank policy guidelines for green banking).general instructions are given to the employees of the banks to use their limited resources for maximum output. findings  essentially, green banking cuts paper work, lowers costs, eliminates threats, saves time, improves reputation, and maintains a safe climate. if a paperless banking method is implemented for families, it is projected that 16500000 trees would be saved per year. almost every bank in bangladesh has begun to conduct online transactions in order to take advantage of emerging technologies. while a significant number of private commercial banks (pcbs) and foreign commercial banks (fcbs) in bangladesh have introduced green banking policies, the number of state-owned commercial banks (scbs) and specialized development banks is steadily growing (sdbs).  the bangladesh bank not only offers appropriate strategies, but also technological assistance for green banking adoption. the central bank has stated that proposals that are environmentally sustainable would receive additional or reduced funding, while projects that are not environmentally friendly would not receive any assistance. in 2016, the bangladesh bank established a fund of 200 million dollars to sustain a safe working atmosphere in factories and ensure protection in the readymade apparel, leather, and plastic sectors, but only 42 million dollars were disbursed in september of 2019.  owing to a lack of understanding regarding current technologies and systems, bank management and other involved parties are less interested in adopting green banking. they carry out their banking operations based on their previous experience and expertise. as a consequence, they permanently lose their consumer appeal because modern consumers are used to receiving prompt service.  solar equipment’s, effluent treatment plants (etps), bio-gas plants, and hybrid hoffman kilns (hhks) are examples of green banking initiatives.  banks' implementation of various current green banking laws is also, to a large degree, willful. in bangladesh, the essence of bank management activities is eco-friendly banking practices, which are given less priority by the general public since they are not deemed obligatory.  since they have a small variety of green products for their customers, most banks in bangladesh have followed the credit risk management (crm) credit evaluation and management system, which does not have any risk requirements.  online banking and automated teller machine (atm) services are seen as the first step toward introducing paperless work, putting the community and community first, and ensuring long-term growth. however, the majority of state-owned commercial banks (scbs) and specialized development banks (sdbs) continue to practice weak online banking, and atm facilities are still inadequate. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 9 discussion bank can play a vital role to ensure sound environment by taking the blessing of modern technology. the importance of green banking is immense in economy to reduce costs and helps to avoid risks, and to enhance customer satisfaction by delivering rapid services. the challenges of green banking are new concept for many banks, involvement of higher operating cost, necessity of experienced officer, reputational risk which may arise for choosing environmental damaging projects and involvement of higher credit risk. so, the respective problem facing banks need to handle the above challenges by following the bangladesh bank’s guidelines effectively regarding green banking policy and empowering charismatic leading system. all banks should maintain proper training systems and keep critical problem-solving tendency to adapt green banking systems in their organization rapidly. bangladesh bank should carefully monitor and supervise the green banking practices in all banks. from the study of findings, we observed that state-owned commercial bank (scbs) and specialized development bank (sdbs) have not fully taken the green banking policy, though bangladesh bank have taken initiatives to adapt it for all types of banks. this finding partially supports existing literature that real scenario of green banking is growing steadily. slow increasing adaptation of green banking is pessimism because the banks are perpetual members of a country. bangladesh bank made a fund for environment friendly project but only 21% was disbursement till last 3 years. bank management have less interested on lending principle of green initiative projects. at present all banks urgent need to enhance knowledge & awareness about business technology so that we can make our business environment human friendly. government should encourage to all general people about the advantages of green banking system by providing necessary information in various social media. recommendation  green banking regulations must be followed by all schedule banks in accordance with the bangladesh bank's green banking guidelines. as a result, state-owned commercial banks (scbs) and specialized development banks (sdbs) would effectively implement green banking.  the bangladesh bank must keep track of all banks' green banking activities and take corrective action to assign budgets to environmentally sustainable sectors. a database may be created for professional assistance as well.  it is important that all relevant bodies work together. knowledge networking is the most effective and beneficial method for peer groups.  authorities must make every effort to develop the most critical measures in the banking sector. as a result, green banking presents customers with a strong understanding of the economy as well as environmentally sustainable corporate practices. through funding more and more environmentally sustainable schemes, banks can ensure that funds are available for projects that are environmentally friendly or ethical in nature. o hybrid hoffman kiln (hhk) projects. o green bond o green savings account o green mortgages o green credit cards o mobile banking and online banking o hybrid hoffman kiln (hhk) projects. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 10  government should take appropriate steps to make conscious common people about importance of eco-friendly smart banking. uses of papers is leading to the environment to destruction by encourage flattening of plants. to keep our environment green banks should reduce the use of papers or begin the use of eco-friendly papers. representatives should minimize unnecessary printing and use flip over while printing.  assessing environment risk essential for bank to invest in a project. banks should monitor existing environment friendly products and introduce new environment friendly products such as o green home loan, o green car loan o auto brics industry o lpg bottoling plant o solar home system o effluent treatment plant (etp) o bio gas plant o bio fertilizer plant  deposits are one of the main functions of bank. banks give lucrative deposit services to collect money from the clients. banks should be introducing environment friendly deposit products under online management.  alternative delivery channels (adc) should be introduced in all schedule banks. it expands the reach of services beyond the traditional bank branch channel. so state-owned commercial banks (scbs) and specialized development banks (sdbs) should practice alternative delivery channels appropriately.  banks can play a vital role in against natural disasters. banks can provide financial supports, aids and interest free loans and so on after such differing circumstance to support the sufferers to survive in the newer environment. several seminar and symposium on environmental pollution arranged by banks may make their clients more conscious to adapt green banking activities. conclusion in today's financial landscape, green banking has become a hot topic. green banking operations, both in theory and in reality, are updated with the help of bank management. both scheduled banks must now not only allocate budget for green financing, green events or green initiatives as part of their corporate social responsibility (csr) operations, green promotion, and capacity building, but also ensure that the budget allocation is used efficiently. bangladesh bank has the regulatory authority to audit commercial banks to see whether they are following green banking policies in order to combat the country's own emissions. green banking is thought to ask for capital in the short term but provide long-term growth. finally, the researcher believes that it is past time to strengthen green banking policies in the banking sector in order to promote the use of renewable, efficient energy from nature (green). references bihari, s. c. (2011). green banking–socially responsible banking in india. the india banker, 6(1), 32-37. chowdhury, m. a. a., & dey, m. (2016). green banking practices in bangladesh. the cost and management, 44(2), 34-39. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 11 chen, z., hossen, m. m., muzafary, s. s., & begum, m. (2018). green banking for environmental sustainability-present status and future agenda: experience from bangladesh. asian economic and financial review, 8(5), 571. hoque, n., mowla, m., uddin, m. s., mamun, a., & uddin, m. r. (2019). green banking practices in bangladesh: a critical investigation, international journal of economics and finance, 11(3), 58-68. masud, m., kaium, a., hossain, m. s., & kim, j. d. (2018). is green regulation effective or a failure: comparative analysis between bangladesh bank (bb) green guidelines and global reporting initiative guidelines. sustainability, 10(4), 1267. thombre, k. a. (2011). the new face of banking: green banking. research paper–commerce, 1(2), 1-4. ullah, m. s. (2014). green banking in bangladesh: progress, problems and prospects. nibm, prajnan, 43(1). verma, m. k. (2012). green banking: a unique corporate social responsibility of india banks. international journal of research in commerce & management, 3(1), 110-114. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (http://creativecommons.org/licenses/by/4.0). https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3, no. 1; 2021 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 49 does individual attributes matters on the employability readiness among engineering graduates in the high education institutes in oman masoud rashid al hinai phd research fellow faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: alhinai6602@gmail.com dr. abul bashar bhuiyan associate professor faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: bashariuk@gmail.com dr. nor azilah husin associate professor & deputy dean faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: nor_azilah@unisel.edu.my received: october 03, 2021 accepted: october 30, 2021 online published: november 25, 2021 doi: 10.46545/aijbms.v3i1.223 url: https://doi.org/10.46545/aijbms.v3i1.223 abstract the aim of this study is to examine the effects individual attributes on the employability readiness among engineering graduates of the high education institutes in oman. the study adopted selfdirected structured questionnaire which was distributed to a sample of engineering students and graduates from a number of colleges and universities. the study used the structural equation modelling (sem) for analysing the collected data. the findings of the statistical analysis of the study showed the most influential individual attributes on graduates’ readiness for employability are workshop attendance that affect the attainment of the technical skills of the graduates, family motivations, and graduates’ career orientations that help graduates to identify future career requirements and future career opportunities, and graduates’ personal learning targets. also, class attendance, academic excellence, financial sources, and parents’ career position showed mailto:nor_azilah@unisel.edu.my https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 50 high important effects as well. the findings of this attribute which consist of the individual attributes of personnel’s’ values, attitudes, abilities, and work-life balance enhance the graduates attainment of the adaptability and flexibility attributes for their future readiness for employability. therefore, study findings showed individual attributes factor has high influence on the readiness for employability of the graduates in oman. finally, the study’s implementations and recommendations could be transferred to the gulf and arab or other countries’ contexts having similar settings of he systems and similar issues of skills gap and employability concern of their graduates. keywords: individual attributes, employability readiness, engineering graduates, high education institutes, oman introduction one of the essential objective of the higher education (he) system in oman is enhancing the skills and qualities of the fresh graduates to meet the requirement of the labor market, however, most graduates still lack the acquirement of the required readiness for employability skills (al hinai, bhuiyan, & husin, 2020a, 2020b, 2020c; lim, lee, yap, & ling, 2016; rahman & bhuiyan, 2019; yang, cheung, & fang, 2015). many kinds of studies found that graduates of the heis in oman and regional countries face strong challenges to get easily employed because those graduates seriously lack the employability skills (almunajjed, sabbagh, & insight, 2011). as a result of the skills gap of the he graduates, the unemployment rate among the omani graduates is high as another research concluded that many omani youth graduates spend more than three years to find a job (ncsi, 2015). a recent study on the desired readiness for employability skills required for omani engineers listed thirteen essential skills including analytical thinking or critical thinking, problem solving skills (the ability to analyze facts and situations), creative thinking (the ability to develop and apply appropriate solutions), communication skills including listening and questioning, capacity for lifelong learning including readiness to contribute to new ideas, capacity for lifelong learning including openness to new ideas, teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions, professional ethics and morality, entrepreneurial skills, leadership skills, proficiency in written and oral english, specialization and industrial required technical skills, capacity for applying knowledge in practice (al hinai et al., 2020a). also, in an important study of graduates attributes factors affecting the engineers graduates’ attainment of the required readiness for employability skills, five attributes factors were believed to have the most influential matters on the acquirement of required employability skills including human capital attributes, social capital attributes, individual attributes, institution-related attributes, and active learning attributes (al hinai et al., 2020b). therefore, this study aims to determine the effect of individual attributes factors on the graduates’ readiness for employability to improve the quality of engineering education which consequently, will enable the engineering colleges to produce graduates suitable for employment. more specifically, this study aims to answer the following question. literature review the aspect of individual attributes has recognised as an essential part of a career success (fugate & ashforth, 2003). for any graduates having adaptability and flexibility attributes help the graduate to deal with any required change and also make the graduate ready to deal with future https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 51 career changes and therefore he can enhance his job desired outcomes (fugate, kinicki, & ashforth, 2004; heijde & van der heijden, 2006). bridgstock (2009) in his paper “the graduate attributes we've overlooked: enhancing graduate employability through career management skills”, splits career skills into as “self-management skills and career building skills”. the selfmanagement skills consist of the individual attributes of personnel’s’ “values, attitudes, abilities, aptitudes, interests and work-life balance”. while career building skills help graduates to sail and progress in their careers (bridgstock, 2009). therefore, graduates are desired to attain the adaptability and flexibility attributes for their future readiness for employability. in a study of the effect of the individual and personnel attributes of the graduates and their effect on employability, productive self-management skills (organisation, planning, and selfdiscipline) ,creative and innovative skills (work independently, entrepreneurship, self-motivated, and innovative thinking), new technology adaptation skills (information computer technology skills and use of modern tools, equipment and technologies), personal attributes and individual differences (ethical conduct, positive attitude, and responsibility), lifelong learning skills, leadership skills, and finally global citizenship skills (knowledge of another language and awareness of global issues) were found essential for graduates readiness for employability (sarfraz, rajendran, hewege, & mohan, 2018). also, in an analysis study of the influencing factors of job attainment. the study findings indicated that work place decision preferences widely in line with the common believe of the contents of graduates’ attributes factors, consisting of work technical experience, attainment of required industrial generic skills and abilities, and finally the outstanding integrity of the graduate which is an important individual attributes affecting skills and career attainmen (jackson, 2014). besides, “integrity, reliability and teamwork” which are graduates individual attributes were found as the most essential generic skills connected to employability of graduates (gupta, singh, & kaushik, 2018). in addition, another study found that students lack the understanding of the sets of the employability skills of the fourth industrial revolution as a strong indication of gap of employability skills provided by the heis and the labour market demands which affect individual graduates getting employability (pauceanu, rabie, & moustafa, 2020). additionally, the importance of individuals classroom attendance, training induction learning, and evaluation activities in the wil episode were recognised essential for the development of the required employability skills and recognition of elements which hinder ability accumulation and achievement. besides, work induced training programmes as well as course size, format and layout found to be important as well (jackson, 2015). also, a new approach to employability was considered by developing a framework that incorporates six key dimensions which included human capital, social capital, individual attributes, individual behaviours, perceived employability, and labour market factors. the study was based on uk and australian data. the study model contributed to the understanding of the individual, institutional and contextual variables that impact employability and career results among graduates. moreover, the model also identified zones of individual obligation (for students and graduates) (clarke, 2018). others emphasis essentially at self-perception for graduates employment success. they have different definition for employability to be based in the individual’s perception of the possibility of getting and sustaining employment. thus individual perception of employability is connected to what the graduate himself do to attain competencies including his abilities, capacities and skills along with his behavioural attitude towards employment and future career (vanhercke, de cuyper, peeters, & de witte, 2014). also, students’ manner of speaking, their mental alertness, and their ability for presenting ideas found to be dominated in a study of identifying the most https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 52 predictive attributes among employability signals of undergraduate students . while, the other attributes such as the physical conditions of the graduates, their self-confidence, their communication skills abilities, the students’ performance rating, and the graduates’ general appearance scored as stated respectively (casuat & festijo, 2020). therefore, the individual attributes elements intended to be analysed in this study are personal planning, career orientations, class attendance, family motivation, parents career position, academic excellence, and financial sources of study (al hinai et al., 2020b). finally, the initial theoretical framework representing the relationship among the study variables is presented in figure 1. this portion of the framework is obtained from a wider study of factors affecting the readiness for employability among engineering graduates of the heis in oman (al hinai et al., 2020b). figure 1. the influence of individual attributes on graduates’ readiness for employability among engineering graduates of the heis in oman h1: there is a significant relationship between individual attributes and graduate’s readiness for employability among engineering graduates of the heis in oman. methodology the simple random characteristic strategy of the sampling technique was utilised by collecting data from an intended sample consisting from 340 random sample of engineering students obtained from different heis in oman. to ensure the validity and clarity of the questionnaires, a panel of experts were consulted consisting of two academic engineering experts and two language experts. the findings of this study are accomplished utilizing the quantitative statistical methodology approach. this approach implements a numerical analysis using survey questionnaires as the base to collect data from students, and graduates (creswell & creswell, 2017; dörnyei, 2007).. human capital theory were utilised as the underpinning theory of the study since it examines the financial benefits resulting from the investments in people’ skills and resources. such investment will result to have highly-skilled labors placed in highly-skilled careers, which could improve the nation’s economy and prosperity (becker, 1962; leslie & brinkman, 1988; mcmahon, 2009; schultz, 1963; slaughter, taylor, & rosinger, 2015). also, two statistical programs are used for data analysis. the first one is the use of the statistical package for the social studies (spss) version 26.0 to administer the preliminary data analysis. the second statistical program utilised for this study was the partial least square structural equation modelling (plssem) software. this program is used for the evaluation of the reflective measurement model, dv graduates’ readiness for employability iv individual attribute h1  personal planning  career orientations  class attendance  family motivation  parents career position  academic excellence  financial sources of study  workshop attendance https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 53 structural model, path analysis, and hypotheses testing (hair jr, sarstedt, ringle, & gudergan, 2017). discussion of research questions and findings testing for normality the descriptive statistics present the statistical distribution of the study data that includes the observed variables, the means, standard deviations, skewness, and kurtosis. the spss 26 version software was used to provide the descriptive statistics which highlights the statistical distribution of the collected data of the sampled pilot test. this statistical data represents the study assigned variables, the means and the standard deviations. in addition, skewness, and kurtosis are employed for testing the normality of the data. table 1 show the results of the descriptive statistics calculation and testing the normality of the data. as shown in the tables, all selected variables have skewness values as well as kurtosis values within the range -3 and +3 which signify that the study variables are normally distributed. specifically, the recommended values for skewness are between 3 and + 3, and the values for kurtosis are between 10 to + 10 when using sem (urbano, 2013). table 1. the skewness and kurtosis for normality descriptive statistics n skewness kurtosis statistic statistic std. error statistic std. error normality assumption ia1 340 -.999 .132 .977 .264 normal ia2 340 -1.145 .132 1.486 .264 normal ia3 340 -1.028 .132 .905 .264 normal ia4 340 -1.174 .132 1.568 .264 normal ia5 340 -.755 .132 .220 .264 normal ia6 340 -1.273 .132 1.511 .264 normal ia7 340 -1.122 .132 1.015 .264 normal ia8 340 -.706 .132 -.367 .264 normal ia9 340 -.971 .132 .568 .264 normal ia10 340 -.549 .132 -.087 .264 normal table 2. mean and standard deviation-individual attributes descriptive statistics-individual attributes item n mean std. deviation workshop attendance of graduates enhances their attainment of readiness of employability skills 340 5.8382 1.33271 family motivations elevate graduates' attainment of readiness of employability skills 340 5.7588 1.32619 graduates with clear career orientations can easily identify future career requirements 340 5.6206 1.22421 graduates who plan to achieve their learning goal(s) are more ready for employment 340 5.5441 1.27413 https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 54 note: using seven-dimensional likert scale (1represents “strongly disagree”, and 7 represents “strongly agree”) using spss version 26, table 2 indicates that the most influential individual attributes on graduates’ readiness for employability are workshop attendance that affect the attainment of the technical skills of the graduates (jackson, 2015), family motivations , graduates’ career orientations that help graduates to identify future career requirements and future career opportunities (clarke, 2018), and graduates’ personal learning targets (craps et al., 2017). while, class attendance, academic excellence, financial sources, and parents’ career position have lesser effects. the findings of this attribute which consist of the individual attributes of personnel’s’ “values, attitudes, abilities, aptitudes, interests and work-life balance” enhance the graduates to attain the adaptability and flexibility attributes for their future readiness for employability (bridgstock, 2009; clarke, 2018; oliver, 2016). table 3. summary of measurement model findings constructs (latent variable) measureme nt items (indicators) converge nt validity (loading) internal consistenc y reliability composit e reliabilit y ave discrimina nt analysis ca cr individual attributes ia1 0.785 0.901 0.921 0.59 6 yes ia2 0.805 ia3 0.821 ia4 0.849 ia5 0.787 ia6 0.766 ia7 0.733 graduates with clear career orientations can easily identify future career opportunities 340 5.5353 1.33102 graduates who set their personal learning targets are more ready for employment 340 5.4912 1.34469 academic excellence of graduates can enlarge the chances of their future readiness for employability 340 5.4529 1.47171 class attendance of graduates reinforces the attainment of readiness of employability skills 340 5.2794 1.43949 financial sources of study affect graduates' attainment of readiness of employability skills 340 4.9147 1.56899 parents' career positions magnify students' future readiness for employability 340 4.9147 1.72311 individual attributes average score 340 5.4765 .98785 https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 55 by utilising sem-pls 3.0 (hair jr et al., 2017), table 3 highlights a brief summary of the results obtained for the measurement model assessment which illustrates that the reliability and validity tests for this study. the findings shows that all the requirements of reliability and validity of the measurement model assessment are met. hypothesis testing to conduct the hypotheses testing connected to the structural model of the study, there are several elements are required to be considered. the first element, for a hypothesis to be valid, the value of the path coefficient of 0.1 or higher is required to account for a certain impact within the model (hair, ringle, & sarstedt, 2011). secondly, the acceptable t-value and p-value must be greater than 1.96 and less than 0.05 respectively (ramayah, cheah, chuah, ting, & memon, 2018). the hypothesis testing result of the impact of individual attributes on the readiness for employability is illustrated in table 4. table 4. hypothesis testing results path coefficient β t statistics p values 5% bci ll 95% bci ul decision (p < 0.05) individual attributes -> readiness for employability 0.254 3.245 0.001 0.122 0.384 accepted the study findings highlight a significant contribution of the individual attributes factor in the readiness for employability of the engineering graduates of the heis in oman. according to the findings, the most influential individual attributes on graduates’ readiness for employability are workshop attendance that affect the attainment of the technical skills of the graduates (jackson, 2015), family motivations , graduates’ career orientations that help graduates to identify future career requirements and future career opportunities (clarke, 2018), and graduates’ personal learning targets (craps et al., 2017). while, class attendance, academic excellence, financial sources, and parents’ career position have lesser effects. the findings of this attribute which consist of the individual attributes of personnel’s’ “values, attitudes, abilities, aptitudes, interests and work-life balance” supported previous studies finding and came to proof its strong influence in enhancing the graduates attaining the adaptability and flexibility attributes for their future readiness for employability (bridgstock, 2009; clarke, 2018; oliver, 2016). therefore, the individual attributes play relatively a significant role to encourage the graduates to have adaptable and flexible attitudes to job search and career self-orientation by acquiring the important careerrelated readiness for employability skills (okay–somerville & scholarios, 2015). conclusion and policy recommendation the findings of the statistical analysis of the study showed the most influential individual attributes on graduates’ readiness for employability are workshop attendance that affect the attainment of the technical skills of the graduates, family motivations, and graduates’ career orientations that help graduates to identify future career requirements and future career opportunities, and https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 56 graduates’ personal learning targets. also, class attendance, academic excellence, financial sources, and parents’ career position showed high important effects as well. therefore, heis are required to pay close attention to workshop equipment and practical activities. this element of individual attributes had scored the highest importance among the individual attributes items which directly affect the attainment of one of the most required engineering skills and competence. another recommendation for heis is to consider involving graduates families as an important aspects for developing their graduates attainment of the required readiness for employability skills since family motivations along with graduates’ career orientations help graduates to identify future career requirements, future career opportunities, and graduates’ personal learning targets (craps et al., 2017). also, a third recommendation for heis is to promote among its students the importance of class attendance and academic excellence for future career opportunities and sustainment of employability. therfore, the findings of this attribute having the personnel’s graduates values, attitudes, and abilities had illustrated strong influence in enhancing the graduates attaining the graduates’ readiness for employability, adaptability, and flexibility for future employability (bridgstock, 2009; clarke, 2018; oliver, 2016). therefore, the individual attributes play relatively a significant role to encourage the graduates to have adaptable and flexible attitudes to job search and career self-orientation by acquiring the important career-related readiness for employability skills (okay–somerville & scholarios, 2015). finally, the study’s implementations and recommendations could be transferred to the gulf and arab or other countries’ contexts having similar settings of he systems and similar issues of skills gap and employability concern of their graduates. references al hinai, m. r., bhuiyan, a. b., & husin, n. a. 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(2015). an empirical study of hospitality employability skills: perceptions of entry-level hotel staff in china. journal of hospitality & tourism education, 27(4), 161-170. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (https://creativecommons.org/licenses/by/4.0). https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies 4(1) (2022), 22-29 22 business and management studies aijefr vol 4 no 1 (2022) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa prioritization and identification of factors affecting bank employees retention and its influence on productivity: a conceptual framework fatema tuj johra tania (a)1 sakib uddin kowser (b) (a) mohammadpur kendriya college, national university, gazipur, dhaka, bangladesh; e-mail: fatematujjohratania@gmail.com (b) electronic &telecommunication engineering, international islamic university, chittagong, bangladesh; e-mail: sakibuddinkowseropu@gmail.com a r t i c l e i n f o article history: received: 19th october 2022 revised: 30th november 2022 accepted: 19th december 2022 published: 30th december 2022 keywords: employee retention, productivity, training and development, employee voice, attractive compensation, job satisfaction, career development jel classification codes: m10, m12 a b s t r a c t employee retention is vital for every organization, especially in the banking sector, for a nation's growing economy. banking institutions are the platform for the economic growth of a country. the main objective of this study is to find out the influencing factors of employee retention and its impact on employee performance in the financial sector of bangladesh. this research is qualitative and exploratory in nature, where data have been collected from secondary sources like published articles and renowned journals, including scopus database, springer, abs, google scholar, emerald, and research gate. from extensive literature, it is assumed that career development, training and development, job satisfaction, attractive compensation package, employee voice, and transformational leadership positively impact employee retention, and employee retention has a significant relationship with employee performance. the organisation's management can make policies and redesign the work on the basis of the factors presented in this paper, which would lead to a happy workforce. this study will be of value to anyone seeking a better understanding of employee retention to improve employee performance and organizational productivity. © 2022 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction nowadays, the banking sectors are regarded as the indispensable area of every country that play significant role to grow economy of a nation. on the other hand, it is called life blood of the economy of a country. this sector is growing rapidly with competition for providing attractive services to the customers in the market. basically, the demand of the customers ‘are changing day by day based on modern technologies which is an alarming for rate of every financial institution in this competitive market. also, today’s market is very competitive where the banks are facing difficulties to maintain services to the consumer’s demands. in this regard the (ali et al., 2020; ali et al., 2021) employees are the key essential source of competition to stay in the competitive market. however, employees are considered as the paramount resources of every organization and their retention is highly crucial of every organization to provide services to the customers according to their demand (akhter, karim, jannat, & islam, 2022). the performance of employees is related with the performance of organization, so employee’s performance is crucial regarding better services to the consumers in the marketplace. employee’s retention t means to keep the workers through providing opportunities to in working environment (rahaman & taru, 2020). moreover, retention creates inspiration of the employees to work enthusiastically that assist to grow their performance which support to provide good-looking services to the consumers of the banks. therefore, the management of every organization should give chance to engage the employees in activities regarding enhancing their performance that aid to achieve goals of the organization (rahaman, 2020a). from the extensive literature review numerous studies have been showed on some influencing factors of employee retention but a few research has been conducted on bank employee’s retention and their productivity. so, there is no prior research on bank employee’s retention and their performance based on some factors like training and development, employee voice, attractive compensation, job satisfaction, career development. this study responds to determine the influencing factors of employee retention and its impact on employee productivity of 1corresponding author: orcid id: 0000-0003-0134-4633 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v4i1.281 to cite this article: tania, f. t. j., & kowser, s. u. (2022). prioritization and identification of factors affecting bank employees retention and its influence on productivity: a conceptual framework. american international journal of business and management studies, 4(1), 22–29. https://doi.org/10.46545/aijbms.v4i1.281 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v4i1.281 https://orcid.org/0000-0003-0134-4633 https://orcid.org/0000-0002-0443-5170 tania & kowser, american international journal of business and management studies 4(1) (2022), 22-29 23 banking sector in the context of bangladesh. also, this study retorts the research gap through finding manipulating determinants of employee retention and its effect on productivity. the main objective is to find out the necessary influencing factors of employee retention and its effect on employees’ productivity in the organization, especially in banking sector in the context of bangladesh. literature review based on extensive literature review several factors have been found to affect employee retention that have directly impact on productivity. a few studies have been conducted on them. this study responds the following significant factors of employee engagement: career development career development is regarded as the motivation factor that helps to engage employees in working place which grow their knowledge, skills, and abilities. on the other hand, career development process assists to retain qualified employees in the organization and it also provides various opportunities of employees (ali, 2021; chowdhury et al., 2020; chowdhury et al., 2021a; chowdhury et al., 2021b). however, career development is considered as the global factor of employee engagement which grow the performance of employees in an organization (bhatnagar, 2007). previous studies also recommended that, career development inspires to engage employees in working environment that help to develop employee performance in an organization (rahaman, 2016). career development basically offers the opportunity of employees to stay in the organization for future brightness that undoubtedly impact on employee retention which support to enrich employee performance in productivity (rahaman, 2021a; iqbal et al., 2021; kader et al., 2019; kader et al., 2021a). another study also suggested that career development influence on employee retention and retention impact on employee productivity (avery et al., 2007; ali, haque, & nahar, 2022). training and development training is regarded as learning motive which increase knowledge, skills and abilities of employees that help to expand performance in an organization (rahaman, hassan, asheq, & islam, 2022). besides, training means to learn new ideas from the trainer and it is related with the performance of employees (gazi et al., 2021; kader et al., 2021b; kabir et al., 2021; nayeen et al., 2020). on the other hand, training and development opportunities brings motivation among the workers to work willingly, as a result the organization can obtain feedback timely and effectively from the employees. moreover, development means to grow facilities of employees in the working sector which expand employee engagement and employee performance (rahaman & uddin, 2022; nahar et al., 2021; rahman et al., 2021a; rahman et al., 2021b; shahriar 2021a). however, training and development provides facilities to teams, individuals, communities, organizations and it also support to organizational opportunities which enrich economic development of a nation. henceforth, training and development is a crucial source of employee engagement which grow the performance of employees of an organization and prior study also explained that training should be part of every organization that creates attractiveness among the employees (yuan et al., 2022; shahriar 2021b; zayed et al., 2021a; and zayed et al., 2021b). moreover, previous study also said that, training and development emphasized on employee retention in the financial sector of an organization especially in the context of banking sector of bangladesh (aktar & pangil, 2018; latif & karim, 2019; ahmed et al., 2022; al-quraan et al., 2022). compensation package employees are the big assets of every organization for achieving goals within a specified time, so attractive compensation package is highly essential in every institution (rahaman, 2021b; faisal-e-alam et al., 2022; mia et al., 2022). moreover, pay and benefits always generate positive thinking among the employees that engage themselves in the organization that produce their performance in work (ali, rana, nahar, tesha, & jabir, 2022). likewise, previous study also recommends that attractive pay and benefits always create intention to engage in the working place that help to expand their performance. therefore, there are three monetary benefits for creating retention tendency among the employees in an organization specially in banking sector like cash bonuses, pay and stocks (barnes & collier, 2013). on the one hand, compensation lead to greater engagement among the employees which is related with performance of employees (rahaman, hassan, asheq, & islam, 2022). another study also postulates that, pay and benefits is regarded as the indispensable factor of employee’s motivation that creates retention tendency t among the workers which has a significant relationship with employee performance (ali & dahana, 2021; rahaman, 2020b; rubi et al., 2022; zayed et al., 2021a; zayed et al., 2021b). job satisfaction job satisfaction is regarded as the stepping stone of employee engagement which create mental satisfaction and self –efficacy of employees and it has positive relationship with employee performance (rahaman et al., 2022; zayed et al., 2022a; zayed et al., 2022b). however, job satisfaction is considered as the satisfaction of employees regarding job, compensation, extra benefits, promotion, bonus, working environment etc. those are directly impact on employee retention in the organization specially in banking sector (andrew & sofian, 2012; rahaman, luna, kejing, ping, & taru, 2021). besides, job satisfaction brings happiness among the employees where the organization can easily retain qualified and talented employees for organization performance and these facilities boost the performance of employees in an organization (prajapat et al., 2022). previous study also recommended that, job satisfaction has a significant relationship with higher engagement of employees and engagement has positive relationship with employee performance (sawang, 2012; islam et al., 2022). another research is claim that job satisfaction has a positive and significant effect on employee retention (mamoon, taru, & atikur, 2021; tania & kowser, american international journal of business and management studies 4(1) (2022), 22-29 24 zayed et al., 2022c; zayed et al., 2022d; bhuiyan et al., 2022; shayery et al., 2022). employee voice employee voice is a significant factor of retention which is essential to grow performance of employee. besides, it is regarded as the involvement and interaction of employees regarding job opinions and ides which help to achieve the organizational objectives and target (van dyne & lepine, 1998). however, employees’ voice is the essential source of information which provides pleasures to develop individuals and organization performance (detert & burris, 2007; ai et al., 2022). moreover, employee voice is considered as the opportunity to express views, opinions, and ideas with the management of an organization which directly impact on employee performance. therefore, employee voice generates the motivation among the workers to work without feeling hesitation and frustration that arises performance of employees regarding achieving target of the organization (islam et al., 2014). previous study also recommends that, employee voice has a positive and significant effect on employee retention that enhance the employee’s performance in banking sector (mamoon & rahaman, 2021; akhter, karim, & islam, 2022). transformational leadership transformational leadership is defined as the democratic leadership style where this leader provides facilities and encourages of employees or followers to work willingly (chen et al., 2022b). besides, transformational leadership refers to a leader who influence and motivate the employees or followers through works and interaction that expand knowledge, skills and abilities among the employees in the working place (sudha et al., 2016). prior research is assumed that, there is a relationship between both senior management and employee line manager and employee voice has a relationship with employee engagement and performance (rahaman, gupta, ali, ali, & taru, 2021). based on the extensive literature transformational leadership is related with employee involvement which has positive and significant effect on employee retention (chen et al., 2022a). conceptual framework there are some significant factors such as career development, training and development, attractive compensation package, transformational leadership and employee voice directly effects on employee performance of an organization. based on the prior studies the determining factors of employee retention and its impact of employee productivity are given below through a conceptual model in this research. figure 1. the conceptual framework materials and methods in this study purpose secondary data have been collected from various sources like scopus database, springer, abs, google scholar, emerald, and research gate. also, his study is qualitative and exploratory in nature. this study is responded based on the topic of determining influencing factors of bank employee’s retention and its impact on productivity in an organization. also, the data have been collected from published articles and renowned journals. results and discussions the main objective of this study is to find out the influencing factors of employee retention and its impact on employees’ productivity. from the literature review it is assumed that training and development, career development, attractive compensation package, employee voice, transformational leadership, job satisfaction has positive impact on employee engagement in every organization especially in banking sector in the context of bangladesh. basically employees are the great resource of every organization where they want to get empowerment and engagement in various activities with attractive pay and benefits. as a result, they can work enthusiastically based on their willingly intention in work. in other words, the more highly engaged the employee, the more likely he or she will be to say positive things about the organization. there are various factors of employee engagement but in this study responds some crucial factors which assist to engage employee in an organization. on the other hand, the credit or performance of an organization depends on employee performance. in this study it is said that, career development cd), training and development t&d), attractive compensation career development (cd) training and development (tad) compensation package (cp) job satisfaction (js) employee voice (ev) transformational leadership (tl) employee productivity (ep) employee retention (er) tania & kowser, american international journal of business and management studies 4(1) (2022), 22-29 25 (ac), transformational leadership (tl), job satisfaction (js) has positive effect on employee engagement and employee engagement has highly impact on employee performance. from the conceptual model it can be assumed that some of the suggestions in this paper include different employee engagement approaches for new employees like strong induction programs, rigorous training and development programed, certification programme and giving them a realistic job preview in the organization which creates better performance of employees. therefore, the management needs to give highly concentration regarding engagement of employees and their performance for creating right jobs to the employees in the organization. besides, teamwork and support also creates more engagement in the work of employees. also, good job leads to higher motivation to stay in the organization. sufficient levels employee development via skills, training and learning can result in making employees more engaged with respect to the job and the organization. conclusions employees are regarded as the great resources of every organization where the organizational performance basically depends on qualified employee performance and their retention. employee retention is long term activities that is possible to determine influencing factors like career development, training and development, pay and benefits, employee voice, transformational leadership, and job satisfaction in the working place. however, emphasis should be given employee opinions and opportunities should be provided to them to be heard. transparency from the senior leadership will also make the organization culture. the main objective of this study is to determine the influencing factors of employee retention and that impact on employee performance and productivity. from literature review in this study responds that, career development, training and development, pay and benefits, transformational leadership, and job satisfaction has positive effects on employee retention which assist to develop employee performance and this performance brings happiness between both employee and employer in the organization especially in banking sector in bangladesh. in this case the top management can also take necessary steps to create better retention and prevent attrition among employees. for example, organizations need to take advantage of their leaders' transformational style to boost engagement among staff for achieving objectives in their specified time. on the other hand, organizations can improve retention rate by maintaining decision-making, commitment, opportunity thinking and enhancing employee’s motivation. based on this study we suggest that the management of the organization should determine influencing factors from time to time to increase more retention process of employees and appropriate training programmers should ensure to build up correlation among the workers of employees in the working place. author contributions: conceptualization, f.t.j.t. and s.u.k.; methodology, f.t.j.t.; software, f.t.j.t.; validation, f.t.j.t.; formal analysis, f.t.j.t.; investigation, f.t.j.t.; resources, f.t.j.t.; data curation, f.t.j.t.; writing – original draft preparation, f.t.j.t. and s.u.k.; writing – review & editing, f.t.j.t. and s.u.k.; visualization, f.t.j.t. and s.u.k.; supervision, f.t.j.t.; project administration, f.t.j.t.; funding acquisition, f.t.j.t. and s.u.k. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references ai, y., rahman, m. k., newaz, m. s., gazi, m. a. i., rahaman, m. a., al mamun, a., & chen, x. 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2021 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 34 the effects of human capital attributes on the employability readiness among engineering graduates in the high education institute’s in oman masoud rashid al hinai phd research fellow faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: alhinai6602@gmail.com dr. abul bashar bhuiyan associate professor faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: bashariuk@gmail.com dr. nor azilah husin associate professor & deputy dean faculty of business and accountancy university of selangor 40000 shah alam, selangor darul ehsan, malaysia e-mail: nor_azilah@unisel.edu.my received: october 01, 2021 accepted: october 30, 2021 online published: november 24, 2021 doi: 10.46545/aijbms.v3i1.222 url: https://doi.org/10.46545/aijbms.v3i1.222 abstract the aim of this study is to investigate the effects of human capital attributes on the employability readiness of the engineering graduates of the high education institutes in oman. the study adopted self-directed structured questionnaire distributed to a sample of engineering students and graduates from a number of colleges and universities. the study used the structural equation modelling (sem) for analysing the collected data. the findings of the statistical analysis of the study showed that omani graduates signify professional ethics and morality, teamwork including respecting others, cooperating, negotiating, persuading, and contributing to discussions, communication skills including listening and questioning, capacity for lifelong learning including openness to new ideas, creative thinking of the ability to develop and apply appropriate solutions, and problem solving skills of the ability to analyse facts and situations as the top required skills mailto:nor_azilah@unisel.edu.my https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 35 of readiness for employability. specifically, study findings showed human capital attributes factor has high influence on the readiness for employability of the graduates in oman. finally, the study’s implementations and recommendations could be transferred to the gulf and arab or other countries’ contexts having similar settings of he systems and similar issues of skills gap and employability concern of their graduates. keywords: human capital attributes, employability readiness, engineering graduates, high education institutes, oman. introduction the omani heis graduates are considered to have low readiness for employability skills (lim, lee, yap, & ling, 2016; yang, cheung, & fang, 2015). the skills gap of the graduates of the heis are affecting the new graduates’ employability and career outcomes at workplaces (al-azri, 2016). also, many researches revealed that unemployment rate for omani nationals under the age of 30 have magnitude values because of the skills gap of the fresh heis graduates (barnett, malcolm, & toledo, 2015; belwal, priyadarshi, & al fazari, 2017; forstenlechner & rutledge, 2010; silatech & bank, 2010). as a result, the principle link between heis graduates and the industry lies on the level of graduates’ readiness for employability skills that the graduates acquired to match the employer’s requirements (al-harthi, 2011; allen & de weert, 2007). this link is considered as a principle factor for graduate readiness for employability connecting graduate attributes factors and graduates’ attainment of employability skills, attitude, competencies, and knowledge (clarke, 2018). also, in an important study of graduates attributes factors affecting the engineers graduates’ attainment of the required readiness for employability skills, five attributes factors were believed to have the most influential matters on the acquirement of required employability skills including human capital attributes, social capital attributes, individual attributes, institution-related attributes, and active learning attributes (al hinai, bhuiyan, & husin, 2020a, 2020b, 2020c; rahman & bhuiyan, 2019). therefore, this study aims to determine the effect of human capital attributes factors on the graduates’ readiness for employability to improve the quality of engineering education which consequently, will enable the engineering colleges to produce graduates suitable for employment. more specifically, this study aims to answer the following questions. literature review graduate readiness for employability definitions the definition of graduate readiness for employability and its concept affect the individuals and their communities in general. employability or graduate readiness for employability has been the focus of many researches. some of the newly conducted studies reveal that the concept of employability still has major considerations by researchers, academia, and the industries (finch, hamilton, baldwin, & zehner, 2013; smith, ferns, & russell, 2014; sumanasiri, yajid, & khatibi, 2015). a new description of graduates’ employability which combines the weight of generic soft skills and graduate attributes reveals the usefulness of industrial and work skills attainment (jackson, 2016). “a set of generic softer skills, in particular, personal attributes that can be summed up as a positive attitude are critical to being employable. a positive attitude encapsulates characteristics such as a willingness to take part and openness to new activities and ideas. it underpins and links together the other key capabilities” (jackson, 2016). therefore, the definition https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 36 of graduate employability or graduate readiness for employability can be understood to indicate the readiness of heis graduates to be employed. it signifies the graduates’ possession of the required employable skills, knowledge, graduate attributes, attitudes, and workplace tasks requirements to assess them achieving the workplace objectives (mason, williams, & cranmer, 2009). literature review on graduate readiness for employability required skills many types of research were conducted to examine the key soft skills required for the graduates’ readiness for employability. for example, in malaysia, one study revealed students’ ethics and their professionalism scored the highest of 19%. while the second soft skills of analytical thinking and problem solving scored 17%. other important soft skills founded were the abilities of working in a team, leadership and communications. these abilities scored 14% to 15%. the lowest in importance skills were information management & lifelong learning and entrepreneurship. these skills got a low score of 10% each. the study also recommended that it would be effective to recognize the suitable practice and evaluation criteria to guarantee that heis students have the required soft skills (adnan, daud, alias, & razali, 2017). also, in an exploration of global employability skills with the aim to identify the most essential global readiness for employability skills where 43 researches from 17 countries were studied. the findings revealed that they were 10 major skill sets considered as key employability skills. these skill sets were categorised as interpersonal and collaborative skills in which communication skill found to be the most important skills in the category, relationship management skills (team work, flexibility and adaptability), cognitive and problem solving skills (problem solving, analytical/conceptual thinking, and critical thinking), productive selfmanagement skills (organisation, planning, and self-discipline), creative and innovative skills (work independently, entrepreneurship, self-motivated, and innovative thinking), new technology adaptation skills (information computer technology skills and use of modern tools, equipment and technologies), personal attributes and individual differences (ethical conduct, positive attitude, and responsibility), lifelong learning skills, leadership skills, and finally global citizenship skills (knowledge of another language and awareness of global issues) (sarfraz, rajendran, hewege, & mohan, 2018). additionally, a study conducted on the employability of undergraduate students in a malaysian higher educational institution aiming to explore the employability readiness of malaysian undergraduates. the study examined few employability attributes including academic, conscientiousness, leadership, critical thinking, teamwork, human and social capital, work and career resilience attributes. it implemented quantitative research approach involving 425 final year undergraduates from management and computing and informatics faculties. the findings of the study illustrated that teamwork, career resilience, and conscientiousness attributes had the highest score. also, academic, leadership, human, and social capital attributes had lower respondents’ rates. besides, the study revealed that employability among students depends on the academic achievement and study areas. it recommended that curriculum review is essential to consist the required employability attributes (wong, samsilah, siaw, sulaiman, & ab jalil, 2018). also, in a study titled as the critical analysis on employment of graduates in oman. the study analysed three objectives consisting of the problems confronted by graduates in getting work placement, the problems facing the employers with the outcomes of the current he system, and the methods to be endorsed to improve the graduates of the he system to increase job attainment for omanis. the findings of the study revealed that graduates lacked the technical abilities including design, testing, https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 37 and configuration management, personal skills such as communication and teamwork, and professional qualities. also, the study illustrated that problems facing the students getting work placement were due to their english language proficiency, communication skills, weakness of understanding basic concepts, and the skills gap between education and employability requirements. the study recommended improving the alignment between the academic curricula and the essential required employability skills, enriching the students’ projects to be essential parts of the learning mechanism, and enhancing the virtual training (edwin & sabura, 2019). there is a recent study titled as “employability under the fourth industrial revolution (uae)”. the study stressed that future labour will depend highly on students’ employability skills which are considered as the key factors for sustaining employment. the aim of the study was to determine the employability skills as seen by the he students’ side compared with the labour market employers’ requests. a quantitative study utilising a simple random sampling consisting of 216 participants was conducted with questionnaires via the online platform. the findings of the study showed that students lack the understanding of the sets of the employability skills of the fourth industrial revolution indicating a gap of employability skills provided by the heis and the labour market demands. the study recommended that the he subject matter experts to review the programmes of the heis and enhance the programmes’ learning outcomes to deliver the required future employability skills such as communication, it skills, foreign languages, and team-work to prepare the students to compete in the future job market (pauceanu, rabie, & moustafa, 2020). moreover. in an interesting study connected to the employability of graduates in asia. the sets of employability skills required for graduates to be entitled to enter the labour market were analysed. this study was based on studies conducted on graduate employability from indonesia, malaysia and the philippines. the findings of the study revealed that employability depends on a number of attributes and competencies that helps the graduates to get and sustain employment such as: individual attributes (basic social skills, competencies (motivation, confidence), transferable skills (literacy, numeracy, problem-solving, communication, adaptability, team working skills), qualifications, and educational attainment. besides, individual’s social and household circumstances (family and caring responsibilities, access to resources). additionally, on external factors related to the labour demand situations. the study recommended that students must be equipped with certain employability skills such as motivation, creative thinking, problem solving, communication skills, and the ability to work independently or as part of a team. the study is also found that it is important for graduates to gain the adaptability skills to continuously allow them to update their skill, and learn new technologies. as a result, the study recommended the students to be responsible to continuously enhance the attainment of the required knowledge and skills to meet the demands of the workplace (tran, 2019). also, a research paper on graduate attributes and employability skills investigated the foremost prevalent graduate attributes as they apply to graduates’ employability in oman. the aims of the paper were to survey the key graduate attributes or employability aptitudes from the point of view of business in oman in specific and the gcc nations in general, to know and acknowledge students' recognitions of the foremost common abilities that managers in oman give esteem for admitting the entry level employments, and to analyze and contextualize graduate qualities and employability aptitudes from all-encompassing point of view, including higher educational institutions (heis), employers, and the students. the research conducted by surveys and interviews with omani graduates using the principles of ‘hypothetic-deductive logic’ and inferential analysis using a combination of focus group and survey approach. the findings of the research paper indicated that the domain of higher educational institutes in oman is basically https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 38 confined to the essential nonspecific abilities in creating the graduate properties. students’ viewpoints on employers’ determination criteria uncover that computing abilities, the capacity to work in groups, proficiency of english language, earlier training, and the graduate’s identity are the five most critical employability skills in oman. the study also concluded that at present, there are few interactions among higher educational institutions (heis), alumni, and industry in oman for enhancing the employability of students. it recommended that all the partners in oman to be compelled to come together to characterize employability skills judiciously by extending the domain beyond generic skills and abilities (belwal et al., 2017). finally, a study on english language proficiency and communicative competence in oman. the study intended to evaluate their implications for employability and sustainable development. this study raised a major concern about the tremendous collections of human and financial assets the government commit into supporting english language instruction. nevertheless, this venture has clearly failed to convey the anticipated outcomes with both secondaryand tertiary-level graduates regularly characterized as being weak in the english and as having communication abilities that are insufficient for the workforce. this paper considered number of issues related to the ways in which english language proficiency and communicative competence were created in omani schools and colleges, with a focus on the challenges that exist inside the government education system. the suggestions of these challenges for graduate employability and feasible advancement were investigated. the study recommended methods of aligning the gap between students’ english language abilities and the requests of the industry in oman (al-mahrooqi & denman, 2018). literature review in human capital attributes affecting graduates readiness for employability human capital attributes, acknowledged as essential elements for graduates’ readiness for employability. a number of researchers have argued the magnitude to which generic skills, soft and technical, considered to be interchangeable from heis to the industries, or among employers (hinchliffe & jolly, 2011; kalfa & taksa, 2015). however, skill learning is an essential part of higher education. general required competencies, including problem-solving, critical thinking or team skills, represent a higher order thinking type of skills that are expected to be acquired by he graduates. they are considered to be the essential part of graduates’ identity. those skills are linked strongly with career expertise especially for entering highly sophisticated professions such as engineering or medicine. therefore, human capital attributes are essential part of graduate employability (clarke, 2018; heijde & van der heijden, 2006). since the last two decades of the 20th, governments and employer’s groups have put high pressure at heis to provide evidence of the effectiveness of their higher educational programmes in providing ready to work graduates. from academic perspective, there is a concern about the effectiveness of heis used strategies in developing transferable employability skills into their students. holmes (2013) analysed the ways universities deliver graduate employability required skills and their methods of embedded them into their programme curricula. he also analysed three influencing factors which affects graduate employability. those factors are the human capital factors, the social capital factors and the individual behaviour factors. he proposed an employability frame work consisting of the above factors as main independent variables and contains for the human capitals; skills, competencies and work experience, for social capital; network, social class and university ranking and for the individual behaviour; career selfmanagement and career building skills (holmes, 2013). https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 39 finally, a new approach to employability was considered by developing a framework that incorporates six key dimensions which included human capital, social capital, individual attributes, individual behaviours, perceived employability, and labour market factors. the study was based on uk and australian data. the study model contributed to our understanding of the individual, institutional and contextual variables that impact employability and career results among graduates. moreover, the model also identified zones of individual obligation (for students and graduates) and zones for potential collaboration between colleges, work providers and industry sections. at last, this model advertised a multidisciplinary point of view in this manner laying the establishment for future investigations and collaborations between higher education specialists, career analysts and researchers from related areas, such as administration and psychology. the paper suggested to be expanded to incorporate labour market factor (clarke, 2018). the initial theoretical framework representing the relationship among the study variables is presented in figure 1 below. this portion of the framework is obtained from a wider study of factors affecting the readiness for employability among engineering graduates of the heis in oman (al hinai et al., 2020b). figure 1. the influence of human capital attributes on graduates’ readiness for employability among engineering graduates of the heis in oman h1: there is a significant relationship between human capital attributes and graduate’s readiness for employability among engineering graduates of the heis in oman. methodology the simple random characteristic strategy of the sampling technique was utilised by collecting data from an intended sample consisting from 340 random sample of engineering students obtained from different heis in oman. to ensure the validity and clarity of the questionnaires, a panel of experts were consulted consisting of two academic engineering experts and two language experts. the findings of this study are accomplished utilizing the quantitative statistical methodology approach. this approach implements a numerical analysis using survey questionnaires as the base to collect data from students, and graduates (creswell & creswell, 2017; dörnyei, 2007). also, human capital theory were utilised as the underpinning theory of the study since it examines the financial benefits resulting from the investments in people’ skills and resources. such investment dv graduates’ readiness for employability iv human capital attribute h1 adaptation skill leadership skill motivational mindset ethical and moral issues team works orientation communication skills soft skills critical, analytical thinking and problem solving skills communication skills lifelong learning and information literacy team-working skills professional ethics and morality entrepreneurship skills leadership skills technical skills english proficiency https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 40 will result to have highly-skilled labors placed in highly-skilled careers, which could improve the nation’s economy and prosperity (becker, 1962; leslie & brinkman, 1988; mcmahon, 2009; schultz, 1963; slaughter, taylor, & rosinger, 2015). two statistical programs are used for data analysis. the first one is the use of the statistical package for the social studies (spss) version 26.0 to administer the preliminary data analysis. the second statistical program utilised for this study was the partial least square structural equation modelling (pls-sem) software. this program is used for the evaluation of the reflective measurement model, structural model, path analysis, and hypotheses testing (hair jr, sarstedt, ringle, & gudergan, 2017). discussion of research questions and findings by conducting a meta-analysis of the literature review on the readiness for employability as part of the human capital attributes, thirteen skills were identified and analysed to determine their levels of importance among the engineering graduates of the heis in oman. the identified readiness for employability skills are listed as:  analytical thinking or critical thinking  problem solving skills (the ability to analyze facts and situations)  creative thinking (the ability to develop and apply appropriate solutions)  communication skills including listening and questioning  capacity for lifelong learning including readiness to contribute to new ideas  capacity for lifelong learning including openness to new ideas  teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions  professional ethics and morality  entrepreneurial skills  leadership skills  proficiency in written and oral english  specialization and industrial required technical skills  capacity for applying knowledge in practice using spss version 26, the results obtained from the engineering student’s survey of the study, as indicated by table 1, has illustrated the following level of importance of the graduates’ readiness for employability table 1. level of importance of the readiness for employability readiness for employability mean level of importance proportion of high proportion of low professional ethics and morality 6.3059 1 95% 2.6% teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions 6.2765 2 94% 3% communication skills including listening and questioning 6.0206 3 92% 3.8% https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 41 capacity for lifelong learning including openness to new ideas 5.8441 4 89% 3% creative thinking (the ability to develop and apply appropriate solutions) 5.8265 5 86% 4% problem solving skills (the ability to analyse facts and situations) 5.8118 6 88% 5% capacity for lifelong learning including readiness to contribute to new ideas 5.6618 7 85.6% 4.4% capacity for applying knowledge in practice 5.6324 8 87% 6% leadership skills 5.5794 9 82% 6.8% proficiency in written and oral english 5.5353 10 92% 4.7% specialization and industrial required technical skills 5.3941 11 79% 8.5% analytical thinking or critical thinking 5.3000 12 73% 7% entrepreneurial skills 4.9824 13 64% 13% the results of the study clearly illustrate the importance of professional ethics and morality, teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions, communication skills including listening and questioning, capacity for lifelong learning including openness to new ideas, creative thinking (the ability to develop and apply appropriate solutions), and problem-solving skills (the ability to analyze facts and situations). these six readiness for employability skills are considered by the omani engineering graduates as the most important skills. such findings support the findings of adnan et al., (2017) where he found that ethics & professionalism had ranked the highest in importance followed by teamwork, and communications were also among the highest important skills required for employability. also, the study findings support the importance of teamwork skills among omani graduates that found by belwal et al., (2017) where he found that computing skills, teamwork, proficiency of english language, placement training, and the personality of the graduates were the five most required employability skills in oman. besides, the study finding are even supported when communication, teamwork, and professional qualities were found as the most essential skills required for omani graduates (edwin & sabura, 2019). while critical thinking and problem solving skills had been also found as important readiness for employability skills (mtawa, fongwa, & wilson-strydom, 2019). though the findings, illustrated in table 1 shows that the proficiency in written and oral english is ranking at level 10 of importance, yet its proportion of high is 92% and knowing that the mean of communication of engineering in oman is english, therefore, it can be considered to have a high level of importance and can be justified with the communication skills. the english communication skill among engineering students consisting of both written and oral communication is one of the key barriers that face graduates to engage effectively in the interviews (al-mahrooqi & denman, 2016). this view is consistent with other studies, who mentioned that developing learners’ communicative capability is one of the challenges of oman’s he system as it falls short to produce fluent english proficient graduates. as a result, the critical value of english https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 42 proficiency is recognised as an essential skill to gaining knowledge and pursuing employment’s opportunities (al-mahrooqi & denman, 2016). table 2. summary of measurement model findings constructs (latent variable) measureme nt items (indicators) convergen t validity (loading) internal consistenc y reliability ave discrimin ant analysis ca cr human capital attributes hca1 0.806 0.906 0.928 0.683 yes hca2 0.801 hca3 0.862 hca4 0.734 hca5 0.890 hca6 0.857 readiness for employabili ty skills res1 0.568 0.920 0.931 0.513 yes res2 0.834 res3 0.747 res4 0.761 res5 0.751 res6 0.739 res7 0.737 res8 0.699 res9 0.601 res10 0.723 res11 0.654 res12 0.711 res13 0.749 table 2 highlights a brief summary of the results obtained for the measurement model assessment. the measurement model assessment illustrates that all the requirements of reliability and validity of the measurement model assessment are met. hypotheses testing to conduct the hypotheses testing connected to the structural model of the study, pls-sem version 3.0 is used (hair jr et al., 2017). there are several elements are required to be considered. the first element, for a hypothesis to be valid, the value of the path coefficient of 0.1 or higher is https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 43 required to account for a certain impact within the model (hair, ringle, & sarstedt, 2011). secondly, the acceptable t-value and p-value must be greater than 1.96 and less than 0.05 respectively (ramayah, cheah, chuah, ting, & memon, 2018). the hypothesis testing result of the impact of human capital attributes on the readiness for employability is illustrated on table 3. table 3. the hypothesis testing result of the impact of human capital attributes on the readiness for employability hypothesis h1 path coefficient β t statistics p values 5% bci ll 95% bci ul decision (p < 0.05) human capital attributes > readiness for employability 0.472 6.159 0.000 0.338 0.585 accepted the findings of the study showed significant relationship between the readiness for employability and human capital attributes (h1). this finding illustrates that, there is a big influence of the human capital attributes on the readiness for employability of the engineering graduates of the heis in oman. this finding enhances the study conducted by holmes (2013), when he determined that human capital attributes played a major role in delivering the graduate employability required skills when heis utilised suitable methods of embedded the required knowledge, skills, and attitudes of the graduates into their programme curricula. also, the study findings support the finding of clark (2018), who stressed that most work providers, heis, and governments had concentrated on graduate readiness for employability from a human capital perspective. the underlying belief is that the acquirement of some specific skills and abilities that are considered as human capital attributes such as problem-solving, critical thinking, team work, and adaptability or openness to new challenges will result in enhanced graduate readiness for employability (clarke, 2018; kalfa & taksa, 2015). conclusion and policy recommendation the current study remarked the determination of the set of the graduates’ readiness for employability skills and their level of importance as seen from heis/ students and graduates. since students and graduates believe that heis/engineering departments are responsible for preparing them for a highly competitive labor market through improving their skills attainment, academic achievement, and professional abilities, therefore, the finding of this study should be used as guide lines for ministry of higher education, heis’ engineering departments, course designers, and policy makers to improve the quality of the students and eliminate the skills gap of the graduates thus enhancing graduates employability and achievement throughout their career life cycle. one important recommendation is for the ministry of higher education, heis’ engineering departments, course designers, and policy makers to utilize the set of studied graduates’ readiness for employability skills to develop adequate engineering programmes having suitable employability-related curriculum and outcomes in accordance with the needs and requirement of the labor market. more skills-oriented activities and practices should be embedded in the core curriculum and delivered to students in the classrooms, workshops, and industrial visits. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 44 such practice will contribute effectively to the engagement with the desired learning goals, and skills requirement so achieving practical outcome and improving students readiness for employability. besides, the requirements of the readiness for employability skills must be updated regularly. one suggestion is to create a sub department in each hei to work as a link between the heis and the most popular industrial organizations so as, detecting new skills required as well as new techniques and or new technologies introduced, and advised the heis to update their curricula, syllabi, specializations and programmes offered to improve quality and employability of the graduates. in conclusion, this paper has analyzed the objective of measuring the levels of importance of the readiness for employability skills among the engineering graduates of the heis in oman. by conducting a meta-analysis process of literature reviews of the recent published papers, thirteen skills were identified and analysed to determine their levels of importance among the engineering graduates of the heis in oman. the identified readiness for employability skills are listed as: analytical thinking or critical thinking, problem solving skills (the ability to analyze facts and situations), creative thinking (the ability to develop and apply appropriate solutions), communication skills including listening and questioning, capacity for lifelong learning including readiness to contribute to new ideas, capacity for lifelong learning including openness to new ideas, teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions, professional ethics and morality, entrepreneurial skills, leadership skills, proficiency in written and oral english, specialization and industrial required technical skills, and capacity for applying knowledge in practice. the results of the study clearly illustrate the importance of professional ethics and morality, teamwork including respecting others, cooperating, negotiating / persuading, and contributing to discussions, communication skills including listening and questioning, capacity for lifelong learning including openness to new ideas, creative thinking (the ability to develop and apply appropriate solutions), and problem solving skills (the ability to analyze facts and situations) as the six most important readiness for employability skills considered by the omani engineering graduates. therefore, the finding of this study should be used as guide lines for ministry of higher education, heis’ engineering departments, course designers, and policy makers to improve the quality of the students and eliminate the skills gap of the graduates thus enhancing graduates employability and achievement throughout their career life cycle by developing adequate engineering programmes having suitable employability-related curriculum and outcomes in accordance with the needs and requirement of the labor market. more skills-oriented activities and practices should be embedded in the core curriculum and delivered to students in the classrooms, workshops, and industrial visits. such practice will contribute effectively to the engagement with the desired learning goals, and skills requirement so achieving practical outcome and improving students readiness for employability. references adnan, y. m., daud, m. n., alias, a., & razali, m. n. 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(2015). an empirical study of hospitality employability skills: perceptions of entry-level hotel staff in china. journal of hospitality & tourism education, 27(4), 161-170. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (https://creativecommons.org/licenses/by/4.0). https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3, no. 1; 2021 issn 2641-4937 e-issn 2641-4953 published by american center of science and education, usa 20 application of seven principles of maizbhandari tariqa on business ethics for sme’s sustainability in fatikchari, bangladesh shahjada syed irfanul hoque managing trustee of darul irfan research institute (diri) and nayeb sajjadah nasheen of gausia ahmadia manzil, maizbhandar darbar sharif fatikchhari, chattogram, bangladesh muhammad muhi uddin chaplain, hmp risley, united kingdom associate member darul irfan research institute (diri), bangladesh e-mail: tasauf.darulirfan@gmail.com muhammad ali asgor lecturer department of islamic studies dilowara jahan memorial college, chattogram, bangladesh associate member darul irfan research institute (diri), bangladesh e-mail: tasauf.darulirfan@gmail.com mejbaul alam bhuiyan lecturer department of management nanupur laila kabir university college, bangladesh associate member darul irfan research institute (diri), bangladesh e-mail: tasauf.darulirfan@gmail.com received: august 08, 2021 accepted: august 30, 2021 online published: september 26, 2021 doi: 10.46545/aijbms.v3i1.206 url: https://doi.org/10.46545/aijbms.v3i1.206 abstract ethical awareness is vital for business organizations to gain the trust of customers and the sustenance of business. inner purification is a prerequisite for developing ethical personification, thus, helping an individual demonstrate the culmination of morality. at the same time, we need to transform self-purification into organizational behaviour. in this case, usul-e-sab’a (the seven principles) originated by “khatam ul awliya '' gauth al-azam hazrat maulana shah sufi syed ahmad ullah (r.) can play a vital role. the seven principles’ methods can assist the business mailto:tasauf.darulirfan@gmail.com mailto:tasauf.darulirfan@gmail.com mailto:tasauf.darulirfan@gmail.com https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 21 community to bring business sustenance through awakening morality and ethics. therefore, the purpose of the study is to bring sustainability in the business and in the organizational behaviour through usul-e-sab’a (the seven principles) which is an effective method of self-purification and also the attainment of morality. in order to draw an effective result, the exploratory research design has been applied. for collecting data, a survey questionnaire was developed and was administered to the chosen traders. the findings of the study show business sustainability of those sme traders have been increased who practice ethics for their business. the study will assist the trader’s community, in general, to build up a moral life and organize their business with honesty and integrity. keywords: usul-e-saba’h, self-purification, business ethics, business sustainability, sme. introduction making a good business environment is an essential factor of national competitiveness and longterm economic growth (džunić & golubović, 2018). without a conducive and suitable business environment, all sorts of trades and commerce can’t be sustained for a long time. as trades and commerce are the key factors for the economic development of a country, organizations should motivate employees by providing moral instructions as well as other incentives, since the morality and ethics for running a business are integrally involved (baqir et al., 2020). special emphasis has been placed on morality in every religion. islam, in particular, has instructed very strongly for running a business with honesty and integrity. moreover, in islam, the six basic ethics have been discussed related to doing business which is: work, honesty, freedom in economic enterprises, justice and protection, generosity, and trade without usury (marina & imam wahjono, 2017). a survey was conducted by american and canadian corporate executives in 1996 based on a question which was: “why does, or will, your company practice sustainable development?” the responders opined mostly on the issues of ‘complying with legal regulations and moral commitment to environmental stewardship’ (payne & raiborn, 2001). the empirical evidence of the above survey highlights the necessity of practicing ethics in doing business activities. we find many ethical theories such as relativism theory, the divine command theory, egoism theory, utilitarian theory, deontology theory, and virtue ethics theory (al-aidaros et al., 2013). although some of these ethical theories are, to some extent, compatible with islamic ethics and ethos, some others, in most cases, sit on the other side of the ethical spectrum. those ethical theories are not universal; rather, time and place-bound, again some of which have already been abandoned. the sources of those ethical theories are the consequences of human thoughts and research; thus, are susceptible to errors and inaccuracy. on the other hand, islamic ethics are derived from the divine revelationsthe quran and hadith-, and are believed to be free from mistakes and errors. if islamic ethical theories and principles are followed to bring transparency in trade and commerce, then success in business is undoubtedly possible. however, in this paper, we have limited our study on how to bring business sustainability practicing business ethics in the light of usul-e-sab’a (the seven principles) originated by gauth al-azam hazrat moulana shah sufi syed ahmad ullah. bertocci (2001) asserted that the founder of the maizbhandari tariqa developed a fairly elaborate “seven step” (sapta paddati) methodology for the attainment of their view of spiritual perfection (bertocci, 2001). because usul-e-sab’a (the seven principles) is derived from the quran and hadith, which, if followed, will lead to the attainment of morality and can help a https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 22 man to attain perfect humanity. an honest and trustworthy person can show honesty and transparency in business. and transparent and accountable business can sustain a long span of time. introduction, problem statement, research objectives, research questions, literature review, methodology, findings and results, discussion, limitations are among the sections of this paper. problem statement business and trade are called the driver of the economic growth of a country. in particular, small and medium enterprises are the largest processors of foods and commodities which is keeping the country's economy strong (nkwabi, 2020). the proprietors of those businesses are keeping the country's economy afloat on the one hand and serving the general consumers on the other. while small and medium enterprises are said to be the lifeblood of the economy of a developing country like bangladesh, they are being manipulated by some unscrupulous businessmen. but as per the view of business people, if ethics are practiced in doing business and some basic trainings are provided, it will bring welfare for the society and will eliminate malpractices in businesses (hoque, 2013)(nkpurukwe et al., 2020). therefore, the study aims to bring sustainability in the business and in the organizational behaviour through usul-e-sab’a (the seven principles), an effective method of self-purification, and also the attainment of morality. for concluding an effective result, the exploratory research design has been adopted. for gathering data, a survey questionnaire is developed and is administered to the chosen traders. research objectives  to identify the importance and role of usul-e-sab’a in sustaining business.  to highlight how ethics is achieved through the practice of usul-e-sab’a research questions  why are the practices of usul-e-sab’a so important in sustaining business?  how can ethics be achieved by practicing usul-e-sab’a? literature review smes, business sustainability and ethics smes refer to small and medium-sized enterprises which are considered as the engine of the economics of the developing country. in the fields of the sustainable economy worldwide, smes are playing a vital role. according to fox (2005), smes represent over 90% of enterprises and about 50-60% of employment are being provided at the national level. as of the assumption of kenya’s economic recovery strategy, about 88% of new jobs are being created by smes. according to estimates of the industrial development corporation, 80% of new job opportunit ies are being created in africa by the initiative of smes (painter-morland & dobie, 2014). in developed countries, recent empirical studies prove that the smes are contributing to gdp on average of 55% and at a rate of 65% are creating new job opportunities (keskin et al., 2010). small and medium-sized enterprises (smes) are suitable for densely populated countries like bangladesh. this sector is contributing immensely to alleviate the poverty in the country creating https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 23 many job opportunities with lower investment and minimum wages. the international monetary fund (imf) country report (2012) shows that smes in bangladesh have created more than 99% of private-sector industrial enterprises and contributed for 70% to 80% creating job opportunit ies for non-agricultural labour forces (alauddin & chowdhury, 2015). business sustainability is the way where one has to manage a triple bottom line as they are financial, social and environmental risks (armstrong, 2020). in other words, business sustainability refers to the business continuity which can be sustained by many ways such as ecoeffectiveness, eco-efficiency, socio-efficiency, socio-effectiveness, sufficiency and ecological effectiveness (marina & imam wahjono, 2017). if we add ethics with the above criteria, then business sustainability can be accelerated undoubtedly. we know that business sustainability is essential for achieving sustainable development goals (sdg) as well as business organization need to transform their workers as winners (geleta, 2019). the business executives comment that business sustainability-related strategies are necessary to be competitive even today and in the future (dyllick & muff, 2016). the root word of ethics is ‘ethos’, a greek word and in french, it is called ‘ethique’. it is used in latin and english as ‘ethic’. ethics symbolises an individual’s or a group of people’s character, traits, attitude, moral principles, and legal behaviour which affect the character and values of the person (laila fatimah & mohd shah, 2016). ethics is the basis of long-last ing happiness and contentment. if you are not satisfied or dissatisfied with unethical decisions in the workplace, the business won’t sustain. as a founder of any enterprise, your personal well-being plays an important role in achieving your business success. perhaps, the realization of self-worth, happiness and mindfulness drives moral behaviour (mellahi & wood, 2003). self-purification and ethics self-purification means cleansing of inner-self. that is to get rid of evil forces like irresist ib le desires of the world, pretence, hypocrisy, jealousy, rivalry, and malic, etc. (ter maten, 2016). those evil forces defile the human soul and drive him to the wrong path. so a morally depraved person can never bring welfare to the nation. therefore, it is seen that in the case of business and trade, the violence of such people is constantly observed. a dishonest businessman does not hesitate to resort to immorality in conducting business. an unscrupulous businessman causes misery and suffering to the people by warehousing of goods, creating artificial crisis in the market through syndicates, increasing prices of commodities, supplying expired and adulterated foods and so on. therefore, to bring honesty in business and to make it oriented to human welfare, it is necessary to have the moral qualities of a businessman. therefore, in order to bring sustainability to the business, businessmen have to focus on the practice of ethics. and ethics cannot be built up and developed in a human character without selfpurification. so, we can conclude that self-purification is the catalyst that can assist in making people with moral values. hazrat maulana syed ahmad ullah and his usul-e-sab’a (the seven principles) hazrat maulana shah sufi syed ahmad ullah, the descendant of the holy prophet hazrat muhammad (peace be upon him) was born on wednesday, january 15, 1826 corresponding to 1244 ah in the village of maizbhandar under fatikchhari police station in chattogram, bangladesh. he died on monday, january 24, 1906 at the age of seventy nine. his famous and well-known titles are gauth al-azam (the greatest saviour), khatemul awliya (the seal of the https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 24 sainthood) (maizbhandari, 2009). in 636 ah, hazrat muhi al-din ibn arabi, a prominent sufi theologian, prophesied 586 years before his birth in his book entitled ‘fusus al-hikam’ as follows among mankind, a son will be born who is a follower of hazrat sheesh (as) and the bearer and holder of his secrets. after this, no boy with such dignity will be born. he will be khatemul walad. a sister will be born shortly before his birth. his birth will be on the outskirts of china. his language will be the language of that city. then infertility will be transmitted between men and women. there will be an abundance of marriages without procreation. he will call mankind to allah but there will be no satisfactory answer. after the death of him and the believers of that era, human nature will become the nature of four-limbed animals. halal, haram will not be identified. becoming detached from religion and conscience, the human being will be busy satisfying lust in the direction of nature and instinct (’arabi, n.d.). hazrat muhi al-din ibn arabi's prophecy was fully reflected in the case of gauth al-azam hazrat maulana shah sufi syed ahmad ullah. maizbhandari tariqa (maizbhandari sufi order) introduced by him is secular, liberal, dominated by moral religion, non-discriminatory and humane (maizbhandari, 2009). these unique characteristics contributed to the high popularity of this tariqa in this region and helped it attract its followers from various social and economic assemblages. usul-e-sab’a (the seven principles) taught by gauth al-azam hazrat maulana shah sufi syed ahmad ullah is considered as one of the usul (the principles) of this tariqa and a self-practic ing method for its followers to attain spiritual purification. this usul-e-sab’a is easy-to-do, hassle free and well-received by all sufi followers. and it is easy to follow and advice for all regardless of race, religion and caste (maizbhandari, 2012). usul-e-sab’a (the seven principles) and its importance for business sustainability usul-e-sab’a (the seven principles), as indicated by syed delawor hossain, are the compendious articles of the teachings of the quran and hadith, and are intended to help a seeker purify his inner self and possess moral character and ethics. hence, observance of usul-e-sab’a (the seven principles) can play a significant role to make a trader morally motivated and ethically obliged; thus, preventing him getting involved in any kind of corruption in his business activities, as there is no substitute for ethics in conducting business. because these seven principles are derived from the quran and hadith. the seven principles are explained in two facets in wilayat-e-mutlaqa. fana-e-salasa (three annihilations) & mawt-e-arba`a (four deaths). fana-e-salasa-(the three annihilations) fana anil khalq: it refers to renunciation of all earthly aid and the seeking of refuge only in allah (brandt, 2011). the literal meaning of fana is annihilation and khalq means creation. it refers to self-reliance. this implies that no service or benefit should be expected from others. this practice makes a person self-reliant and makes him confident in his own strength(maizbhandari, 2009). islam has placed special emphasis on self-reliance. we see that in order to eradicate poverty and alleviate economic injustice in the society, governments of different countries continuous ly undertake various strategies, policies, projects and programs, success rate of which is always a subject of debate and doubt. in this regard, self-reliance can be the main weapon to combat poverty. as per the view of qardawi (1986), work and self-reliance can be the first weapon to alleviate poverty in the muslim community. so to speak, the self-reliance concept is an essential ingred ient regarding alleviating poverty from society (bello, 2010). https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 25 fana anil hawa: the term refers to the extinction of all earthly desires (brandt, 2011). to avoid useless and vain talks and activities is called fana anil hawa in sufi terminology. that is to refrain oneself from unnecessary activities and useless discussions, avoid useless things and refraining from unnecessary work or conversation. practicing it makes a person's livelihood easier and hassle free (maizbhandari, 2009). the holy qur'an and hadith emphasize avoiding laghw (vain and foolish talks). nowadays people are involved in laghw anyhow. we often see that a businessman exaggerates by promoting his products with deceptive and false information in the hope of marginalizing his profit, whereby the consumer is tricked into buying the product through vague assurance and description by the seller. such unethical practice creates distrust and lack of confidence between customers and dealers, which, in turn, threatens business sustainability. therefore, leaving and avoiding laghw (vain talks) can create the foundation of a new way of thinking about the economy and consumer behaviour (seise, 2019). fana anil irada: in sufi terms, surrendering one's will to the will of allah is called fana anil irada. that is giving priority to the will of allah and surrendering one's will and desire to the will of allah. it enables a person to acquire the habit of submission and satisfaction (taslim and reja) (maizbhandari, 2009). in businesses, it can have both profits and losses. when a business gains, a businessman will thank god for it, and if he loses, he will leave it to god's will without despair. by acquiring the characteristics of fana anil irada, a businessman can play an important role in business sustainability. mawt-e-arba`afour types of death al mawt al abyad-white death: the white death, in other words, the encounter with suffering that is like unto-death in order to achieve purity (brandt, 2011). it is achieved through fasting and self-restraint as a result of which the human mind is enlightened. for example, fasting (siam) during the month of ramadan and voluntary fasting (nafl) assist us developing self-control (maizbhandari, 2009). the term ‘al mawt al abyad’ can be used in the place of sabr (patience). modern psychology emphasizes self-regulation. although self-regulation and sabr (patience) are often used for the same purpose, the sabr has the additional dimension which conforms to the higher truth. however, self-regulation does not meet overall criteria like sabr (raquib et al., 2020). self-restraint, self-regulation, sabr or ‘al mawt al abyad’ whatever we say is the important ancillary of human characteristics. cavanagh (2015) has examined three strategies for developing just and consistent global business. these three strategies are (1) international treaties and agreements (2) global codes of business conduct and (3) voluntary self-restraint of individua l executives and firms. he considered the last and final option for dealing with global sweatshop s, environmental degradation, and other ethical issues. the third option is also preferred for those businessmen who assume that the unregulated free market can bring benefits for all (cavanagh, 2015). so self-restraint can help a businessman avoid immoral activities in doing business activities such as monopoly, creating artificial crisis of goods through syndicates, hoarding, smuggling and weight fraud, etc. al mawt al aswad-black death: the black death: the encounter with the pain of death in the face of criticism from other persons (brandt, 2011). this death of human instinct is achieved by embracing criticism and hostility of enemies positively. an individual shall look at himself after facing criticism, if he finds the cause he will have the opportunity to repent and correct himse lf. on the other hand, if he does not find the cause of criticism within himself, he again thanks allah https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 26 for his innocence. through such practice he finds the presence of great power in his personality. he then considers his critics as his friends (maizbhandari, 2009). customer satisfaction and evaluation is the main fundamental indicator of a dealer. a variety of studies shows that a higher level of customer satisfaction leads to greater customer loyalty and through increasing loyalty, customer satisfaction can help to generate future revenue (anderson et al., 1997). as a statutory right, a customer can both discuss and criticize the quality of goods and services. in such scenario, if the trader finds fault with goods, he will replace them with a better alternative securing greater customer loyalty and satisfaction. hence, it can be concluded that the practice of black death which is an essential part of an effective after-sale customer service helps a trader receive customer's criticism or negative feedback positively and use it to enhance the way he communicates with his clients and to identify areas of improvement; thus, bringing sustainability and success in his business. al mawt al ahmar-red death: the red death: to bear the pain of death in order to become free from sexual desires (brandt, 2011). this kind of death of human instinct is achieved by avoiding immoral and illegal sexual instinct and greed. it makes a man a perfect saint by gaining the power of belayat (maizbhandari, 2009). there is a proverb that greed begets sin, sin begets death. we see that unscrupulous traders subdued by greed are constantly violating consumers’ rights. they are always trying to exploit the customers by inventing new fashioned mechanisms for making windfall profits. these unscrupulous traders are involved in monopolizing, hoarding, price hiking, and providing substandard products (alam & haq, 2016). although there are legislations against dishonest and deceitful business activities, they are, sadly, not always enforced. in addition to relevant legislations, self-purification and liberating one from the prison of greed can play a vital role in preventing him from exploiting consumers, leading the businessman to conduct his business ethically, therefore, making the business sustainable on one hand and preserving consumer rights on the other. therefore, the practice of ‘al mawt al ahmar (the red death)’ can play an important role in this case. al mawt al akhdar-green death: the green death: everything else is barred from the heart except for the love of god (brandt, 2011). this kind of death of human instinct is achieved through the sacrifice of luxurious life. it creates the love of god in the human mind. it belongs to belayeti-khizri (maizbhandari, 2009). from the perspective of george field, the green colour has an ideas and force of vigour and freshness, and it additionally implies to the image of youth, the spring of life (zimmerman, 2017). so just as green indicates the freshness of life, it also indicates the attainment of spiritual maturity. it is necessary to be moderate in conducting business without being too ambitious. a businessman accustomed to living a simple life can maintain honesty and transparency in business. on the other hand, over ambitious and dishonest businessmen cannot maintain honesty and transparency in business and may resort to dishonest activities. as a result, his business does not last long. practicing ‘green death’ will help bring honesty and transparency, and in turn, sustainability and success in his business. lauri harvilahti (1950), has considered the seven principles as the seven-phase of one who strives for building up an association with the divine. the contents of the seven-phase have a resemblance with the catalogue of abu’l qasim al-qushayri’s of 45 maqams (the mystical stations) (brandt, 2011). that is to say, the issues which have been discussed in the seven principles, are also discussed in ‘al-risala al-qushayriyya fi-ilm al-tasawwuf’ in the chapter on maqamat. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 27 from the above discussion we have known that if usul-e-sab’a is practiced, the selfpurification will be achieved. the self-purification will lead a trader to develop business ethics. finally, business ethics will help the dealer to sustain his business. methodology an exploratory research design is used for this study. a survey questionnaire is used in this study. the questionnaire was structured on a five-point likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). the study framework, which is attached below, is used to make the questionnaire structure. after then, it was given to a sample. secondary data was gathered from books, journals, newspapers, and the internet. the target demographic consists of the owners of 50 smes in nazirhat and nanupur bazar, fatikchari, bangladesh, who were chosen at random from the market authority's data. the owners of the 50 smes have returned their responses, resulting in a 100% response rate. the majority of those who took part in the survey were men. participants between the ages of 18 and 30 are 12 in number, those between the ages of 31 and 45 are 10 (ten), and those between the ages of 46 and 60+ are 28 (twenty eight). figure 1. the given research framework is structured on the following variables the above research framework refers to seven independent variables (iv) as they are fana anil khalk (iv1), fana anil hawa (iv2), fana anil irada (iv3), white death (iv4), black death (iv5), red death (iv6) and green death (iv7). the two mediating variables (mv) are selfpurification (mv1), business ethics (mv2) and one dependent variable (dv) is business sustainability. the independent variables (iv) affect two mediating variables (mv) and then two mv effects on dependent variables. the framework implies that the practice of seven ivs can enable a person to attain self-purification (mv1) and self-purification (mv1) can develop business ethics (mv2). if business ethics (mv2) is stored in a trader’s characteristics, business sustainability (dv) can be accelerated. the questionnaire was designed and evaluated based on seven iv, two mv, and one dv. for each variable four questions were done. the total number of questions stands at 40 (forty). the respondents' responses were analysed on a five-point likert scale. then the likert scale’s data was analysed using spss (statistical package for the social sciences) 26 version. https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 28 results reliability test cronbach’s alpha method has been used for checking the reliability among the statements of the questionnaire so that internal consistency is measured. we have found that the coefficient value of cronbach’s alpha is α= 0.881. if the value of cronbach’s alpha coefficient is greater than α=.70, the value is accepted. we can say that the statement in the questionnaire is reliable. respondents’ perceptions of business sustainability through the practice of usul-e-sab’a as previously indicated, we have determined some variables for assessing and evaluating participant answers. for each variable, we asked them four questions. due to brevity, we have simply mentioned the questions' keywords in the table. the respondents were free to respond to these questions in any way they wanted. we used a five-point likert scale to evaluate the responses. the table: 1 shows how the respondents rated themselves on a scale. table 1. the following table is giving statistics of respondents’ responses shown as percentage. variables statements variables statements 5 4 3 2 1 a n d fana anil khalk business with own responsibility, selfreliance, selfconfidence, risk in business red death warehousing products, illegal profits, transaction and tax and revenue 90 % 10% 0% fana anil hawa weight manipulation, useless things, price hike and bargaining with the customer green death equal service, friendliness with employees and traders and interest of the country fana anil irada the will of the creator, profits and losses of the business, patience and satisfaction self-purification seven principles, vain talks and useless things and excessive greed white death expired and adulterated products, products’ shortcomings, abusing indigent customers and neighbouring traders. business ethics business ethics, social responsibility , natural environment and economic growth black death after-sales service, backbiting and accepting negative feedback positively. business sustainability social responsibility , environment, customer’s satisfaction, economic growth source: field survey june 2021 table 1 shows the percentages of responses given by respondents. when we look at the above table, we can see that the percentage of 4 (agree) and 5 (strongly agree) scales is 90%, https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 29 while the percentage of 3 (neutral) scales is 10%. however, there is no percentage on the 1 (strongly disagree) and 2 (disagree) scales. based on the results of the likert scale data analysis, we may conclude that practicing usul-e-sab'a leads to self-purification, and self-purification leads to business ethics. a person or trader can succeed in running a business if he possesses the attributes of business ethics. as a result, his company will be able to sustain itself for a long time. correlations among the variables correlations between independent, mediating, and dependent variables are justified using the pearson product-moment correlation coefficient. the independent variables have a moderately positive relationship with the mediating and dependent variables, as shown in the table below. the following table has been drawn up. table 2. shows the correlations between the following variables correlations fana anil khalk fana anil hawa fana anil irada white death black death red death green death fana anil khalk pearson correlation 1 .687** -.031 .686** .718** .474* -.016 sig. (2-tailed) .001 .898 .001 .000 .035 .945 fana anil hawa pearson correlation .687** 1 -.106 .614** .734** .645** .057 sig. (2-tailed) .001 .655 .004 .000 .002 .811 fana anil irada pearson correlation -.031 -.106 1 -.166 .036 .376 .207 sig. (2-tailed) .898 .655 .483 .881 .102 .382 white death pearson correlation .686** .614** -.166 1 .802** .561* .149 sig. (2-tailed) .001 .004 .483 .000 .010 .530 black death pearson correlation .718** .734** .036 .802** 1 .615** .019 sig. (2-tailed) .000 .000 .881 .000 .004 .936 red death pearson correlation .474* .645** .376 .561* .615** 1 .634** sig. (2-tailed) .035 .002 .102 .010 .004 .003 green death pearson correlation -.016 .057 .207 .149 .019 .634** 1 sig. (2-tailed) .945 .811 .382 .530 .936 .003 n 50 50 50 50 50 50 50 **. correlation is significant at the 0.01 level (2-tailed). *. correlation is significant at the 0.05 level (2-tailed). https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 30 table 3. shows the correlations between self-purification, business ethics and business sustainability correlations selfpurification business ethics business sustainability self-purification pearson correlation 1 .075 .745** sig. (2-tailed) .752 .000 n 50 50 50 business ethics pearson correlation .075 1 .000 sig. (2-tailed) .752 1.000 n 50 50 50 business sustainability pearson correlation .745** .000 1 sig. (2-tailed) .000 1.000 n 50 50 50 **. correlation is significant at the 0.01 level (2-tailed). *. correlation is significant at the 0.05 level (2-tailed). tables 2, 3, and 4 demonstrate how strong and significant the correlation between the variables is. we know that the correlation reveals a linear relationship between the variables. positive, negative, or neutral linear relationships exist. if we focus on two variables, such as fana anil khalk and fana anil hawa, we can observe that they have a strong positive relationship that is statistically significant. similarly, we get the same result when we combine other variables. although there are a few negative relationships among the variables, the majority of them have a strong positive relationship. as a result, we may conclude that the variables in the tables above have a strong positive relationship. the limitation of the study is also pointed out. our study was confined to a limited area and was only focused on smes. in this case, the wide range of areas and the large-sized enterprises have been omitted. the survey questionnaire was only adopted on 50 respondents which could not be applied to a large scale. if a large number of the population would be included, the better result would be brought out. discussions the three issues such as social, environmental, and economic issues are embedded in sustaining the business. ethics is considered a key factor for business sustainability. when faced with ethical decisions, business ethic theorists largely agree that executives use ethical norms established from ethical philosophy (makkar & saini, 2016). if the practice of ethics is not expanded, particular ly in business, a country's overall economic progress will be disrupted. usul-e-sab’a (the seven https://www.acseusa.org/journal/index.php/aijbms https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies vol. 3 no. 1; 2021 31 principles) of maizbhandari tariqa originated by gauth al-azam hazrat moulana shah sufi syed ahmad ullah is one of the guidelines for practicing ethics. there has been a lot of research on ethics and business sustainability before. although many researchers talked about various ethical theories for business sustainability, our study only focuses on how it is possible to bring business sustainability through the practices of usul-e-sab’a (the seven principles) of maizbhandari tariqa. we have tried to search on research gaps and we have found that the study on the practices of usul-e-sab’a (the seven principles) for business purposes was not accomplished in the past. finally, we have concluded that the usul-e-sab’a can guide a trader to attain selfpurification and a self-purified dealer can absorb moral qualities or business ethics. if business ethics is absorbed in the entity of a trader, business sustainability can be accelerated. apart from that, if the usul-e-sab'a is followed during the covid-19 pandemic, a hassle-free life in all spheres of human activity will be achievable (imran & ahmed, 2020). references arabi, m. i. 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(2017). the puzzle of the color symbolism in " the masque of the red death ": solved at last ? author ( s ): brett zimmerman source : the edgar allan poe review , vol . 10 , no . 3 ( winter 2009 ), pp . 60-73 published by : penn state university press stable url. 10(3), 60–73. copyrights copyright for this article is retained by the author(s), with first publication rights granted to the journal. this is an open-access article distributed under the terms and conditions of the creative commons attribution license (https://creativecommons.org/licenses/by/4.0). https://www.acseusa.org/journal/index.php/aijbms american international journal of business and management studies 4(1) (2022), 12-21 12 business and management studies aijefr vol 4 no 1 (2022) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa assessment of micro insurance as an emerging microfinance for the poor: a study on somalia md al-imran (a) md salim chowdhury (b) abdikhaliq dahir ayanle (c)1 abdullah al masum (d) (a) master of science in business analytics, college of graduate and professional studies, trine university, allen park, michigan 48101-3636, united states of america; e-mail: malimran23@my.trine.edu (b) master of science in business analytics, college of graduate and professional studies, trine university, allen park, michigan 48101-3636, united states of america; e-mail: mchowdhury23@my.trine.edu (c) department of businesses administration, daffodil international university, dhaka-1216, bangladesh; e-mail: abdikhaliq6355@gmail.com (d) department of businesses administration, north south university, dhaka-1229, bangladesh; e-mail: abdullah_al_masum@ymail.com a r t i c l e i n f o article history: received: 18th october 2022 revised: 30th november 2022 accepted: 18th december 2022 published: 30th december 2022 keywords: micro insurance, microfinance, somalia jel classification codes: g21, g22 a b s t r a c t this research aims to determine whether micro insurance could take the role of conventional microfinance for the underprivileged in somalia. the current situation of micro-insurance in somalia is examined in this study, along with the difficulties encountered and the potential for development. the study also investigates how the poor view micro-insurance and whether they are willing to use this financial tool. the outcomes of this paper will aid in shaping future micro-insurance programs that are more successful by shedding light on the viability of using it to help somalia's poor gain financial inclusion. the study examined how micro-insurance affects the poor's access to the financial system and risk management skills. the non-probabilistic sampling method is used to conduct the study, including a literature review, stakeholder interviews, and surveys of clients. the results of this study will help researchers better understand how micro insurance may be used in somalia to promote financial inclusion and fight poverty. the findings will also help policymakers and practitioners to figure out the best strategy for utilizing micro insurance’s potential to lessen poverty and encourage financial inclusion among the underprivileged in somalia. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction a viable method for reducing poverty and encouraging financial inclusion among the underprivileged in developing nations is micro insurance (janzen & carter, 2019; ali et al., 2020a; ali et al., 2020b). micro insurance is still not widely used or adopted in somalia, despite the potential advantages. the purpose of this study is to assess the viability of micro insurance as a new microfinance tool for the impoverished in somalia, with an emphasis on its adoption and usage, as well as the challenges and opportunities it provides (hassan, 2020). micro insurance, a branch of microfinance, aims to assist lowincome families by providing insurance coverage customized to their requirements. in underdeveloped nations, when the current insurance markets are ineffective or non-existent, micro insurance is frequently practiced. the insured pays much cheaper premiums because the coverage worth is significantly smaller than that of a standard insurance plan (banerjee et al., 2018). adults in low-income households or those without retirement savings are typically covered by micro insurance. islam (2015) stated that micro insurance solutions are designed primarily to cover lesser valued belongings or assets as well as recompense for illness, injury, or death. the four primary methods for delivering micro insurance are provider-driven strategies, full-service approaches, community-based models, and partner-agent models, in that order. in somalia, the microfinance industry is currently without proper regulation. the 2012 financial institutions law only acknowledges commercial banks and money transfer businesses as financial institutions, leaving microfinance companies in a legally uncertain position. the fil is undergoing modernization and revision in 2019 to address this issue (xalane & salleh, 2019; chowdhury et al., 2020; chowdhury et al., 2021). the regional reach of microfinance institutions varies 1corresponding author: orcid id: 0000-0002-5380-8025 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v4i1.280 to cite this article: al-imran, m., chowdhury, m. s., ayanle, a. d., & masum, a. a. (2022). assessment of micro insurance as an emerging microfinance for the poor: a study on somalia. american international journal of business and management studies, 4(1), 12–21. https://doi.org/10.46545/aijbms.v4i1.280 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v4i1.280 https://orcid.org/0000-0002-9340-5642 https://orcid.org/0000-0001-5499-677x https://orcid.org/0000-0002-5380-8025 https://orcid.org/0000-0002-4807-8662 al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 13 depending on the institution. microfinance companies connected to commercial banks typically operate in the same areas as the parent bank, while non-governmental organizations based microfinance institutions are mainly located in major cities such as mogadishu, hargeisa, garowe, and kismayo. the size of microfinance assets in somalia varies from 300,000 to 3 million us dollars. microfinance services in somalia are provided through islamic financial instruments, with the two most commonly used being qardu hassan, which is based on charity and often funded by donations, and murabaha, which is based on cost-plus financing (wajdi dusuki, 2008). microfinance is a type of financial service that is provided to individuals who don't have access to traditional financial institutions, such as banks. these services typically include savings and loan options and are aimed at helping low-income households manage their finances. according to mcguire and conroy (2000), microfinance is aimed at meeting the financial needs of the poor, such as those related to life events, economic opportunities, and emergencies. this was further defined by khanam et al. (2018) as including a range of financial services, like savings, credit, insurance, leasing, money transfers, and equity transactions. the primary objective of this research is to evaluate the possibility of micro insurance as a new kind of microfinance for reducing poverty among somalia's underprivileged. the specific objectives were to find out;  how micro insurance is currently being used and adopted in somalia, as well as the opportunities and problems it presents for the underprivileged.  how micro insurance affects the livelihoods of the poor.  how micro insurance helps with financial inclusion and general well-being. literature review concept of microfinance microfinance, as defined by otero (1999), refers to the provision of financial services to low-income individuals who are self-employed. ledgerwood (1998) states that these services generally consist of savings and credit options, but can also include insurance and payment services. the goal of microfinance is to increase access to small deposits and loans for households that are not served by traditional banks (schreiner & colombet, 2001; alam & khan, 2022; s. chowdhury et al., 2021; iqbal et al., 2021; kader et al., 2019; kader et al., 2021a; kader et al., 2021b). in essence, microfinance involves providing financial services, such as savings, loans, and insurance, to people living in both urban and rural areas who do not have access to these services through formal financial institutions. microfinance is considered as a way to combat poverty, but its effect is complex and not always straightforward. the relationship between microfinance and poverty alleviation is influenced by various factors such as the delivery channel, approach, and financial products offered. the circumstances in which microfinance is most effective for low-income individuals must be carefully considered, as access to traditional banking services is a challenge for them (bakhtiari, 2006; kabir et al., 2021; nayeen et al., 2020; nahar et al., 2021; rahman et al., 2021a; rahman et al., 2021b). according to the united nations capital development fund (2018), microfinance is seen as a significant factor in development. proponents of microfinance believe it plays three key roles in development, including providing a safety net for low-income households, improving household economic wellbeing, and promoting gender equality by supporting women's economic involvement. concept of micro insurance micro insurance is a term used to describe insurance plans created for low-income people who might not have access to standard insurance options. it is sometimes viewed as a strategy to give poor people financial security since they may be more vulnerable to losing money as a result of unplanned occurrences like illnesses, accidents, or natural disasters. micro insurance policies are intended to be economical and accessible to those who need it the most. compared to regular insurance products, they often offer coverage for less money. micro insurance is designed to assist people in managing the monetary risks they encounter on a daily basis and to increase their overall financial stability (bernards, 2022; shahriar 2021a; shahriar 2021b; zayed et al., 2021a; and zayed et al., 2021b; ahmed et al., 2022; al-quraan et al., 2022). micro insurance as an emerging microfinance micro insurance is a crucial aspect of the microfinance services offered to support the financial needs of low-income households and their businesses. by providing access to financial services, microfinance helps individuals at the bottom of the socioeconomic pyramid to improve and expand their sources of income, accumulate assets, and move beyond merely surviving day to day to making plans for a better future. this can lead to improvements in their standard of living, including better nutrition, housing, health, and education, and also result in increased productivity (pareek et al., 2022; ; faisal-ealam et al., 2022; khan et al., 2022a; khan et al., 2022b; mia et al., 2022; rubi et al., 2022; zayed et al., 2022a). ramm and ankolekar (2015) found that micro insurance is a tool to mitigate risks and vulnerabilities faced by lowincome and poor households, especially those in the informal economy. micro insurance is not intended to replace public social protection systems, but rather it is most effective when integrated into a comprehensive social protection framework that includes both public and private risk management strategies, as well as preventive measures, coping strategies, and mitigation efforts. according to naik (2015), micro insurance provides low-premium policies with minimal coverage for people with limited financial means. these insurance products aim to protect the interests of the underprivileged, who are frequently disregarded by traditional insurance options. micro insurance helps lessen risks encountered by people living in poverty in both rural and urban regions by giving financial security. it provides a solution by offering low-cost insurance options to those in need. combining micro insurance, micro savings, and micro credit has the potential to end poverty and promote financial al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 14 inclusion. developing inclusive programs that address the unique needs of different income groups is necessary to provide basic social services, break the cycle of poverty, and ensure access to affordable healthcare (platteau et al., 2017; ali & faisal-e-alam, 2022; zayed et al., 2022b; zayed et al., 2022c; zayed et al., 2022d; bhuiyan et al., 2022;; shayery et al., 2022; edeh et al., 2023). a study conducted by babajide (2015) found that micro insurance is a crucial aspect of financial services for people of lower socioeconomic status. people with fewer resources are exposed to greater risks and are more susceptible to the impact of these risks. however, it has become increasingly evident that micro insurance requires stronger support and supervision from governing and regulatory bodies such as the insurance regulatory development authority and the government to fully serve this population. materials and methods study area this study took place in somalia, which is located in the horn of africa and is bordered by djibouti, kenya, the gulf of aden and yemen, the indian ocean, and ethiopia. it consists of six government-recognized states and one self-declared state. somalia has a total land area of 637,657 square km, with 45% as rangelands, 30% as desert, 14% as forested, and 11% as fertile for agriculture. it has two international river basins, the shabelle and juba, which can sometimes become sources of flooding, especially during the rainy season. the populations living in riverine areas face challenges from these floods and the ethiopian government is responsible for addressing these issues. figure 1. map of somalia source: world atlas (2021) study design a qualitative survey was designed to conduct the study. the survey is a research methodology that involves gathering information from a group of participants by asking them questions and collecting their responses (check & schutt, 2012; reza & faisal-e-alam, 2022). so that this design was used to describe how the drought impacts on small scale farmers to collect information based on proposed questionnaire and summarize according to the respondent’s feedback accordingly that this type of survey design simplifies the researcher to understand and simply summarize the problem. sample size the researcher planned to determine the sample size using the formula suggested by lemeshow et al. (1990), however, due to factors such as time and resource constraints, the final sample size could not be determined. the study was conducted through an online survey, with an unlimited target population and respondents limited to certain disaster-stricken areas in somalia. however, the number of populations in those districts was uncounted but it is assumed that 100 participant were included in the study. sample procedure in this study, the researcher chose to use a non-probabilistic sampling method and employed purposive sampling to determine the sample size. this method was chosen because it allowed the researcher to deliberately select participants who were residing in disaster-prone areas of somalia and were knowledgeable about the issue. the purpose of using purposive sampling was to gather focused information, and the researcher chose it for its efficiency in terms of saving time and money. additionally, the researcher's inability to be physically present in somalia made the situation more challenging. al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 15 research instrument this research utilized a questionnaire as the primary method of collecting data, which was administered through google forms. the use of a questionnaire was deemed appropriate due to the nature of the information being collected, the time constraints, and the goals of the research. the purpose of the paper was to understand the impact of drought on minor scale farmers in somalia and its effects on various aspects such as economics, health, agriculture, and livelihoods. the use of a questionnaire was deemed efficient for collecting responses from a large sample size. additionally, the ongoing covid-19 pandemic and limitations in conducting field visits also played a role in the decision to use an online survey through the questionnaire. data collection and analysis procedure data was gathered for this study's purposes from both primary and secondary sources. the core data came from an online poll conducted using google forms, while the secondary data came from publications like books and journals as well as earlier research. microsoft excel and spss version 23.0 were used to analyze the data. ethical consideration ethics play a crucial role in research. although gaining knowledge through research is valuable, it should never be achieved at the cost of violating human dignity. in this study, the researcher utilized both personal and institutional data with consideration for ethical considerations. results and discussions socio-demographical information the demographic categories relevant to this study's research include gender, marital status, age, and the level of education. table 1. gender, marital status, age, and level of education demography category frequency percentage gender male 88 73.3 female 32 26.7 total 120 100.0 marital status single 89 74.2 married 31 25.8 total 120 100 age below 18 9 7.5 18-25 73 60.8 25-35 33 27.5 above 40 5 4.2 total 120 100.0 education level primary 9 7.5 secondary 17 14.2 university 85 70.8 none 9 7.5 total 120 100.0 source: primary data this table 1 reveals that 73.3% of respondents are male and 26.7% are female, indicating that males made up the majority of those who responded to the poll while females didn't participate as frequently. the respondents' marital status in contrast, 25.8% of respondents are married, meaning that 74.2% of respondents are single. majority of the respondents which are below 18 is 7.7%, age between 18-25 is 60.8% that shows the most respondents they are all most 18-25, also the age between 25-35 is the second highest one and it shows that is 27.5% and age above 40 is 4.2% that shows the age above 40 is the least of this survey. the majority of the participants of the research are university students that accounted 70.8%, other responders where secondary students are 14.2% and primary students are 7.5% while the respondents that they have none education background is 7.5 %or in their life did not attend any academic level are rare .and this shows that the primary students and none education levels they are same. financial protection for low-income with micro insurance table 2. micro insurance serves as a safeguard against financial dangers that are encountered by individuals with limited financial means. indicator frequency percent strongly agree 48 40% agree 40 33% neutral 16 13% disagree 9 8% strongly disagree 7 6% total 120 100 source: primary data al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 16 the majority of the respondents (73%) agreed that micro insurance serves as a safeguard against financial dangers that are encountered by individuals with limited financial means. 40% strongly agreed, while 33% simply agreed. 13% of the respondents were neutral, while 8% disagreed and 6% strongly disagreed, according to the above table 2 and below figure 2. figure 2. micro insurance serves as a safeguard against financial dangers that are encountered by individuals with limited financial means. source: primary data mitigating risks and vulnerability for low-income households with micro insurance table 3. micro insurance serves as a means to reduce exposure to hazards and diminish the fragility of economically disadvantaged households. indicator frequency percent strongly agree 45 37% agree 42 35% neutral 17 14% disagree 9 8% strongly disagree 7 6% total 120 100% source: primary data the majority of the respondents (72%) agreed that micro insurance serves as a means to reduce exposure to hazards and diminish the fragility of economically disadvantaged households. 38% strongly agreed, while 35% simply agreed. 14% of the respondents were neutral, while 8% disagreed and 6% strongly disagreed, according to the above table 3 and below figure 3. figure 3. micro insurance serves as a means to reduce exposure to hazards and diminish the fragility of economically disadvantaged households. source: primary data micro insurance increases creditworthiness table 4. micro insurance increases creditworthiness indicator frequency percent strongly agree 50 42% agree 39 33% neutral 16 13% disagree 10 8% strongly disagree 5 4% total 120 100 source: primary data al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 17 the majority of the respondents (75%) agreed that micro insurance increases creditworthiness. 42% strongly agreed, while 33% simply agreed. 13% of the respondents were neutral, while 8% disagreed and 4% strongly disagreed, according to the above table 4 and below figure 4. figure 4. micro insurance increases creditworthiness source: primary data combating poverty with micro insurance for financial support in disasters table 5. micro insurance helps alleviate poverty by offering financial assistance to those in need during unexpected events, thereby alleviating their financial stress. indicator frequency percent strongly agree 53 44% agree 35 29% neutral 20 17% disagree 7 6% strongly disagree 5 4% total 120 100 source: primary data the majority of the respondents (73%) agreed that micro insurance helps alleviate poverty by offering financial assistance to those in need during unexpected events, thereby alleviating their financial stress. 44% strongly agreed, while 29% simply agreed. 17% of the respondents were neutral, while 6% disagreed and 4% strongly disagreed, according to the above table 5 and below figure 5. figure 5. micro insurance helps alleviate poverty by offering financial assistance to those in need during unexpected events, thereby alleviating their financial stress. source: primary data conclusions the following recommendations for policy can be made based on the study's findings on the evaluation of micro insurance as a developing kind of micro lending for the underprivileged in somalia:  financial literacy promotion: it's crucial to encourage financial literacy among the underprivileged in order to guarantee the adoption of micro insurance. this can be accomplished by developing awareness campaigns, financial education initiatives, and accessible resources on micro insurance goods and services.  promoting public-private collaborations: together, the public and private sectors may build an environment that fosters micro insurance’s expansion and uptake, lowering the vulnerability of low-income households and fostering financial stability.  supporting microfinance organizations: microfinance organizations are essential to the poor people's access to micro insurance services. to increase these organizations' capacity to offer micro insurance products and services, the government should help them financially and technically. al-imran et al., american international journal of business and management studies 4(1) (2022), 12-21 18  monitoring and assessment: to ensure the sustainability and efficacy of micro insurance, regular monitoring and evaluation of its effects on the poor is crucial. the government should develop a framework for monitoring the success of the micro insurance industry and making adjustments as needed in conjunction with the pertinent stakeholders.  regulations: regulations should be strengthened so that the development of micro insurance is supported by the somalian government. the regulatory framework may need to be clarified, accountability and openness encouraged, and local and international companies encouraged to participate. finally, by putting these recommendations into practice, the somalian government can contribute to the development of a favorable environment for micro insurance, which has the potential to significantly reduce poverty. author contributions: conceptualization, m.a.i., m.s.c., a.d.a. and a.a.m.; methodology, m.a.i.; software, m.a.i.; validation, m.a.i.; formal analysis, m.a.i., m.s.c., a.d.a. and a.a.m.; investigation, m.a.i.; resources, m.a.i., m.s.c., a.d.a. and a.a.m.; data curation, m.a.i.; writing – original draft preparation, m.a.i.; writing – review & editing, m.a.i., m.s.c., a.d.a. and a.a.m.; visualization, m.a.i., m.s.c., a.d.a. and a.a.m.; supervision, m.a.i.; project administration, m.a.i.; funding acquisition, m.a.i., m.s.c., a.d.a. and a.a.m. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare 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(2022d). the power of compensation system (cs) on employee satisfaction (es): the mediating role of employee motivation (em). economies, 10(11), 290. https://doi.org/10.3390/economies10110290 publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. https://doi.org/10.3390/economies10110290 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 6(1) (2024), 8-14 8 business and management studies aijefr vol 6 no 1 (2024) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa risk and opportunity management in mep projectbased companies and its impact on business performance muhammad awais javed (a)1 ali hassan (b) usman latif (c) (a) school of business, los angeles, international american university, main campus, los angeles, 90010, ca, usa; e-mail: dr.mawaisjaved@gmail.com (b) school of business, los angeles, international american university, main campus, los angeles, 90010, ca, usa; e-mail: ali.hass927@gmail.com (c) head of engineering department, bunny’s limited lahore, pakistan; e-mail: usmanlatif750@gmail.com a r t i c l e i n f o article history: received: 6th july 2024 reviewed & revised: 6th july to 8th september 2024 accepted: 10th september 2024 published: 16th september 2024 keywords: risk management, mep business performance, construction industry, risk evaluation, pls model jel classification codes: g32 peer-review model: external peer review was done through double-blind method. a b s t r a c t the board is crucial for mep project-based organizations to progress. gamble the board prevents cost overruns and project delays, while opportunity the executives capitalize on excellent opportunities. chance administration in pakistan's growth is the study's main focus, and chance mechanical, electrical, and plumbing (mep) management in project board in pakistani development is reviewed. the evaluation included several hundred development (mep) projects from karachi, lahore, faisalabad, rawalpindi, islamabad pakistan's five largest cities with active development and large investments. surveys are sent to company managers via group inspection, and 250 responses are received mechanical, electrical, and plumbing (mep) projects management. data is analyzed using savvy pls's structured condition presentation. business performance is connected to the board systems that are based on proven evidence, evaluation, checking and helped the construction project succeed. risk executives' methods fundamentally and well affected job completion, according to the assessment. understanding executive risk valuation is much better. the results reveal that that in terms of genuine development projects, an efficiency study may present a fuller picture of risk the board in various enterprises. the practice of conducting systematic audits to assess the philosophy of writing is rarely employed in the execution of executive projects and risk analysis. the results revealed that the effective mechanical, electrical, and plumbing (mep) performance of the board tactics is in improving project execution in pakistan. the exploratory approach is employed to integrate previous studies on risk management executives and the implementation of business ventures in the field of development. © 2024 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction the dynamic and serious development industry relies on mechanical, electrical, and plumbing (mep) project-based firms to deliver complex infrastructure projects. mep projects are especially vulnerable to a variety of risks and opportunities that might affect business performance due to their complexity and interdisciplinary (jin et al., 2018). executives in mep projects identify, survey, and mitigate predicted risks while identifying and profiting from opportunities (alzoubi, 2022). the business pressures, administrative changes, and manufacturing network disruptions is caused mep venture risks (during et al., 2021). the mechanical advances, process improvements, market expansion, and critical organizations. the combined focus on risks and opportunities allows mep businesses to be proactive, boosting their flexibility and preparedness even with weaknesses (ben mahmoud et al., 2022). rom's impact on mep project-based organizations' display is poorly understood despite its importance. this gap in data emphasizes the need for a rigorous analysis of board performance and opportunity practices and company performance metrics. this study examines the interaction between these aspects to show how strong rom systems is boosted project success, functional effectiveness, and mep organization manageability. understanding how rom affects business execution is assisted mep firms navigate complicated development projects' challenges and opportunities, boosting their seriousness and market positioning (perusso, 2021). the comprehensive study will examine rom in mep projects, including risk identification, appraisal, and mitigation methods, as well as open door 1corresponding author: orcid id: 0009-0001-4568-056x © 2024 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v6i1.317 to cite this article: javed, m. a., hassan, a., & latif, u. (2024). risk and opportunity management in mep project-based companies and its impact on business performance. american international journal of business and management studies, 6(1), 8–14. https://doi.org/10.46545/aijbms.v6i1.317 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://www.openaccess.nl/en https://doi.org/10.46545/aijbms.v6i1.317 https://orcid.org/0009-0001-4568-056x https://orcid.org/0009-0008-0641-7233 https://orcid.org/0009-0008-4490-2723 javed et al., american international journal of business and management studies 6(1) (2024), 8-14 9 acknowledgment and capitalization. the study will also investigate the relationship between rom practices and kpis including project completion time, cost efficiency, customer satisfaction, and benefit. the study uses quantitative and subjective methods to understand how rom affects mep company performance. the mep project-based businesses must effectively manage risks and great opportunities. the study addresses the knowledge gap and shares notable experiences to advance rom practices and their vital role in growth. as mep projects become more complex, the study's findings will help determine risk and opportunity boards, improving mep organizations' exhibition and manageability. literature review mep project-based performance mechanical, electrical, and plumbing (mep) project-based companies face numerous challenges and opportunities that significantly impact their business performance (lavikka et al., 2021). risk management in mep projects involves identifying, assessing, and mitigating various risks, such as technical, operational, business, regulatory, compliance, and human resource risks (liu et al., 2016). the opportunity management focuses on identifying and capitalizing on potential gains through innovation, market expansion, sustainability initiatives, and client relationship management (schaltegger & wagner, 2011). embracing technologies like building information modeling (bim) and the internet of things (iot), exploring new markets, implementing green building practices, and maintaining strong client relationships are essential for seizing opportunities (regona et al., 2022). the industry evolves, continuous improvement in rom strategies will be essential for sustained success. thus, robust risk and opportunity management practices are fundamental to enhancing the overall business performance of mep project-based companies (demil & lecocq, 2010). with a weight of 0.113—the highest possible score—the outcome-based contract is the most important kind of contract (javed, 2024). randon project completion risk the board is identifying elements that might affect a project's cost, timeline, and quality. past studies have found mixed effects of random administration on project completion (chien et al., 2014). project delays and increased cost result from the inability to take genuine performances the board practices in many agricultural nations, including pakistan (briscoe et al., 2005). risk distinguishing evidence, quantitative and subjective performance analysis, risk reaction planning, and chance checking are prevalent in performance the board interactions (sheedy, 2021). performance evaluation a subjective report of semi-organized interviews with smes in the development sector in three eu nations found that risk the ceos take increases hierarchical seriousness in mindfulness, efficiency, and benefit (mburu, 2022). in pakistani it has a chance management techniques including performance recognition, evaluation, and response improve project management and success (kardes et al., 2013). the risky executive practices are essential for development programs, especially in agricultural nations. these methods help estimate costs and timelines and improve project execution and seriousness (jaffee et al., 2010). materials and methods data collection to accomplish these objectives, a quantitative methodology to data collection from executive directors of pakistani construction firms is employed. there are several studies where construction firms' executive directors are the main respondents among others. some studies conducted in africa found that the level of awareness of project managers about rm is low. therefore, it is expected that managers of construction companies would be more familiar with the level of rm practice in their firms and project performance. the population comprised 450 building construction firms based on the statistics provided by the pakistani chamber of commerce and industry. given the security situation in pakistan, it is difficult for the researcher to choose all the cities for the data collection. research design questionnaires are distributed to 312 pakistani construction companies in faisalabad, lahore, islamabad, karachi, and rawalpindi. a total of 200 surveys are submitted, and 80% of them are ansared. in this study, the operationalization of the rm practices measurement is based on 24 items distributed over three elements of rm practices; which are risk identification (rmp_ri), risk assessment (rmp_ra), and response and monitoring of risks (rmp_rmr) drawn from chien et al. (2014). all items are designed to be ensured based on a five-point likert scale (1= strongly disagree, 2= disagree, 3= neutral, 4=agree, 5= strongly agree). results and discussions descriptive statistics table 1 indicates that 80/8% (n= 348) of respondents from the pakistani development business are male, while 8.2% (n= 24) are female. the largest proportion of responses (42.8%) falls within the age range of 20 to 29 years, followed by 26.4% falling within the age range of 26 to 29 years, and 34% falling within the age range of 29 to 42 years. 84.2% of individuals hold four-year certificates, 28.4% have achieved aces, and 34.8% possess secondary school recognitions. 4% of respondents possess doctoral credentials. the majority of respondents (69.2%) hold the position of chiefs. javed et al., american international journal of business and management studies 6(1) (2024), 8-14 10 table 1. descriptive statistics of respondents variable detailing frequencies percentage gender male 348 80.8 female 24 8.2 22-24 years 03 0.123 24-29 years 72 26.4 age 29-31 years 82 42.8 31-45 years 72 34 45-60 years 42 34.4 over 60 26 6.4 education below high school 0 0 high school 0 0 bachelor 284 84.2 master 68 34.8 doctorate 20 4 responsible positions company director 329 80.4 supervisor 4 2.6 project manager 34 4.8 program manager 8 4.2 work experience less than 6 years 0 0 6-20 years 62 20.8 22 24 years 206 42.4 more than 24 years 82 29.8 number of workers below 26 employees 8 4.2 26-60 employees 53 28.6 62-86 employees 86 40 86-200 employees 29 28 202-329 employees 53 28.2 329-452 employees 28 8.2 more than 452 employees 28 6.8 approximately 28% of the participants had been employed in the field of development for a duration ranging from 6 to 20 years, whilst 69.2% had accumulated more than 20 years of experience. each entity handled various operations related to private accommodations, hotel, business, and shopping complexes. 26% of the incidents reported were false private occurrences, 34.6% were related to shopping establishments, 8.2% were related to workplaces, and 4.8% were related to hotels. approximately 40% of enterprises had a workforce size ranging from 4 to 50 employees, followed by 86 to 200 employees (28%), 26 to 60 employees (28.6%), and 202 to 329 employees (28.2%). organizations employing between 329 and 452 experts, with 26 or less, had the lowest rates, namely 8.2% and 4.2%. the selected companies had been operating in pakistan for a period of 26-20 years, accounting for 53.6% of the total, followed by a duration of 20-24 years, which constituted 28.2%. approximately 20% of the enterprises had a presence in pakistan for over two decades, and 24% had been operating there for a period ranging from 6 to 20 years. 60.4% of enterprises have polished rm for a period of less than 6 years. subsequently, 53.4% of enterprises used risk management for a duration between 6 and 20 years, while 34.4% practiced it for a duration between 20 and 24 years. only a small fraction of firms (2.4%) has practiced risk management for over 26 years. following the 29.8% are practicing cprms and 29.5% do not have a plan. pls model results table 2 are utilized to distinguish the degree of hazard the board (rm) rehearses. the dangers included risk recognizable proof (rm_ri), risk appraisal (rm_ra), and reaction and observing of dangers (rm_dm). likert scale estimating from 2 to 6 is utilized in the three performance the board types to decide use of rm in project the executives. the utilization of least worth in the examination which is 2.53 as addressing 2.00 and the most elevated worth of 4.68 addressing 6.00 in the likert scale. table 2 the degree of chance administration rehearses in pakistani development organizations are controlled concerning hazard distinguishing proof (rm_ri), chance appraisal (rm_ra), and reaction and checking of dangers (rm_dm) with their mean qualities running somewhere in the range of 4.08 and 4.29 and the standard deviation is in the request somewhere in the range of 2.04 and 1.69. this mirrored that there is irregularity of the interest of supervisors in pakistani development organizations corresponding to the most common way of rehearsing risk the executives. the performance recognizable proof (rm_ri) connected with rm positioned first in quite a while of the interest of pakistan development organization chiefs, with a controlled terrible of 4.29 and by and large normal deviation of 1.69. the number juggling implies values for all chance distinguishing proof things ran somewhere in the range of 4.20 and 4.64, and the standard deviation values went somewhere in the range of 2.42 and 2.42. the reaction and checking of dangers (rm_dm) in rm are evaluated second with a controlled all out dreadful of 4.42 and generally speaking standard deviation of 1.69. for all rm_ri things the relating values ran somewhere in the range of 4.26 and 4.48 and the standard deviations somewhere in the range of 2.53 and 2.42. at last, the performance evaluation (rm_dm) of rm is put third with a limited mean of 4.08 in general regular deviation of 2.04. the math implies for all rm_ra things went from 2.84 to 4.29 while the standard deviations are somewhere in the range of 2.29 and 2.42. javed et al., american international journal of business and management studies 6(1) (2024), 8-14 11 table 2. statistics on rm practices variable item mean std. deviation rank rm practice’s level risk identification (rm_ri) rm_ri1 4.48 2.42 4 restrained rm_ri2 4.6 2.53 2 restrained rm_ri3 4.4 2.42 6 restrained rm_ri4 4.48 2.53 4 restrained rm_ri5 4.64 2.48 2 restrained rm_ri6 4.42 2.48 8 restrained rm_ri7 4.48 2.48 6 restrained rm_ri8 4.2 2.42 8 restrained mean 4.29 1.69 -2 restrained risk assessment (rm_ra) rm_ra1 2.84 2.4 4 restrained rm_ra2 4.06 2.42 4 restrained rm_ra3 2.82 2.48 6 restrained rm_ra4 4.24 2.48 2 restrained rm_ra5 4.29 2.29 2 restrained mean 4.08 2.04 -4 restrained response and monitoring of dangers (rm_dm) rm_dm1 4.42 2.48 4 restrained rm_dm2 4.48 2.4 2 restrained rm_dm3 4.26 2.48 8 restrained rm_dm4 4.42 2.48 4 restrained rm_dm5 4.28 2.48 6 restrained rm_dm6 4.26 2.53 8 restrained rm_dm7 4.53 2.48 4 restrained rm_dm8 4.4 2.48 6 restrained rm_dm9 4.26 2.48 8 restrained mean 4.42 1.69 -2 restrained model development studying the estimating model with a focus on the primary element and an end value of 0.60 establishes the model. table 3 shows that every loading was higher than 0.60. factor loadings, composite dependability (cr), and separated normal fluctuation (ave) are used to analyze the structure. it suggests that ave and cr cutoffs be set above 0.60 and 0.80, respectively. table 3. results of convergent validity and loading factor model construct measurement item loading composite reliability (cr) average variance extracted (ave) risk identification rm_ri1 0.69 rm_ri2 0.82 rm_ri3 0.69 rm_ri4 0.69 0.848 0.829 rm_ri5 0.69 rm_ri6 0.82 rm_ri7 0.69 rm_ri8 0.69 risk assessment (rm_ra) rm_ra1 0.72 rm_ra2 0.62 rm_ra3 0.68 0.826 0.624 rm_ra4 0.84 rm_ra5 0.86 response and monitoring of risks (rm_dm) rm_dm1 0.82 rm_dm2 0.84 rm_dm3 0.69 rm_dm4 0.82 rm_dm5 0.69 rm_dm6 0.86 0.848 0.853 rm_dm7 0.69 rm_dm8 0.69 rm_dm9 0.69 rm_dm10 0.84 rm_dm11 0.8 project routine (pr) pr1 0.8 pr2 0.82 0.848 0.698 pr3 0.82 pr4 0.82 heterotrait-monotrait test table 4 represents the cr and ave exceeded 0.80 and 0.60, respectively. the heterotrait-monotrait (htmt) percentage of connections technique is utilized to assess discriminant legitimacy once focused legitimacy is authorized. htmt is utilized to analyze interior component or variable correlations when the multimethod grid is used htmt values above 0.8 may javed et al., american international journal of business and management studies 6(1) (2024), 8-14 12 compromise discriminant validity. later, discriminant legitimacy is explained, and table 4 shows its benefits are smaller than 0.80. table 4. results of discriminant validity analysis by htmt construct pr rm_dm rm_ra rm_ri pr 1 rm_dm 0.692 1 rm_ra 0.82 0.842 1 rm_ri 0.696 0.694 0.802 1 first-request builds to quantify rm rehearsals were represented in the results that built up rm_ri, rm_ra, and rm_dm. instead of employing several variables to handle the overall display of the project, the execution estimation analysis is applied. in order to better understand project execution, the effects of rm drills (rm_ri, rm_ra, and rm_dm) are seen as a single construct. evaluation of the main model following approval of the estimate model, the underlying model is examined using the savvy pls 4 tool to look at the relationships between the various elements. table 5 shows that the model's r2 upsides are high enough to at least partially explain the changes. r2 values should not be less than 0.20 when illustrating a ward's variation. to be considered large, the r2 value must be more than 0.86 and the satisfactory value must be greater than 0.26. stone test in the unlikely event that the value of predictive significance q2 is greater than 0.0, the model possessed predictive legitimacy for a certain ward construct. the stone-test the formula that goes with it is used to calculate geisser's q2, which is q2 = 2-sse/sso, eq (2), where q2 = prescient pertinence. sse is equal to the square of errors number of squares of perceptions equals sso. to determine shared reiteration measures for the dependent components, the continuing review employed d = 8. the q2 values should be 0.02 (little), 0.26 (middle), and 0.29 (enormous). table 5. usefulness of the model for making predictions items sso sse q² (=2sse/sso) construction projects’ performance 2000 472.532 0.629 hypotheses testing table 6 demonstrates that the performance of building projects has a substantial predictive value as a comparative measure of predictive relevance. the model's predictions are of sufficient quality, with the q2 value being about 0.6. as part of the underlying model assessment, the examination also includes an analysis of the coefficients, which indicate the strength of the relationship between the independent and dependent variables. a bootstrap resampling approach is employed to calculate t-insights and the standard errors. the bootstrap technique assessment differs significantly from conventional algorithms. table 6. hypotheses test results hypotheses path coefficient standard error t-stat. p-value results h2 rm_ri -> 0.262 0.062 4.692 0 supported construction pr h2 rm_ra -> 0.628 0.064 8.034 0 supported construction pr h4 rm_dm -> 0.34 0.064 4.434 0 supported construction pr the coefficients, standard errors, and t-values are shown in table 6. the three hypotheses h01, h02, and h04 are supported. the outcomes of the ongoing review align with previous studies on risk management practices (rm_ri, rm_ra, and rm_dm) and project performance, specifically in the context of construction projects. conclusions the study examined risk executives' practices (appraisal, reaction, and checking) and development project execution in pakistan. multiple development initiatives in pakistan are under assumption due to several variables winning in the nation, prompting the evaluation. the development industry is the most dangerous, especially during the coronavirus 28 epidemic and the countrywide war. one strategy to solve the concerns is to assess the risks faced by many development businesses. the study classified pakistani development organizations' risk management practices into risk identification, reaction promotion, and risk assessment. this started with a fundamental cycle (distinguishing proof) and progressed to increasingly difficult situations, which is realistic and risk-appropriate for executives. to mindfulness (rm-ri) had the highest mean of 4.29 and standard deviation of 1.69 among the three board hazard classifications. these results matched previous studies conducted in pakistan and development enterprises. to examine how rm practice (rm_ri, rm_ra, and rm_dm) affects pakistani development project presentation. the main question is how rm_ri will affect pakistani development projects. a significant favorable effect of rm_ri is seen in development projects (β = 0.262, t = 4.692, p <0.002). compared to nguyen and watanabe (2028), pakistani development enterprises' rm_ri practices have increased their initiatives' javed et al., american international journal of business and management studies 6(1) (2024), 8-14 13 presentation by 26%. hazard evaluation (rm_ra) affects pakistani development activities' exhibition. compared to assumption 2, rm_ra positively impacts development undertakings' exhibition (β = 0.628, t = 8.034, p <0.002). pakistani development enterprises' rm_ra technique improved project presentation by 262%. hypothesis 4 found that rm_dm positively impacted pakistani development projects' presentation (β = 0.340, t =4.434, p <0.002). rm_dm improved performance by 34%. the rm practices (rm_ri, rm_ra, and rm_dm) strongly influenced upgrading project execution. through these techniques, pakistani development organizations now account for 84% of the overall presentation. subsequent studies might assess the appropriateness of these associations for organizations in pakistan. cross-sectional evaluations do not include any rm progressions, such as ri (repeated improvement), ra (repeated achievement), and dm (differential mastery). therefore, future researchers will employ subjective methodologies to provide comprehensive information on issues and conduct long-term studies to examine the relationship between resource management techniques and the performance of pakistani development firms. external ecological factors, construction companies, and project loans is influenced resource management techniques and project performance. further investigation is required to delve into these matters. author contributions: conceptualization, m.a.j., a.h. and u.h.; methodology, m.a.j.; software, m.a.j.; validation, m.a.j.; formal analysis, m.a.j., a.h. and u.h.; investigation, m.a.j.; resources, m.a.j.; data curation, m.a.j.; writing – original draft preparation, m.a.j., a.h. and u.h.; writing – review & editing, m.a.j., a.h. and u.h.; visualization, m.a.j.; supervision, m.a.j.; project administration, m.a.j.; funding acquisition, m.a.j., a.h. and u.h. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references alzoubi, h. m. 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(2011). sustainable entrepreneurship and sustainability innovation: categories and interactions. business strategy and the environment, 20(4), 222-237. https://doi.org/10.1002/bse.682 publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2024 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. https://doi.org/10.1002/bse.682 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 6(1) (2024), 1-7 1 business and management studies aijefr vol 6 no 1 (2024) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa artificial intelligence and the future of communication in business administration: a comprehensive review mir mohtasam hossain sizan (a)1 bizary prava mondal (b) md rafiqul islam (c) md rashed buiya (d) (a) masters of science in business analytics, university of north texas, usa; e-mail: mhsizan855@gmail.com (b) masters of science in information systems & technology, university of north texas, usa; e-mail: bizaryprava.99@gmail.com (c) department of business administration, international american university, los angeles, california, usa; e-mail: me.hanifislam@gmail.com (d) computer science department, california state university, dominguez hills, usa; e-mail: md.rashedbuiya124@gmail.com a r t i c l e i n f o article history: received: 6th july 2024 reviewed & revised: 6th july to 8th september 2024 accepted: 10th september 2024 published: 17th september 2024 keywords: artificial intelligence, communication transformation, quantitative analysis, workforce education, communication business european communication professionals jel classification codes: m10, m15 peer-review model: external peer review was done through double-blind method. a b s t r a c t as steam engines were introduced and the industrial age began, mesopotamian manufacturing processes underwent significant changes. the mechatronics business is now experiencing a technological boom, thanks to recent breakthroughs in the internet, cellphones, electronics, nanotechnology, healthcare, digital applications, and other related technologies. robotics and artificial intelligence were prominent topics during the last world economic forum, with major economists such as stiglitz and roubini making significant contributions to the discussion. the objective of the study is to determine the impact of artificial intelligence on communication sources related to business. the purpose of the research is also to find the answers of the following questions: how well do professionals know and use artificial intelligence? what influence does artificial intelligence have on communication management, say experts? what challenges do professionals face with artificial intelligence communication? what threats do the artificial intelligence use they see? the study has used the data set of a quantitative cross-national survey of 2375 european communication professionals. the study has applied the one-way anova analysis with post-hoc scheffé, kendall rank correlation, pearson product-moment correlation, and pearson's chi-square tests. the results show that communication managers have driven artificial intelligence implementation and educate themselves and their workforce. there is a significant positive relationship between the use of artificial intelligence and business communication sources. the results the artificial intelligence has make a lot of improvement in communications systems and shows how the experts evaluate the technology. research indicates that individuals employed in the field of communication have a limited understanding of artificial intelligence, although they possess a higher level of anticipation regarding its influence on their profession compared to its impact on their personal life. © 2024 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction artificial intelligence is becoming increasingly integrated into all areas of our lives, spanning from everyday activities to industries such as manufacturing, service, and retail. language-based assistants like siri and alexa, as well as algorithms used in news sites and e-commerce platforms, are just a few examples of the advancements in artificial intelligence. an increase in patents related to artificial intelligence, a rise in job opportunities in the field, and a boost in positive media attention surrounding ai concerns (dwivedi et al., 2021). there has been a noticeable increase in academic conferences, course enrollments, and research focused on artificial intelligence and its effects in various fields. ai has the potential to greatly influence the field of communication management (salas-pilco & yang, 2022). several uses of artificial intelligence have been highlighted by experts and trade publications. these include analytics, targeting, content generation, chatbots, assessment procedures, strategy formulation, and crisis management (enholm et al., 2022). although ai technologies have the potential to improve professional operations, there are those who believe that humans cannot be replicated or substituted by technology (benbya et al., 2020). it is valuable to take into account the viewpoints of professionals in the field of communication. how knowledgeable are they in the field of artificial intelligence? is the level of adoption of this technology satisfactory? how do they perceive the challenges and dangers that ai poses to the field? the aim of study is to evaluate the 1corresponding author: orcid id: 0009-0003-1444-6791 © 2024 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v6i1.316 to cite this article: sizan, m. m. h., mondal, b. p., islam, m. r., & buiya, m. r. (2024). artificial intelligence and the future of communication in business administration: a comprehensive review. american international journal of business and management studies, 6(1), 1–7. https://doi.org/10.46545/aijbms.v6i1.316 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://www.openaccess.nl/en https://doi.org/10.46545/aijbms.v6i1.316 https://orcid.org/0009-0003-1444-6791 https://orcid.org/0009-0004-1675-0786 https://orcid.org/0009-0000-3730-4460 https://orcid.org/0009-0004-9747-0785 sizan et al., american international journal of business and management studies 6(1) (2024), 1-7 2 existing literature on ai in communication management and present the findings of a quantitative survey conducted among 2375 practitioners in european countries. the study attempts to address these concerns and communication professionals' perspectives by answering these research questions: how much do professionals know about ai and how much do they use it daily? how do experts estimate ai's influence on communication management? what are professionals' ai communication management challenges? what threats do they see? the study provides the theoretical foundation and ongoing research in two steps: first, to define artificial intelligence in corporate information and computer science literature. the study will then present communication management and examine ai research in this field. using these approaches will reveal research gaps that the empirical investigation addresses. literature review the term "artificial intelligence" was coined by john mccarthy, an american computer scientist, in the 1950s, specifically in a proposal for the 1956 dartmouth conference. this symposium is considered the inception of artificial intelligence as a formal discipline, aimed at studying the development of computers capable of performing tasks that need human-like ability (bhutani & sanaria, 2023). mccarthy's proposal emphasized the development of computational frameworks that might imitate aspects of human learning and understanding. this distinguished the area from current studies in artificial intelligence and laid the groundwork for future research in computer-based intelligence (anderson, 2024). computer scientists david poole and alan mackworth at the university of british columbia describe ai as “computational agents that act intelligently. they define intelligence as competent action responding to circumstances and goals, adapting to changing environments and goals, learning from experience, and making good decisions (mackworth & zhang, 2001). cluster of technologies the artificial intelligence as a “cluster of technologies” that includes “natural language processing” and “machine learning (goldfarb et al., 2023). the analytics and machine learning as ai components, while ai encompasses data perception. machine learning is often viewed as a meta-concept that includes knowledge representation (brown, 2021). ai may be defined as flexible decision-making processes and behaviors of software-driven agents, by considering several definitional methods. they adapt to shifting objectives and unpredictable environments, learn from experience, seek logic, and persevere despite perceptual and computational limits (subramaniam, 2020). natural language processing, data retrieval, knowledge representation, semantic reasoning, and machine learning underpin ai. knowledge representation is a subset of machine learning, while software-driven agents may respond depending on their environment or prior experiences. however, integrating both abstract and physical ai features makes this definition theoretically broad and easy to grasp for non-it professionals. guiding all organizational messages is a crucial aspect of communication management (yu, 2023). this material primarily focuses on the potential impact of artificial intelligence on communication management and professional responsibilities. transformation of ai technology the transformative impact of ai assistants on how corporations engage with their customers. ai-based marketing has the potential to enhance communications, enhance targeting, and utilize bots for consumer communication (haleem et al., 2022). a significant portion of communication skills, 32%, can be accomplished without the need for technological assistance. additionally, 27% of these skills do require some level of tech support. this suggests that despite advancements in technology, human involvement is still crucial in this area. the technology will have a minimal impact on the job market for communications professionals, accounting for only 1.5% of job losses. as indicated by human practitioners set themselves apart from robots by leveraging their creativity, critical thinking skills, and the trust they build with stakeholders (van laar et al., 2017). few businesses have integrated ai into their communication departments, despite the potential. only 3% of swiss corporations utilize ai for communications, according to a study conducted by chief communication officers (zerfass et al., 2020; pande et al., 2024). technological administration further investigation is necessary as communication professionals appear to encounter significant challenges when integrating ai. the adoption of technical advances by administrations is contingent upon their inherent qualities and resources, such as communication procedures and structures, as well as their external environment, which includes legislative restrictions and technology infrastructure (melville et al., 2004). ai in communications may encounter challenges at the meso-, department-, and agency levels in addition to the macro-level social barriers. it is uncertain if practitioners are as sanguine about ai as industry journals and practitioner literature are, or if they are more afraid that ai will replace them in many activities and lead to lower pay, more unemployment, and a loss of professional identity. administrations and their members may be in risk when new technology is introduced (ernst et al., 2019). these five criteria—which account for a substantial 54% of the total—carry the most weight, and they include the concepts of leadership and service (javed, 2024). one risk associated with managing it projects personally is "lack of ability, training, motivation and experience of staff, ai may diminish human abilities, responsibilities, control, and self-determination. understanding ai influences how it is viewed and what it means for the communications industry. the paucity of scientific literature and experience sometimes leads to variable and imprecise knowledge levels among practitioners (lebovitz et al., 2021). unified theory of adoption and usage of technology (utaut) it is necessary to look into this baseline and any variations related to the organizational histories of practitioners and their usage of ai devices. theoretically, organizational technology adoption is influenced by disparities in experience, age, and sizan et al., american international journal of business and management studies 6(1) (2024), 1-7 3 gender. these variables are used as moderators by the unified theory of adoption and usage of technology (utaut) and its sequel, utaut2, to explain how various factors influence the adoption and usage of new information systems (touray et al., 2013). the opinions on ai will differ between men and women, between younger and older professionals, and between those who have used ai devices and those who haven't. it is also assumed by the toe paradigm that the way different types of administrations perceive ai in communication management may differ (fristedt et al., 2021). materials and methods the study questions were incorporated in a quantitative, cross-national online survey of european communication professionals. most of the 2375 practitioners have more than 10 years of communications experience and hold key positions. data collection process the ai survey has 6 questions. all of our research instrument questions came from the literature review. the total poll's demographic questions were analyzed. to engage participants, the research employed a 5-point likert scale from 1 to 5 to assess how ai affected their job, division, agency, and work style (micro, meso, or macro). a definitional question assessed ai knowledge: we provided participants eight ai traits—four right and four wrong—and had them choose their preferences based on the information. proper definition eliminated knowledge difference bias. the perceived hurdles of reaching human (practice competencies and motivation), organizational (top-level management, leaders, and clients' support), and societal (users' and external stakeholders' tolerance) ai in communications standards. each level had cognitive or motivational challenges after structural ones. on a 5-point likert scale, 1 was "not likely" and 5 was "very likely. “not likely" and "very likely" were likert scale extremes. independent factors include responder gender, age, and country of origin, firm type, and management level. survey the online survey ran for five weeks between january and march 2024. the academics, students, and practitioners from various locations were excluded from the population, 2375 responses out of 2670 were used for data analysis. females made up 55.16% of 1,523 participants and males 43.2% of 1,156. the average age was 75.7% of the population (n = 2,570) had an academic degree, with 63.2% having a master's or postgraduate degree (n = 1575) and 6.2% a phd. 67.6% (n = 1,617) had more than 10 years of communications experience, and 67.6% (n = 1,620) were unit or team leaders or agency ceos. the communication departments of seven out of ten professionals were employed by joint stock corporations (17.7%, n = 541), private corporations (25.1%, n = 618), governmental administrations (16.6%, n = 447), or non-profit administrations (10.6%, n = 270). the remaining professionals (27.5%) were employed by communication consultancies, pr firms, or independent total communication (36.2%, n = 1,027), strategy and coordination (31.7%, n = 652), media relations/press spokesperson (30.7%, n = 630), online/social media 26.2%, n = 705), and marketing/brand/consumer communication 24.7%, n = 665 were the most frequently mentioned communication management subdisciplines. southern europe (31.4%, n = 645) and western europe (27.0%, n = 761) represented the bulk of responders, followed by northern and eastern europe. data evaluation data analysis was done with spss. depending on the variable, one-way anova with post-hoc scheffé, kendall rank correlation, pearson product-moment correlation, and pearson's chi-square test identified significant differences and (inter-)dependencies. results and discussions professionals in communication generally exhibit a fairly narrow grasp of artificial intelligence. they anticipate a bigger influence on the profession total than on how their company or they operate. key risks and obstacles include unclear duties and varying degrees of proficiency across businesses, as well as a lack of individual capabilities. ai communication specialist the 16.7% of the participants were classified as adopters of ai, indicating that they make use of both intelligent equipment in their homes and offices and intelligent assistants on their smartphones. table 1 represents the considered "ai experts," 15.4% of the professionals polled accurately identified seven or all eight of the stated features of ai as either true. the majority only had a rather hazy idea of what artificial intelligence is, and 7.1% of respondents, or "ai greenhorns," avoided the definitional issue entirely by saying they had no idea. compared to female experts (16.7%), there are more male experts (16.3%). adoption and skill in ai are unrelated; interestingly, we discovered that those who do not yet utilize the technology in their daily life have higher levels of ai expertise (15.7% versus 13.7%). table 1. represents the ai communication specialists’ details agents operated by software make decisions and take actions. 66.76% acquiring knowledge through experience 56.60% human-assisted computer activities 54.73% adjusting to shifting objectives and erratic circumstances 35.70% comprehending normal language (meaningful moods) 41.60% the whole range of human abilities 15.50% (going through emotions) 10.70% the process of learning by doing 6.60% sizan et al., american international journal of business and management studies 6(1) (2024), 1-7 4 as a percentage, the frequency is determined by the selection process. when people talk about "artificial intelligence," they often use different definitions. pick out all the definitions that you believe fit the bill. when we talk about ai, it is referring about 15.4% of the total sample and 16.6% of the definition-selecting population are experts in artificial intelligence. most of the people (36.5%) have gotten 5 out of 6 things right. among those working in the field of communication, 41% anticipate that ai will impact pr and communications in general (m = 2.70, sd = 2.37, n = 2,566). the influence on the profession will be substantial, according to every second responder (50.6%). distinct differences exist between the micro and meso levels of impact perception, which is an intriguing observation: even fewer professionals (33.7%) think that artificial intelligence would drastically alter their own work processes (m = 2.73, sd = 1.20), and only 29.2% expect that ai will cause major changes to the way their agency's or department's communication department operates (m = 3.05, sd = 2.01). there were noticeable variations among the different kinds of corporations and the respondents' varying degrees of hierarchy. working professionals in joint stock firms report a higher degree of organizational and personal effect compared to practitioners in other types of administrations. specifically, 40.3% of them estimate a high or very high level of influence at the meso level, and 29.1% at the micro level. when comparing communication leaders to their colleagues in lower-ranking positions, the same holds true. projects of ai organization according to table 2, the projected effects of ai on macro, meso, and micro levels are ranked from highest to lowest by organizational hierarchy. table 2. the effect that communication experts anticipate ai will have on the field. artificial intelligence will have impact on head of communication department / agency ceo unit leader / team leader team member / consultant total the profession of public relations and communications as a whole * 2.76 2.73 2.73 2.63 -2.34 -2.36 -2.36 -2.36 the way our department / agency works ** 5.11 3.02 2.74 3.03 -2.36 -2.37 -1.35 -2.01 the way i personally work * 2.63 2.71 2.65 2.72 -1.18 -2.36 -2.36 -2.01 note. p-value < 0.01. more than half of the respondents considered organizational infrastructure and communication practitioners' competencies (m = 3.56, sd = 1.04, n = 2,566) to be major barriers to implementing ai in communication management (m = 3.54, sd = 2.35). the subsequent tier is distinguished by support from leaders, consumers, and senior management (m = 3.25, sd = 2.36), approval from users and external stakeholders (m = 2.73, sd = 1.02), and encouragement to apply ai from communication practitioners (m = 3.27, sd = 2.36). it is uncommon (m = 2.63, sd = 2.36) to identify social infrastructure. ai administration problems table 3 illustrates two areas where they score significantly higher: organizational infrastructure (f = (4; 2561) = 4.736; p < 0.01) and assistance from leaders, clients, and senior management (f = (4; 2,561) = 3.666; p < 0.01). however, it's important to note that compared to individuals who have not used ai frequently, those who have used ai have reported fewer issues. table 3. the challenges different administrations expect adopting ai in communications cooperative stock secluded legislative non-profit consultancy total corporations corporations administrations administrations & agencies competencies of communication practitioners to use ai 3.61 3.5 3.61 3.6 3.57 3.56 -1.03 -1.04 -1 -0.76 -1.06 -1.04 motivation of communication practitioners to use ai 3.27 4.29 2.73 2.73 2.76 3.27 -2.33 -2.33 -1.07 -1.06 -2.35 -2.36 organisational infrastructure (e. g. it, budgets, responsibilities) ** 2.76 3.5 3.66 3.76 2.63 3.54 -1.35 -2.34 -2.3 -1.06 -2.37 -2.35 support by top management, leaders, and clients ** 5.13 3.35 2.71 2.73 3.27 3.25 -2.35 -2.31 -2.33 -1.06 -2.36 -2.36 societal infrastructure (e. g. highspeed internet, legal rules) 3.04 2.73 3.03 3.04 2.63 2.63 -1.2 -2.37 -2.35 -2.35 -1.18 -2.36 acceptance by users and external stakeholders 2.76 2.76 2.76 2.63 2.7 2.73 -1.03 -1.02 -1.02 -0.76 -1.04 -1.02 note: the scheffé post-hoc test showed significant results (p < 0.01). major barriers to incorporating ai into communications include organizations with uneven staff expertise (m = 2.74, sd = 2.33, n = 2,566) and jobs that are not clearly defined (m = 3.61, sd = 1.35). disillusionment with identity (m = 1.99, sd = 1.25), a reduction in one's essential abilities (m = 1.97, sd = 1.20), and a drop in pay (m = 2.44, sd = 2.36) are additional risks. table 4 represents the professionals view these obstacles as possible hazards. with an index score of 2.60 as opposed to 2.67 and 2.75 for team leaders and members, respectively, top communicators had a more positive view. sizan et al., american international journal of business and management studies 6(1) (2024), 1-7 5 meanwhile, 46.7% of nonprofit professionals anticipate issues with unclear responsibilities and 61.5% of nonprofit professionals foresee challenges with different staff capability. ai communication risk changes in work responsibilities might account for the second piece of information. planning and review with ai assistance increases ceo time. in this era of data-driven communication, stakeholder participation and news story authoring and interpretation may become outdated. table 4. represents the ai-facilitated intergenerational communication risks. 27 or 30 29 40 47 50 57 60 or total younger older statement pros are suffering job losses ** 2.65 2.16 2.33 2.43 2.33 2.41 -1.33 -2.36 -2.35 -1.2 -1.35 -1.2 communiqué gps 2.62 1.97 2.43 2.46 2.32 2.44 wages will decrease -1.3 -2.34 -2.35 -2.33 -1.24 -2.36 organisations will encounter challenges 2.63 2.76 3.51 2.73 2.71 2.74 miscellaneous operate proficiency -1.07 -2.35 -2.33 -2.31 -1.18 -2.33 businesses will face challenges 5.15 3.06 5.15 5.16 4.29 3.61 whose roles are not clearly defined -1.24 -1.18 -1.23 -2.01 -1.31 -1.35 in the field of communications 2.63 2.17 1.97 1.96 2.17 1.97 determination drops fundamental competencies ** -1.26 -2.34 -2.01 -1.2 -1.3 -1.2 the infrastructures occupation 2.61 2.32 2.36 2.33 1.97 1.99 will lose its distinctiveness -1.29 -1.23 -1.18 -1.35 -1.31 -1.25 note: ** highly significant at p < 0.01 using pearson correlation. the respondents were categorized based on the indices of all questions that assess the impact and all things that assess the risks. approximately 67.7% of practitioners expect to have some degree of impact, however they score low or neutral on the risk scale (with a risk index value of less than 3, reflecting a predominantly optimistic outlook within the profession. however, a small fraction of just 14.7% of those who oppose ai predict that the technology would have a substantial adverse impact and present several risks with both indices being more than 3. discussions there is a still significant untapped potential for artificial intelligence in the field of communication management. based on our findings, experts in the industry believe that ai has the capacity to transform their work, and like the third-person effect of media influence (perloff, 2009). a cognitive bias when we inquired about the anticipated impact in depth from professionals: they anticipate that ai would revolutionize their field, but not their specific organization. although professionals may have stayed informed about the latest developments in their sector, they have not yet utilized artificial intelligence in their professional or personal endeavors. currently, ai does not have significant attention in the field of communication management. the study pioneering quantitative research examined the impact of artificial intelligence on public relations and marketing research (berente et al., 2021). the responsibility of communication executives is to integrate artificial intelligence into their department, and communicators themselves should acquire knowledge on the issue. although there is extensive discussion about ai in trade periodicals, the bulk of public relations specialists still lack knowledge about this subject. the limited comprehension of big data, a technology linked to artificial intelligence, among communication professionals (smith, 2020). moreover, the effectiveness of 'learning by doing' approaches should be evaluated as the use of ai-based gadgets in daily activities does not lead to proficiency. the practitioners should acquire new technologies in a methodical manner. the primary obstacle to integrating ai into communication management is the proficiency level of individual specialists, which presents a substantial threat to enterprises (alshahrani et al., 2024). conclusions despite ai's inability to replicate every skill of a human communicator, practitioners of ai can nonetheless achieve mastery. despite challenges at the human and organizational levels, meeting societal needs appears to be occurring. high-speed internet, adherence to ai rules, and the endorsement of external stakeholders are of little concern to anybody in the communication business. while there may be some disagreement among practitioners, it is necessary to fully adopt and accept artificial intelligence at this point in time. there is a significant proportion of individuals do not harbor significant fears or concerns regarding artificial intelligence. experts in the field of communication, who anticipate the most beneficial influence of ai on employment may need to educate and involve colleagues with varying levels of ai expertise and apprehension. a significant proportion of the research sample consists of individuals in their twenties and those who anticipate significant repercussions and several hazards. paradoxically, the individuals who were labelled as "digital were the ones who expressed the highest level of concern regarding artificial intelligence. the biggest expected organisational threats were concerns around worker competence and uncertainty surrounding positions and tasks. effective team staffing and organization of ai work are essential tasks for communication executives. the support of top-level management and the presence of a designated project champion are essential for an organization to adopt technology. multiple factors should be considered while assessing the outcomes of our inquiry. due to the lack of information about the total number of communication professionals in europe and the low response rate from eastern europe, our sample cannot be used to accurately represent the communication profession from a statistical standpoint. our technique exclusively assessed the sizan et al., american international journal of business and management studies 6(1) (2024), 1-7 6 perspectives of communication experts. although we included our ai definition in the poll, it is possible that other variables influenced participants' perception of risks and challenges, despite our efforts to prevent this. we refrained from inquiring about the extent of ai use in communication departments or agencies due to our expectation that a significant number of respondents would lack knowledge on the subject. the intricate technology adoption models offered in the literature analysis were too intricate for us to examine. the study primary goal was to provide individuals with an early advantage in ai for communication management. to advance both theoretically and practically, future study should expand the viewpoint on potential challenges and hazards, incorporate other elements, and establish connections with empirical evidence. author contributions: conceptualization, m.m.h.s., b.p.m., m.r.i. and m.r.b.; methodology, m.m.h.s.; software, m.m.h.s.; validation, m.m.h.s.; formal analysis, m.m.h.s., b.p.m., m.r.i. and m.r.b.; investigation, m.m.h.s.; resources, m.m.h.s.; data curation, m.m.h.s.; writing – original draft preparation, m.m.h.s., b.p.m., m.r.i. and m.r.b.; writing – review & editing, m.m.h.s., b.p.m., m.r.i. and m.r.b.; visualization, m.m.h.s., b.p.m., m.r.i. and m.r.b.; supervision, m.r.b.; project administration, m.r.i.; funding acquisition, m.m.h.s., b.p.m., m.r.i. and m.r.b. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references anderson, m. m. 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(2020). artificial intelligence in communication management: a cross-national study on adoption and knowledge, impact, challenges and risks. journal of communication management, 24(4), 377-389. https://doi.org/10.1108/jcom-10-2019-0137 publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2024 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 5(1) (2023), 1-8 1 business and management studies aijefr vol 5 no 1 (2023) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa the efficiency influence of agencies on controlling money laundering in bangladesh mohammad ali mia (a)1 kamisah supian (b) (a) phd student, universiti selangor (unisel), malaysia; e-mail: labibali2003@yahoo.com (b) associate professor universiti selangor (unisel), malaysia; e-mail; e-mail: kamisah@unisel.edu.my a r t i c l e i n f o article history: received: 4th may 2023 revised: 30th july 2023 accepted: 10th august 2023 published: 13th august 2023 keywords: money laundering, efficiency, financial crime, agencies, bangladesh context. jel classification codes: k42 a b s t r a c t money laundering has emerged as a global concern in recent times, impacting both affluent and developing nations. among emerging economies, bangladesh faces pronounced challenges in addressing financial illicit activities due to its lenient regulatory framework and unstable financial sector. the bangladesh central bank issues guidelines to streamline the implementation of the prevention of money laundering act. to ensure the stability and security of their institutions, financial entities are required to devise anti-money laundering policies in accordance with the stipulations of the bangladesh bank. this study centers on assessing the effectiveness of sanctioned organizations in countering money laundering. the research delves into the latest transformations in financial wrongdoing from the bangladeshi context. it thoroughly explores strategies to prevent money laundering and other financial offenses through enhanced efficiency. presently, money laundering constitutes a complex and evolving criminal activity, with perpetrators constantly devising novel tactics to undermine the financial system. the study will advance the discussion of the influence of combatting efficiency of the authorized agencies to fight against money laundering in bangladesh. © 2023 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction money laundering entails the process of camouflaging unlawful proceeds and integrating them into the lawful financial system, as defined by global financial integrity (integrity, 2019). additionally, money laundering refers to the methodology employed by individuals engaged in money laundering to cleanse tainted funds stemming from criminal activities, thereby presenting them as originating from legitimate origins while obscuring their source (young & woodiwiss, 2021). moreover, particularly in emerging and less developed nations, money laundering poses an obstacle to domestic advancement, exerting adverse effects on economies across the board. economic growth slowdown affects financial institutions, causing a decline in productivity within the tangible sectors of the economy due to misallocation of resources, heightened criminal activity, and fostering corruption. this, in turn, undermines capital flows and international trade, impeding sustainable economic expansion (alnasser mohammed, 2021). money laundering can stem from various factors such as tax evasion and the creation of unreported income. a multitude of stakeholders, including certain criminals, politicians, corporations, executives, and employees, engage in money laundering (khan et al., 2020). notably, a group of government agencies is fighting money laundering and related crimes in bangladesh according to the money laundering prevention rules (mlpr, 2019). plausibly, the efficiency of these agencies has a significant influence on fighting money laundering. this article will focus on the influence of the combatting efficiency of the agencies on money laundering. research problem over the past few decades, money laundering and its impacts have drawn the attention of academics, researchers, and law enforcement organizations everywhere. around the past few decades, money laundering methods like online gambling and 1corresponding author: orcid id: 0009-0008-3201-6839 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v5i1.294 to cite this article: mia, m. a., & supian, k. (2023). the efficiency influence of agencies on controlling money laundering in bangladesh. american international journal of business and management studies, 5(1), 1–8. https://doi.org/10.46545/aijbms.v5i1.294 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v5i1.294 https://orcid.org/0009-0008-3201-6839 https://orcid.org/0000-0001-6851-0742 mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 2 its impacts have drawn the attention of academics, researchers, and law enforcement agencies all around the world. researchers have argued in the past that regulators are growing more concerned about criminals who are using unlawful activities like money laundering, financing terrorism, and tax fraud (parveen, 2020). according to ba and huynh (2018), money laundering has been connected to the instability of the financial system and a decrease in foreign investment. according to unodc, the amount of money believed to be laundered globally in a single year ranges from $800 billion to $2 trillion, or around 2% to 5% of the world's gdp. although there is a significant difference between those numbers, even the lower estimate highlights how serious the issue is that governments have promised to solve (unodc, 2020). in addition, according to unodc (2018), the nature of financial crimes including tax evasion, money laundering, bribery, and other types of corruption means that a single action may break multiple laws. therefore, it is difficult for any jurisdiction as well as the international standard-setters to control money laundering (jayasekara, 2021). bangladesh is one of the country’s most badly affected by the epidemic of trade-based money laundering or capital flight, according to recent global financial integrity (gfi) surveys. gfi calculates that bangladesh lost 61.6 billion usd, or 25% of its gdp for the 2016–17 fiscal year, between 2005 and 2014. between 2008 and 2017, over-invoicing and underinvoicing cost bangladesh an astonishing usd 7.53 billion annually, or 17.95 percent of the total amount of its international trade with all of its trading partners (gfi, 2020). in 2015, trade mis-invoicing cost bangladesh usd 5.9 billion, and bangladesh is one of the top 30 countries for illicit money flows, according to a report by gfi published in 2020. according to a recent report from the bangladesh financial intelligence unit (bfiu), the organization received 8,571 suspicious transaction reports (str) and suspicious activity reports (sar) in the fiscal year 2021–2022—an increase over the previous five years. this pattern suggests unauthorized financial transactions and unusual capital flight, such as money laundering in bangladesh (bfiu, 2021-2022). the objective of this study is to investigate the efficiency influence of the agencies to gain insight into how to manage money laundering more effectively and professionally, in accordance with the aforementioned justification. the goal of this study further aims at combatting efficiency of the authorized agencies to fight against money laundering in bangladesh. as a foundation for developing anti-money laundering models, this research is anticipated to contribute to the list of additional factors that will help to combat money laundering. literature review money laundering is the most frequent crime committed in a nation using the financial system's resources. any nation in the globe must deal with the issue of money laundering (dujovski & mojsoska, 2019). compliance departments, law enforcement, and intelligence organizations all across the world still struggle with money laundering (teichmann, 2019). the fundamental issue is that it is challenging to pinpoint exactly how money laundering happens. although there have been numerous global initiatives to combat money laundering, it is sometimes stated that these efforts are insufficient (teichmann & sergi, 2018). the development of money laundering can be attributed to the financial transfer system's technological advancements (teichmann & sergi, 2018). the reason for this is that electronic money transmission may be carried out quickly and easily, for instance by using automated teller machines (atms) and electronic wire transfers. financial transfers have benefited from technology advancements. because it is available around-the-clock, operates without regard to geography, and can be completed quickly through electronic means, money laundering is made possible (niepmann & schmidt-eisenlohr, 2017). national boundaries are becoming irrelevant as a result of information technology advancements. it makes it simple to commit an organized crime. the different elements that makeup diamond fraud constitute the foundation for money laundering. pressure, rationalization, opportunity, and capability are all fraud diamonds (simser, 2012). financial pressure is frequently the driving force behind money laundering activities (zaleskiewicz et al., 2013). opportunities and factors also form one of the key forces behind the action. even when the conduct was wrong, the laundering would have a cause to defend it (zaleskiewicz et al., 2013). moreover, without the people who are qualified to perform such tasks, money laundering could not be conceivable (wolfe & hermanson, 2004). additionally, there is a wide range of ways that money might be laundered by saving in banks, investing in stocks, or purchasing expensive goods. placements, layering, and integration are the three sorts of typologies that can be used to categorize all washing models. the three steps of activity that make up the money laundering process are placement, layering, and integration (gilmour, 2022). efficiency and money laundering in the literature, the term efficiency refers to competence or inability to take part in mediation and is used interchangeably. the term efficiency is introduced in the parts that follow to describe the various skills needed to access intervention (susan, et. al., 2003). in several disciplines, efficiency has been thoroughly investigated. these initiatives have resulted in the creation of specific efficiency measurement techniques. according to brockbank and ulrich (2003), efficiency is the capacity to increase the value of an organization’s operations, with a particular emphasis on the process of moving from changing business conditions to obtaining long-term competitive advantage. an extensive intake process to measure organizational efficiency appears out of place with a quick intervention like mediation and is unlikely to produce a valid assessment process. in areas where they feel vulnerable (current involvement in domestic abuse, medical issues, physical and mental limitations, medication), people might withhold information during the first intake process. this information frequently appears later in a treatment procedure in a therapeutic environment. the mediator runs a substantial risk of making an error in judgment in the absence of adequate training, suitable evaluation instruments, and accurate participant information. incorrect conclusions can have serious repercussions for the parties and put mediators in legal hot water. furthermore, people have a right to be informed that they are being evaluated. since this is not made clear in the mediation mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 3 literature, there is a risk that mediators could decide on efficiency without the parties' knowledge or consent (susan, et. al., 2003). further, efficiency also refers to the agency’s capabilities and resources that are connected to business performance. they are located using techniques for market analysis and the procedure for strategic planning. grant (1991) explores the subordinate components of core competencies, including innovation and the creation of a learning agency. agency resources (such as individual employees' skills), leadership, and more tangible assets like capital resources, brand recognition, and patents come together to form agency competencies and capabilities. corporate talents, according to klein, edge, and kass (1991), are purposeful mixtures of individual (human) productivity, hard agency variables (like tools and facilities), and soft agency factors (like culture and agency design). therefore, core efficiency measures serve as stable sources of competitive advantage and reveal what makes one agency more successful than another. superior records of innovation, learning quality, or other long-term business factors are utilized as performance metrics to evaluate this. agencies must actively manage their efficiency portfolio, examining current and upcoming efficiency requirements in conjunction with the process of developing strategies (jaradat, keating, & bradley, 2017). previous studies have found that money laundering is related with efficiency (isa et al., 2015). influence of efficiency is regarded as an important construct for money laundering (domashova & pisarchik, 2016). again, combating efficiency has a positive influence on money laundering (gilmour, 2016). additional findings from related studies suggested that money laundering and combatting effectiveness are connected (khan, jani, & zulkifli, 2021). combating efficiency is regarded as an important construct for money laundering (domashova & pisarchik, 2016). again, combating efficiency has a positive influence on money laundering (gilmour, 2016). such studies also indicated that combating efficiency is related to money laundering (khan, jani, & zulkifli, 2021). the government has designated an authorized agency to handle the particular responsibility (nasri et al., 2022). a permanent government entity known as an authorized agency, or occasionally an appointed authority, is in charge of overseeing and carrying out a certain set of duties. agency kinds come in a wide range. a government agency is often distinct from a department, ministry, and other sorts of public bodies established by the government, notwithstanding terminology differences. because different sorts of agencies are frequently established in an advising capacity, their duties are typically executive (craft & halligan, 2020). efficiency of agencies to combat money laundering in bangladesh any ministry, department, entity, or program listed in the schedule that is approved by the government to do the particular responsibility is referred to as an agency (nasri et al., 2022). an authorized agency, also known as an appointed authority, is a permanent department of the executive branch of government charged with overseeing and carrying out particular duties. there are many different kinds of agencies. a government agency is often separate from a department or ministry as well as other sorts of public bodies established by the government, notwithstanding terminology differences. since various sorts of agencies are frequently established in an advising capacity, their activities are typically of an executive nature (zhang, et. al., 2020). a number of government organizations are fighting money laundering and related crimes in the context of bangladesh. the national board of revenue (nbr), the anti-corruption commission (acc), the bangladesh security exchange commission (bsec), the criminal investigation department (cid), the directorate of environment (doen), the directorate of narcotics control (donc), and bangladesh customs are some of the organizations leading the charge against money laundering (mlpr, 2019). to combat money laundering, the money laundering prevention act was passed by the bangladeshi government in 2002 to address the issue of money laundering. the uncac was subsequently put into effect by the government in 2007. the anti-money laundering department (amld) of the central bank was named the government's financial intelligence unit (fiu) in 2007. in 2008, the government passed the anti-terrorism ordinance (ato 2008) and the money laundering prevention ordinance (mlpo 2008). both legislation facilitate international cooperation in the fight against money laundering, including the recovery of funds that have been forcibly transferred to or from other countries (sanctionscanner, 2021). bangladesh has participated in the asia pacific group on money laundering (apg), a founding member, annual plenary conference since 1997. as an apg member, bangladesh is committed to implementing the 40 recommendations of the fatf. bangladesh is the first country in south asia to comply to international standards and fix the problems with the mlpa, 2002. the bangladeshi parliament passed the money laundering prevention ordinance (mlpo) in 2008, however the mlpa took its place in 2009. the anti-terrorism act (ata) of 2009 was revised in 2012 and 2013 to improve bangladesh's aml/cft framework and meet international standards. the mlpa of 2012 repeals the mlpa of 2009. the mutual legal assistance in criminal matters act, 2012 was also passed by bangladesh to enhance global collaboration in the fight against money laundering, terrorism financing, and other related crimes. the anti-money laundering department (amld) of bangladesh bank was replaced by the financial intelligence unit (fiu) in june 2012. according to mlpa guidelines, amld was renamed bangladesh financial information unit (bfiu) on january 25, 2012, strengthening and guaranteeing the operational independence of fiu (faysal & arifuzzaman, 2022). efficiency of the criminal investigation department the criminal investigation department (cid) has performed as a top-notch investigation unit as the chief investigative division of bangladesh police. as the leader in criminal investigation, the unit has undergone substantial changes to become proactive, tech-savvy, and sensitive to issues crucial to building a society where it will be better to live and work (cid, 2023). with around three thousand manpower, cid is handling financial crimes like money laundering in bangladesh, in accordance with the money laundering prevention rules 2019. clause 2 of the money laundering prevention act of 2012 lists 27 different categories of predicate offenses and only cid is authorized to investigate and act with 18 of them. clause 54 of the aforementioned guidelines additionally permits cid to handle up to an additional six predicate offenses mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 4 concurrently and in collaboration with other authorities. according to a statistics, cid looked into 331 cases of money laundering between 2015 and 2022. of those, a charge sheet has been issued in 198 of the cases, 229 have been resolved, and 31 have received a final report from cid. 102 incidents of money laundering are now being investigated by the concerned unit. additionally, of the 477 money laundering instances, 132 are being investigated, and 345 have been resolved after an investigation (bangladesh police, 2023). with a view to enhancing the efficiency of the cid officers, exclusive training on financial crime investigation was organized between october 2022 and february 2023. around 450 officers including sub-inspector, inspector, assistant police super, and additional police super attended the training in six batches and obtained practical knowledge and skills on dealing with money laundering more efficiently (cid, 2023). simultaneously, another capacity enhancement training on extending the activities of money laundering prevention was conducted from 5th to 9th february 2023, where forty-four officers of different ranks took part and learned the techniques of combating money laundering practically (cid, 2023). efficiency of anti-corruption commission the anti-corruption commission (acc) is another recognized organization to combat money laundering in bangladesh, according to the money laundering prevention rules (mlpr) 2019 regulations. the bangladesh anti-corruption act, 1974, which established the bureau of anti-corruption, is one of the most important measures taken to combat corruption in bangladesh (sakib, 2019). recently, the commission made the decision to delegate responsibility for issues relating to money laundering, banking, and financial institutions to the inspection and money laundering section. on these matters, earlier activities were collected from the special investigation and investigation department. this has already been accomplished by staffing the money laundering unit. this division has received documents pertaining to money laundering from the special investigations and investigations division (acc, 2023). money laundering is one of the 6 major activities of the anti-corruption commission which has two units (a) the unfinished matters unit, and (b) the inspection and anti-money laundering unit. recently, the commission decided to entrust matters related to money laundering, banking and financial institutions to the inspection and money laundering unit. earlier, activities were taken from the special investigation and investigation department on these issues. money laundering unit has already been manned for this purpose. with a manpower of 2146 officers and employees, acc has been operating its functions against money laundering. with a view to making acc officers more dynamic, effective and visible, the commission is committed to enhancing the capacity of its own manpower as well as ensuring transparency and accountability (acc, 2023). in 2022, in addition to modernizing the working environment of the commission, the commission has taken several steps in organizing necessary training, seminars, symposiums etc. to enhance the skills of officers/employees. among them, 253 officers have been appointed under the new organizational structure of the anti-corruption commission to effectively investigate, investigate and prevent corruption. anti-corruption commission has promoted a total of 163 officers/employees during the financial year 2021-2022. orientation training has been provided to newly recruited officers and in-service training is ongoing. acc also provided software based training to 682 acc officers/employees on investigation and prosecution management system (ipms) software byt the year 2023. exclusively 12 officers in training on trade finance process and trade-based money laundering, 35 in acc hotline 106, 5 in training related to e-gp system policy level activities, 10 in digital forensic lab, short procurement training: orientation of anticorruption, 150 people in training on officials, 30 people in training on financial accounting course, 84 people in capital market management training, 10 people in 58th senior security course, 39 people in integrity and good governance training, 25 officers/employees trained in bank operations done. additionally, training has been completed in the country and abroad on five software tools for the nominated officers to run their own digital forensic lab established for easily obtaining information from digital devices for the investigation and investigation work of the commission. efficiency of bangladesh securities and exchange commission in terms of the number of formal institutions, the number of financing instruments, and the size of the asset bases, bangladesh's financial industry and institutional financing operations have grown over time. in addition to non-bank financial institutions (nbfis), capital market intermediaries, insurance firms, and microfinance institutions (mfis), bangladesh's financial system is founded on banks. the bangladesh securities and exchange commission, or bsec, oversees and regulates capital market operations including nbfis' use of securities instruments (habib et al., 2019). according to the provisions of the bangladesh securities and exchange commission act 1993, the bangladesh securities and exchange commission (bsec) was founded on june 8th, 1993 as the country's capital market regulator. the commission's goals are to safeguard investors’ interests, expand the securities market, and establish regulations for everything related or incidental to these goals. the commission is made up of the chairman and four commissioners, all of whom are full-time government appointments. the bsec has been given the authority to serve as an authorized agency to combat money laundering in bangladesh under the money laundering prevention rules 2019 (mlpr, 2019). in order to protect the interests of investors in securities, promote the securities market, and enact regulations on these topics or subjects related thereto, the bangladesh securities and exchange commission was established. consequently, the commission's mandate is to safeguard securities investors' interests; expand the securities industry; creating regulations on subjects relating to securities or those covered by them. the commission’s main functions are: regulating the business of the stock exchanges or any other securities market, registering and regulating the business of stock-brokers, sub-brokers, share transfer agents, merchant bankers and managers of issues, trustee of trust deeds, registrar of an issue, underwriters, portfolio managers, investment advisers and other intermediaries in the securities market, registering, monitoring and regulating of collective investment scheme including all forms of mutual funds, monitoring and regulating all authorized mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 5 self-regulatory organizations in the securities market, prohibiting fraudulent and unfair trade practices relating to securities trading in any securities market, promoting investors’ education and providing training for intermediaries of the securities market, prohibiting insider trading in securities, regulating the substantial acquisition of shares and take-over of companies, undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the stock exchanges and intermediaries and any self-regulatory organization in the securities market and conducting research and publishing information (bsec, 2023). efficiency of the national board of revenue there are numerous ways to define money laundering. it is defined as any income, whether generated legitimately or unlawfully, that is not reported to a government agency and for which no income tax is paid to the government. because it downplays the significance of the idea of money that has been obtained illegally, undeserved, or by unethical, improper, or illegal means, this definition tends to lessen the magnitude of the black money problem. according to waris and latif (2014), black money is associated with corruption, crime, unlawful activity, and the black economy. the money laundering prevention rules (mlpr 2019) have given nbr the authority to operate as an authorized agency to combat money laundering in bangladesh. in view of the aforementioned, bangladesh joined the asia pacific group (apg) anti-money laundering group as a founding member, and for five years after 2002, bangladesh supported the adoption of anti-money laundering regulations. when the first anti-money laundering act (aml) was passed in 2002, money laundering itself was not regarded as a crime. this huge gap was not filled until 2008 when the 2009 act entered into force first as an ordinance and subsequently as an act. since its passage, it is anticipated that several hundred crore have returned to the nation, including as a result of the tax amnesties that the bangladeshi government has from time to time provided. efficiency of directorate of narcotics control the directorate of narcotics control (dnc) is another authorized agency to combat money laundering (mlpa, 2012). directorate of narcotics control under the ministry of home affairs of the government of the people's republic of bangladesh. preventing the flow of illegal drugs in the country, controlling the import, transportation and use of legal drugs used in medicine and other industries subject to customs duties, proper testing of drugs, ensuring treatment and rehabilitation of drug addicts, planning and implementation of prevention programs aimed at creating widespread public awareness about the evils of drugs, the united nations and other international agencies. the main responsibility of the directorate is to build resistance against drugs nationally and internationally by creating close working relationships (dnc, 2023). dnc has been working with the mission to gradually reduce drug abuse in the country by strengthening enforcement and legal activities to prevent drug abuse and illegal trafficking in the country, creating public awareness against drugs and ensuring treatment and rehabilitation of drug addicts (donc, 2023). efficiency of the department of environment the department of environment (den) is another authorized agency to combat money laundering in bangladesh (mlpa, 2012). environmental conservation is one of the most discussed issues internationally. the existence of life on earth is threatened due amongst other things to climate change as a result of continuous environmental pollution. for a long time, environmentalists around the world have tried to focus the attention of world leaders on this and other pressing environmental matters. one of the first international collaborative efforts was the stockholm conference on human environment in 1972 (den, 2023a). according to den (2023), the first environmental activities in bangladesh were taken soon after the stockholm conference on human environment in 1972. as a follow-up action to the stockholm conference, the government of bangladesh funded, under the aegis of the department of public health engineering and with a staff level of 27 and after promulgating the water pollution control ordinance in 1973, a project primarily aimed at water pollution control. in order to enhance the efficiency of its workforce having 1133 approved positions, the department of environment has initiated a series of capacity development training like: a 2-month foundation course, financial management, conservation of environment, strengthening capacity for monitoring environmental emissions under the paris agreement in bangladesh, awareness and capacity building workshop on enabling activates for the implementation of kigali amendment to the montreal protocol, environmental clearance certificate (ecc) automation, project management and procurement system, preparation of para wise reply of writ petitions, leave to appeal, contempt & others, introduction and crosscutting issues of ipcc guidelines for doe officials, hands-on training on ghg inventory and mrv system for forestry and other land use, etp design evaluation ges etp inspection process, bangladesh environment statistical 2020, material safety data sheet (msds), environmental issue, environmental fate and behaviour and residual information etc (den, 2023b). efficiency of bangladesh customs bangladesh customs was formed under the national board of revenue in 1972 after the independence of bangladesh through the customs act. in 2016, bangladesh customs joined operation irene to stop the illegal trafficking of small arms and drugs. bangladesh customs has an intelligence division, responsible for preventing smuggling and tariff evasion. in 2016 it started operations to recover cars bought and sold in bangladesh evading taxes, the cars were bought by foreign officials working in international agencies such as the world bank and various agencies of the united nations (ciid, 2023). the ciid did file a total of 83 cases between 2016 and 2019 (morshed & rahman, 2021). the national board of revenue (nbr) defines it as any legally or illegally earned money, that is not declared to the government agency, and on which no income tax is paid to the government. this definition tends to dilute the seriousness https://en.wikipedia.org/wiki/national_board_of_revenue https://en.wikipedia.org/w/index.php?title=operation_irene&action=edit&redlink=1 https://en.wikipedia.org/wiki/world_bank https://en.wikipedia.org/wiki/united_nations mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 6 of the issue of black money, because it minimizes the importance of the concept of illegally obtained money or unearned income or money amassed through immoral, improper and illegitimate means. black money is linked up with corruption, crime, illegal activities and black economy (waris & latif, 2014). the customs intelligence has been entrusted with special powers to take necessary steps as per law to deter traders who are disrupting the stability of the country's economy and local markets through customs evasion and smuggling, and who are not doing business in accordance with the prevailing customs laws (ciid, 2023). considering the efficiency demand of the nbr workforce, it has emphasized on n anti-counterfeiting measures for practitioners, abusive use of transfer pricing, cross-border trade and transactions, combatting transfer mispricing and so on (bangladesh customs, 2021). conceptual framework based on the thorough literature analysis, the study proposes a research framework (figure 1). the model conceptualizes the connection between money laundering and the role of authorized agencies. the issues with the connection mentioned above are also brought up. the model could serve as the foundation for the next empirical studies. figure 1. research framework influence of agency efficiency on controlling of money laundering a regulatory body or governmental organization with the authority to act in the subject area is referred to as an agency (butler & macey, 1996). contrarily, the term money laundering refers to any criminal activity carried out by an individual or a group of individuals that entails obtaining money or other property that belongs to another person in order to pursue personal or professional benefit (gottschalk, 2010). in the instance of bangladesh, the government has granted authority to several agencies, including a specialized branch of the bangladesh police, to combat money laundering and associated crimes. the criminal investigation department (cid), anti-corruption commission (acc), bangladesh security exchange commission (bsec), directorate of environment (den), directorate of narcotics control (dnc), the national board of revenue (nbr), and bangladesh customs are working against money laundering with its available resources and performance efficiency. it is anticipated that by empowering their efficiency with modern knowledge and technological orientation money laundering could be controlled. discussions bangladesh has developed the money laundering prevention program in an effort to participate in the worldwide push to address the issue of according to the provisions of the money laundering prevention act of 2012 (the mlpa), the bangladesh financial intelligence unit (the bfiu), an anti-money laundering division of the bangladesh bank, has been given government authority to act as the central agency in charge of independently reviewing suspicious transaction reports (str) and cash transaction reports. while not limiting the reporting agency's transaction monitoring process, suspicious actions can be found during the financial body's client's onboarding and ongoing due diligence. a behavior constitutes a suspicion when it is connected to the client's general behavior and gives rise to information or suspicion that the client may be engaged in illegal activity for which proceeds could be created. (rana & awwal, 2020; bfiu, 2019). this study further intends to explain the efficiency influence of authorized agencies in combating money laundering. moreover, the money laundering prevention act of 2012 and the anti-terrorism act of 2009, as amended in 2013, both control the bangladesh financial intelligence unit (bfiu). it is a technology division that provides intelligence data to the appropriate government authorities to help them combat money laundering in bangladesh. the cid, ciid (customs intelligence & investigation directorate), anti-corruption commission, and other government agencies deal with money laundering issues with their highest efficiency. conclusions the primary aim of this investigation was to assess the efficacy of established institutions in their efforts to prevent money laundering. this inquiry delved into the paramount importance of the study, the capabilities of the criminal justice system in countering money laundering, and the awareness surrounding authorized entities operating within bangladesh dedicated to this cause. the comprehensive scrutiny encompassing all variables of the study, encompassing money laundering offenses, sanctioned agencies, and their effectiveness, was also prominently emphasized within this piece. the examination of these facets was meticulously conducted. consequently, the conceptual framework, coined as the 'influence of agency efficiency on the regulation of money laundering in bangladesh,' was formulated through a nuanced conceptual elucidation expounded exclusively in this manuscript. agency efficiency money laundering mia & supian, american international journal of business and management studies 5(1) (2023), 1-8 7 author contributions: conceptualization, m.a.m.; methodology, m.a.m.; software, m.a.m.; validation, m.a.m.; formal analysis, m.a.m. and k.s.; investigation, m.a.m.; resources, m.a.m.; data curation, m.a.m.; writing – original draft preparation, m.a.m. and k.s.; writing – review & editing, m.a.m. and k.s.; visualization, m.a.m.; supervision, k.s.; project administration, m.a.m.; funding acquisition, m.a.m. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references acc (2023). retrieved from https://sec.gov.bd/home/functions albrecht, c., duffin, k. m., hawkins, s., & rocha, v. m. m. 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(2020). how governmental agencies legitimize organizations: a case study on chinese business schools from 1977 to 2014. academy of management learning & education, 19(4), 521-540. publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2023 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. http://www.unodc.org/unodc/en/money-laundering/ http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 4(1) (2022), 30-40 30 business and management studies aijefr vol 4 no 1 (2022) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa investigating the determinants of mobile health apps adoption among elderly citizens in bangladesh hamida akhter (a)1 md. arif hossain (b) (a) assistant professor, department of management information systems, faculty of business studies, university of dhaka, dhaka, bangladesh; e-mail: hamida.mis@du.ac.bd (b) assistant manager, sylhet gas fields limited, sylhet, bangladesh; e-mail:arifhossain.sgfl@gmail.com a r t i c l e i n f o article history: received: 20th october 2022 revised: 30th november 2022 accepted: 20th december 2022 published: 30th december 2022 keywords: m-health apps, utaut model, perceived risk, social influence, healthcare profession. jel classification codes: g91, f14, l11 a b s t r a c t in this modern era, healthcare services are provided through technology, one of which is m-health apps. as a developing country, bangladesh pursues to offer healthcare facilities to its citizen by using modern technology. however, it adoption is different among younger and older generations, and several factors impact the adoption intention. this research aims to investigate determinants influencing elderly citizens of bangladesh to adopt m-health apps. this study applies pls (partial least squares) statistical technique based on structural equation modeling (sem) to achieve research objectives. a quantitative research methodology approach was adopted, and a structured questionnaire was disseminated to the 112 target respondents. purposive random sampling technique was used in this study. the underpinning theory used in this research endeavor is the utaut model (unified theory on acceptance and use of technology), incorporating several variables such as the quality of m-health apps, perceived risk, and cost. the findings demonstrate that social influence and app quality have a significant positive impact on older people's willingness to adopt m-health apps. in addition, the behavioral intention of users and actual usage behavior have a significant positive association. by extending the utaut model with some rationally related variables, this research has contributed to the ict of the healthcare profession. mhealth app providers need to consider improving the features of apps as the quality of apps is regarded as a critical criterion for users. © 2022 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction health information systems are becoming prominent in our daily life, and in the last few decades, it has grabbed the attention of scholars (sam, 2017). developed countries provide better healthcare services to their citizens. educated citizens are needed, and healthy citizens are also necessary for economic development. the number of mobile phone users is increasing day by day in the world. the internet population is becoming familiar with different app services. m-health services enable people to quickly get healthcare services at a low cost (kallander et al., 2013). bangladesh is a developing country, and most people live in rural areas. urban people get better health services instead of rural areas citizens. moreover, older citizens are lagging in society. the digital divide still exists in developing countries. the government of bangladesh develops it infrastructure to provide modern facilities to all its citizens. during covid-19, bangladeshi citizens used m-health services and mobile health apps for registration to get the vaccine. therefore, patients and healthcare service providers are now realizing the benefit of mobile health app services. in bangladesh, numerous studies have assessed e-heath service adoption, m-health service adoption, and continuation intention. however, m-health app adoption among elderly citizens has not yet been addressed previously. as elderly citizens are more prone to illness, they frequently need healthcare services. consequently, this study examines factors influencing older people to adopt m-health apps. usually, when new information technology is introduced, users are reluctant to accept it as they are familiar with legacy systems. therefore, investigating crucial factors influencing adoption behavior is essential to establish an information 1corresponding author: orcid id: 0000-0003-2377-1505 -1505 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v4i1.282 to cite this article: akhter, h., & hossain, m. a. (2022). investigating the determinants of mobile health apps adoption among elderly citizens in bangladesh. american international journal of business and management studies, 4(1), 30–40. https://doi.org/10.46545/aijbms.v4i1.282 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v4i1.282 https://orcid.org/0000-0003-2377-1505 https://orcid.org/0000-0002-4183-0030 akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 31 system. literature review mobile phone usage has increased in the past few decades; wireless technology to get health services has also enlarged. as a result, researchers have focused on these issues (cameron et al., 2017). in addition, assessing the drivers influencing mhealth app adoption with changing technology features has made this issue more attractive to researchers (baabdullah et al., 2018). mobile health apps services the term m-health app services are provided through a mobile platform, encompassing health advice from professional physicians, medical registration, and geographical-based services (zhang et al., 2017). in addition, m-health services are cost-effective and help assess health risks and positively modify patients' health habits (brown-connolly et al., 2014). mobile health technologies have become popular because of the features of wireless technology, such as portability and ubiquitous (akter et al., 2010). the benefits of the m-health app service were accessibility to qualified physicians at affordable cost at any time (khatun et al., 2016). numerous research has been experimented to identify factors that impact m-health adoption. for example, quaosar et al. (2018) found the significant drivers affecting the willingness of patients to accept m-health services: improved performance, social influence, anxiety about new technology, convenience, and resistance to change. zhao et al. (2018) showed a meta-analysis in which they demonstrated that user intention was significantly influenced by observed usefulness, assumed convenience, perceived vulnerability, and perceived severity. besides, cajita et al. (2018) researched the usa using the tam model to examine important facilitators and obstacles to adopting mobile health services. their findings showed that user-friendly, adequate experience, training programs, and equipment support influenced m-health adoption behavior. moreover, lee and han (2015) demonstrated that users’ age, gender, and earnings did not influence m-health adoption, while effectiveness, ease of accessibility, and economic values positively impact to use of mobile health services. furthermore, kaium et al. (2019) revealed that social influence, privacy issues (hoque, 2016), monetary value, etc., impacted users' desire to use mobile health. finally, phichitchaisopa & naenna (2013) asserted that the factors that significantly affect m-health usage are performance improvement expectation, user-friendly expectation, facilitating settings, and behavioral willingness on technology adoption. there are several established models for examining technology adoption, such as theory of reasoned action (tra) (fishbein & ajzen, 1977); technology acceptance model (tam) (davis,1989) ; technology acceptance model-2 (venkatesh & davis, 2000); technology acceptance model-3 (venkatesh & bala, 2008); theory of planned behavior (tpb) (ajzen, 1991); unified theory of acceptance and use of technology (utaut) (venkatesh et al., 2003). some similar constructs are identified among utaut, tra, and tpb models (kapoor et al., 2014). socio culture contexts are different in emerging countries compared to advanced countries; therefore, theories do not apply to all contexts. identifying which factors are more influential in adopting technology in developing countries is challenging (dwivedi et al., 2016). however, the user’s adoption intention and external variables that impact the user’s adoption willingness are being predicted more accurately using the tam model compared to the tra and tpb models (zhang et al., 2017). many scholars use the tam model to identify the newest m-health technologies acceptance (kang, 2014; hoque, 2016; sezgin et al., 2018; cho et al., 2014; byomire & maiga, 2015; chang et al., 2016). davis, bagozzi, and warshaw (1989) demonstrated that tam explains why users accept or reject information systems based on the concept developed by davis (1985). in the original tam model, assumed effectiveness and perceived user-friendliness instigate an individual’s intention to use technology. in 2008, venkatesh and bala presented tam3 by incorporating different factors in perceived ease of use in the previous tam2 model (venkatesh & davis 2000). the utaut model is a widely popular theory to examine it adoption, and this study applied the utaut model (hoque & sorwar, 2017; nunes et al., 2019). in addition, some new variables, such as app quality, perceived risk, and cost, are incorporated due to contextual demand. the following figure 1 represents the research model of this study. figure 1. research model apps quality cost perceived risk performance expectancy actual usage of mhealth apps mhealth apps adoption intention social influence effort expectancy akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 32 materials and methods after investigating the previous study, several research constructs are developed to attain the purpose of this study. the hypotheses of this study are derived from prior studies. the operational definition of the research constructs of this study are discussed in the following section. quality of apps refers to the apps' features, display, and content. users want updated content, attractive presentation, and informative features (calisir et al., 2014). therefore, when m-health apps do not meet users' expectations, users are not willing to accept m-health apps. consequently, we propose the following hypothesis: h1: app quality positively impacts the patients’ intention to adopt m-health apps. another vital element is cost issues while adopting m-health apps. users compare the cost and benefits when using any new it (lin et al., 2011). they prefer the lower cost and higher benefits of using it. if the usage cost of m-health apps is within the benefits, they are willing to accept m-health apps. thus, the following hypothesis is developed: h2: cost negatively impacts the patients’ intention to adopt m-health apps. effort expectancy denotes the extent of ease of use of a system (venkatesh et al., 2003). users search for a system that is more convenient, easy to use, comfortable, and fulfills requirements. therefore, end users' adoption of new technology is strongly influenced by effort expectancy. as a result, the following hypothesis is proposed: h3: effort expectancy positively impacts the patients’ intention to adopt m-health apps. data theft, unauthorized access by thirst parties, and privacy violation have become significant issues for users as they share their personal information in the m-health app. sometimes, different app installation on the mobile device requires access to personal information; consequently, users are unwilling to install apps. the more users perceive the risk of using m-health apps, the more they are reluctant to accept m-health apps (laxman et al., 2015; becker, 2016). hence, we develop the following hypothesis: h4: perceived risk negatively impact the patients’ intention to adopt m-health apps. performance expectancy refers to the individual’s perception of the benefit they gain from using the systems. performance expectancy is a vital determinant to influence adoption behavior among users, which is established by several previous studies (cimperman et al., 2016; hsu & wu, 2017; hoque & sorwar, 2017). based on prior studies the following hypothesis is developed: h5: performance expectancy positively impacts the patients’ intention to adopt m-health apps. social influence represents that individuals are influenced by other members of society, especially the person whom they consider important (venkatesh et al., 2003; venkatesh et al., 2012). social influence is another significant element that strongly effected users’ intentional behavior in accepting digital technology and health information systems (sun et al., 2013). this research proposes the following hypothesis: h6: social influence positively impacts the patients’ intention to adopt m-health apps. the association between behavioral intention (bi) and actual usage (au) has been examined by scholars, and they asserted that there is a positive relationship between bi and au (sheppard, 1988; venkatesh & davis, 2000). in addition, in the health information systems discipline, similar findings were found in several studies (kijsanayotin et al., 2009). hence, the following proposition is made in this study: h7: mhealth apps adoption intention positively impacts the actual usage of m-health apps. measurement of the research constructs the structured questionnaire was adapted after a rigorous studying previous literature. to confirm the questionnaire's clarity, accuracy, and readability, a pre-testing was conducted. the structured questionnaire of the study has two sections: demographic information of the respondents and user's acceptance of m-health apps services. a likert five-point scale was used to assess the user's acceptance of m-health app services. the scale ranges from 1 to 5, where 1 = strongly disagree and 5= strongly agree. the measurement scale of the major research constructs of this study is given below: apps quality (aq) the elements of mobile health apps quality are adapted from past studies, and these are: (1) m-health apps are very much organized; (2) m-health apps are updated regularly and available 24 hours; and (3) looking m-health apps are attractive (alaiad et al., 2019). akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 33 cost (ct) the indicators which measure the construct of cost are: (1) the cost of using m-health apps is expensive to me; (2) the benefit getting from using m-health apps is lower than the usage cost; and (3) overall, i think cost factor is a barrier to me for adopting m-health apps (alaiad et al., 2019). effort expectancy (ee) the effort expectancy construct is constituted of three elements such as (1) using m-health apps is easy for me; (2) learning how to use m-health apps is easy for me; and (3) interaction with m-health apps is clear and understandable to me (venkatesh et al., 2012; johnston & warkentin, 2010; zhang et al., 2017; alaiad et al., 2019). perceived risk (pr) perceived risk is measured through three items such as (1) m-health apps would not keep my personal information confidential; (2) information that i share with m-health apps may be attacked by hackers anytime; and (3) mhealth apps are not trustworthy (xue et al., 2012; hoque & sorwar, 2017; alaiad et al., 2019). performance expectancy (pe) the items of performance expectancy are derived from previous studies, and these are (1) m-health apps help me to get better treatment quickly; (2) m-health apps enable me to manage my health problems more effectively; and (3) overall, mhealth apps are helpful to me (venkatesh et al., 2003). social influence (si) after studying prior literature, three items are adapted for measuring subjective norms, and these are (1) individuals who are important to me think that i should use mobile health services; (2) individuals whose opinions are valuable to me think that i use m-health services; and (3) people who are using m-health services have more high status in our social system (venkatesh et al., 2012; alam et al., 2020). adoption intention (ai) the construct of adoption intention is comprised of three items and these are (1) i intend to use mobile health service regularly in the future; (2) i plan to use mobile health services recurrently; and (3) i will always try to use mobile health services in my daily life( zhang et al., 2017; alam et al., 2020). actual usage (au) for assessing actual usage construct, three components are adapted from previous literature, and these are (1) i actually use mobile health services to keep me healthy; (2) i use mobile health services often; and (3) mobile health services provide me good experience (moon & kim, 2001; alam et al., 2020). participant characteristics the following table 1 demonstrates the demographic information of survey respondents. among the respondents, male and female respondents were approximately 53% and 46%, respectively. as we considered only elderly citizens, the respondents' age was above 50 years. the majority of the participant completed their graduation and engaged in working. in terms of mhealth app usage experience, nearly 70 percent of respondents have less than one year of experience. moreover, thirty-four percent of the respondents stated that the frequency of m-health usage is once per month. table 1. demographic information of respondents category frequency percentage (%) gender male 60 53.57 female 52 46.43 age (years) 50 to 55 42 37.50 56 to 60 39 34.82 61 to 65 19 16.96 66 to 70 12 10.71 educational qualification higher secondary 19 16.96 bachelor's degree 65 58.04 master's degree 28 25.00 employment status yes 58 51.79 no 54 48.21 employment nature full time 36 32.14 self-employed 49 43.75 part time 16 14.29 others 11 9.82 akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 34 m-health apps usages experiences less than 1 years 79 70.54 1-3 years 16 14.29 4-6 years 11 9.82 more than 6 years 6 5.36 m-health apps usage frequency once per week 34 30.36 once per month 39 34.82 2-5 times per month 24 21.43 more than 5 times per month 15 13.39 income level less than 15000 bdt 38 33.93 15001 to 30000 bdt 16 14.29 30001 to 45000 bdt 24 21.43 45001 to 60000 bdt 25 22.32 more than 60000 9 8.04 sampling procedures and sample size the study's target population is users of m-health app services in dhaka. because of resource and time limitations, others cities in bangladesh are not included in the study. a structured questionnaire was sent to the target population through google and printed forms. only completed questionnaires were used to conduct the analysis. smart pls (v3) was used to analyze the data. in pls-sem, the minimum sample size is one hundred to conduct an investigation (reinartz et al., 2009). to attain the research objective purposive random sampling technique was used. the authors of this research paper used their judgment to select respondents with attributes to serve the survey purpose. this study used the g*power 3.1 software. the suggested sample size was 109, whereas this research has taken 112 respondents. the configuration was as follows: effect size f2 = 0.15; α err prob= 0.05; power = 0.85; number of predictors= 6 have been used to identify sample size. research design a quantitative research approach is appropriate for this study, and a survey is used as a research technique. furthermore, a structured questionnaire is used for conducting the survey. participants were asked questions regarding some personal attributes and evaluated some statements related to m-health app services. results common method variance (cmv) this research uses spss software to conduct harman’s single-factor test to identify whether any common method bias exists (podsakoff et al., 2003). the result of harman’s single factor is approximately 41% which is lower than the threshold value of 50%. consequently, this study established there is no common method variance. measurement model analysis the outer model analysis must be performed before evaluating the structural model. therefore, it is suggested by hair et al. (2019) to examine the loadings of the indicators for measuring measurement model. in addition, composite reliability and average variance extracted also need to be measured to ensure convergent validity (hair et al., 2010). the following table 2 shows the outer model assessment result. all the indicator loadings values are greater than 0.70 and therefore meet the threshold value. moreover, the cr and ave values of the elements confirm the threshold values. as a result, the convergent validity of measurement has been established in this research. table 2. validation of measurement model constructs indicators loadings composite reliability (cr) average variance extracted (ave) ai ai1 0.886 0.885 0.720 ai2 0.802 ai3 0.855 aq aq1 0.819 0.840 0.638 aq2 0.844 aq3 0.728 au au1 0.84 0.866 0.683 au2 0.782 au3 0.855 ct ct1 0.549 0.769 0.535 ct2 0.891 ct3 0.715 ee ee1 0.841 0.862 0.675 ee2 0.86 ee3 0.761 pe pe1 0.604 0.789 0.560 pe2 0.786 pe3 0.834 pr pr1 0.825 0.875 0.701 pr2 0.85 akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 35 pr3 0.835 si si1 0.783 0.875 0.700 si2 0.877 si3 0.846 notes: aq =apps quality; ct =cost; ee= effort expectancy; pr =perceived risk; pe =performance expectancy; si =social influence; ai =adoption intention; au =actual usage to ensure the discriminant validity of the research, the fornell –larcker criterion, htmt.90 criterion, and cross loadings are used, and these results are shown in tables 3, 4, and 5. according to fornell and larcker (1981), to attain discriminant validity, the off-diagonal values should be lower than the diagonal value in the fornell-larcker criterion. table 3 demonstrates that discriminant validity has been achieved using the fornell-larcker criterion. another test result is htmt.90 criterion which is represented in table 4, and all the values are below 0.90; thus, sufficient discriminant validity has been ensured (henseler et al., 2015; kline, 2015). cross-loading is another criterion to establish discriminant validity. table 5 depicts the cross-loading result, and it is seen that an indicator’s loadings are greater than all of its cross-loadings, therefore, achieving discriminant validity (hair et al., 2011). table 3. assessing discriminant validity using fornell –larcker criterion constructs au ai aq ct ee pr pe si au 0.826 ai 0.745 0.849 aq 0.683 0.706 0.798 ct 0.405 0.436 0.534 0.731 ee 0.696 0.662 0.773 0.463 0.822 pr -0.621 -0.620 -0.649 -0.454 -0.680 0.837 pe 0.629 0.556 0.637 0.405 0.507 -0.480 0.748 si 0.773 0.758 0.638 0.459 0.629 -0.602 0.621 0.837 notes: aq =apps quality; ct =cost; ee= effort expectancy; pr =perceived risk; pe =performance expectancy; si =social influence; ai =adoption intention; au =actual usage table 4. assessing discriminant validity using htmt .90 criterion constructs au ai aq ct ee pr pe si au ai 0.891 aq 0.847 0.871 ct 0.572 0.614 0.830 ee 0.849 0.841 0.849 0.702 pr 0.796 0.771 0.851 0.649 0.877 pe 0.885 0.783 0.672 0.717 0.655 si 0.837 0.872 0.842 0.646 0.816 0.768 0.877 notes: aq =apps quality; ct =cost; ee= effort expectancy; pr =perceived risk; pe =performance expectancy; si =social influence; ai =adoption intention; au =actual usage table 5. cross loadings constructs ai aq au ct ee pe pr si ai1 0.886 0.655 0.689 0.441 0.610 0.543 -0.600 0.690 ai2 0.802 0.549 0.610 0.263 0.461 0.396 -0.433 0.618 ai3 0.855 0.586 0.591 0.397 0.610 0.469 -0.536 0.617 aq1 0.611 0.819 0.631 0.410 0.673 0.490 -0.616 0.552 aq2 0.630 0.844 0.506 0.481 0.612 0.558 -0.485 0.519 aq3 0.411 0.728 0.497 0.381 0.566 0.479 -0.442 0.450 au1 0.651 0.644 0.840 0.382 0.649 0.547 -0.485 0.660 au2 0.548 0.498 0.782 0.311 0.477 0.493 -0.482 0.599 au3 0.640 0.543 0.855 0.309 0.586 0.518 -0.572 0.655 ct1 0.229 0.252 0.196 0.549 0.225 0.208 -0.202 0.247 ct2 0.430 0.459 0.427 0.891 0.405 0.395 -0.452 0.468 ct3 0.249 0.446 0.200 0.715 0.369 0.244 -0.284 0.230 ee1 0.557 0.684 0.634 0.393 0.841 0.439 -0.545 0.572 ee2 0.591 0.679 0.561 0.389 0.860 0.508 -0.615 0.514 ee3 0.478 0.532 0.518 0.358 0.761 0.283 -0.510 0.461 pe1 0.312 0.328 0.228 0.313 0.226 0.604 -0.153 0.291 pe2 0.429 0.549 0.538 0.213 0.462 0.786 -0.379 0.527 pe3 0.487 0.525 0.583 0.387 0.419 0.834 -0.486 0.537 pr1 -0.560 -0.575 -0.552 -0.356 -0.557 -0.456 0.825 -0.480 pr2 -0.500 -0.554 -0.495 -0.402 -0.571 -0.384 0.850 -0.484 pr3 -0.490 -0.495 -0.507 -0.383 -0.579 -0.356 0.835 -0.551 si1 0.558 0.503 0.586 0.311 0.532 0.454 -0.492 0.783 si2 0.680 0.569 0.677 0.436 0.531 0.506 -0.547 0.877 si3 0.655 0.528 0.671 0.396 0.519 0.592 -0.473 0.846 notes: aq =apps quality; ct =cost; ee= effort expectancy; pr =perceived risk; pe =performance expectancy; si =social influence; ai =adoption intention; au =actual usage akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 36 structural model analysis the first step of structural model analysis is confirming non-collinearity issues. inner vif (variance inflation factor) should be lower than three to ensure non-collinearity matters, which hair et al. (2019) recommend. all the inner vif values are less than three, shown in table 6. as a result, this study has no collinearity issues. hair et al. (2017) recommended that to examine hypotheses, some tests such as co-efficient, t-statistics, and p values need to be considered. therefore, for hypotheses testing, bootstrapping with 5000 resamples has been executed, and the result is demonstrated in table 6, and the graphical representation is shown in figure 2. table 6. hypothesis result hypothesis path std. beta std. error t statistics p values supported? vif r2 q2 f2 h1 aq -> ai 0.280 0.109 2.568 0.005 yes 2.407 0.668 0.462 0.069 h2 ct -> ai -0.016 0.073 0.220 0.413 yes 1.468 0.001 h3 ee -> ai 0.089 0.114 0.782 0.217 yes 2.995 0.008 h4 pr -> ai -0.103 0.083 1.246 0.106 yes 2.152 0.015 h5 pe -> ai -0.001 0.090 0.015 0.494 no 1.950 0.000 h6 si -> ai 0.469 0.094 4.968 0.000 yes 2.248 0.295 h7 ai -> au 0.745 0.042 17.643 0.000 yes 1.000 0.554 0.370 1.244 notes: aq =apps quality; ct =cost; ee= effort expectancy; pr =perceived risk; pe =performance expectancy; si =social influence; ai =adoption intention; au =actual usage participants’ responses support all the hypotheses except h5. apps quality (β = 0.280, t = 2.568, p < 0.01) and social influence (β = 0.469, t = 4.968, p < 0.001) have a significant positive impact on the adoption intention of the participants. similarly, adoption intention has the most significant effect on the usage of the m-health app services (β = 0.745, t = 17.643, p < 0.001). however, performance expectancy is not considered a major driver for the participants to adopt m-health app services (β = -0.001, t = 0.015, p > 0.05). the f2 value of adoption intention is 1.244, which denotes a large effect size, whereas app quality (f2= 0.069) has a small effect size. in addition, the f2 value of social influence is 0.295, which is greater than 0.15 and thus has a medium effect (cohen, 1988). figure 2. structural model for m-health apps adoption by elderly citizens hair et al. (2017) advised that researchers should examine the value of r2 for ensuring model predictive accuracy and q2 for establishing model predictive relevance. the value of r2 in this research is 0.55, which indicates that this model explains around 55% variation of the actual usage of the m-health services. furthermore, model relevance is examined through the q2 value, which should be more than zero. the q2 value of this study is 0.37, which is higher than zero; hence, model predictive relevance is acquired. akhter & hossain, american international journal of business and management studies 4(1) (2022), 30-40 37 discussions after performing hypotheses testing, social influence and quality of m-health apps are significant drivers that impact the users’ intentional behavior. besides, willingness to accept is also significantly positively associated with the actual course of action to use m-health apps. social influence was found significant by holtz and krein (2011) as well as hoque and sorwar (2017), and this finding is consistent with our study. the cost of using m-health apps influences the adoption intention is supported by collected data but not significantly. this may be due to the increased internet package cost because most m-health apps require an internet connection while using it. however, as the price of mobile devices is reasonable, the cost issue is treated as an insignificant barrier to the users. alaiad et al. (2019) revealed that participants were not concerned about the cost of using m-health apps which is partially similar to the finding of this study. hoque and sorwar (2017) and nunes et al. (2019) demonstrated that performance expectancy was a major determinant of adopting m-health service. however, surprisingly our study reveals performance expectancy as a non-vital element, which is the opposite finding of prior studies (hoque & sorwar , 2017; nunes et al., 2019). furthermore, this study shows a negative association between perceived risk and older people's intention to use m-health apps. this finding is also reinforced by previous studies (guo et al., 2013; alaiad et al., 2019). in addition, this study established a positive relationship between effort expectancy and behavioral intention, which is also similar to prior research findings (phichitchaisopa & naenna, 2013; dwivedi et al., 2016; hoque & sorwar ,2017; alaiad et al.,2019). finally, willingness to adopt technology and actual usage behavior has a significant association found in our study. again, this is supported by prior research endeavors in the m-health discipline (ifinedo, 2012; hoque & sorwar, 2017). conclusions from the findings of this research, policymakers need to concentrate on the features, content, upgrade, accuracy, and quick response of the m-health apps. developers of m-health apps need to consider several aspects, such as privacy, trust, and security risk issues. this study incorporates several variables rationally related to ict in healthcare and thus contributes to the literature. however, some constraints limit the research findings from being generalized. at first, the sample size was insufficient, and only dhaka metropolitan citizens were considered participants. in addition, a longitudinal study was not taken due to time and resource constraints. several variables, such as the health condition of the participants, age, gender, social status, and education, can be considered moderating variables for future research in this sector. author contributions: conceptualization, h.a. and m.a.h.; methodology, m.h.a.; software, h.a.; validation, f.t.j.t.; formal analysis, h.a.; investigation, h.a. and a.h.; resources, h.a.; data curation, h.a.; writing – original draft preparation, h.a. and m.a.h.; writing – review & editing, h.a. and m.a.h.; visualization, h.a.; supervision, h.a.; project administration, h.a.; funding acquisition, h.a. and m.a.h. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references ajzen, i. 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(2018). what factors influence the mobile health service adoption? a meta-analysis and the moderating role of age. international journal of information management, 43, 342-350. https://doi.org/10.1016/j.ijinfomgt.2017.08.006 publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 4(1) (2022), 1-11 1 business and management studies aijefr vol 4 no 1 (2022) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa does marketing capabilities mediate on the ict’s adoption and business performance of the smes in oman? conceptual review nasser saif al busaidi (a)1 abul bashar bhuiyan (b) norhayah zulkifli (c) (a) phd fellow, faculty of business and accountancy, universiti selangor, shah alam, malaysia; e-mail: albu500@hotmail.com (b)associate professor, faculty of business and accountancy, universiti selangor, shah alam, malaysia; e-mail: bashariuk@gmail.com (c) professor & dean, faculty of business and accountancy, universiti selangor, shah alam, malaysia; e-mail: norhayah@unisel.edu.my a r t i c l e i n f o article history: received: 8th october 2022 revised: 30th november 2022 accepted: 13th december 2022 published: 30th december 2022 keywords: icts adoption, marketing capabilities, smes, business performance, oman. jel classification codes: m31 a b s t r a c t the main purpose is to review the empirical evidence and summarize the marketing capabilities' mediating effects on the adoption of icts and business performance of the small and medium enterprises (smes) in oman and develop a conceptual framework. data were collected from the existing literature from different online sources. the study review findings revealed a significant gap in the literature regarding the full understanding of the simultaneous relationship among icts, marketing innovation, and business performance in smes. most studies have concentrated on analyzing and discussing only one or two of these phenomena at a time. however, the other studies that have examined the simultaneous relationship among the three variables mentioned above have generally ignored the component of marketing capabilities, focusing instead on the idea of innovation in its broader sense. the present study findings also establish a lack of or insufficient empirical studies that broadly examine the contribution of icts adoption among smes and its effect on companies’ capabilities, such as marketing capabilities, and consequently its effect on business performance, especially in developing countries. therefore, the present study is motivated to develop a conceptual framework for measuring the mediating effect of the marketing capabilities, icts adoption and business performance of smes in oman one of the developing countries. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction small and medium enterprises (smes) have been recognized worldwide as a backbone of modern economies due to their major contributions to global economic growth, and sustainable development. the positive impact of smes sector on the economic, industrial, and social development around the world have been documented in the literature and in many cases, they are supported by empirical evidence and explained by relevant theories. in the developed and many developing countries, smes generate a significant share of gross domestic product (gdp) that represents a key element of the economic stability of a country. smes have been reported as a main source of job creation and poverty alleviation, income generation, and income distribution as well as a breeding ground for entrepreneurship and new venture ideas. ndiaye, razak, nagayev, and ng (2018) report that there are approximately 600 million workers that will enter the global workforce over the next 15 years, mainly in the developing countries, and most of the new job opportunities are expected to be generated by smes. this estimation demonstrates the important role of smes in the developing, and emerging economies, and to ensure that they are successful and stay competitive, the governments in these countries are looking for ways to strengthen their performance and growth. in case of oman, the smes are facilitating and enhancing the organizational capabilities, improve performance, growth, and competitiveness of smes, icts adoption and use are foreseen as essential hence leading the growth and development of the national economy (k. e. okundaye, 2016). the empirical findings of the present study are expected to contribute in the following three areas: literature, policies, and practice. the literature surrounding icts adoption in 1corresponding author: orcid id: 0000-0001-6951-3064 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v4i1.279 to cite this article: busaidi, n. s. a., bhuiyan, a. b., & zulkifli, n. (2022). does marketing capabilities mediate on the ict’s adoption and business performance of the smes in oman? conceptual review. american international journal of business and management studies, 4(1), 1–11. https://doi.org/10.46545/aijbms.v4i1.279 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v4i1.279 https://orcid.org/0000-0001-6951-3064 https://orcid.org/0000-0002-7368-9000 https://orcid.org/0000-0002-3358-3842 busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 2 developing countries is found to be scarce. most of the extant studies focus mainly on the upstream issues that is to identify the factors that facilitate, or barriers and challenges on icts adoption, rather than downstream issues that is to analyze postadoption effect and its benefits (rahayu & day, 2017). in most of countries, including oman, smes play a significant role to the economic progress of the country and stability through creation of employment opportunities, economic growth, substantial share of gdp, providing a breeding ground for entrepreneurship, and new business ideas. the implication of the present study paves the way for oman to formulate policies and strategies to strengthen the capabilities, performance, and growth of smes by encouraging and supporting smes to adopt and use icts in their activities and operations. icts can facilitate the improvement of productivity, performance and competitiveness of the smes. oman has intensively focused on sme sector in the last two decades, especially in the last two five-year development plan (20112015) and (2016-2020), however until the present time, the performance of smes still has not been encouraging. supporting smes and facilitating entrepreneurship environment in oman is considered as a key-target goal to emphasize the development and the outcome of its smes and to enhance the economy diversification. by focusing on investigating and analysing empirically the effect of icts adoption and use on marketing capabilities and business performance of smes in oman, the study might benefit the owners/managers in a way of assisting them, for instance, to make an appropriate decision in investing and improving return on icts investments. the value of a company in the market place can be maximised through the adoption of technologies (k. okundaye, fan, & dwyer, 2019; sevrani & bahitii, 2013). in addition, stakeholders such as the government, and financial institutions, might benefit from the findings to develop an effective workable policy framework that support the sustainability of smes and enhance their capabilities to compete in the current era of economic globalisation, and electronic commerce. the findings might also enlighten the employees of smes on the roles, and benefits derived when they accept and use icts in their business. as an industry, sme is an important pillar of a society, and the sustainability and improvement of smes would have a positive social impact. globally, smes play a vital role in addressing the impediments of poverty, inequality and job creation. they are an important source of employment, particularly for low skill workers and the youth (fiseha & oyelana, 2015; k. okundaye et al., 2019). therefore, the present study is motivated to develop a conceptual framework for measuring mediating effect of the marketing capabilities, icts adoption and business performance of smes in oman as one of the developing countries. literature review icts investment, in business environments, is often seen as a vital necessity these days. it is reported that 30 percent of all budgets of research and development (r&d), including private and public sectors, in developed countries are assigned for r&d of icts. governments have attempted to provide suitable policy measures to support companies in high-tech sectors related to new digital technologies(lee, hwang, & kim, 2022; tarut\.e & gatautis, 2014). it has been recognised widely that the adoption and use of icts have facilitated smes to achieve growth by becoming more efficient, effective, innovative, and competitive in the global market (chege & wang, 2020; curraj, 2020; jones, simmons, packham, beynon-davies, & pickernell, 2014; k. e. okundaye, 2016). the majority of studies about ict adoption are focused more on large companies due to the fact that smes are usually characterised as lacking of knowledge about the possible actual advantages of icts, however the limited empirical evidences on the influence of icts in smes demonstrate the necessity to gain and exploit the positive outcomes such as growth of production, efficiency, effectiveness, competitiveness etc. of icts adoption and use in smes (alraja, khan, khashab, & aldaas, 2020; bayo-moriones, billón, & lera-lópez, 2013; consoli, 2012; elshaiekh, alghafri, alsakeiti, & aziza, 2018; enríquez, cuevas-vargas, & adame, 2015; setiowati, daryanto, & arifin, 2015; tarut\.e & gatautis, 2014). chege and wang (2020) reviewed literature on the effect of icts on the performance of smes and job creation in developing countries. the study revealed that technology innovations influence employment creation in smes positively and act as a driving force for development of economic. in addition, the study found that icts has a major impact on the competitiveness of smes and access to international markets. enríquez et al. (2015) conducted empirical research aiming to analyse the impact of ict on the performance and competitiveness of 200 manufacturing smes of the state of aguascalientes in méxico. their finding, obtained through questionnaire distributed to 200 smes shows that icts impact positively and significantly on the financial performance, the costs reduction and on the competitiveness of the companies. the results of this study are consistent with previous similar studies (esselaar, stork, ndiwalana, & deenswarray, 2006; maldonado, sánchez, gaytán, & ramírez, 2012; menéndez, sánchez, duarte, & d sandulli, 2007). in addition, the studies suggest that the infrastructure investments in icts enable an organisational effective competence with higher productivity, customer satisfaction, organisational capacity, and performance of the company. in examining the adoption of icts, boothby, dufour, and tang (2010) found that there is a correlation between investing in training of computer literacy, and technical skills, and there is a positive effect in increasing the productivity of the companies. cuevas-vargas, estrada, and larios-gómez (2016) examine the effect of icts as innovation facilitators for a greater business performance of smes in mexico. it is found that icts have positive effect on growth and competitiveness of smes and facilitate innovation through diffusion processes, usage practices and commercial success. in contrast, chae, koh, and prybutok (2014) reexamined the relationship between icts capability and firm performance with data from two previous studies conducted in 2000s. contrary to the earlier studies, the findings show no significant link between icts capability and firm performance. (díaz-chao, sainz-gonzález, & torrent-sellens, 2015) investigate new co-innovative sources of labor productivity i.e., ict use, human capital, and training, and new forms of work organisation from 464 smes in spain and found that co-innovation does not directly affect the productivity of small local companies in contrast to evidence that is found in larger companies. however, it has been proven by empirical analyses about icts impact on the productivity of companies that rate of return on technological investment are higher than rate of return on physical investment due to the fact that technological investment and use often occur along with other endeavors such as human busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 3 capital improvement and changes in organisational structure. the studies emphasised that icts adoption can improve the performance of smes only when companies and workers gain the necessary technological, educational, and training, organisational, business, and cultural competencies (abebe, 2014; bayo-moriones et al., 2013; boothby et al., 2010; díazchao et al., 2015; kunz, schmitt, & meyer, 2011; liang, you, & liu, 2010) . the studies investigate and measure the impact of icts on business performance and highlighted the fact that icts investment and use are essential but not sufficient conditions for improving performance. they have explored the existence of complementarities between technological and organisational changes in analyzing icts impact on the performance of companies. they suggest that the existence of complementarities across resources of companies can increase their joint impact on business value because it is more difficult for competitors to imitate the total effect. bayo-moriones et al. (2013) investigate the effect of icts and innovative work practices on several dimensions of business performance, taking into consideration both direct and indirect effects, and both short, and long-term effect. using data obtained from 267 spanish manufacturing smes, the findings show that there is a significant positive relationship between icts adoption and all the measures of perceived performance. however, the study found that impact does not necessary occur immediately since the lag effects and length differ according to the type of icts (al busaidi, bhuiyan, zulkifli, & enterprises, 2019; alam, bhuiyan, jani, wel, & management, 2016; bhuiyan, said, jani, & fie, 2016). liang et al. (2010) examine whether information technology (it) and organisational capabilities `have significant effect on firm performance. by deploying a meta-analysis on 42 published empirical studies, the results revealed that the mediated model that includes organizational capabilities as mediators between organizational resources and firm performance explains better the value of ict than the direct-effect model without organizational capabilities. in addition, boothby et al. (2010) examine the complementarities between investments in icts and the change in workplace organizations, such as training in computer literacy and technical skills, as well as their impact on the performance of the companies. data was collected through survey targeted the plant managers of 4200 canadian manufacturing establishments and it is found that these combinations are associated with higher productivity. abebe (2014) investigates the effect of icts adoption, particularly e-commerce on the performance of smes in texas, usa, and investigate the relationship with the entrepreneurial orientation as a mediating variable. the results reveal that e-commerce adoption has a significant positive influence on smes average and annual sales growth rate. this rate is even more with smes that have higher level of entrepreneurial orientation and the analysis therefore indicate the importance of ecommerce adoption along with smes’ entrepreneurial orientation on the performance of smes. moreover, mazzarol, clark, and reboud (2014) ) investigate the impact of the specific use of icts on the performance of companies particularly applied to supply chain management (scm). the findings, obtained through data collected from 744 companies in spain using structural equation modelling, show that there is no positive direct relationship between the specific use of its and the retailer’s perceived performance, however indirect impact has been found through both information sharing and satisfaction. bayo-moriones et al. (2013) state that the empirical studies that confirm the direct impact of icts on performance of companies framed their work in a resource-based view (rbv) theory. they view icts as intellectual resources of companies and conceives them as components of the structural capital of the organisations that support all of business processes and performance. according to rbv theory, performance of a company is based on its specific resources and capabilities that are scarce and difficult to imitate, and generate a sustainable competitive advantage. high investment in icts and its combination by companies may improve organisational capabilities, such as workforces, icts skills, and experience, and finally it leads to enhance the performance of companies. in the 1980s and 1990s, a number of studies was conducted especially in america, and it was found that there is no relationship between icts investment and performance of companies (loveman, 1994; stephen samuel roach, 1987; stephen s roach, 1989, 1991). according to dedrick, gurbaxani, and kraemer (2003), this phenomenon, referred to as “productivity paradox”, stimulated icts researchers, economists, and management scientists, to conduct more rigorous empirical and scientific studies to deeply analyse the actual relationship between icts use and productivity of companies. hence, researchers have started to study the indirect impact of icts. according to barua, kriebel, and mukhopadhyay (1995), the final impact of ict should be measured using both intermediate variables, ict effect on the business processes, and final variables, representing ict effect on performance variables. in addition, kim, shin, kim, and lee (2011) state that to tackle the productivity paradox problem, research on value of icts business should investigate the effects of icts on business processes (e.g., a better way of doing things) rather than the product where icts makes an exact impact. liang et al. (2010) aggregate empirical previous research that adopts the resource-based view (rbv) to investigate whether information technologies (its) and organisational resources have significant effect on performance of companies. they proposed a framework that includes direct and indirect-effect models, by adopting a meta-analysis on 42 relative published empirical studies. the research shows two main findings: firstly, the impact of its on performance through organisational capabilities, as mediator, is better than the direct-effect model without organisational capabilities. secondly, its can improve operation performance, however they may not enhance financial performance directly (liang et al., 2010). (azam, 2014) analysed the diffusion of icts in bangladesh smes and its impact on smes performance, using integration and effective utilisation of icts as the mediators. the final analysis, obtained through both quantitative and qualitative method and structural equation modelling (sem), demonstrate the non-existence of the paradox by applying the mediating role of ict integration and the degree of utilisation explains the impact of icts usage on company performance that is consistent with the resource-based theory (rbv). through different angle, dibrell, davis, and craig (2008) discus and analyse empirically the role of it as mediator between the innovation (product and process) and smes performance (profitability and growth). the study finds that through using structural equation modeling sem on a sample of 397 smes, it is revealed that the innovation (both product and process) has positive indirect impact on the profitability and growth via the mechanism of the importance manager’s place on it. busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 4 the underpinning theories and development of conceptual framework the approaches and theories used in the icts/smes are diverse and a number of theories contributed extensively to information and communication technologies (icts) adoption and implementation have been applied in some studies (sunday & vera, 2018). korpelainen (2011) has reviewed critically the icts literature to find the appropriate theories and models of ict system implementation and adoption as underpinning theories to be used in management and business research. among the theories and models that have been focused include technology acceptance model (tam) by davis (1986), diffusion of innovation (doi) by rogers (2003), the resource-based theory (rbt), a dynamic capabilities approach, and technology–organisation–environment (toe). although the theoretical approaches provide an important scientific framework for examining the adoption and use of icts by smes and their contributions, most of the theories viewed icts adoption as a one-off action as they mainly focus on factors that influence decision making at one decision point. they tend to minimise on the fact that adoption decision is a dynamic process through stages and it could influence by the same or different factors (gono, harindranath, & özcan, 2016; sunday & vera, 2018). in addition, theories such as tam, toe and doi specifically focus on the factors affecting the decision of adoption rather than explaining the postadoption effect and its benefits (rahayu and day (2017). the present study aims mainly to determine the effect of icts post adoption on marketing capabilities and business performance of smes in oman. it considers icts as one of the resources, and dynamic capabilities of a company that positively contribute to the performance of the organisation. therefore, this study relies on the resource-based theory (rbt), and the dynamic capabilities view (dcv) as underpinning theories in to investigate and analyse the effect of icts on the marketing capabilities, and business performance of smes in oman. however, one of the objectives of this study is to find out the factors that influence the manager’s/owner’s decision making in adopting icts and hence tam, and toe theories are considered along with rbt and dcv. the next two parts of this section discus and review the four theories. resource-based theory (rbt) and dynamic capabilities view (dcv) traditionally, the resource-based theory (rbt) has been considered widely as one of the most prominent and powerful theories in analysing and examining the role of company’s capabilities in building and sustaining competitive advantage and performance outcomes (barney, ketchen jr, & wright, 2011; kozlenkova, samaha, & palmatier, 2014; d. roach, ryman, jones, & ryman, 2018). according to rbt, achieving the competitive advantage of companies resides through their ability to exploit their high and rare resources, which are difficult to imitate by competitors (pucci, nosi, & zanni, 2017). in other words, a company improves its performance outcomes and achieves a competitive advantage when it has resources that are able to generate more economic value than the marginal firm in its sector and when its competitors are unable to duplicate the benefits of this strategy (barney & clark, 2007; kozlenkova et al., 2014). therefore, the logical assumption of rbt suggests that if a company owns valuable resources that few others have, and if the others find it too costly to adopt or difficult to duplicate the resources, then the company controlling the resources likely can generate sustainable competitive advantage. according to chiş, lacurezeanu, popa, and zelter (2018), the rbt has won wide share of popularity in the last decades in the study field of icts because they claim that a company can gain the competitive advantage by exploiting its existing and distinctive resources adequately. the resources include location, electronic resources, support from top management, and market competition. in addition, kozlenkova et al. (2014) found that the use of rbt in marketing research has increased more than 500% which suggests the importance of rbt as a foundation theory in explaining and predicting competitive advantages and performance outcomes. however, it has been argued that rbt is inherently internally focused (kozlenkova et al., 2014; d. roach et al., 2018; teece, pisano, & shuen, 1997). it has failed to explain how resources are developed, and deployed to achieve the competitiveness, and enable to consider the impact of dynamic market environments. due to these criticisms, rbt gradually evolved towards the belief that resources are not sufficient alone to generate superior performance, and on the basis of being inherently internally focused, rbt is limited in dealing with the issues of current complex and turbulent marketplaces. therefore, in response to the limitations of the rbt, the dynamic capabilities view (dcv) has been offered as a more suitable foundation theory to cope with complex and turbulent markets, that requires continual renewal, and reconfiguration of organization and its resource level (ambrosini, bowman, & collier, 2009; d. roach et al., 2018; teece et al., 1997). according to teece et al. (1997), dcv examines the sources and methods of wealth creation captured by private companies that are operating in the environment of rapid technological change, attempts to identify and locate capabilities that can drive the company to improve its performance and achieve a sustainable competitive advantage. the theory explains how the dynamic capabilities can help to enhance resource allocation in the company. in other words, dcv posits that the capabilities in which the company’s resources are developed and deployed are able to match the company’s market environment and explains its performance variance over time (ambrosini et al., 2009). technology acceptance model (tam) and technology-organisation-environment (toe) the technology acceptance model (tam), proposed by davis (1986) provides a model for various types of information systems and communication technologies. it is formulated to predict an individual behavior regarding the adoption and use of technology. it has two main constructs namely; perceived usefulness (pu) and perceived ease of use (eu) to explain computer usage behavior. in addition, tam originally assumes that information systems are used in the organizational settings to improve the efficiency of the workers. however, this theory is not without its critics as it ignores the effects of other important factors that come from both internal and external of the organizations (el-gohary, 2012; rahayu & day, 2015). the technology-organization-environment (toe) theory, developed initially by tornatzky, fleischer, and chakrabarti (1990), has considered the external environment of the firm along with organization internal context. in this busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 5 model, there are three aspects of a firm's context that influence the adoption of the technology innovation namely technological context, organizational context, and environmental context (rahayu & day, 2015). the technological context involves both internal and external technologies that might be useful in improving the performance, and growth of the company. the context includes, for instance, company size, managerial structure, financial, and technological resources of the firm. the environmental context involves other parties such as suppliers, competitors, governments etc. according to rahayu and day (2015) toe has been recognised widely as a model that provides an interactive perspective that assumes the changes in an organisation are determined by the individuals of the company and by the characteristics of the organisation where all of the factors and their interaction can be treated in one dynamic framework. it is believed that toe can explains and describes the adoption of icts comprehensively. toe model is broadly deployed in previous icts adoption studies due to the fact that it covers and considers both internal and external dimensions surrounding the company. for instance, ghobakhloo, arias-aranda, and benitez-amado (2011) conducted a study to identify the factors that influence smes in iran to adopt e-commerce (ec). their findings, based on toe, reveal that ec adoption is affected by perceived relative advantage, perceived compatibility, ceo’s innovativeness, information intensity, buyer/supplier pressure, support from technology vendors, and competition. therefore, the present study makes an attempt to utilise toe as the underpinning theory to explain the adoption of icts in smes in oman. it also takes into consideration the argument that toe does not put emphasis on individual factors such as employees, and managers’ attributes. conceptual framework the present study focuses on the adoption of icts in smes in oman and establish marketing capabilities as the mediating variable between icts adoption and business performance. icts adoption has been set as the independent variable of the study. there are three components of icts adoption that have been deployed in this study namely e-mail, ecommerce, and social media and, hence, the context of the icts adoption in this study is measured by the adoption of those three types. moreover, the three types of icts are the among the most common types of icts that match the characteristics of smes and their adoption consequent effect in enhancing the marketing capabilities, and business performance of smes (martin & matlay, 2001; setiowati et al., 2015). in the present study business performance is established as the dependent variable and it is measured by growth on revenue, profit, and the number of employees of smes (bayo-moriones et al., 2013; consoli, 2012; setiowati et al., 2015; tarut & gatautis, 2014; yunis, el-kassar, & tarhini, 2017). in the conceptual framework, the role of marketing capability as a mediating variable is to complement the adoption of icts to influence business performance of smes in oman. the mediating variable is measured by planning flexibility, marketing implementation, product development, pricing, and communication (fahy et al., 2000; joensuu-salo, sorama, viljamaa, & varamäki, 2018; morgan, zou, vorhies, & katsikeas, 2003; setiowati et al., 2015; tsai & shih, 2004; vorhies & morgan, 2003). figure 1 depicts the conceptual framework of the present study. figure 1. the conceptual framework busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 6 hypotheses development icts adoption and business performance of smes in oman ict is defined as any technology that enables communication, collection, processing, use and transmission of information electronically(ab wahab, mohamad, yusuff, & musa, 2020; ashrafi, sharma, al-badi, & al-gharbi, 2014). ict also includes the use of a technology as a tool to implement communication processes and communication mediums across multiple situations across geographical situations, times and locations(ab wahab et al., 2020). it has been described as an integrated system that incorporates the technology, and infrastructure that are required to store, manipulate, deliver and transmit information. therefore, ict can be referred to as an organised communication networks, and data resource that collect, transform and spread information within and among enterprises including smes (apulu, latham, & moreton, 2011). in examining the adoption of ict among smes, the previous literatures have shown diverse and still inconsistent findings that support the relationship between ict adoption and firm performance. a number of studies have found that adoption of ict in a business firm does have a significant effect on productivity and performance (ab wahab et al., 2020; abebe, 2014; cuevas-vargas, enríquez, adame, & servin, 2015; tajvidi & karami, 2017) while there are studies that have had the opposite findings (cardona, kretschmer, & strobel, 2013; mazzarol et al., 2014; yunis et al., 2017). based on the different results of previous studies, the empirical evidence on the relationship between ict adoption and business performance is still inconclusive. therefore, an empirical study needs to be conducted to examine the relationship between ict adoption and business performance of smes in oman in order to find out the current trends of icts adoption and its possible effect on improving firm performance among smes in oman. hence, the first hypothesis of study has been developed as below; h1 : there is a significant positive relationship between icts adoption and business performance of smes in oman. h1a : icts adoption positively influences revenue growth of smes in oman. h1b : icts adoption positively influences profitability of smes in oman. h1c : icts adoption positively influences number of employees of smes in oman. marketing capabilities have been described as the results or outcomes of an integrative process designed to apply the collective knowledge, skills, and resources of a company to market-related needs that enable business to add value to customer value creation and be competitive (mazzarol et al., 2014; setiowati et al., 2015; tsai & shih, 2004). it has been claimed that companies with greater marketing capabilities can achieve sustainable competitive advantage and realise superior performance (tajvidi & karami, 2017). marketing capabilities are one of the functional capabilities of the company which were developed so that employees can solve companies’ marketing challenges and problems (setiowati et al., 2015). adoption of icts has transformed and revolutionized the way that a business is conducted and provide companies with tremendous opportunities to improve their business performances. empirical evidence reveals ict as an endogenous element of the firm, performs as a vital element of management and marketing practices. according to setiowati et al. (2015), intensive ict use in marketing improves companies’ innovativeness, reduces barriers to innovate and speed up the innovation process. in addition, ict use in marketing encourages collaboration and integration of the business environment in the development of the innovation process and consequently improving the degree of adaptation of the new product to market needs. social media are considered as an attractive tool for information seekers to obtain information about the product/service they are going to buy and leads to enhanced purchase intent in consumers. they also considered as communication channel help companies to achieve different organisational objectives including marketing, advertising, branding, customer service, human resources and problem solving (tajvidi & karami, 2021). still, despite the findings made by the above, understanding the effect of icts adoption and use on sme’s marketing capabilities is still limited. this study is highlighting this issues on icts adoption in order to find its possible effect on improving marketing capabilities of smes in oman. hence, the second hypothesis of study has been developed as below; h2 : there is a significant positive relationship between icts adoption and marketing capabilities of smes in oman. h2a : icts adoption positively influences planning flexibility of smes in oman. h2b : icts adoption positively influences marketing implementation of smes in oman. h2c : icts adoption positively influences product development of smes in oman. h2d : icts adoption positively influences pricing system of smes in oman. h2e : icts adoption positively influences communication capability of smes in oman. marketing capabilities and business performance of smes in oman organizational capabilities play an important role in improving organisational performance (rehman, mohamed, & ayoup, 2019). according to the resource based view (rbv) theory, organisational resources and capabilities that are valuable, rare, inimitable and distinctive are considered as an important source of competitive advantage and superior performance (tajvidi & karami, 2021). empirical research findings (kajalo & lindblom, 2015; lekmat, selvarajah, & hewege, 2018; pérez‐cabañero, gonzález‐cruz, & cruz‐ros, 2012; shin & aiken, 2012) confirm the positive effect that marketing capabilities have on firm performance. wong and karia (2010) have found that marketing planning and marketing implementation as two elements of firm marketing capabilities have positively effect on business performance. in addition, study conducted by (morgan, 2012) revealed that marketing capabilities have direct complementary effect on profit growth of the firm. however, the role of marketing capabilities and its effect on sme performance have been adequately discussed and analysed in the developed country context, but more research needs to look at developing countries (lekmat et al., 2018; neill, singh, & pathak, 2014). hence, the following third hypothesis of study is proposed. busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 7 h3 : there is a significant positive relationship between marketing capabilities and business performance of smes in oman. h3a : marketing capabilities positively influences revenue growth of smes in oman. h3b : marketing capabilities positively influences profitability of smes in oman. h3c : marketing capabilities positively influences number of employees of smes in oman. mediating effects of the marketing capabilities on the relationship between icts adoption and business performance the effects of icts on business performance for smes are critical issues requiring further research, because ict alone is not enough to promote strong business performance especially to achieve competitive advantage and therefore complementarities between technological and organisational changes in analyzing icts impact on firm performance are crucial (bayo-moriones et al., 2013; boothby et al., 2010; liang et al., 2010; setiowati et al., 2015; yunis et al., 2017).the effect of icts adoption and use on business performance indicators is greater when the companies, including sems, correlate icts adoption with the innovative work practices and organisational capabilities such as the development of an effective marketing capabilities. despite scholarly attention in literature toward marketing capabilities and firm performance, the literature reveals that evaluation of marketing capabilities role between the icts adoption and business performance in the context of smes industry continue to lag (lekmat et al., 2018; tajvidi & karami, 2021). hence, there is a literature gap in comprehensive research that links influencing ict adoption to how it contributes to the enhancing of marketing capabilities and the consequences towards increasing business performance of sme. this study contributes to fill this gap by examining the mediating role of marketing capabilities (as one of the inter-firm capabilities pillar) between icts adoption and business performance of smes in oman through formulating the following hypothesis for testing. h4 : there is a significant positive mediating effects of the marketing capabilities on the relationship between icts adoption and business performance of smes in oman. conclusions through reviewing the literature of icts adoption among smes as a multidimensional construct, it is found that there are many issues that still need to be addressed and further researched. firstly, the existing icts adoption literatures have shown diverse and still inconsistent findings that support the relationship between ict adoption, and firm performance. although the study began early, this gap still exists, studies stated that the findings regarding the effect of icts adoption on business performance are heterogeneous in the existing literature. several studies have found that the adoption of icts does not have significant correlation and relationship with business performance of smes. the empirical evidence on the relationship between ict adoption and business performance is still inconclusive and, therefore, more primary research on this issue is necessary to be conducted in order to highlight the current situation of the effect of ict adoption on improving business performance among smes in oman. secondly, the studies are mostly focused either in larger organisations or in developed countries. while the studies in developing countries are mainly focused on upstream issues where they tend to report the factors that facilitate challenges encountered by smes in the adoption of icts rather than focusing on the downstream issues, i.e., studies that focus on post adoption advantages, and benefits of the adoption whether it is beneficial for business performance. this definitely limits the understanding about icts adoption by smes in developing countries, as well as the post-adoption advantages (downstream issues) of icts. a systematic literature review conducted on the adoption and use of digital technologies by smes covered 382 articles that have been published in the last two decades in 85 countries around the world, revealed that middle east and north africa, south asia, sub-saharan africa regions seem to have lower number of studies and calls for more empirical studies to further the understanding of the role of digital innovation in general and icts adoption in particular for smes development. in addition, the study found the majority of studies in this field focused on the determinants of digital technologies and icts in smes. specifically, researchers focused more in exploring and examining the factors facilitating and/or hindering smes’ adoption of icts and digital innovation. fewer studies examined digital technologies effects on specific business performance measures such as profitability, customer satisfaction, competitiveness, and internationalization. finally, the authors emphasised that digital technologies in the smes context need conceptual contributions that are distinct from what already exists to move the field forward. in addition, the study concludes and suggested that future studies need attention from researchers, and academies to investigate the impact of technology adoption on the performance of smes that might highlight additional benefits and find ways to be more precise in measurement scales for digital transformation, and its added value to smes. the literature further reviewed show that the main digital adoption that are commonly used by smes are less recent technologies and more innovation technologies that have been developed in the last two decades, which opens avenues for researchers for further studies on how smes upgrade their icts adoption in enhancing the performance, and competitive advantage. third, there is a significant gap exists in the literature regarding the full understanding of the simultaneous relationship among icts, marketing innovation, and business performance in smes. most studies have been concentrated on analysing, and discussing only one or two of these phenomena at a time. however, the other studies that have been carried out in examining the simultaneous relationship among the three variables above mentioned, have generally ignored the component of marketing capabilities, focusing instead on the idea of innovation in its broader sense. hence, the present study establishes that there is a lack of or insufficient empirical studies that broadly examine the contribution of icts adoption among smes and its effect on companies’ capabilities, such as marketing capabilities, and consequently its effect on business performance, especially in developing countries. therefore, the present study is busaidi et al., american international journal of business and management studies 4(1) (2022), 1-11 8 motivated to contribute to icts literature in general and ict adoption in smes in particular by analysing, and measuring its effect on the marketing capabilities, and business performance of smes in oman as one of the developing countries, all from the perspective of the second-generation statistical technique of structural equation modelling (sem).therefore, the present study is motivated to contribute to icts literature in general and ict adoption in smes in particular by analysing, and measuring its effect on the marketing capabilities, and business performance of smes in oman as one of the developing countries. finally, the present study establishes that there is a lack of or insufficient empirical studies that broadly examine the contribution of icts adoption among smes and its effect on companies’ capabilities, such as marketing capabilities, and consequently its effect on business performance, especially in developing countries. therefore, the present study is motivated to develop a conceptual framework for measuring mediating effect of the marketing capabilities, icts adoption and business performance of smes in oman as one of the developing countries. author contributions: conceptualization, n.s.a.b., a.b.b. and n.z.; data curation, n.s.a.b.; methodology, n.s.a.b.; validation, n.s.a.b., a.b.b. and n.z.; visualization, n.s.a.b., a.b.b. and n.z.; formal analysis, n.s.a.b., a.b.b. and n.z.; investigation, n.s.a.b., a.b.b. and n.z.; supervision, a.b.b. and n.z.; software, n.s.a.b.; project administration, n.s.a.b.; funding acquisition, n.s.a.b., a.b.b. and n.z.; authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data 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(2017). impact of ict-based innovations on organizational performance: the role of corporate entrepreneurship. journal of enterprise information management, 30(1), 122-141. publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 4(1) (2022), 41-52 41 business and management studies aijefr vol 4 no 1 (2022) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa empowering economic growth: the vital role of microfinance in reducing unemployment in somalia abdullah al masum (a)1 md. eqtedar ul hoque (b) anowar ullah (c) abdikhaliq dahir ayanle (d) miftahul zannat hridoy (e) (a) department of businesses administration, north south university, dhaka, bangladesh; e-mail: abdullah_al_masum@ymail.com (b) department of business administration, daffodil international university, dhaka, bangladesh; e-mail: eqtedar19@gmail.com (c) senior lecturer, department of businesses administration, daffodil international university, dhaka, bangladesh; e-mail: anowar.bba@daffodilvarsity.edu.bd (d) department of businesses administration, daffodil international university, dhaka, bangladesh; e-mail:abdikhaliq6355@gmail.com (e) department of businesses administration, daffodil international university, dhaka, bangladesh; e-mail: hridoy11-1801@s.diu.edu.bd a r t i c l e i n f o article history: received: 24th october 2022 revised: 30th november 2022 accepted: 24th december 2022 published: 30th december 2022 keywords: microfinance, job creation, unemployment, small business, entrepreneurship. jel classification codes: g32, f65, l66, l25, m41 a b s t r a c t this study investigates how microfinance might help somalia's unemployment rate decline. in many developing nations, microfinance has been acknowledged as a powerful tool for reducing poverty and fostering economic growth. the impact of microfinance on somalia's unemployment rate is examined in this essay. widespread acceptance of microfinance as a technique for reducing poverty and promoting economic growth in developing nations. the high unemployment rate in somalia has posed a significant obstacle to the nation's economic development and social stability. this study looks at how microfinance could encourage small business growth and entrepreneurship in somalia while lowering unemployment rates. the study looks at the difficulties faced by somalia's microfinance organizations and how they affect efforts to lower unemployment. additionally, it explores the connection between microfinance and job creation as well as the ways in which it might encourage entrepreneurship and the growth of small businesses. according to the study's findings, microfinance has the potential to significantly contribute to lowering somalia's unemployment rate by facilitating access to capital, encouraging entrepreneurship, and generating employment possibilities. yet, overcoming the difficulties faced by microfinance institutions in somalia, such as poor infrastructure, a lack of regulatory framework, and political instability, is essential to the success of microfinance in lowering unemployment. © 2022 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction microfinance is a crucial instrument utilized by ngos, banks, and governments to tackle the difficulties of poverty that affect over two billion individuals with earnings below us$2.00 per day (chen et al., 2017). microfinance encompasses various financial services that involve granting microcredit loans as a means of acquiring capital to initiate or grow small-scale businesses. the comprehensive classification of microfinance also involves insurance, savings, money transfers, mortgages, and pension plans tailored for individuals who are not adequately served by conventional banks. microcredit loans serve multiple purposes, including facilitating financial inclusion and smoothing consumption, but the primary focus of this special issue is their role in promoting economic participation and supporting small businesses among low-income groups (khavul, 2010). microfinance, or microcredit, is a banking service that caters to individuals or groups with low income or no employment opportunities, who are otherwise unable to access conventional financial services. the majority of microfinance institutions primarily offer lending services, with microloans ranging from $100 to $25,000. however, many banks also provide other services such as checking and savings accounts, micro insurance products, and financial and business education. the fundamental aim of microfinance is to offer impoverished individuals the chance to become selfsufficient (kagan, 2022). microfinance has demonstrated its efficacy in addressing poverty, generating employment opportunities, and 1corresponding author: orcid id: 0000-0002-4807-8662 © 2022 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v4i1.283 to cite this article: masum, a. a., hoque, m. e. u., ullah, a., ayanle, a. d., & hridoye, m. z. (2022). empowering economic growth: the vital role of microfinance in reducing unemployment in somalia. american international journal of business and management studies, 4(1), 41–52. https://doi.org/10.46545/aijbms.v4i1.283 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://doi.org/10.46545/aijbms.v4i1.283 https://orcid.org/0000-0002-4807-8662 https://orcid.org/0009-0002-6263-4597 https://orcid.org/0009-0007-8980-1582 https://orcid.org/0000-0002-5380-8025 https://orcid.org/0009-0003-7679-6332 masum et al., american international journal of business and management studies 4(1) (2022), 41-52 42 enhancing the quality of life for impoverished individuals. it has also been instrumental in empowering the poor, particularly women, by enabling them to manage their businesses, make independent decisions, and improve their self-esteem and selfefficacy. additionally, it is regarded as a critical means to attain the millennium development goals of reducing hunger and extreme poverty by 2015, promoting gender equality, and achieving universal primary education, as per al-shami et al. (2014). the capacity of the businesses that microfinance invests in to expand determines how effective it is as a vehicle for economic growth and employment. the evidence demonstrates that while self-employment and microenterprises are significant from a social standpoint, they have little influence on job creation and unemployment reduction. grants may be a more cost-effective way to provide micro seed cash for self-employment, and microfinance may be repositioned to offer risk financing to entrepreneurs who make it past the startup phase and have the potential to boost the economy and create jobs. this intense concentration appears to be motivated by the underlying presumption that microenterprise development can help create jobs and reduce unemployment and that microfinance has a significant role to play in this process (chen & ravallion, 2010). the concept of microfinance is not a new phenomenon, as various savings clubs and burial societies can be observed worldwide. moreover, there have been savings and credit organizations that have existed for centuries, such as the "susus" in ghana, "chit funds" in india, "tandas" in mexico, "arisan" in indonesia, "cheetu" in sri lanka, "tontines" in west africa, and "pasanaku" in bolivia, as noted by nagarajan and janakiraman (2014). the microfinance revolution came into existence when bangladeshi economist muhammad yunus provided some financial assistance to a struggling basket weaver in 1974, for which he was later awarded the nobel peace prize. while the notion of microfinance has now extended to latin america, asia, eastern europe, and africa, the most renowned microfinance programs are rooted in asia. in 1976, dr. yunus launched a microfinance initiative among women in bangladesh in response to a severe famine that had affected the country in 1974, according to hulme (2009). according to the recently developed multidimensional poverty index by oxford university, africa is identified as the region with the highest poverty levels in the world. it is notable that the microcredit movement, which gained momentum in the 1980s and experienced significant growth in the 1990s, originated in this region (schrieder & hiedhues, 1995). microfinance is a term that refers to a "program that provides very poor people with small loans for selfemployment enterprises that create money so they can take care of themselves and their family." the world bank has recognized the microfinance program as a means of addressing poverty and income inequality, and it has been demonstrated to be effective in many countries. in order to strengthen its efforts to combat poverty, the world bank has designated 2005 as the year of microfinance. microfinance is the provision of financial services, including savings, loans, and insurance, to disadvantaged individuals in both urban and rural areas who are unable to obtain such services from conventional financial institutions (nasir, 2013). the origins of microfinance in pakistan date back to the early 1980s when the aga khan rural support program (akrsp) and the orangi pilot project (opp) were established. the akrsp approach was subsequently adopted nationwide with the creation of the national rural support program (nrsp) and the sarhad rural support program (srsp) in the 1990s. while these organizations provided social services, including financial services, loan defaults were a common problem. to address this, the kash foundation was founded in 1996 as a specialized microfinance nongovernmental organization, which paved the way for the formation of the pakistan microfinance network (pmn). the khushhali bank, established in 2001, was specifically designed to serve the underprivileged population (ahmad, 2008). according to the second annual report on the program's implementation, which was released today, the european progress microfinance facility has established to be a real instrument for creating jobs, especially for groups that have trouble obtaining funding from more conventional sources. this is because it assists micro entrepreneurs with their start-ups. twenty microfinance companies operating throughout the european union have benefited from this facility by receiving guarantees or capital (debt or equity) to support their lending to prospective micro entrepreneurs worth €170 million over the next two to three years (chandy & narasimhan, 2011). the poorest region in the world, identified by oxford university's new multidimensional poverty index, is in africa where microfinance started to gain popularity in the 1980s and grew stronger in the 1990s. in africa and the middle east, microfinance institutions (mfis) have consistently experienced portfolio growth, according to the 2016 convergences microfinance barometer. in 2015, mfis in africa reported a 16.4% increase compared to the previous year. the group has 8,692 workers in the region and has provided loans worth $9.4 billion to 7.4 million people. microfinance specialists in the region determine which mfis will receive assistance based on their operational excellence, transparency, and social performance, with long-term partnerships and fieldwork enhancing effectiveness (ayodele et al., 2019). despite state interference and criticism from a british cooperative expert in 1934, informal financial institutions like "esusu" continue to play a significant role in nigeria. in south africa, the microcredit market experienced growth in four distinct phases from the 1980s, involving a variety of institutions. however, the micro finance regulatory council's decision to reduce margins led to the closure of many micro lenders, resulting in a decline from 3,500 formal micro lenders in 1997 to only 1,334 registered mfis in 2000 (okapara, 2010). the phrase "creating jobs" is frequently used to refer to government initiatives to lower unemployment that resulted in many unemployed people finding employment and lowering the unemployment rate. government initiatives to lower unemployment are frequently referred to as "job creation." there are many different types of job creation schemes. for instance, a government may slash taxes and regulations to cut the cost of recruiting. on the other hand, a government may employ personnel directly, for instance, to construct a road (van rooyen et al., 2012). the idea that employment has a favorable effect on stability and poverty alleviation underlies the emphasis of employment creation. it is believed that the development of jobs both directly lowers poverty by raising household incomes and indirectly stimulates the economy by generating demand. it is believed that increasing employment reduces the desire masum et al., american international journal of business and management studies 4(1) (2022), 41-52 43 to engage in conflict, legitimizes the state, and supports the institutions and procedures essential to a state's efficient operation (holmes et al., 2013). although producing jobs is a major issue in somalia, there aren't enough studies on the subject, so the goal of this research is to ascertain how microfinance might help the country's high unemployment rate. objectives general objective the main objective of the study is to identify the role of microfinance to reduce unemployment in somalia. specific objectives  investigate the advantages of microcredit for small businesses.  analyze the role of microcredit in reducing unemployment.  examine how microcredit contributes to overall economic development. literature review the main hurdle that the poor encounter when seeking loans from formal financial institutions is the need for collateral. in addition, the loan application process involves several bureaucratic procedures, which raises transaction expenses for the disadvantaged. lending to this group is not a priority for formal financial institutions. these institutions typically prefer lending to urban rather than rural areas, large-scale over small-scale transactions, and non-agricultural loans over agricultural ones. microcredits' primary goal is to enable the severely poor to rise beyond the poverty line and start their own small businesses. in order to combat poverty, social aids in the form of donations that "reinforce the spread of a beggar culture" are ineffective (latifee, 2003; ali et al., 2020; ali et al., 2021). however, the fundamental goal of the recently popularized "micro finance" method is to count the poor in the labor force and make them productive so they can raise their social and economic standing (altay, 2007; chowdhury et al., 2020; chowdhury et al., 2021a; s. chowdhury et al., 2021b; iqbal et al., 2021). microcredit is frequently cited in studies as a crucial tool for reducing poverty. nader (2008) investigated the relationship between microcredit and women's socioeconomic welfare. although a strong association between children's education, income, and assets was discovered that is consistent with the literature, the notion that microcredit improves the health and harmony in the family was denied. mahjabeen (2008) discovered that microfinance institutions in bangladesh raised household consumption and income levels, improved welfare, and reduced income disparity. microcredit is a significant tool in initiatives to combat poverty, according to (bakhtiari, 2006; kader et al., 2019; kader et al., 2021a; kader et al., 2021b; kabir et al., 2021; nayeen et al., 2020). the development of allocation of resources, market support, and the implementation of cutting-edge technology are all supported by microcredit services, which promote economic growth and development. furthermore, microcredit borrowers' choice to invest money in better living conditions, health, nourishment, and education will benefit development. increased understanding of borrowers, using peer lending organizations as pre-screening tools, putting joint liability agreements into place, short-term loan agreements with regular repayments, loan ladders, and other strategies are just a few of the ways microcredit organizations use to lower their own risks. in order to provide credit to low-income borrowers without collateral assets and to raise payback rates, they also employ different strategies. microcredit providers, unlike philanthropic organizations, believe that poverty is caused by social processes that deny access to social resources, including credit. some view credit as a human right and seek to bring a social and economic revolution by uniting the poor through grameen-style microcredit institutions. microcredit programs have drawn the attention of the international donor community due to their high loan recovery rates and effectiveness in reaching impoverished rural women. this was exemplified by the 1997 microcredit summit, which had 2900 representatives from 137 nations and 1500 organizations in attendance (qudrat & rahman, 2006; nahar et al., 2021; rahman et al., 2021a; rahman et al., 2021b; shahriar 2021a; shahriar 2021b). projects to create jobs in an emergency should be specifically created to address the needs of the local community, with local input, priority, and ownership. they ought to be quick to act, adaptable, and focused on achieving short-term, modest goals of community reconstruction. projects could include agricultural and fisheries restoration, community cleanup, sanitization, and road and building repair, as well as small-business support through microcredit, training, and market aid (beasley, 2006; zayed et al., 2021a; zayed et al., 2021b; ahmed et al., 2022; al-quraan et al., 2022). concept of job creation and reducing unemployment the difficulty in measuring job creation is explored in this paper, which examines various employment generation strategies that can be used during an economic downturn. the "net new job" is the desired outcome of job creation programs, but it is challenging to assess whether a new job has been created at the microeconomic level. while it may be straightforward to determine macroeconomic job creation through the bureau of labor statistics, specific job creation is challenging to quantify. although the theoretical process for creating jobs through policies is well understood, demonstrating that it has created net new jobs is difficult or non-existent. the report highlights this recurring challenge (atiase & dzansi, 2019; faisal-e-alam et al., 2022; mia et al., 2022). empirical literature the influence of microfinance on employment is not included in global data sources across industries. mix, for instance, masum et al., american international journal of business and management studies 4(1) (2022), 41-52 44 has 11 outreach metrics. each borrower's average loan balance and each saver's average savings balance are expressed as a percentage of his gnp. percentage of female clients, overall number of savers or borrowers, and the number of her $300 or less loans that have been executed. mfi is able to calculate all of these without speaking with the customer. the other three impact indicators must be switched back and forth. consider your clients and produce statistics at the household level, per day and per household member. the informal sector employs more than 48% of the workforce in africa, 45% in latin america, and 33% in asia. they work for themselves or small businesses. microfinance institutions (mfis) are specifically used by this group of consumers who are active in the informal sector (balkenhol, 2006; rubi et al., 2022; zayed et al., 2021a; zayed et al., 2021b; zayed et al., 2022a). researchers are aware of a wider variety of occupation types. here, the outcomes are more encouraging. the need for more employed workers also appears to be influenced by the size of a customer's farm at the time of initial contact with mfi. when she obtained her first loan, her kik program client in indonesia had a combined workforce (paid and unpaid) of 3 for her and 15 for him. it seemed that at least some of them were no longer "household companies". between industries, there were also significant disparities (construction jobs fell while agriculture increased manufacturing and trade jobs). the central bank has infused $791 million in loans into the commercial banking industry overall through its refinancing facilities, which "generated $255 million in new fixed investment and produced 67,000 employment in two years" (balkenhol, 2006; zayed et al., 2022b). a loan that would support many jobs creation and preservation in serbia was approved in 2014 by the microfinance organization that is the focus of the study that is being presented (radmila, 2015; zayed et al., 2022c; zayed et al., 2022d). the following are the study's primary hypotheses: positive correlation between bank lending and job growth was qualitatively verified (alkalha et al., 2012; bhuiyan et al., 2022; shayery et al., 2022). the study assessed employment data with a particular emphasis on two important metrics: permanent jobs and jobs produced, measured at the level of mfi clients across all sectors of agriculture, business, and population. the information used was: a certain number was considered a full-time number. the number of new hires that mfi's clients want to make when the loan is approved, counted as new employment created. the agriculture sector includes householders aged 15 years and above. the number of permanent positions is represented by the variable 'c', while the total number of new employment created by day workers or seasonal employees that the customer typically hires each year is represented as 'quantity'. only loans aimed at supplementing home income from commercial or agricultural activities, as well as those hired to help with additional household duties and outside human resources, are included in this population sector. the number of new jobs created is calculated whenever a customer applies for a new loan. in 2014, mfi approved loans that kept 28,720 individuals employed and added 13,658 jobs in serbia, with the dynamics of employment recorded month by month using mathematical and descriptive statistical techniques. the coefficient of determination is used to measure how well the trend line fits, contributing 88.28% to the forecast of produced job dynamics and 93.98% to the prediction of sustainable job dynamics (radmila, 2015). materials and methods study design the survey is a research strategy that outlined the gathering of data from a sample of people by their responses to questions that were posed (check & schutt, 2012). so that this design was used to describe how the drought impacts on small scale farmers to collect information based on proposed questionnaire and summarize according to the respondent’s feedback accordingly that this type of survey design simplifies the researcher to understand and simply summarize the problem. sample procedure the study used purposive sampling, a non-probabilistic technique, to select participants from somalia who were living in areas prone to disasters. the researcher intentionally excluded individuals who were not in this category to focus on collecting specific information. purposive sampling was chosen for its efficiency in saving time and money. it is important to note that the researcher and the country were not responsible for exacerbating the situation. research instrument this study aimed to investigate the impact of drought on small-scale farmers in somalia, specifically in the areas of agriculture, economics, health, and livelihoods. the data was collected using a questionnaire instrument adapted through google forms, as it was efficient in collecting responses from a large sample size and suitable for the researcher's study. the questionnaire is a technique of data collection where each person responds to the same set of questions. the use of this tool was guided by the nature of the data to be collected, time constraints, and the objectives of the study. due to the covid19 pandemic and the absence of the researcher, an online survey was chosen as the most appropriate method to collect primary data. the study also involved the collection of secondary data. results & discussions microfinance as a tool for contributing to the self-employment of poor individuals table 1. mfi is contributed self-employment of poor people indicator frequency percent strongly agree 48 40% agree 37 31% masum et al., american international journal of business and management studies 4(1) (2022), 41-52 45 neutral 20 17% disagree 8 7% strongly disagree 7 6% total 120 100 source: primary data based on table 1 and figure 1 presented above, it can be observed that 40% of the participants strongly agreed, 31% agreed, 17% were neutral, 7% disagreed, and 6% strongly disagreed with the statement that mfi contributes to the self-employment of poor people. these results suggest that the majority of the respondents agreed that mfi is playing a role in promoting self-employment among the poor. figure 1. mfi is contributed self-employment of poor people source: primary data microfinance institutions (mfis): bridging the gap in access to credit and income opportunities table 2. mfi providing credit for increasing income earning opportunities indicator frequency percent strongly agree 45 38% agree 37 31% neutral 23 19% disagree 11 9% strongly disagree 4 3% total 120 100 source: primary data based on table 2 and figure 2, the majority of the respondents agreed that microfinance institutions (mfis) provide credit to increase income earning opportunities. specifically, 38% strongly agreed and 31% agreed, while 19% responded as neutral, 9% disagreed, and only 3% strongly disagreed. figure 2. mfi providing credit for increasing income earning opportunities source: primary data the impact of small business funding on job creation and economic growth table 3. funding small business leads to job opportunity indicator frequency percent strongly agree 35 29% agree 40 33% neutral 26 22% disagree 11 9% strongly disagree 8 7% total 120 100 source: primary data masum et al., american international journal of business and management studies 4(1) (2022), 41-52 46 the majority of respondents agreed that funding small businesses leads to job opportunities, according to the results of table 3 and figure 3. specifically, 29% of respondents strongly agreed and 33% agreed with this statement, while 22% were neutral, 9% disagreed, and 7% strongly disagreed, as indicated by the percentages in the table and figure. figure 3. funding small business leads to job opportunity source: primary data microfinance institutions (mfis): fueling entrepreneurship in impoverished nations through accessible financial services table 4. mfi provides financial services to help encourage entrepreneurs in impoverished nations to act on their ideas indicator frequency percent strongly agree 37 31% agree 39 33% neutral 20 17% disagree 14 12% strongly disagree 10 8% total 120 100 source: primary data based on table 4 and figure 4 below, it can be inferred that a large percentage of respondents agree that microfinance institutions (mfis) provide financial services to help entrepreneurs in impoverished nations to act on their ideas. specifically, 31% of the respondents strongly agree and 33% agree, while 17% remain neutral, and 12% disagree, and 8% strongly disagree. figure 4. mfi provides financial services to help encourage entrepreneurs in impoverished nations to act on their ideas source: primary data microfinance: empowering the poor and promoting equality through access to financial services table 5. microfinance is the most effective solution to poverty and inequality indicator frequency percent strongly agree 32 27% agree 40 33% neutral 27 23% disagree 12 10% strongly disagree 9 8% total 120 100 source: primary data based on table 5 and figure 5, it can be inferred that most of the respondents (60% in total) agreed or strongly agreed that microfinance is an effective solution to poverty and inequality. this is supported by the fact that 27% of respondents strongly agreed with this statement, while 33% agreed. however, there were still a significant number of masum et al., american international journal of business and management studies 4(1) (2022), 41-52 47 respondents who were neutral (23%), disagreed (10%), or strongly disagreed (8%). figure 5. microfinance is the most effective solution to poverty and inequality source: primary data microfinance and financial inclusion: increasing household autonomy in financial decision-making table 6. microfinance give households more freedom in their financial decision indicator frequency percent strongly agree 38 32% agree 34 28% neutral 27 23% disagree 10 8% strongly disagree 11 9% total 120 100 source: primary data based on the data presented in table 6 and figure 6, it can be inferred that the majority of respondents agreed that microfinance provides households with greater financial decision-making autonomy. specifically, 32% of respondents strongly agreed and 28% agreed with the statement, while 23% remained neutral, and 8% and 9% disagreed or strongly disagreed, respectively. figure 6. microfinance give households more freedom in their financial decision source: primary data microfinance as a catalyst for economic development: empirical evidence and future prospects table 7. microfinance has proven itself as a strong stimulant to economic development indicator frequency percent strongly agree 38 32% agree 34 28% neutral 24 20% disagree 13 11% strongly disagree 11 9% total 120 100 source: primary data based on table 7 and figure 7 above, it can be inferred that a majority of the respondents agreed with the statement that microfinance is a powerful driver of economic development. specifically, 32% of the respondents strongly agreed and 28% agreed, while 20% responded neutrally, 11% disagreed, and 9% strongly disagreed. masum et al., american international journal of business and management studies 4(1) (2022), 41-52 48 figure 7. microfinance has proven itself as a strong stimulant to economic development source: primary data microfinance: promoting financial stability and savings culture among low-income households table 8. microfinance helps low-income households to stabilize their income flows and save for future needs indicator frequency percent strongly agree 46 38% agree 33 28% neutral 27 23% disagree 10 8% strongly disagree 4 3% total 120 100 source: primary data the data presented in table 8 and figure 8 indicate that the majority of respondents (66%) agreed that microfinance has a positive impact on the ability of low-income households to stabilize their income and save for future needs. more specifically, 38% of respondents strongly agreed and 28% agreed, while 23% were neutral, 8% disagreed, and 3% strongly disagreed. table 8. microfinance helps low-income households to stabilize their income flows and save for future needs source: primary data conclusions this research focused on exploring the impact of microfinance on job creation and had three main objectives. the study aimed to investigate how microfinance contributes to the growth of businesses, the acquisition of better housing, access to affordable healthcare, education, and improved welfare. the study found that larger loan amounts resulted in increased savings that could be utilized to improve living standards, and the funds could also increase annually to support larger credit limits. the research concluded that microfinance services could significantly benefit the country by reducing poverty. in particular, training provided by mfis to help customers acquire skills and knowledge on saving was found to be beneficial to the majority of microfinance institution clients who were in informal employment.  the study proposes that mfis operating within states should be supported with finances so they can offer loans to locals and facilitate rapid economic growth.  the government of somalia should review and update their policies on mfis to address the changing banking industry.  it is suggested that microfinance programs should be designed in a way that meets the specific needs of their target customers, who are typically poor.  if the government offers incentives such as tax exemptions, subsidies, and streamlined business registration procedures, msmes in somalia could thrive. masum et al., american international journal of business and management studies 4(1) (2022), 41-52 49  the government should also implement strict measures to prevent corruption and other unethical practices in microfinance programs. finally, by tackling problems like political unrest, and shoddy infrastructure, governments can attempt to establish a climate that is conducive to business. these steps could encourage investment and foster an advantageous business environment that encourages job creation and economic expansion in somalia. author contributions: conceptualization, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; methodology, a.a.m.; software, a.a.m.; validation, a.u.; formal analysis, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; investigation, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; resources, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; data curation, a.u.; writing – original draft preparation, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; writing – review & editing, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; visualization, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.; supervision, a.u.; project administration, a.u.; funding acquisition, a.a.m., m.e.u.h., a.u., a.d.a. and m.z.h.. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was 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(2022d). the power of compensation system (cs) on employee satisfaction (es): the mediating role of employee motivation (em). economies, 10(11), 290. https://doi.org/10.3390/economies10110290 publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2022 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. https://doi.org/10.3390/economies10110290 http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ american international journal of business and management studies 6(1) (2024), 15-44 8 business and management studies aijefr vol 6 no 1 (2024) p-issn 2641-4937 e-issn 2641-4953 available online at www.acseusa.org journal homepage: https://www.acseusa.org/journal/index.php/aijbms published by american center of science and education, usa development and implementation of a python-based hotel management system: a comprehensive tool for room reservation, payment, and administration mahfuz alam (a)1 md shafiqur rahman (b) mir araf hossain rivin (c) md borhan uddin (d) mir mohtasam hossain sizan (e) (a) department of mba in business analytics, international american university (iau), los angeles, ca, united states; e-mail: jnmahfuz@gmail.com (b) department of mba in management information systems, international american university (iau), la, ca, united states; e-mail: s.rahman9560@gmail.com (c) department of msc in mathematics, louisiana tech university, 201 mayfield ave, ruston, la, united states; e-mail: miraraf.rivin@gmail.com (d) department of mba in business administration, international american university, los angeles, ca, united states; e-mail: seumuradkhan@gmail.com (e) department of masters of science in business analytics, university of north texas, united states; e-mail: mhsizan855@gmail.com a r t i c l e i n f o article history: received: 28th october 2024 reviewed & revised: 28th october 2024 to 26th december 2024 accepted: 27th december 2024 published: 31st december 2024 keywords: hotel, management, user, dashboard, pythondjango, payment, administration jel classification codes: o14 peer-review model: external peer review was done through double-blind method. a b s t r a c t the hotel industry faces challenges related to manual management processes, which can lead to inefficiencies and errors in operations such as booking, payment processing, and administrative tasks. to address these challenges, there is a growing demand for automated systems to streamline operations and improve overall efficiency. this study investigates the design and implementation of a python-based hotel management system built using the django framework and mysql database. the system is developed to handle essential hotel operations, including room booking, payment processing, and general management, while ensuring scalability, security, and usability. the research follows a software development approach based on functional and non-functional requirements, with a focus on unit, integration, functional, and security testing to ensure the system’s reliability and performance. key features of the system include real-time booking functionality, secure payment processing, and authenticated user access for administrators and customers. the results reveal that the system effectively reduces operational errors, enhances the user experience for both hotel administrators and guests, and improves overall operational efficiency. the system also supports secure financial transactions and simplifies hotel management tasks through an intuitive interface. the findings suggest that the pythonbased hotel management system provides an effective solution for automating hotel operations. it offers a scalable, secure, and user-friendly platform, optimizing both management and customer-facing tasks while improving the overall efficiency and effectiveness of hotel operations. © 2024 by the authors. licensee acse, usa. this article is an open-access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). introduction hotel the rapid expansion of the hospitality industry has highlighted the necessity of effective hotel management systems that can respond to the challenges created by manual and semi-automated systems. conventional techniques for room reservations, payment processing, and administrative functions are susceptible to inefficiencies, errors, and delays. this ultimately results in customer dissatisfaction and operational penalties. besides, with technological advancements, the hospitality industry is experiencing cut-throat competition. tackling these issues is important for the sector’s future growth and competitiveness. from a scientific perspective, the contribution of this research is in providing an integrated, real-time and scalable hotel management system with efficient operational processes while ensuring strong security and ease of use. this is one of the reasons why current solutions often only provide a partial remedy to the comprehensive issues surrounding real-time data synchronization, secure payment gateways, and role-based access control. these gaps need to be filled which calls for a complete overall system to fulfill the specific demands of the administrators, hotel owners, and customers. this study proposes the design and implementation of a hotel management system based on python programming language, using the django framework and mysql database. main goal is build reliable tool for fast room booking, safe payment 1corresponding author: orcid id: 0009-0009-2005-8326 © 2024 by the authors. hosting by acse. peer review under responsibility of acse, usa. https://doi.org/10.46545/aijbms.v6i1.322 to cite this article: alam, m., rahman, m. s., rivin, m. a. h., uddin, m. b., & sizan, m. m. h. (2024). development and implementation of a python-based hotel management system: a comprehensive tool for room reservation, payment, and administration. american international journal of business and management studies, 6(1), 15–44. https://doi.org/10.46545/aijbms.v6i1.322 mailto:miraraf.rivin@gmail.com http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/) https://www.openaccess.nl/en https://doi.org/10.46545/aijbms.v6i1.322 https://orcid.org/0009-0009-2005-8326 https://orcid.org/0009-0003-1839-3746 https://orcid.org/0009-0000-6333-3476 https://orcid.org/0009-0009-8418-724x https://orcid.org/0009-0003-1444-6791 alam et al., american international journal of business and management studies 6(1) (2024), 15-44 9 processing, and administration management. mediate goals are the following data digital, robust identity isolation, and also real-time feedbacks for all stakeholders. the approach includes scrutiny of functional and non-functional requirements, architecture design as a modular system, and thorough testing to ensure performance and reliability. as a result, the system undergoes unit, integration, functional, and security tests that produce a valid response and are consistent with industry standards. the world has come to understand the importance of computers and the applications they can be used for. computers' influence on society is seen in hotel reservation systems. the hotel operations' efficiency has significantly improved due to the hotel room reservation system. travelers need an information system that is easy to use, quick to respond to, and trustworthy while making travel plans. everyone always needs shelter, whether business travelers traveling from one place to another or students studying away from home. shelter is a basic human necessity. professionals venture outside of their industry to pursue particular objectives, like travel. the manual hotel management method is labor-intensive and time-consuming, often leading to delays in releasing booking lists. it also increases the risk of duplicate records when clients request additional rooms for others, complicating room management. additionally, improper handling of document transfers or records can result in the loss of entire bookings, further disrupting operations. this method also makes it difficult to efficiently track and inspect visitors, especially those with complex or challenging booking issues. the aims and objectives of the system include simplifying data retrieval and storage, allowing for easy tracking of hotel guests' arrivals and departures. it will provide summaries of visitors who have reserved, arrived, and left the hotel on a daily, weekly, and monthly basis. additionally, the system aims to improve data management efficiency by eliminating redundant information. subsequent sections discuss the design and development process for the system, share results of testing, and assess the effectiveness of the system in addressing identified problems. the results demonstrate the system's ability to enhance hotel operations and their efficiency, security, and user satisfaction. literature review an online hotel management system is a computerized web-based system for reservations. these systems have been developed over the years to meet the growing demands of technology and other requirements, such as secure payments. the literature review chapter discusses the evolution of hotel management systems from manual calculation to digital platforms. the chapter also discusses the influence of technology and the different deliveries of online and offline systems. understanding the need for hotel management systems the exponential growth of the hotel and hospitality industry requires practical tools and approaches to satisfy the evergrowing demand from the ever-growing population. several systems have been designed to offer solutions to hotel room reservations. these systems have been developed from the manual user of ledger cards to sophisticated systems that implement advanced technologies. the literature review section examines information concerning the online hotel reservation system. technology has led to various transformations in different contexts, including the hospitality industry. in hotel management, online reservations have become common in virtually all hotels worldwide. online hotel reservation is a business operation that provides an efficient way for a customer to find a room in a hotel, check if that room is available, and make payment, which is done through a secure online payment interface. there has been an increasing trend in hotel reliance on one platform due to a wide range of advantages associated with the operation, such as streamlining operation procedures, hen, eliminating onerous occurrences, and providing a seamless platform for users to interact with (kim & kim, 2004). the advancement of technologically oriented systems is mainly attributed to the need for accurate operations, customer convenience, and the effectiveness of hotel operations. the early researchers on the use of online reservation management systems indicated that there were numerous advantages associated with online operations primarily due to the ability of the information to vary in real-time, thereby facilitating a more effective continuing satisfaction of customers' needs and the development of customer relationship management (hu & gu, 2013). the elimination of manual activities in hotels is also associated with the minimization of human errors. indeed, one of the most significant benefits of using an online hotel reservation management system is eliminating human errors in many operations. the use of the management system integrated with payment processes, such as the use of credit cards, is also associated with enhanced user satisfaction. some security measures integrated into online payment systems include securely encrypted consumer information and high accuracy of transactions since the operations are done through automated systems. the process of transaction is therefore associated with minimal mistakes. operation systems are also essential since they allow hotels to manage their products effectively, including room inventory, prices, profit margin strategies, and customers' interests. the need for services by the hospitality industry hotels has been precipitated by a high level of competition in the sector (delizo & esguerra, 2013). the influence of online travel agencies such as booking.com and expedia.com has also added to the reliance on technologies in online reservations. necessarily, in the bid to enable users to book reservations in real-time, effectively compare prices, and check quality levels of services through reviews, hotels have yet to be left with an option but to develop their online booking engines or resort to using external booking engines. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 10 historical development of hmis in the 20th century, there was a significant shift in the hospitality sector from manual booking methods to computerized ones; hotels relied on paper files to book clients and track the number of booked rooms and guests in and out of the hotel. this process was inefficient, leading to double bookings and loss of files many times, among others. the computerized booking method was booming with the computerized hotel management system used in the 1990s. the first computerized system adopted basic ways of booking, which included information about the guest, booking, orders ready, room ready for the guest, and checking the guest out. the system was one of the significant ways that improved the hospitality management system and helped in numerous ways. among the benefits include proper booking of clients, knowing which rooms are empty for new guests, and well-structured payment methods, leading to efficient collection of revenue in the hotels. the advances in internet technology led to the development of web-based hotel reservation systems, which hotels adopted during the late 1900s and early 2000s. the system enables the guest to know which hotels have which empty rooms, reserve the rooms, and pay for the rooms. this system was more efficient, and many hotels that had not adopted the radical mode of booking were forced to follow suit. the system was enhanced by the development of travel and tour companies and agents, some of which provided a way to make travel arrangements and reservations, not necessarily call the hotel for booking. as the technology advancements continued, hotel management systems started to be equipped with more advanced and useful features such as dynamic pricing algorithms, customer relationship management tools, and integration with social media. these features allowed hotels to understand customers' preferences better, lead to a more tailored experience for guests, and optimize pricing strategies for hotel owners based on real-time demand. nowadays, a hotel management system is integral for hotels of every size and type. it offers an extensive solution to manage reservations, payment, and interaction with hotel guests. technological advancements in hotel management systems technological advancements in hotel management have significantly improved hotel operations' efficiency, accuracy, and customer service standards. the most game-changing innovation is cloud computing. it has allowed many hotels to migrate from on-premise hotel management systems to cloud-based solutions. the benefits of the latter solution are manifold, including scalability, which allows hotels of any size to adopt it; flexibility, which allows the management to access the system from any location; and reduced costs for maintaining additional on-site infrastructure. furthermore, cloud storage of data is more efficient than saving it in local databases. saving the data to remote servers makes the system real-time, which is an excellent way to facilitate and enhance the efficiency of hotel operations. mobile technology is another crucial solution that should be implemented in the modern hotel management system. in conjunction with the rapid growth of smartphones, many hotels have designed mobile-friendly booking platforms that allow guests to check in, check out, and book their rooms through their smart devices. mobile apps for hotels are becoming increasingly popular due to their convenience and the possibility of booking hotel services through the app, such as room service and spa or restaurant service. artificial intelligence and machine learning have become used in the industry in recent years, reshaping the industry by improving customer interactions, operational efficiency, and pricing strategies. the technology has allowed using aipowered chatbots in many hotels to manage guest inquiries, suggest recommended sites, and even book guest reservations. ai systems learn the behaviors of guests, analyze the data, and predict the potential preferences a guest may want, hence offering more personalized services to increase customer satisfaction. further, analyzing these data helps predict the areas where the casino is losing money, with machine learning algorithms being used to change the room rates in real-time accordingly. in addition, blockchain technologies have become more commonly used to manage booking guest systems. the technology allows a secure and effective management system where transactions are managed securely and mutually. this dramatically reduces fraud and increases trust. in addition, the technologies were also used in managing customer loyalty programs, allowing the earning and redemption of customer points across different branches in the hotel. the internet of things has also allowed the incorporation of smart devices in the industry, significantly increasing the guest experience in many ways. many hotels have smart thermostats, intelligent occupancy sensors, smart switchboards, and even innovative parking systems to make guests' stays much more convenient. secure payment gateways are also more commonly used today, considering that more customers are paying for their slots online. the secure payment gateways use encryption, tokenization, and other essential steps to ensure customers' safety and better payment processes that ensure that the confidentiality and payments of customers are always safe and secure. online and offline hotel reservation systems: a comparative analysis a comparison between online and offline hotel reservation systems shows that online systems present numerous advantages in terms of efficiency, convenience, and guest satisfaction. online hotel reservation systems allow guests and prospective visitors to check room availability and make reservations and payments from any location and time without direct contact between the visiting guests and the hotel staff. convenience is the principal factor leading guests to adopt online rather than traditional offline systems. offline hotel reservation systems are still being used, and they involve the guests' communications with the hotel to make reservations. this method is time-consuming and is prone to human errors, such as inadvertent double bookings, miscommunications, and misunderstandings between guests and hotel staff. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 11 on the other hand, online systems are automating and updating the room availability status and supporting safe and secure payments using online means. furthermore, online hotel reservation systems are more cost-effective because they significantly reduce the time and effort required from the hotel staff to prepare invoices, manage payments, and control room availability and booking. in addition, online systems can be integrated with other systems that support customer relationship management or hotel operations. the user experience is improved by the fact that the users can compare room rates and search for reviews and special promotions. guests have more control over their reservations and can change their reservations or cancel them without needing to contact the hotel. user experience and why it matters user experience is critical in the context of the success of online hotel reservation systems. one of the significant aspects of user experience in hotel online reservation systems is a user-friendly interface. a successfully designed ui would improve customer satisfaction, increase online bookings, and stimulate brand loyalty. by contrast, poor design would result in booking cancellations, negative feedback, and loss of revenue. while navigating a hotel reservation system, customers should be able to see what rooms are available for the dates they need to book, the prices, and how they can do it in just one click. the search box that would not cause your guests to perform dozens of clicks should be easy to find and placed right in front of the search engine. similarly, precise wording in web design and the context of simple navigation menus is essential for achieving a simplistic ui. additionally, online customers are impatient, and it is critical to complete most bookings without them leaving their pages, as they would get annoyed by the lengthy booking process. the need-to-have list of features is also transferable to the context of e-commerce. mobile responsiveness is another crucial consideration. the data show that more guests are booking hotels through their smartphones, so adjusting the website to the device is crucial. in particular, it is stated after delizo and esguerra that a mobile-friendly design enables guests to quickly look through the rooms available for booking, reserve a room, and pay for it. thus, this requirement also contributes to enhancing the hotel reservation system. another consideration is the use of personalization. modern ai and machine learning technologies collect guest data and allow one to make personalized offers depending on previous bookings, preferences, and search history. according to kim and kim, this personalization promotion can significantly improve the customers' experiences by providing them with offers that meet their specific needs. results and discussions requirement analysis requirement analysis is the initial phase of any systems development lifecycle to collect information about customers' and administrators' needs. in systems development, it is crucial to consider the requirement analysis phase to ensure the final product meets the users' requirements. this aspect is particularly crucial in developing the hotel management system. the current part will outline the need for the python tool to manage a hotel. the following part will consider the requirement analysis with a separate focus on the functional and non-functional requirements. the requirement analysis phase aims to develop a comprehensive hotel management tool to help hotel owners, administrators, and customers fulfill their needs in managing reserved and booked rooms. requirements engineering as the name suggests, requirements engineering is the technological discipline that develops user needs and specifies software systems. the concept of requirements engineering is defined differently by different people. however, it is generally agreed upon that requirements involve understanding user demands and what they mean for the design of a computer system. requirements engineering and software engineering are closely associated fields that center on the process of building systems that consumer’s desire. user requirements  an app that facilitates pleasant and easy communication is required.  an application that lets the administrator book a room with accurate guest details.  a program that lets the administrator take online and cash payments.  using computers to handle all organizational functions.  enabling direct room reservations for users. system requirements admin module home: the administrator may quickly check the total number of new bookings, authorized bookings, canceled bookings, and registered users in this section through the dashboard. room category: the administrator can create, edit, and remove categories in this section. new room: the administrator can add, edit, and delete rooms in this section. booking: in this section, the administrator can inspect, approve, cancel, and add comments to new and approved alam et al., american international journal of business and management studies 6(1) (2024), 15-44 12 bookings. registered users: the administrator can view the details of registered users in this section. search: using the booking number, the admin can look up inquiries and booking information in this part. reports: this section allows the administrator to examine the details of inquiries and bookings made within a specific time frame. invoice: the administrator can create and print an invoice following the confirmation of a reservation. hotel owner module home: this part allows the hotel owner to examine all new reservations, authorized reservations, and canceled reservations quickly through the dashboard. hotel owners can add or amend categories for their rooms in this section. add or amend rooms in this section for the hotel owner. booking: the hotel owner can view, approve, cancel, and view new reservations in this section. they can also leave comments. reports: hotel owners can examine booking details for a specific period and read inquiry details in this section. invoice: the administrator can create and print an invoice after the reservation has been confirmed. user module home: it is a welcome page for users. about: it is an about us page of a website. book room: in this section, the user can book a hotel room by registering with the hotel. sign up: users can register through the sign-up page. login: it is the login page. invoice: after reservation confirmation, the user can generate an invoice and print it. functional requirement  provide users with the ability to search and discover the most pertinent booking alternatives. link each online reservation to an account. restrict each account to a single user.  accept the date and time to see if any rooms are available at that specific moment. send the booking confirmation to the designated contact information. compute and show the cost of lodging and other utilities. cancel reservations. show and modify visitor records. non-functional requirement  encrypt data to prevent bot bookings and make sure search results appear in reasonable amounts of time.  if users provide incorrect input, they should be suitably assisted in filling out the mandatory forms.  payments should be accepted by the system using various methods (optional).  accessible, effective, and simple to use. monitor responses, actions, and documents. specification of each requirement admin specification function: registration, data addition, editing, and deletion. description: all system accessibility. inout: admin entered his data in the designated fields. output: successful information submission was made. hotel owner specification functions include registering, logging in, adding, editing, and deleting data. description: system interface access for hotel owners. the hotel owner entered his details in the designated field. output: the data was successfully submitted. adverse consequences: not one user specification features: sign up, log in, search, add, and modify information description: system access through the user interface. user input: the user entered his criteria and his information. output: the data was successfully submitted. no adverse consequences alam et al., american international journal of business and management studies 6(1) (2024), 15-44 13 database specification function: insert an entry using the database. enter the data as an input. results: inserted data was successfully take action: provide supporting data no adverse consequences use case diagram of the system figure 1. use case diagram for hotel room reservation system figure 1 shows some of the critical interactions of the main actors, admin, hotel owner, and customer, as well as the core functionalities of such interaction. the admin, in turn, will be involved in managing the system, rooms, bookings, reports, and users. the hotel owner will also have the following functions: a room administrator who should monitor and update the availability or selling of rooms for booking. the customer, in turn, will search for rooms or bookings, make the reservations, and pay for them through the secure credit card payment gateway. project planning project planning is an integral part of the software development life cycle, providing details regarding the resources, scope, activities, and timelines that have to be considered to achieve the set objectives. in the case of the python-based hotel management system, the planning process has been logical and systematic to ensure that the identified functional and nonfunctional requirements are met. the current section provides an overview of such aspects of the planning process as task estimation, resource allocation, scheduling, and a strategy for mitigating risks. project planning is an integral part of the software development life cycle, providing details regarding the resources, scope, activities, and timelines that have to be considered to achieve the set objectives. in the case of the python-based hotel alam et al., american international journal of business and management studies 6(1) (2024), 15-44 14 management system, the planning process has been logical and systematic to ensure that the identified functional and nonfunctional requirements are met. the current section provides an overview of such aspects of the planning process as task estimation, resource allocation, scheduling, and a strategy for mitigating risks. the following activities of software project planning that have followed in this project are:  estimation of the software project  task scheduling  personal requirements  resource requirements  estimation of the software cost  cost-benefit analysis project estimation the use of software has grown in importance in the design, development, and purchase of systems, especially large, intricate systems. precise assessments of software expenses are essential to effective program administration for these kinds of systems. most cost estimation techniques concentrate on this element and provide estimates in person months since human labor accounts for most software development costs. accurate cost estimates are essential to both developers and clients. rfps, contract negotiations, scheduling, monitoring, and managing are among their uses. underestimating expenses could result in management approving suggested solutions that eventually cost more than planned, have poor quality, underdeveloped functions, and are not completed on schedule. an excessive amount of resources could be committed as a result of overestimating. the outcome for the projects, or during contract bidding, is that the contract is lost, which may result in job loss. failures in software projects have been a popular topic in the last ten years. the majority of software project failures are caused by errors in planning and estimate rather than problems with the project itself. function estimation functions of the proposed system table 1. functional points user registration f1 user login f2 admin login f3 hotel owner registration f4 hotel owner login f5 add types f6 add rooms f7 manage category f8 manage types f9 manage rooms f10 manage guest f11 booking rooms f12 manage booking f13 view booking record f14 add payment f15 manage payment f16 view records f17 contact us f18 generate report f19 ensuring that functional points measure a downloaded software system's functionality is essential. spitzer states that functional points are critical for estimating the effort required to develop the system. therefore, at the organizational level, functional points reflect critical tasks or features that have to be supported by the hotel management system. table 1 explains what must be done to make the system function. the data in the table obviously reflects the results of a top-down design, stating that three types of users will use the system and 12 functions must be performed. a row in the table corresponds to the unique system functions and can be associated with the users' intended interaction or an internal operation. an explanation of some of the functional points is given below: user registration: the system allows users to create an account by entering their details. it is a fundamental function because it is the entry point for customers to book hotel rooms, view previous bookings, and other information in the system. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 15 user login: after registering, users need to log in to access the system's features, such as searching for rooms or making payments. this ensures that the system can differentiate between the registered users and provides a personalized experience for them, who can view the hotel rooms they booked previously. admin login: this function enables the admin to log in to the backend system to view reports and other functions. the admin access is restricted for security reasons to ensure that only the admin can make changes to the entire system. hotel owner registration and hotel owner login: this function is similar to the user registration; however, it allows the hotel owners to register and log in. after logging in, the hotel owners can make hotel rooms available, adjust the pricing, and view bookings. these two roles need to be separated, meaning the registration of normal users and hotel room management users. room and category management: these are all the functions that allow the admin or the hotel owners, should they log in locally, to add, update, delete, and manage the room categories and types. for example, the various types of rooms available in a certain hotel can be standard, deluxe, suites, etc. these usually have differing prices and are available on different days. manage guests: these are all the functions that allow the admins or hotel owners to view and manage the records of the people who are booking the hotels. it should give information about the guests through booking details and other information. search and book rooms: this is one of the system's core functionalities. it allows users or customers to search and book rooms based on availability, dates, and room type preferences. booking functionality ensures the system maintains bookings in real-time without overbooking or double bookings. manage bookings: this function allows administrators or hotel owners to manage and modify existing bookings. it allows viewing new bookings, accepting or canceling them, and putting instructions and remarks if needed. view booking records: it is another critical feature for administrators and hotel owners to get a summary or detailed view of all bookings. not viewing the booking will allow the administration to see the trend in occupancy and customer information. add and manage payment: the system also needs to process payment, allowing users and admins to control the payment related to the booking. the payment process needs to accept payment online, and recording in the system should see through the different payment methods. view record and generate report: this functionality is vital for administrators and hotel owners to watch guest bookings, payments, and other records. report functionality should also be available where the report can be generated to indicate how the hotel runs in a given period, such as a daily, weekly, and monthly summary. function-oriented metrics instead of emphasizing software values, function point-based estimate concentrates on information domain values. five information domain properties are compared in order to compute function points. the following are the information domain values: the total number of external inputs (ei) is the sum of all user inputs that give the program unique application-oriented data. it is essential to distinguish between inquiries and inputs. total number of external outputs (eo): the total number of external outputs (eo) is tallied for every user output that gives the user information specific to their application. number of external inquiries (eq): an online input that yields results is considered an inquiry—creating an online output that is an instantaneous software reaction. every unique question was recorded. counting each logical master file determines the number of internal logical files (ilf), which are database tables that a program modifies based on input. the total number of machine-readable interfaces used to send data to another system was tallied as the external interface files (eif). the domain weights are fixed and can be found in the corresponding table. three categories can be used to group weights based on how the system works. they are average, complicated, and straightforward. although a component of the more extensive system, the entire system is complex. each count is given a complexity rating once the data has been gathered. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 16 the fp count is calculated using the following formula: the value adjustment factor (vaf) equals 0.65 plus (.01x tdi). adjusted function point count (afp) = ufp x vaf effort for php = afp x productivity; ufp = ufp (data fn) + ufp (transaction fn). function point estimation this table shows the functionality of the input and output of admin. table 2. functional point estimation (admin) functionality input output login email, password enter the admin dashboard add categories category id, category name added into a database table view categories click on view categories display all categories listed as a table update category click on the edit button updated successfully delete category click on the delete button the record has been removed add types type id, type name added into a database table view types click on view types display all types list as a table update types click on the edit button updated successfully delete types click on the delete button the record has been removed add rooms room id, room name, category, type, facility, details, price added into a database table view rooms click on view rooms display all rooms listed as a table update rooms click on the edit button updated successfully delete rooms click on the delete button the record has been removed add booking booking id, guest id, room id, member id, check time, check out time, grand total added into a database table view booking click on view booking display all booking lists as a table delete booking click on the cancel button of booking data has been deleted view payments click on view payment display payments as a table delete payments click on the delete button data has been deleted update payment click on the update button data has been updated successfully table 3. functional point estimation (customer) functionality input output registration user id, user name, user email, user phone, password added into database table login email, password enter the user panel search rooms by filtering dates, categories, and types display rooms info add booking select rooms and book that room added into the database payment choose offline payment or online payment the room will be listed on the account as booked booking details view booking id, guest id, room id, member id, check-in time, check-out time, grand total display order detail table 4. identify complexity (hotel owner) transition function field/ file involve ftrs dets registration hotel owner id, user name, user email, user phone, password 2 6 login (ei) fieldsemail, password filelogin 1 2 add categories (ei) fieldscategory id, category name file-category 1 2 view rooms (eo) fieldsroom id, room name, category, type, facility, details, price, created at fileview room, category, type, facility 4 8 update rooms (ei) fieldsroom id, room name, category, type, facility, details, price, created at file room, category, type, facility 4 8 delete rooms (ei) fieldsroom id, room name, category, type, facility, details, price, created at file room 1 8 add booking (ei) fieldsbooking id, guest id, room id, member id, payment id, check-in time, checkout time, grand total, issue date filebooking, room, guest, payment 4 10 view booking (eo) fieldsbooking id, guest id, room id, member id, payment id, check-in time, checkout time, grand total, issue date fileview booking, room, guest, payment 4 10 delete booking (ei) fieldsbooking id, guest id, room id, member id, payment id, check-in time, checkout time, grand total, issue date filebooking, room, guest, payment 4 10 view payments (eo) fieldspayment id, subtotal, vat, total, discount, paid, due fileview booking, payment 2 7 delete payments (ei) fieldspayment id, subtotal, vat, total, discount, paid, due filepayment 1 7 update payment (ei) fieldspayment id, subtotal, vat, total, discount, paid, due 2 7 alam et al., american international journal of business and management studies 6(1) (2024), 15-44 17 filebooking, payment add guest info (ei) fieldsguest id, name, address, phone, adult, child fileguest, booking 2 6 table 5. identify complexity (customer) transition function field/ file involve ftrs dets registration (ei) fieldsuser id, user name, user email, user phone, password fileuser 1 6 login (ei) fieldsemail, password filelogin 1 2 search rooms (eq) fieldscheck-in date, check-out date, categories, types, rooms, price filecategory, type, room 3 6 add booking (ei) fieldsbooking id, guest id, room id, member id, payment id, check time, check-out time, grand total, issue date filebooking, room, guest, payment 4 10 payment (ei) fieldspayment id, subtotal, vat, total, discount, paid, due filebooking, payment 2 7 booking details view (ei) fieldsbooking id, guest id, room id, member id, payment id, check-in time, check-out time, grand total, issue date fileview booking, room, guest, payment 4 10 identify complexity of data function the table shows the identified complexity of the data function table 6. identify complexity (df) data function field/ file involve rets dets manage categories (ilf) fieldscategory id, name, edit, delete fileview categories 1 2 manage type (ilf) fieldsfacility id, name, edit, delete fileview facilities 1 2 manage types (ilf) fieldstype id, name, edit, delete fileview types 1 2 manage rooms (ilf) fieldsroom id, room name, category, type, facility, details, price, created at, edit, delete fileview rooms 1 3 manage booking (ilf) fieldsbooking id, guest id, room id, payment id, check-in time, check-out time, grand total, issue date, edit, delete fileview booking 1 6 manage guests (ilf) fieldsguest id, name, address, phone, adult, child fileguest, booking 2 6 manage payment (ilf) fieldspayment id, subtotal, vat, total, discount, paid, due, edit, delete filebooking, payment 2 5 manage users (ilf) fieldsuser id, user name, user email, user phone, password fileuser 1 5 manage admin users (ilf) fieldsid, name, email, password, address, edit, delete fileadmin 1 5 unadjusted function point contribution the table shows the unadjusted function point contribution for the transaction function. table 7. unadjusted function point contribution for transaction function # transition function ftrs dets complexity ufp 1 registration (ei) 1 6 low 3 2 login (ei) 1 2 low 3 3 add categories (ei) 1 2 low 3 4 view categories (eo) 1 3 low 4 5 update category (ei) 1 2 low 3 6 delete category (ei) 1 3 low 3 7 add types (ei) 1 2 low 3 alam et al., american international journal of business and management studies 6(1) (2024), 15-44 18 8 view types (eo) 1 3 low 4 9 update types (ei) 1 2 low 3 10 delete types (ei) 1 3 low 3 11 add facilities (ei) 1 2 low 3 12 view facilities (eo) 1 3 low 4 13 update facility (ei) 1 2 low 3 14 delete facilities (ei) 1 3 low 3 15 add rooms (ei) 4 8 high 6 16 view rooms (eo) 4 8 high 7 17 update rooms (ei) 4 8 high 6 18 delete rooms (ei) 1 8 low 3 19 add booking (ei) 4 10 high 6 20 view booking (eo) 4 10 high 7 21 delete booking (ei) 4 10 high 6 22 view payments (eo) 2 7 average 5 23 delete payments (ei) 1 7 low 3 24 update payment (ei) 2 7 low 3 25 add guest info (ei) 2 6 low 3 26 add member info (ei) 2 5 low 3 27 search rooms (eq) 3 6 average 4 total 107 unadjusted function point contribution table show the unadjusted function point contribution for data function table 8. unadjusted function point contribution for data function data function rets dets complexity ufp manage categories (ilf) 1 2 low 7 manage facilities (ilf) 1 2 low 7 manage types (ilf) 1 2 low 7 manage rooms (ilf) 1 3 low 7 manage booking (ilf) 1 6 low 7 manage guests (ilf) 2 6 low 7 manage payment (ilf) 2 5 low 7 manage users (ilf) 1 5 low 7 manage admin users (ilf) 1 5 low 7 total 63 performance and environmental impact the table shows the performance and environmental impact here. table 9. performance and environmental impact gsc tdi 1 data communication 2 2 distributed data processing 0 3 performance 3 4 heavily used configuration 1 5 transaction rate 0 6 online data entry 3 7 end-user efficiency 4 8 online update 2 9 complex processing 2 10 reusability 3 11 installation ease 3 12 operational ease 3 13 multiple sites 3 14 facilitate change 3 total degree of influence (tdi) (range 0 to 70->influence size by +-32%) 32 alam et al., american international journal of business and management studies 6(1) (2024), 15-44 19 value adjustment factor (vaf) = (0.65+ (0.01* tdi)) = (0.65+ (0.01* 32)) = 0.97 ufp= ufp (data function) + ufp (transaction function) = 107 + 63 = 170 afp= ufp * vaf = 170 * 0.97 = 165 approx. total time calculation frame = 165 * 15.5 [productivity of python is 15.5] = 2558 per hour = 2558-person hours / 9 hours = 284-person days / 3 [person in a group] = 95 days per person = 3 months 5 days for one person three people are required to finish the project in approximately three months, and we have completed the project within the estimated timeframe. process-based estimation in process-based estimation, the process is decomposed into a relatively small set of tasks, and the effort required to accomplish each task is estimated. process-based estimation begins with delineating software functions obtained from the project's scope. a series of software process activities must be performed for each function. table 10. process based estimation activity cc planning engineering construction imp. total function analysis design code test f1 0.011 0.053 0.115 0.104 0.133 0.021 0.032 .354 f2 0.010 0.051 0.165 0.129 0.164 0.052 0.024 .595 f3 0.016 0.030 0.102 0.175 0.139 0.031 0.016 .656 f4 0.013 0.023 0.049 0.192 0.238 0.057 0.025 .697 f5 0.015 0.016 0.102 0.147 0.297 0.018 0.012 .607 f6 0.016 0.021 0.151 0.113 0.234 0.063 0.026 .624 f7 0.010 0.039 0.123 0.121 0.232 0.039 0.027 .691 f8 0.012 0.032 0.112 0.295 0.136 0.016 0.022 .625 f9 0.014 0.061 0.125 0.192 0.215 0.032 0.029 .864 f10 0.013 0.064 0.185 0.282 0.233 0.061 0.047 .798 f11 0.010 0.025 0.117 0.105 0.135 0.014 0.014 .987 f12 0.011 0.022 0.128 0.125 0.142 0.025 0.021 .896 f13 0.012 0.052 0.043 0.172 0.176 0.020 0.018 .769 f14 0.010 0.035 0.122 0.185 0.240 0.032 0.021 .785 f15 0.013 0.016 0.106 0.112 0.134 0.044 0.019 .876 f16 0.015 0.024 0.101 0.285 0.158 0.018 0.031 .876 f17 0.014 0.033 0.118 0.108 0.155 0.055 0.042 .520 f18 0.015 0.034 0.119 0.109 0.156 0.056 0.043 .514 f19 0.016 0.035 0.120 0.110 0.157 0.057 0.044 .897 f20 0.013 0.033 0.101 0.165 0.125 0.045 0.042 .513 f21 0.015 0.022 0.115 0.138 0.186 0.068 0.027 .534 total 0.32 0.90 2.80 3.84 4.23 0.90 0.64 13.63 effort 2% 8% 20% 25% 35% 6% 4% 100% effort distribution for the project figure 2. effort based estimation language hours per function point asp* 06.1 visual basic 08.50 java 10.6 sql 10.8 c++ 12.4 c 13.0 c# 15.5 python 15.5 effort based plan alam et al., american international journal of business and management studies 6(1) (2024), 15-44 20 description •1 (2% customer communication) •2 (8% -planning) •3 (20% -analyzing) •4 (25% -designing) •5 (35% -coding) •6 (6% -testing). •7 (4% -implementation). project scheduling the process of allocating the estimated work within the allotted project length is known as project scheduling. project scheduling follows a few fundamental guidelines. they are listed in the following order: partitioning: the project must be divided into several doable jobs and activities. interdependency: it is necessary to ascertain how each divided task or activity is interdependent. while specific jobs must be completed in order, others can be completed concurrently. time allocation: each task that needs to be scheduled must be allotted a certain number of work units. validation of effort: each project has a set number of employees. it should guarantee that no more individuals have scheduled at any particular moment than those allotted. clearly defined roles: each scheduled task should be assigned to a designated team member. clearly defined goals: each work plan should have a clear goal. usually, the result is a work product or a portion of a work product. project scheduling chart the construction of a whole system involves several different tasks. these assignments must be completed on time and in order. the project timetable serves as the system developer's guide. this project's timetable chart is as follows: figure 3. project schedule part cost estimation the approximation of the cost of a program is cost estimation. this project has five factors to analyze and calculate the cost. bellowed, • personnel cost • software cost • hardware cost • another cost personnel cost • three hundred sixty-five days make up a year. there are 24 federal holidays. there are 52 weekly holidays. • 365-(52+24) = 289 days is the total working days needed to complete the project. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 21 • 289/12 = 24.083 days are the total monthly working days required to complete the project. • the working hours of the organization are as follows: 9 hours per day x 24.083 * 9 = 216.747 hours per month. table 11. personal cost type no. of members salary system analyst 1 40,000.00 designer 1 20,000.00 coder, tester & customer communicator 1 35,000.00 total 95,000.00 hardware cost cost of the computer that was used to complete the project. table 12. hardware cost name number price number *price total computer 2 10,000 10,000*2 20,000 total hardware cost = 20,000.00 tk software cost it is the cost of the software used in this project. table 13. software cost sl. software number amount total 1 os (windows 10) 1 free free 2 ms office 2013 1 free 3 atom 1 free 4 heidisql 1 free other cost table 14. other cost name price pen and paper 300 tk. mobile 200 tk. transport 500 tk. total 1000 tk. accounts table for the whole project are shown in table 4. table 15. total cost particulars tk salary95,000.00 /= total hardware cost – • computer 20,000.00/= software cost – free other costs1,000.00 /= total cost 1,16,000.00 /= risk management the effective execution of my project depends on risk management, which identifies potential issues before they become serious and develops mitigation plans. risks related to scope, technology, security, and resource limits were identified during the planning of the python-based hotel management system. the hazards related to each component and the management of those risks are listed in the current study. the following steps are taken in order to create a risk management model: identification: risk identification is identifying possible risks or hazards by gathering data. many tools and methods are available for gathering and manipulating data. the group is gathering information and starting to identify possible threats to web resources through the use of both automated and manual methods. one efficient method of gathering data regarding alam et al., american international journal of business and management studies 6(1) (2024), 15-44 22 the condition of websites and web pages is web crawling. risk classification creates an organized model that includes observable risk characteristics and events. the team uses quantitative and qualitative methodologies to describe and categorize the hazards to web pages, websites, and hosting servers. risk assessment involves identifying pertinent risk scenarios or events that can potentially cause harm or loss and the likelihood that these events will occur. rosenthal lists the qualities essential to a general risk assessment standard as "transparent, coherent, consistent, complete, comprehensive, impartial, uniform, balanced, defensible, sustainable, flexible, and accompanied by suitable and sufficient guidance." analysis: risk analysis establishes the likely extent of loss, the possible impact of risk patterns or scenarios, and the direct and indirect recovery costs. in this step, vulnerabilities are identified, mitigation strategies are developed, and the organization's willingness to accept risk in light of possible repercussions is considered. implementation: to manage and address identifiable risks, policies, processes, and methods are defined by risk management implementation. the implemented program should balance the worth of assets and the direct and indirect expenses of averting harm or recovering from loss. to take comprehensive care of a web-based system, we must consider the following points:  the hardware and software environment includes any operating system and web server updates, security patch installations, insecure service removals, firewall usage, etc.  administrative processes, including renewing domain name registration and entering into agreements with reliable service providers.  configuring and maintaining the network, including usage tracking, traffic control, and load balancing.  policies and procedures for archiving and backups include the type of backup media to use, how often to replace it, how many backups to make, and where to store them. every software project should consider various risk categories. in my project, the following risk categories have been considered.  project risks: the project plan is in danger from these threats. the project timeline is likely to be delayed, and costs will likely rise if these risks materialize. project risks are those that indicate possible issues with the software project's budget, timeline, staffing, resources, customers, and requirements.  technical risks: these concerns threaten the timeliness and quality of the software generated. should a technological risk materialize, implementation can become challenging or unfeasible. technical hazards identify potential design, implementation, interface, verification, and maintenance issues. in addition, risk factors include technological uncertainty, specification ambiguity, and technical obsolescence.  business risks: these risks threaten the software's viability. market risks, creating a system that no one actually wants to use, and creating a system that no longer aligns with the company's overarching business plan are examples of business risks. management risks losing senior management's support if their priorities or personnel shift. risks to the budget, loss of manpower, or budgetary commitment. the rmmm plan  risk mitigation: proactive preparation to reduce danger.  risk monitoring: evaluating whether or not anticipated risks materialize, making sure preventive measures are implemented appropriately, gathering data for potential future risk analysis, and making an effort to identify which risks led to which issue.  risk management: what should be done if the risk has materialized and the mitigation measures have failed? type of impact: catastrophic (1), marginal (2), tolerable (3), critical (4). type of probability: deficient (75%). project risks: endanger the project schedule. the project hazards listed below were ones i needed to control in my system. table 16. project risk (p01) project risk (p01) date: 22-02-2024 name changes the requirements probability low (25%) impact marginal (2) description the needs of the customer could alter. mitigation & monitoring the organization redefines requirements in response to business needs or schedule constraints. regular meetings will be held with the company, guaranteeing that the product we are making addresses an issue. management an emergency meeting between both parties to identify a new project alam et al., american international journal of business and management studies 6(1) (2024), 15-44 23 both sides convene in an emergency meeting to determine the new parameters and objectives of the project. status not occur table 17. project risk (p02) project risk (p02) date: 27-02-2024 name poor quality documentation probability low (15%) impact catastrophic (1) description poor quality documentation of the members. mitigation & monitoring meetings will be held routinely to offer documentation suggestions and topics. the progress on documentation will also have a monitor in each meeting. management adding new topics or removing unnecessary topics from the documentation will be assigned to the responsible person. status i was monitoring it. table 18. project risk(p03) project risk (p03) date: 08-03-2024 name lack of development experience. probability moderate (30%) impact catastrophic (1) description lack of developmental experience of the members. mitigation & monitoring each member of the team should watch and see areas where another team members may be weak. management the members who have the most experience in a particular area will be required to help to overcome problems arising from this risk. status we have not encountered such issues yet table 19. project risk (p04) project risk (p04) date: 18-03-2024 name poor comments in code probability low (15%) impact marginal (2) description the code of the developed system is not up to the mark. mitigation & monitoring a formal written standard must be established to ensure the quality of comments in all code. management we should call a meeting with the development team to get rid of this problem and improve the quality. status we are monitoring the issue. technical risks threaten product quality and the timeliness of the schedule. as this is my practicum project, these types of risks need to be addressed properly. table 20. technical risk (t01) technical risk (tr01) date: 24-03-2024 name computer crash probability moderate (25-40%) impact catastrophic (1) description the computer may crash due to several reasons. mitigation & monitoring we should adequately follow up on computers. we also take regular data backups every day. we can use ips to stop unexpected shutdown. management if our computer crashes, then we will restore the backup. status we have not encountered such an issue yet table 21. technical risk (t02) technical risk (tr02) date: 30-03-2024 name technology does not meet specifications. probability low (25%) impact catastrophic (1) description the customer does not have the technology to their desired specification. mitigation & monitoring that ensures that the product we are producing and the specifications of the customers are equivalent. management the customer should be immediately notified, and whatever steps. necessary to rectify this problem should be done. preferably a meeting should be held between the development team and the customer is to discuss this issue at length. status we have yet to encounter such an issue. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 24 table 22.technical risk (t03) technical risk (tr03) date: 07-04-2024 name poor training skill in team members. probability moderate (30%) impact catastrophic (1) poor training skills in team members to train the client. description the entire functionality of the software. system analysts need to ensure and monitor it while the training session starts. management we should arrange a meeting with the train team and come to a point to solve this problem. status we have yet to encounter such an issue. business risk: put the software's viability in jeopardy (risks related to the market, strategy, management, budget, and management). i am developing this project as my practicum; thus, there will not be any traditional business risks involved. as a result, it is decided that all business risks have a low probability. table 23. business risk (br01) business risk (b01) date: 14-04-2024 name insufficient budget probability low (10%) impact marginal (2) description if the budget is low, the project may not be completed. mitigation & monitoring the project requires a pricey streaming server setup. to lower the budget risk, we've streamlined services. management refinement in project goal. a new plan for regulating the budget status not encountered table 24. business risk (br02) business risk (b02) date: 20-04-2024 name end users accept system probability low (10%) impact critical (4) description the system fails to gain the user's faith. mitigation & monitoring in order to prevent this from happening, the software will be developed with the end user in mind. the user interface will be designed to make the program convenient and pleasurable. management training the users to familiarize them with the new system. they are releasing patches/bug fixes for greater user satisfaction. status the risk has table 25. yet to be.5.10: business risk (b03) business risk (b03) date: 26-04-2024 name not pay the installment of software cost. probability very low (05%) impact catastrophic (1) description the customer does not pay for the installation of software costs. mitigation & monitoring we should make good communication between customers and ensure that the entire installment will be completed management the only course of action available would be to find out the status not encountered. analysis modeling since analysis modeling explains how the system will operate, it is the most crucial step in software development. during this stage, developers create use case diagrams, data flow diagrams, and entity-relationship diagrams to show the various parts of the system, how they work together, and their interactions. while the second and third types of models "illustrate the system's processes and the amounts of data flowing through them," the first type of model "captures the dynamic aspects of a system" and demonstrates the functionality of the system. models guarantee that all system requirements are met and serve as a template for the construction process. activity diagram activity diagrams are graphical procedures that show how sequential actions and activities with concurrency, iteration, and selection are carried out. in the unified modeling language, activity diagrams are intended to represent both organizational alam et al., american international journal of business and management studies 6(1) (2024), 15-44 25 and computational operations. an activity diagram can be applied in the same way as the other four uml diagrams. the application's specific purpose is to mimic the control flow between tasks, which does not involve messages. it is appropriate to model the system's activity flow when using the activity diagram. multiple systems may be included in a single application. an activity diagram, which illustrates the progression from one system to the next, also includes these systems. alternative diagrams do not show this exact application. these systems could be external queues, databases, or any other type of system. we will do it right now. examine the activity diagram's applications in real life. the previous discussion makes it clear that an activity diagram is made at a relatively high level. it thus offers a high-level overview of a system. the target audience for this high-level viewpoint is mostly business users or non-technical individuals. admin activity diagram figure 4. admin activity diagram figure 4 the administrator, the hotel owner, and the user are the three critical actors in the above diagram. the administrators oversee the booking, administer the room category, and monitor the booking. hotel managers are responsible for keeping the room tidy and orderly. bookings, payments, and invoices are the responsibility of the clients. all three roles are playable by the same user, and all three performers can be the same individual. there should be one feature available to the assistant: search. this feature allows you to view available rooms and equipment. select the desired model and apply. in the event that they pay and inspect the room, they will receive the "invoices" use-case. the assistant may also announce the reservation over the phone, pay for it at the hotel, and request that the invoice be provided. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 26 hotel owner activity diagram figure 5. hotel owner activity diagram alam et al., american international journal of business and management studies 6(1) (2024), 15-44 27 customer activity diagram figure 6. activity diagram for user (erd) alam et al., american international journal of business and management studies 6(1) (2024), 15-44 28 entity-relationship diagram entity-relationship diagrams, or erds, are crucial components of system database designs. they illustrate the relationships between the various entities—users, rooms, and bookings—on the current diagram and show how the data will be arranged and stored within the database in this fashion. figure 7. er diagram this diagram shows in figure 6 the relations between the main entities within the hotel management system: user. the system has two types of users, including the admin and the customer, who can manage and interact with the system in different ways and have diverse functions. room. the room entity includes data concerning distinct room types and categories as well as their availability in the hotel. additionally, it is possible to identify that each room is usually related to one or several bookings. booking. the entity provides data on the customers' reservations, implying the booking date, the number of rooms, and their status in the system, such as whether they are approved, pending, or canceled. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 29 payment. this entity shows that each booking is connected with a corresponding payment or the record describing the payment status and method used. dfd diagram context level diagram figure 8. context level diagram of hotel room reservation system level 1dfd figure 9. dfd level-1 alam et al., american international journal of business and management studies 6(1) (2024), 15-44 30 level 2-process 1 dfd (registration) figure 10. level-2 process 1 registration) level 2-process 2 dfd (login) figure 11. level 2-process 2 dfd (login) level 2-process 3 dfd (manage hotel) figure 12. level 2-process 3 dfd (manage hotel) alam et al., american international journal of business and management studies 6(1) (2024), 15-44 31 level 2-process 4 dfd (manage room) figure 13. level 2-process 4 dfd (manage room) level 2-process 5 dfd (manage booking) figure 14. level 2-process 5 dfd (manage booking) alam et al., american international journal of business and management studies 6(1) (2024), 15-44 32 level 2-process 6 dfd (book room) figure 15. level 2-process 6 dfd (book room) system design requirement analysis provides the software designer with a representation of information, function, and behavior that can be translated into data, architectural, interface, and component-level designs. for our project, the requirement analysis was performed in the following task phases. database field design: hours: auth_group: alam et al., american international journal of business and management studies 6(1) (2024), 15-44 33 auth_group_permissions auth_permission django_admin_log alam et al., american international journal of business and management studies 6(1) (2024), 15-44 34 django_content_type django_migrations django_session alam et al., american international journal of business and management studies 6(1) (2024), 15-44 35 main_customuser main_customuser_groups main_hotel alam et al., american international journal of business and management studies 6(1) (2024), 15-44 36 main_reservation main_room ui design of admin panel admin login alam et al., american international journal of business and management studies 6(1) (2024), 15-44 37 admin dashboard add hotels hotel list alam et al., american international journal of business and management studies 6(1) (2024), 15-44 38 add rooms room list book list alam et al., american international journal of business and management studies 6(1) (2024), 15-44 39 booking details user login user registration alam et al., american international journal of business and management studies 6(1) (2024), 15-44 40 user room booking alam et al., american international journal of business and management studies 6(1) (2024), 15-44 41 user booking payment user booking list system testing system testing is a critical stage in the development of any software. it is the process in which different modules or elements of the python hotel management system are verified and tested for their proper functioning in the integrated form. the main objective is detecting and removing any defects in the system's working before it goes live. every aspect of the python hotel management system is tested, such as the user interface, backend logic, database, and security gates or tests. the objective is to determine that the python hotel management system meets its functional requirements and works abundantly and reliably. testing goals the main goals of the system testing include: • determining that all the functional requirements are met, such as room booking, guest registration, payment processing, etc. • determining non-functional requirements, such as security, performance, and scalability , are fully implemented. • any fault or inconsistency in the system's living is discovered and treated. • checking that the system runs as specified in regular and unique circumstances. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 42 testing types several types of testing were used in the system testing of the hotel management system to determine that it can function reliably, and the related tests can be repeated with the same results: • unit testing. • integration testing. • regression testing. • stress testing. unit testing this type of testing is the process in which individual parts or components of the system are tested or verified. the parts are checked on a one-to-one basis in isolation to exclude any mistakes or faults. following are the main parts or components of the python hotel management system that are tested: user module: in the system, the tests of different aspects of user registration, login, and setup are carried out. here, the security of the login method is also verified. a test is carried out to verify if login is possible with the wrong password or not. a test is conducted to check if a login is possible without registration. finally, a test is made on the login to determine if the system can provide the facility to more than one user for registration and login at the same time. room management module: here, a test is carried out to ascertain the number of rooms added to the system, as well as the number of additions of room types and categories. a test is also carried out to verify the procedure for room addition and the system's capability to protect rooms of the same type. booking module: in this module, testing ensured users could search rooms, make reservations, and check the status of their bookings. the system's response to invalid bookings, for example, when there are no available rooms, was also checked. table 26. unit testing process (1) testing scenario, no:1 scenario customer registration input’s name, email, phone, password desired output’s when enter all basic info correctly, new customers will be registered in the system. actual output’s for new customer registration, my system work correctly verdict getting results from desired outputs and actual outputs decided this system is successful for new customers’ registration. table 26 represents a unit testing flow, where individual system components are isolated and tested. a test case is conducted with specific input values, and the output is noted. the system is then compared with the expected outcomes and adjusted in case of any variance before moving to the next component. integration testing integration testing primarily ensures that the different modules and components of the hotel management system work together. integration testing is vital since these modules are multiple and interact with one another. database integration: testing was conducted to ensure that data is correctly transferred between the hotel management system's different front-end interfaces and the backend database. when a customer books a room, the booking modules should be able to execute the transaction and update the database with the booked rooms' data. payment gateway integration: integrating the different booking modules and the payment gateway was also tested to ensure that online payments are processed securely. additionally, the booking status was ensured to be updated accordingly. admin and hotel owner dashboard: when testing the booking process of customers into the pages of the admin and hotel owner dashboard interfaces, it was found that the changes of an admin or hotel owner clicking on a particular booking to approve/disapprove the transaction does not change the appropriate column of booking status for a selected booking only. table 27. shows the system integration testing. testing scenario, no:2 scenario customer login testing scenario of my system input’s email, password of user for login desired output’s when you enter your email, password then get access level defines. actual output’s for login, my system works correctly verdict getting results from desired outputs and actual outputs decided this system is successful for login. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 43 functional testing functional testing aims to verify that the system's core features work as the design provides. it is designed to test basic and advanced functionalities from an end-user perspective. as part of the functionality testing process, we tested the room booking feature, different authentications and their respective privileges, and payment processing. room booking functionality: we tested the system to confirm that a customer can search for rooms and proceed to book. the system was also tested to verify its capacity to handle alternative booking situations, such as when all rooms are already booked. we also tested the alternation user requirements following a case of a sudden cancellation. after the test, we confirmed that the system was working as it should. user authentication and role-based access: we also tested the system to confirm that users, admins, and hoteliers can log in and access the various parts of the system as required. here, we confirmed that the users could perform different system privileges, such as managing user accounts and room types for the admins. for the hoteliers, we confirmed that the system could allow them to manage their bookings and effectively show their availability. payment processing: we tested the payment feature to confirm that customers can pay for the booked rooms. we also had to confirm that the system can securely accept the various methods of payment and systematically deal with payment failures. the system was also tested to confirm whether it can effectively show account statements to both parties and later update the booking details after payment. table 28. functional testing process testing scenario, no:3 scenario admin can add, view, update, and delete categories, types, facilities, and rooms. input’s request to manage categories, types, facilities, and rooms. desired output’s show the information to the admin actual output’s my system works correctly in showing all records. verdict the process is worked correctly and successfully. table 28 shows the functional testing process, which involves simulating user adoption of the core features of testing. all the user functions were formalized, and various system requirements were used to test these features. user acceptance testing user acceptance testing (uat) is the final phase of testing, during which the system is tested from the end-users' perspective. the goal is to ensure that the system meets the needs of its intended users and is ready for deployment. customer testing: end users how? (customers) were asked to test the room booking process – from searching for available rooms to making a payment and receiving a booking successfully. the usability of the customer interface and the clarity of error messages were tested. admin and hotel owner testing: admins and hotel owners test their dashboards to ensure they can efficiently manage rooms, bookings, and users. in addition, the ability to generate and access reports and summaries to provide time-critical information for decision-making was tested. table 29. user acceptance testing cycle 4 testing scenario, no:4 scenario admin can add, view, and cancel booking for users input’s request to manage booking desired output’s show information to the admin actual output’s my system works correctly when showing all booking lists and details. verdict the process is worked correctly and successfully. table 29 refers to the uat cycle, during which users interact with the system to confirm and validate that all functionalities are user-friendly, intuitive, and work. user inputs are noted, and final change requests are implemented and checked for the last time before the system goes live. security testing security testing: this is to verify that the system's data and user information are secure from potential vulnerabilities and threats. the hotel management system is tested to ensure that no data breaches, unauthorized accesses, or hacking attacks can occur. alam et al., american international journal of business and management studies 6(1) (2024), 15-44 44 authentication and authorization testing: this ensured that only authorized people could access selected functionality and data based on their roles. strong password policies and account lockouts were enforced to prevent unauthorized access. conclusions the goal of this study is to create an automated hotel management system using python to solve the operational inefficiencies within the hospitality industry involving rooms reservations, payment processing, and administrative management. the research addressed the scientific problem of how to combine advanced technology into a scalable, real-time, and userfriendly solution for streamlining hotel operations. these results indicates that the system, as presented, achieves its goals, key features being: real-time booking updates, role-based access control, and secure payment gateways. the system was thoroughly tested with unit, integration, functional, and security tests ensuring reliable operation, scalability and usability and therefore a practical tool to manage hotel operations. a modular system further guarantees ease of maintenance and adaptation for any future progress in the field. this research provides a decomposing of classical hotel management modes with a transition on technological trends. the work lays the theoretical groundwork for ensuring robust authentication, realtime data processing, and secure transactions in hotel management systems. from a management perspective, this system allows hotel managers to optimize their operations, boost customer satisfaction, and make better-informed decisions thanks to real-time data analysis. while the study achieves worthy goals, it has limitations. the system’s testing was performed outside, under controlled conditions, and would need to be validated further in a variety of real-world conditions. moreover, the existing version of the app addresses only essential functionalities, with many opportunities for improvements, including advanced analytics, integration with third-party reservation platforms, and ai-driven personalization features. future work could explore expanding the system's capabilities to be used with dynamic pricing algorithms, multilingual front-ends, or iot-enabled intelligent rooms. research can also examine the efficacy and adaptability of the system at largescale implementations or different geographical regions. these enhancements would make the system even more a complete package for modern hotel management. author contributions: conceptualization, m.a., m.s.r., m.a.h.r., m.b.u. and m.m.h.s.; methodology, m.a.; software, m.a.; validation, m.a.; formal analysis, m.a.; investigation, m.a.; resources, m.a.; data curation, m.a.; writing – original draft preparation, m.a., m.s.r., m.a.h.r., m.b.u. and m.m.h.s.; writing – review & editing, m.a., m.s.r., m.a.h.r., m.b.u. and m.m.h.s.; visualization, m.a.; supervision, m.a.; project administration, m.a.; funding acquisition, m.a., m.s.r., m.a.h.r., m.b.u. and m.m.h.s. authors have read and agreed to the published version of the manuscript. institutional review board statement: ethical review and approval were waived for this study, due to the fact that the research does not deal with vulnerable groups or sensitive issues. funding: the authors received no direct funding for this research. acknowledgement: not applicable. informed consent statement: informed consent was obtained from all subjects involved in the study. data availability statement: the data presented in this study are available on request from the corresponding author. the data are not publicly available due to restrictions. conflicts of interest: the authors declare no conflict of interest. references delizo, r., & esguerra, e. a. 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(2004). the effects of structural and infrastructural interactivity on initial trust in a web retailer. information and management, 41(4), 377-397. publisher’s note: acse stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. © 2024 by the authors. licensee acse, usa. this article is an open access article distributed under the terms and conditions of the creative commons attribution (cc by) license (http://creativecommons.org/licenses/by/4.0/). american international journal of business and management studies (p-issn 2641-4937 e-issn 2641-4953) by acse is licensed under a creative commons attribution 4.0 international license. http://creativecommons.org/licenses/by/4.0/) http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/licenses/by/4.0/ 