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Monetary Policy, Debt and the Cyclical Behavior of Inventories Ismail, Abdul Ghafar; Bahari, Zakaria
Gadjah Mada International Journal of Business Vol 9, No 1 (2007): January - April
Publisher : Master of Management, Faculty of Economics and Business, Universitas Gadjah Mada

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Abstract

An earlier study on the determinants of inventories investment has been proposed by Lovel (1961). However, the study fails to mention the effects of financial variables. The puzzle prevails on account of imperfect capital markets. This implies that interest rate generally affects inventory investment indirectly through the debt channel. For instance, in the period of tight monetary policy, increasing interest rates have a negative impact on the present value of firms’ collateralizable net worth. In addition, they also weaken firms’ balance sheets as interest expenses also rise up. In imperfect capital markets, this fact indicates an increase in the amount of external financing that firms need, a rise in the premium on external financing that they face, and a reduction in their accumulation of assets, their spending and their production. Given the low adjustment cost that characterizes firms, it will be inventories that firms will initially reduce. Therefore, this paper is contributes to the issue of monetary policy transmission in Malaysia. Our specific attention is limited to the channel of monetary policy on a firm’s inventory. Using micro data, we try to take into account the relevance of the firm’s balance sheet conditions in the transmission of monetary policy.
STUDY OF DIRECT RELATIONSHIP DETERMINANTS ON THE SELECTION OF MUSYARAKAH MUTANAQISAH (MM) PRODUCTS Bahari, Zakaria; Hatizal, Nor; Doktoralina, Caturida Meiwanto
International Journal of Supply Chain Management Vol 8, No 5 (2019): International Journal of Supply Chain Management (IJSCM)
Publisher : International Journal of Supply Chain Management

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Abstract

This study analyses the direct relationship of determinantsâ??both intrinsic and extrinsic factorsâ??affecting the selection of Musyārakat Mutanāqiá¹£at (MM) house financing products. Intrinsic factors include factors of confidence in sharia compliance value and factors regarding the knowledge level of potential customers. Extrinsic factors include MM product characteristics such as service quality, costs, product benefits and promotions. MM products are emphasised in this study because of their many benefits, including lowering the burden of customersâ?? monthly payloads, a relatively shorter monthly payment period and increased benefits and profits for both banks and customers. Data were collected from 100 MM customers in Malaysia via the Internet (Facebook) and analysed using Structural Equation Modeling (SEM-SMART PLS) and the Statistical Package of Social Sciences (SPSS) software. The findings show that only the factors of promotion and religious compliance are significant when selecting MM products; in fact, the influence of promotional factors had a greater impact than the influence of religious compliance. Therefore, Islamic banks are urged to increase their promotional strategies in order to provide information about the role of religious law in selecting Islamic banking products, thus helping customers choose MM products that satisfy their needs while also meeting religious demands.