Obama's Views on War and Terrorism Essay Example | Topics and Well Written Essays - 1750 words

Obama's Views on War and Terrorism - Essay Example President Obama’s agendas have proved to be stronger and more viable over time. President Obama is a law graduate. President Obama’s years of public services has seen immense achievements. He mentioned numerous pointers, or tasks to be completed, in his Inaugural Speech on 20th January 2009. These included reviving the economy by creating jobs for people, developing renewable energy resources, increasing the educational standards, economic and infrastructure development, scientific research and lowering the healthcare costs, and to make federal budget spending transparent in front of masses. Most of these objectives the president has already achieved and continues to improve on. The inaugural speech also contained a specific emphasis on war on terrorism and how the worldwide contempt and hatred is to be tackled. This is the world’s biggest concern so far and, as United States of America is the most powerful country in the world, it also shoulders a certain respon sibility regarding maintaining peace in the world. President Obama’s Inaugural speech received worldwide viewership and interest for his views and interests on the subject of war and terrorism. President Obama’s Inaugural speech contained specific references to the war-zones of that time. â€Å"We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we’ll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet† (Obama). It is evident in these words that President Obama, at the time of gaining office, aimed to establish worldwide peace. He intended to retrieve the United States’ army from Iraq which had been deployed during former president Bush’s reign following the 9/11 chaotic incident. Obama’s priorities also included establishing peace in Afghanistan which had also deteriorated into a war zone in search of Al-Qaeda le ader Osama bin Laden and in search of nuclear weapons which were sadly never discovered. President Obama stressed that he would go to any lengths to establish peace in the region by communicating beneficially with both friends and enemies. As a super power of the world, President Obama specifically felt the responsibility of peace and hence placed extra emphasis on it. President Obama’s other notions have been successfully completed or are in the process. 2.6 million Jobs were added to aid the recession-stricken nation of America and for the country’s economic growth. This would also influence the education sector positively as more people would be able to acquire education if personal financial conditions were satisfactory. President Obama’s efforts do not end here as he furthers his cause and plan till the completion of his tenure. President Obama seems to be carrying a huge impact of his law schooling. He is a strict disciplinary regarding corruption and its legal implications. Not only has he applied his legal educational background to federal budget spending by placing it online in plain view of all United States citizens, but the same is also reflected in his foreign policies and his course of action against terrorism. When talking about President Obama’s views on wars, it is imminent that his views before his presidency were hardly any different. â€Å"I am not opposed to all wars. I am opposed to dumb wars† (Obama). It is clear from his 2002 speech against the Iraq

Impact of Internal Factors on Islamic Banking

Impact of Internal Factors on Islamic Banking Introduction to the Subject Background of the Subject General Objective The purpose of this study is to examine how the internal factors of the Islamic Banking affected their performance before, during and after the financial crisis in the GCC in comparison to the conventional banking in the same area. Research Questions This study aims to answer the following questions: How did the financial crisis affect the profitability of Islamic Banks in comparison to Conventional Banks? What are the internal factors (bank specific characteristics) that influence the profitability of Islamic banking for every year from 2006 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2009? Did these factors have the same impact on the profitability of Islamic Banking before, during and after the financial crisis? Did these internal factors influence the profitability of Islamic Banking in the same manner as of the Conventional Banking? Need for the Study Significance of the Study Assumptions of the Study Limitations of the Study Although we cannot neglect the importance of the external factors on the profitability of Islamic Banking, they were not included in this study. To understand the reason behind this decision, we need to go through the different types of external factors and how they are classified: Macroeconomic Factors Country Regulation Rules Bank Regulation Rules These factors were not included for the following reasons: Since we are examining the performance of 92 banks (27 Islamic Banks and 65 Conventional Banks) in 6 countries, the number of countries used in the study is not significant enough to study the impact of GDP and inflation accurately on Bank profitability especially when examining each year separately Country Regulation Rules as per the IMF Database, although it differs slightly for the selected countries, did not change over the period from 2006 to 2009. This means that for each bank, these factors remained constant. Data about Bank Regulation Rules could not be obtained for GCC banks Delimitation of the Study This study was delaminated to the Islamic and Conventional Banks in the GCC whose data could be obtained in the Bankscope database. Chapter 2: Literature Review Overview of Islamic Banking Islamic Baking has established as an alternative to conventional interest-based banking. The first stirring of the Islamic Banking movement began in 1963 by Dr. Ahmed Alnajar in a small town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Germany and found that it had many saving banks operating on interest. He took the idea from a savings bank in Germany and created his own small Islamic bank that was interest free. After Dr. Alnajarà ¢Ã¢â€š ¬Ã¢â€ž ¢s small bank proved successful, the establishment of other Islamic banks followed. In 1971, the Nasser Social Bank was founded in Egypt with the objective of lending out money as a charity on the basis of a profit and loss sharing system and helping people in need. And in 1975, the idea of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emirates and The Islamic Development (IDB) Bank in Jeddah, Saudi Arabia (Wilson, 1990). Even though Islamic Banking has only been around for thirty years and is still in an evolving stage, Islamic Banking is the fastest growing segment of the credit markets in the Muslim countries. In 2009, Assets held by Islamic Banking banks rose by 28.6 percent to $822bn from $639bn in 2008, according to The Bankerà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã…“Top 500 Islamic Financial Institutionsà ¢Ã¢â€š ¬? survey while conventional banks posted annual asset growth of just 6.8 percent. Furthermore, GCC states accounted for $353.2bn or 42.9 percent of the global aggregate, while Iran remained the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the total. Source: Asian Banker Research, 2009 Finally, Islamic banking operations are not limited to Islamic countries but are spreading throughout the world. One reason is the growing trend toward transcending national boundaries, and unifying Muslims into a political and economic entity that could have a significant impact on the pattern of world trade (Abdel-Magid, 1981). Islamic Banking Rules and Principles Islamic banking rules are according to the Islamic Shariah derived from the Quran and prophet Mohamedà ¢Ã¢â€š ¬Ã¢â€ž ¢s sayings. The three main practices that are clearly prohibited in the Quran and the prophetà ¢Ã¢â€š ¬Ã¢â€ž ¢s sayings are, Riba (Interest), Gharar (Uncertainty), and Maysir (Betting). Prohibition of Riba or any predetermined or fixed rate in financial institutions is the most important factor in the Islamic principles pertaining to banking. As stated in the Quran à ¢Ã¢â€š ¬Ã…“Allah forbids ribaà ¢Ã¢â€š ¬?. Riba means an increase and under Shariah the term refers to the premium that must be paid by the borrower to the lender along with the principle amount as a condition for the loan (Omar and Abdel, 1996). Gharar occurs when the purchaser does not know what has been bought and the seller does not know what has been sold. In other words, trading should be clear by stating in a contract the existing actual object(s) to be sold, with a price and time to eliminate confusion and uncertainty between the buyers and the sellers. Maisir is considered in Islam as one form of injustice in the appropriation of othersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth. The act of gambling, sometimes referred to betting on the occurrence of a future event, is prohibited and no reward accrues for the employment of spending of wealth that an individual may gain through means of gambling. Under this prohibition, any contract entered into, should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions. Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and finance enshrined from al-Qurà ¢Ã¢â€š ¬Ã¢â€ž ¢an and Prophet Mohamedà ¢Ã¢â€š ¬Ã‹Å"s Sayings can be summed up as follows: Any predetermined payment over and above the actual amount of principal is prohibited. The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are also prohibited. Investments should only support practices or products that are not forbidden or even discouraged by Islam. Islamic Banking Products Islamic Banking products have to be done according to Islamic rules and principles, based on profit and loss sharing as well as avoiding interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financing is the most common in Islamic Banking. There are a lot of Islamic Banking products; however there are some famous Islamic products that will be discussed in this section. Al Bai Bithaman Ajil /BBA This involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank will purchase certain assets on a deferred payment basis and then sell the goods back to the customer at an agreed price including some margin or profit. The customer will make payment by installments over an agreed period. A fixed rate BBA is a powerful hedging tool against interest rates (Rosly, 1999). Murabahah Murabahah is a contract of sale. The Islamic Bank acts as a middle man and purchases the goods requested by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lender re-sales to the borrower at a higher price agreed on by both parties. These are more for short term financing Mudharabah According to Kettel (2006), Mudharabah is a basic principle of profit and loss, where instead of lending money at a fixed rate return, the banker forms a partnership with the borrower, thereby sharing in a ventureà ¢Ã¢â€š ¬Ã¢â€ž ¢s profit and loss. Mudharabah is an agreement between the lender and entrepreneur, whereby the lender agrees to finance the project on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses. Musharakah Musharakah means partnership whereby the Islamic institution provides the capital needed by the customer with the understanding that they both share the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to participate in the management of the investment but it is not compulsory. Musharakah can help in providing financing for large investments in modern economic activities Al Ijarah Ijarah means meaning to give something on a rental basis. In Ijarah, the bank acquires ownership based on the promise and leases back to the client for a given period. The customer pays the rental but the ownership still remains with the bank or lender. As the ownership remains with the lessor (bank), it continues to give the service for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004). Wadiah Wadiah is a trust contract and the bank provides gift (hibah) and various types of benefits to the customer. This is exactly like a normal conventional savings account. Istisna Istisna allows one party buys the goods and the other party undertakes to manufacture them according to agreed specifications. Normally, Istisna is used to finance construction and manufacturing projects. Salam Salam is defined as the forward purchase of specified goods with full forward payment. This contract is normally used for financing agricultural production. According to Hassan (2004), Salam based future contracts for agricultural commodities, supported by Islamic Banks, can help to overcome the agricultural financial problems Table 2.1 lists the products of conventional banking and their correspondent products in Islamic Banking. Deposit Services Current Deposit Wadiah Wad Dhamana / Qard Hasan Savings Deposit Wadiah Wad Dhamana / Mudaraba General Investment deposit Mudaraba Special Investment deposit Mudaraba Retail / Consumer Banking Housing Property Finance BBA / Ijara wa Iktina /Diminishing Musharaka Hire Purchase Ijara Thumma Al-Bai Share Financing BBA / Mudaraba / Musharaka Working Capital Financing Murabahah/ Bai Al-Einah/ Tawarruq Credit Card Bai Al-Einah/ Tawarruq Charge Card Qard Hasan Corporate Banking/ Trade Finance Project Financing Mudaraba / Musharaka / BBA / Istisna / Ijara Letter of Credit Musharaka/ Wakala/ Murabaha Venture Capital Diminishing Mudaraba/ Musharaka Financing Syndication Musharaka + Murabaha/ Istisna / Ijara Revolving Financing Bai Al-Einah Short-term Cash Advance Bai Al-Einah/ Tawarruq Working Capital Finance Murabaha/ Salam/ Istijrar Letter of Credit Murabaha Letter of Guarantee Kafala + Ujr Leasing Ijara Export/ Import Finance Musharaka/ Salam/ Murabaha Work-in-Progress, Construction Finance Istisna Bill Discounting Bai al-Dayn Underwriting, Advisory Services Ujr Treasury / Money Market Investment Products Sell buy-back agreements Bai al-Einah Islamic Bonds Mudaraba / Mushraka + BBA / Istisna / Ijara Government Investment Issues Qard Hasan/ Salam/ Mudaraba Other Products Services Stock-Broking Services Murabaha/ Wakala/ Joala Funds Transfer (Domestic Foreign) Wakala/ Joala Safe-Keeping Collection (Negotiable Instruments) Wakala/ Joala Factoring Wakala/ Joala/ Bai al-Dayn Administration of Property, Estates and Wills Wakala Hiring of Strong Boxes Amana/ Wakala Demand Draft, Travellerà ¢Ã¢â€š ¬Ã¢â€ž ¢s Cheques Ujr/ Joala ATM Service, Standing Instruction, Telebanking Ujr Source: Obaidullah, 2005 Financial Crisis and the Islamic Banking Previous Literature The study of bank profitability is an important tool to evaluate bank operation by examining the different factors affecting bank profitability and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank profitability and the determinants of bank profitability either for particular country or for a panel of countries. These studies normally divide these factors into internal factors and external factors. Internal factors represent the bank-specific characteristics such as bank size, liquidity structure; liabilitiesà ¢Ã¢â€š ¬Ã‚ ¦etc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific regulations rules and practices. In the area of banking profitability, many studies have been conducted to investigate the profitability of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will focus on studies in the Islamic banking field. Then we will cover the conceptual framework of this research. Conventional Banking Different studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field. Short (1979) is one of the early scholars who studied the relationship between banking profit rates and concentration for sixty banks in Canada, Western Europe and Japan during the 1970à ¢Ã¢â€š ¬Ã¢â€ž ¢s and he included independent variables including government ownership and concentration by using H index to quantify concentration. Results showed that the government ownership impact on profitability varied throughout the countries studied but expressed an overall negative relationship. He also found evidence that indicated higher concentration rates lead to higher profit rates (Short, 1979). Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America between 1972 and 198 and examined different internal and external factors: internal factors such as staff expenses, capital ratio, liquidity ratio, and loans to deposit ratio; external factors such as regulation, size of economies of scale, competition, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also found that concentration, interest rates, and money supply are positively related to profitability along with capital and reserves of total assets as well as cash and bank deposits of total assets. Bourke adds that well capitalized banks enjoy cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989). Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The paper examined eighteen counties in Europe between 1986 and 1989. This paper replicated Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a positive coefficient with return on capital (profitability) which contradicts with Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s findings. Other results were similar to Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s, showing that concentration, interest rate, and money supply were positively related to bank profitability (Molyneux and Thornton, 1992). In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar findings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks between 1992 and 1998. The study used cross-sectional and dynamic panel models. The variables used in the regression analysis were ROE, the logarithmic of total assets, Off Balance Sheet (OBS) dividends, Capital to Asset Ratio (CAR). The results from both models were similar: evidence reveals that there is a positive relationship between size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability for UK but neutral or negative for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched on ownership type by indicating that there is high competition in banking due to the fact t hat there is foreign bank involvement in domestic banks, and that profitability is not linked to ownership (Goddard, Molyneux, and Wilson, 2004). Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a group of banks from five other countries in the Middle East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used Return on Equity (ROE) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various explanatory variables. This study tests the relationships between bank profitability and size, asset portfolio composition, off-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether measured by ROE or ROA. They found that Lebanese banks are profitable, but not as profitable as a control group of banks from five other countries located in the Middle East. Islamic Banking In the area of Islamic Banking, Bashir (2000) assessed the performance of Islamic banks in eight Middle Eastern countries. He analyzed important bank characteristics that affect the performance of Islamic banks by controlling economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), Before Tax Profit (BTP), Return on Assets (ROA), and Return on Equity (ROE) as performance indicators. There were also internal and external variables: internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership; external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm previous findings and show that Islamic banks profitability is positively related to equity and loans. Consequently, if loans and equity are high, Islamic banks should be more profitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also indicate that favorable macro-economic conditions help profitability (Bashir, 2000). Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that they are not willing accept no returns (Hassoune, 2002). Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to determine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to identify profitability. Other profitability indicators adopted were Before Tax Profit divided by total assets (BTP/TA), Return on Assets (ROA), and Return on Equity (ROE). Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a negative relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to improve because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability. Finally, results also indicate that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004). Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also observed that positive impact on profitability for conventional but have a negative impact for Islamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwanà ¢Ã¢â€š ¬Ã¢â€ž ¢s banks and found a positive link between branch number and long-term profitability and also proved that average salaries are detrimental to banksà ¢Ã¢â€š ¬Ã¢â€ž ¢ profit. Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, Granger causality test and graphical comparison model. They found that there are stable long run relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector. Conceptual Framework Theoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are going to be used in the analysis. In this research, the theoretical framework consists of seven independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank Size (Total Assets), Capital Structure (Equity and Tangible Equity), Liquidity (Loans and Liquid Assets) and Liabilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA). Financial Crisis Internal Factors (Bank-Specific) Islamic Banking Profitability H1: Bank Size H2, H3: Capital Structure H4, H5: Liquidities H6, H7: Liabilities Return on Average Assets (ROAA) Return on Average Equity (ROAE) In this section we develop the hypothesis to be examined in this research paper. Development of Hypotheses This paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis testing is the process of judging which of two contradictory statements is correct. Hypothesis 1: Profitability has a positive and significant relationship with the total assets (ASSETS). Total Assets of a company represents its valuables including both tangible assets such as equipments and properties along with its intangible assets such as goodwill and patent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size; banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be more profitable. Total assets are converted logarithmic to be more consistent with the other ratios Hypothesis 2: Profitability has a positive and significant relationship with equity to asset ratio (EQUITY). Total equity over total assets measures bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s capital structure and adequate. It indicated bank ability to withstand losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found positive relationship. Therefore, EQUITY is included in this study and it is expected to have a positive relation with performance because well capitalized banks are less risky and more profitable (Bourke, 1989) Hypothesis 3: Profitability has a positive and significant relationship with Tangible Equity to total liabilities ratio (TNGEQTY). Tangible Equity represents the subset of shareholderà ¢Ã¢â€š ¬Ã¢â€ž ¢s equity that is not common shares and not intangible asset. Tangible Equity became very popular after the financial crisis as a measure of bank viability since it indicates of how much ownership equity owners of common stock would receive in the event of a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s liquidation. Beltratti and Stulz (2009) examined tangible equity to liabilities in their study to examine why some banks perform better during the financial crisis and found positive and insignificant relationship between TNEQTY and bank profitability. Therefore, TNEQTY is included in this study and it is expected to have positive relationship since banks with better capital structure in since of more equity à ¢Ã¢â€š ¬Ã¢â‚¬Å" seems to perform better. Hypothesis 4: Profitability has a positive and significant relationship with the loans to assets ratio (LOANS). Total loans over total assets a liquidity ratio used that indicates how much of bank assets are tied to loans. For banks, the higher LOANS ratio means less liquidity. Demirguc-Kunt and Huizinga, (1997) found positive relationship between LOANS and bank profitability. LOANS is included in this study and anticipated to have positive relationship with profitability. Furthermore, conventional banks rely on interest-based loans while Islamic banks rely on profit and loss sharing interest-free lending. Therefore, this ratio is also used to compare the performance of interest-based loans and interest-free lending. Hypothesis 5: Profitability has a positive and significant relationship with the liquid assets to total assets ratio (LIQUID). Liquid assets include currency, deposit accounts, and negotiable instruments that can be converted easily into cash. Liquid assets to total assets ratio is a liquidity ratio that measure how easily the banksà ¢Ã¢â€š ¬Ã¢â€ž ¢ assets can be converted into cash. Beltratti and Stulz (2009) found that LIQUID has positive and significant relation with profitability as banks with more liquid assets tend to perform better. Therefore, LIQUID is included in this study and expected to have positive relationship with profitability. Hypothesis 6: Profitability has a reverse and significant relationship with the deposits to assets ratio (DEPOSITS). Deposits to total ratio is another liquidity indicator but is considered a liability since they measure the impact of liabilities on profitability. Bashir and Hassan (2004) examined deposits in their study and found a negative relationship with profitability. Therefore, we expect that DEPOSITS to have negative relationship with profitability. Hypothesis 7: Profitability has a positive and significant relationship with the overhead to assets ratio (OVERHEAD). Overhead costs represent all bank expenses excluding interest expenses as they are considered as operations expenses. Overhead over total assets is a liability ratio that measures the operation efficiency of the bank. Alkassim (2005) included OVERHEAD in his research and found positive relationship to profitability. Therefore, OVERHEAD is included in this study and expected to have positive relationship to profitability. Chapter 3: Methods Data Sample From 2006 to 2008 2009 Country Islamic Banks Conventional Banks Islamic Banks Conventional Banks Bahrain 12 14 5 5 Saudi Arabia 2 9 1 7 Qatar 3 5 2 4 Kuwait 4 14 1 3 Oman 0 6 0 3 UAE 6 17 0 7 Total 27 65 9 29 The data used in this analysis were extracted from Bankscope data for all Islamic and Conventional Banks in the GCC for the period from 2006 to 2009. Using Bankscope has many advantages: it has information for over 30,000 banks, plus the accounting information is presented in a standardized format. Therefore, the accounting information of Islamic Banking is adjusted to be comparable with accounting information of conventional banks. The data used for this study are from a pooled time-series cross-sectional data. The data are taken from various countries. Sample period for this study is from 2002 to 2007. Cross-sectional data provide information on variables for a given period of time. While time series data give information about variables over a number of periods of time. The data for internal variables are obtained from BankScope database which is compiled by International Bank Credit Analysis Limited (IBCA). Using BankScope has two advantages. Firstly, it has information for 11,000 banks, accounting for about 90% of total assets in each country. Secondly, the accounting information at the bank level is presented in standardized formats, after adjustments for differences in accounting and reporting standards. The data for external variables are obtained from World Economic Outlook 2008 database, published by International Monetary Fund (IMF). A total of 60 Islamic banks from 18 countries were chosen in this study. The selected banks are those which are classified as Islamic bank in BankScope database. The Islamic banks have available data for at least one year between 2002 and 2007. This yielded an unbalanced panel data consisting of 260 observations. However, after eliminating cases with missing data, only 155 observations of balanced panel data are left. Variable Definition Independent Variable: Profitability Measures There are many ratios that have been used by researchers to measure bank profitability but the two most often used ratios are the return on assets (ROA) and the return on equity (ROE) (Iqbal et al., 2005). Return on Assets Impact of Internal Factors on Islamic Banking Impact of Internal Factors on Islamic Banking Introduction to the Subject Background of the Subject General Objective The purpose of this study is to examine how the internal factors of the Islamic Banking affected their performance before, during and after the financial crisis in the GCC in comparison to the conventional banking in the same area. Research Questions This study aims to answer the following questions: How did the financial crisis affect the profitability of Islamic Banks in comparison to Conventional Banks? What are the internal factors (bank specific characteristics) that influence the profitability of Islamic banking for every year from 2006 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2009? Did these factors have the same impact on the profitability of Islamic Banking before, during and after the financial crisis? Did these internal factors influence the profitability of Islamic Banking in the same manner as of the Conventional Banking? Need for the Study Significance of the Study Assumptions of the Study Limitations of the Study Although we cannot neglect the importance of the external factors on the profitability of Islamic Banking, they were not included in this study. To understand the reason behind this decision, we need to go through the different types of external factors and how they are classified: Macroeconomic Factors Country Regulation Rules Bank Regulation Rules These factors were not included for the following reasons: Since we are examining the performance of 92 banks (27 Islamic Banks and 65 Conventional Banks) in 6 countries, the number of countries used in the study is not significant enough to study the impact of GDP and inflation accurately on Bank profitability especially when examining each year separately Country Regulation Rules as per the IMF Database, although it differs slightly for the selected countries, did not change over the period from 2006 to 2009. This means that for each bank, these factors remained constant. Data about Bank Regulation Rules could not be obtained for GCC banks Delimitation of the Study This study was delaminated to the Islamic and Conventional Banks in the GCC whose data could be obtained in the Bankscope database. Chapter 2: Literature Review Overview of Islamic Banking Islamic Baking has established as an alternative to conventional interest-based banking. The first stirring of the Islamic Banking movement began in 1963 by Dr. Ahmed Alnajar in a small town in Egypt, called Mit Ghamar. Dr. Alnajar completed his education in Germany and found that it had many saving banks operating on interest. He took the idea from a savings bank in Germany and created his own small Islamic bank that was interest free. After Dr. Alnajarà ¢Ã¢â€š ¬Ã¢â€ž ¢s small bank proved successful, the establishment of other Islamic banks followed. In 1971, the Nasser Social Bank was founded in Egypt with the objective of lending out money as a charity on the basis of a profit and loss sharing system and helping people in need. And in 1975, the idea of Islamic banking spread to other Islamic regions such Dubai Islamic bank in United Arab Emirates and The Islamic Development (IDB) Bank in Jeddah, Saudi Arabia (Wilson, 1990). Even though Islamic Banking has only been around for thirty years and is still in an evolving stage, Islamic Banking is the fastest growing segment of the credit markets in the Muslim countries. In 2009, Assets held by Islamic Banking banks rose by 28.6 percent to $822bn from $639bn in 2008, according to The Bankerà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã…“Top 500 Islamic Financial Institutionsà ¢Ã¢â€š ¬? survey while conventional banks posted annual asset growth of just 6.8 percent. Furthermore, GCC states accounted for $353.2bn or 42.9 percent of the global aggregate, while Iran remained the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the total. Source: Asian Banker Research, 2009 Finally, Islamic banking operations are not limited to Islamic countries but are spreading throughout the world. One reason is the growing trend toward transcending national boundaries, and unifying Muslims into a political and economic entity that could have a significant impact on the pattern of world trade (Abdel-Magid, 1981). Islamic Banking Rules and Principles Islamic banking rules are according to the Islamic Shariah derived from the Quran and prophet Mohamedà ¢Ã¢â€š ¬Ã¢â€ž ¢s sayings. The three main practices that are clearly prohibited in the Quran and the prophetà ¢Ã¢â€š ¬Ã¢â€ž ¢s sayings are, Riba (Interest), Gharar (Uncertainty), and Maysir (Betting). Prohibition of Riba or any predetermined or fixed rate in financial institutions is the most important factor in the Islamic principles pertaining to banking. As stated in the Quran à ¢Ã¢â€š ¬Ã…“Allah forbids ribaà ¢Ã¢â€š ¬?. Riba means an increase and under Shariah the term refers to the premium that must be paid by the borrower to the lender along with the principle amount as a condition for the loan (Omar and Abdel, 1996). Gharar occurs when the purchaser does not know what has been bought and the seller does not know what has been sold. In other words, trading should be clear by stating in a contract the existing actual object(s) to be sold, with a price and time to eliminate confusion and uncertainty between the buyers and the sellers. Maisir is considered in Islam as one form of injustice in the appropriation of othersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth. The act of gambling, sometimes referred to betting on the occurrence of a future event, is prohibited and no reward accrues for the employment of spending of wealth that an individual may gain through means of gambling. Under this prohibition, any contract entered into, should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values intended to be exchanged as a result of their transactions. Therefore, and according to Ahmed and Hassan (2007), the principles of Islamic banking and finance enshrined from al-Qurà ¢Ã¢â€š ¬Ã¢â€ž ¢an and Prophet Mohamedà ¢Ã¢â€š ¬Ã‹Å"s Sayings can be summed up as follows: Any predetermined payment over and above the actual amount of principal is prohibited. The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Making money from money is not acceptable in Islam. Gharar (deception) and Maisir (gambling) are also prohibited. Investments should only support practices or products that are not forbidden or even discouraged by Islam. Islamic Banking Products Islamic Banking products have to be done according to Islamic rules and principles, based on profit and loss sharing as well as avoiding interest. According to BNM statistics 2007, Al Bai Bithaman Ajil financing is the most common in Islamic Banking. There are a lot of Islamic Banking products; however there are some famous Islamic products that will be discussed in this section. Al Bai Bithaman Ajil /BBA This involves the credit sale of goods on a deferred payment basis. In BAA, the Islamic bank will purchase certain assets on a deferred payment basis and then sell the goods back to the customer at an agreed price including some margin or profit. The customer will make payment by installments over an agreed period. A fixed rate BBA is a powerful hedging tool against interest rates (Rosly, 1999). Murabahah Murabahah is a contract of sale. The Islamic Bank acts as a middle man and purchases the goods requested by the customer. The bank will later sell the goods to the customer in a sale and purchase agreement, whereby the lender re-sales to the borrower at a higher price agreed on by both parties. These are more for short term financing Mudharabah According to Kettel (2006), Mudharabah is a basic principle of profit and loss, where instead of lending money at a fixed rate return, the banker forms a partnership with the borrower, thereby sharing in a ventureà ¢Ã¢â€š ¬Ã¢â€ž ¢s profit and loss. Mudharabah is an agreement between the lender and entrepreneur, whereby the lender agrees to finance the project on a profit sharing basis according to a predetermined ratio agreed by both parties concerned. If there are any losses the lender will bear all the losses. Musharakah Musharakah means partnership whereby the Islamic institution provides the capital needed by the customer with the understanding that they both share the profit and loss according to a formula agreed before the business transaction is transacted. In Musharakah all partners are entitled to participate in the management of the investment but it is not compulsory. Musharakah can help in providing financing for large investments in modern economic activities Al Ijarah Ijarah means meaning to give something on a rental basis. In Ijarah, the bank acquires ownership based on the promise and leases back to the client for a given period. The customer pays the rental but the ownership still remains with the bank or lender. As the ownership remains with the lessor (bank), it continues to give the service for which it was rented. Under this contract, the lessor has the right to re-negotiate the quantum of the lease payment at every agreed interval to ensure rental remains in line with the market rates (Hume, 2004). Wadiah Wadiah is a trust contract and the bank provides gift (hibah) and various types of benefits to the customer. This is exactly like a normal conventional savings account. Istisna Istisna allows one party buys the goods and the other party undertakes to manufacture them according to agreed specifications. Normally, Istisna is used to finance construction and manufacturing projects. Salam Salam is defined as the forward purchase of specified goods with full forward payment. This contract is normally used for financing agricultural production. According to Hassan (2004), Salam based future contracts for agricultural commodities, supported by Islamic Banks, can help to overcome the agricultural financial problems Table 2.1 lists the products of conventional banking and their correspondent products in Islamic Banking. Deposit Services Current Deposit Wadiah Wad Dhamana / Qard Hasan Savings Deposit Wadiah Wad Dhamana / Mudaraba General Investment deposit Mudaraba Special Investment deposit Mudaraba Retail / Consumer Banking Housing Property Finance BBA / Ijara wa Iktina /Diminishing Musharaka Hire Purchase Ijara Thumma Al-Bai Share Financing BBA / Mudaraba / Musharaka Working Capital Financing Murabahah/ Bai Al-Einah/ Tawarruq Credit Card Bai Al-Einah/ Tawarruq Charge Card Qard Hasan Corporate Banking/ Trade Finance Project Financing Mudaraba / Musharaka / BBA / Istisna / Ijara Letter of Credit Musharaka/ Wakala/ Murabaha Venture Capital Diminishing Mudaraba/ Musharaka Financing Syndication Musharaka + Murabaha/ Istisna / Ijara Revolving Financing Bai Al-Einah Short-term Cash Advance Bai Al-Einah/ Tawarruq Working Capital Finance Murabaha/ Salam/ Istijrar Letter of Credit Murabaha Letter of Guarantee Kafala + Ujr Leasing Ijara Export/ Import Finance Musharaka/ Salam/ Murabaha Work-in-Progress, Construction Finance Istisna Bill Discounting Bai al-Dayn Underwriting, Advisory Services Ujr Treasury / Money Market Investment Products Sell buy-back agreements Bai al-Einah Islamic Bonds Mudaraba / Mushraka + BBA / Istisna / Ijara Government Investment Issues Qard Hasan/ Salam/ Mudaraba Other Products Services Stock-Broking Services Murabaha/ Wakala/ Joala Funds Transfer (Domestic Foreign) Wakala/ Joala Safe-Keeping Collection (Negotiable Instruments) Wakala/ Joala Factoring Wakala/ Joala/ Bai al-Dayn Administration of Property, Estates and Wills Wakala Hiring of Strong Boxes Amana/ Wakala Demand Draft, Travellerà ¢Ã¢â€š ¬Ã¢â€ž ¢s Cheques Ujr/ Joala ATM Service, Standing Instruction, Telebanking Ujr Source: Obaidullah, 2005 Financial Crisis and the Islamic Banking Previous Literature The study of bank profitability is an important tool to evaluate bank operation by examining the different factors affecting bank profitability and using these factors for management planning and strategic analysis. In the last four decades, many studies have been conducted to study both bank profitability and the determinants of bank profitability either for particular country or for a panel of countries. These studies normally divide these factors into internal factors and external factors. Internal factors represent the bank-specific characteristics such as bank size, liquidity structure; liabilitiesà ¢Ã¢â€š ¬Ã‚ ¦etc while external factors can be macroeconomic factors such as inflation and GDP growth or Country-specific regulations rules and practices. In the area of banking profitability, many studies have been conducted to investigate the profitability of conventional banks while only few were conducted in the field of Islamic banking. In this chapter, we will review these studies for conventional banking first and then will focus on studies in the Islamic banking field. Then we will cover the conceptual framework of this research. Conventional Banking Different studies have been conducted in the field of conventional banking profitability. Short (1979), Bourke (1989), Molyneux and Thornton (1992), Goddard, Molyneux, and Wilson (2004), Peters et al. (2004) are some of the researchers in the field. Short (1979) is one of the early scholars who studied the relationship between banking profit rates and concentration for sixty banks in Canada, Western Europe and Japan during the 1970à ¢Ã¢â€š ¬Ã¢â€ž ¢s and he included independent variables including government ownership and concentration by using H index to quantify concentration. Results showed that the government ownership impact on profitability varied throughout the countries studied but expressed an overall negative relationship. He also found evidence that indicated higher concentration rates lead to higher profit rates (Short, 1979). Bourke (1989) also compared concentration to bank profitability but included other determinants. Bourke (1989) covered ninety banks in Australia, Europe, and North America between 1972 and 198 and examined different internal and external factors: internal factors such as staff expenses, capital ratio, liquidity ratio, and loans to deposit ratio; external factors such as regulation, size of economies of scale, competition, concentration, growth in market, interest rate, government ownership, and market power. His results show that increase in government ownership leads to lower profitability in banking. He also found that concentration, interest rates, and money supply are positively related to profitability along with capital and reserves of total assets as well as cash and bank deposits of total assets. Bourke adds that well capitalized banks enjoy cheaper access to sources of funds as they are less risky than less capitalized banks (Bourke, 1989). Later, Molyneux and Thornton (1992) studied the determinants of European banks profitability. The paper examined eighteen counties in Europe between 1986 and 1989. This paper replicated Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s (1989) work by using internal and external determinants of bank profitability. However, Molyneux and Thornton (1992) results showed that government ownership expresses a positive coefficient with return on capital (profitability) which contradicts with Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s findings. Other results were similar to Bourkeà ¢Ã¢â€š ¬Ã¢â€ž ¢s, showing that concentration, interest rate, and money supply were positively related to bank profitability (Molyneux and Thornton, 1992). In one of the recent papers on bank profitability on European banks, Goddard, Molyneux, and Wilson (2004) shows similar findings to the paper by Molyneux and Thornton (1992). It investigates the determinants of profitability in six European countries and it covered 665 banks between 1992 and 1998. The study used cross-sectional and dynamic panel models. The variables used in the regression analysis were ROE, the logarithmic of total assets, Off Balance Sheet (OBS) dividends, Capital to Asset Ratio (CAR). The results from both models were similar: evidence reveals that there is a positive relationship between size (total assets) and profitability. Meanwhile, OBS appears to have a positive relationship with profitability for UK but neutral or negative for other European countries. Moreover, results also state that CAR has a positive relationship with profitability. Furthermore, the paper touched on ownership type by indicating that there is high competition in banking due to the fact t hat there is foreign bank involvement in domestic banks, and that profitability is not linked to ownership (Goddard, Molyneux, and Wilson, 2004). Peters et al. (2004) studied the characteristics of banks in post-war Lebanon for the years 1993 to 2000 and compared the results to a group of banks from five other countries in the Middle East including UAE, KSA, Kuwait, Bahrain and Oman for the years 1995 through 1999. They used Return on Equity (ROE) measure profitability and leverage and they employed regression models that relate bank profitability ratios to various explanatory variables. This study tests the relationships between bank profitability and size, asset portfolio composition, off-balance sheet items, ownership by a foreign bank, and the ratio of employment to assets. The results show a strong association between economic growth and bank profitability, whether measured by ROE or ROA. They found that Lebanese banks are profitable, but not as profitable as a control group of banks from five other countries located in the Middle East. Islamic Banking In the area of Islamic Banking, Bashir (2000) assessed the performance of Islamic banks in eight Middle Eastern countries. He analyzed important bank characteristics that affect the performance of Islamic banks by controlling economic and financial structure measures. The paper studied fourteen Islamic banks from Bahrain, Egypt, Jordan, Kuwait, Qatar, Sudan, Turkey, and United Arab Emirates between 1993 and 1998. To examining profitability, the paper used Non Interest Margin (NIM), Before Tax Profit (BTP), Return on Assets (ROA), and Return on Equity (ROE) as performance indicators. There were also internal and external variables: internal variables were bank size, leverage, loans, short-term funding, overhead, and ownership; external variables included macroeconomic environment, regulation, and financial market. In general, results from the study confirm previous findings and show that Islamic banks profitability is positively related to equity and loans. Consequently, if loans and equity are high, Islamic banks should be more profitable. If leverage is high and loan to assets is also large, Islamic banks will be more profitable. The results also indicate that favorable macro-economic conditions help profitability (Bashir, 2000). Hassoune (2002) examined Islamic bank profitability in an interest rate cycle. In his paper, compared ROE and ROA Volatility for both Islamic and conventional banks in three GCC region, Kuwait, Saudi Arabia, and Qatar. He states that since Islamic banking is based on profit and loss sharing, managements have to generate sufficient returns for investors given that they are not willing accept no returns (Hassoune, 2002). Bashir and Hassan (2004) studied the determinants of Islamic banking profitability covers 43 Islamic Banks between 1994 and 2001 in 21 countries. Their figures show Islamic banks to have a better capital asset ratio compared to commercial banks which means that Islamic banks are well capitalized. Also, their paper used internal and external banks characteristics to determine profitability as well as economic measures, financial structure variables, and country variables. They used, Net-non Interest Margin (NIM), which is non interest income to the bank such as, bank fees, service charges and foreign exchange to identify profitability. Other profitability indicators adopted were Before Tax Profit divided by total assets (BTP/TA), Return on Assets (ROA), and Return on Equity (ROE). Results obtained by Bashir and Hassan (2004), were similar to the Bashir (2000) results, which found a positive relationship between capital and profitability but a negative relationship between loans and profitability. Bashir and Hassan also found total assets to have a negative relationship with profitability which amazingly means that smaller banks are more profitable. In addition, during an economic boom, banks profitability seems to improve because there are fewer nonperforming loans. Inflation, on the other hand, does not have any effect on Islamic bank profitability. Finally, results also indicate that overhead expenses for Islamic banks have a positive relation with profitability which means if expenses increase, profitability also increases (Bashir and Hassan, 2004). Alkassim (2005) examined the determinants of profitability in the banking sector of the GCC countries and found that asset have a negative impact on profitability of conventional banks but have a positive impact on profitability of Islamic banks. They also observed that positive impact on profitability for conventional but have a negative impact for Islamic banking. Liu and Hung (2006) examined the relationship between service quality and long-term profitability of Taiwanà ¢Ã¢â€š ¬Ã¢â€ž ¢s banks and found a positive link between branch number and long-term profitability and also proved that average salaries are detrimental to banksà ¢Ã¢â€š ¬Ã¢â€ž ¢ profit. Masood, Aktan and Chaudhary (2009) studied the co-integration and causal relationship between Return on Equity and Return on Assets for 12 banks in KSA for the period between 1999- 2007. For their research, the used time series model of ADF unit-root test, Johansen co-integration test, Granger causality test and graphical comparison model. They found that there are stable long run relationships between the two variables and that it is only a one-direction cause-effect relationship between ROE and ROA. The results show that ROE is a granger cause to ROA but ROA is not a granger cause to ROE that is ROE can affect ROA input but ROA does not affect the ROE in the Saudi Arabian Banking sector. Conceptual Framework Theoretical framework is a basic conceptual structure organized around a theory. It defines the kinds of variables that are going to be used in the analysis. In this research, the theoretical framework consists of seven independent variables that represent four aspects of the Bank Characteristics. Theses aspects are the Bank Size (Total Assets), Capital Structure (Equity and Tangible Equity), Liquidity (Loans and Liquid Assets) and Liabilities (Deposits and Overheads). Bank profitability is the dependent variable and two measures of bank profitability are used in this study, namely return on average equity (ROAE) and return on average assets (ROAA). Financial Crisis Internal Factors (Bank-Specific) Islamic Banking Profitability H1: Bank Size H2, H3: Capital Structure H4, H5: Liquidities H6, H7: Liabilities Return on Average Assets (ROAA) Return on Average Equity (ROAE) In this section we develop the hypothesis to be examined in this research paper. Development of Hypotheses This paper attempts to test seven hypotheses. A hypothesis is a claim or assumption about the value of a population parameter. It consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. According to Becker (1995), hypothesis testing is the process of judging which of two contradictory statements is correct. Hypothesis 1: Profitability has a positive and significant relationship with the total assets (ASSETS). Total Assets of a company represents its valuables including both tangible assets such as equipments and properties along with its intangible assets such as goodwill and patent. For banks, total assets include loans which are the basis for bank operations either through interest or interest-free practices. Total assets is used as a tool to measure the bank size; banks with higher total assets indicate bigger banks. Molyneux and el (2004) included total assets in their study and found a positive significant relationship between total assets and profitability. Therefore, total assets are expected to have positive relation with profitability which means that bigger banks are expected to be more profitable. Total assets are converted logarithmic to be more consistent with the other ratios Hypothesis 2: Profitability has a positive and significant relationship with equity to asset ratio (EQUITY). Total equity over total assets measures bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s capital structure and adequate. It indicated bank ability to withstand losses and handle risk exposure with shareholders. Hassan and Bashir (2004) examined the relationship between EQUITY and bank profitability and found positive relationship. Therefore, EQUITY is included in this study and it is expected to have a positive relation with performance because well capitalized banks are less risky and more profitable (Bourke, 1989) Hypothesis 3: Profitability has a positive and significant relationship with Tangible Equity to total liabilities ratio (TNGEQTY). Tangible Equity represents the subset of shareholderà ¢Ã¢â€š ¬Ã¢â€ž ¢s equity that is not common shares and not intangible asset. Tangible Equity became very popular after the financial crisis as a measure of bank viability since it indicates of how much ownership equity owners of common stock would receive in the event of a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s liquidation. Beltratti and Stulz (2009) examined tangible equity to liabilities in their study to examine why some banks perform better during the financial crisis and found positive and insignificant relationship between TNEQTY and bank profitability. Therefore, TNEQTY is included in this study and it is expected to have positive relationship since banks with better capital structure in since of more equity à ¢Ã¢â€š ¬Ã¢â‚¬Å" seems to perform better. Hypothesis 4: Profitability has a positive and significant relationship with the loans to assets ratio (LOANS). Total loans over total assets a liquidity ratio used that indicates how much of bank assets are tied to loans. For banks, the higher LOANS ratio means less liquidity. Demirguc-Kunt and Huizinga, (1997) found positive relationship between LOANS and bank profitability. LOANS is included in this study and anticipated to have positive relationship with profitability. Furthermore, conventional banks rely on interest-based loans while Islamic banks rely on profit and loss sharing interest-free lending. Therefore, this ratio is also used to compare the performance of interest-based loans and interest-free lending. Hypothesis 5: Profitability has a positive and significant relationship with the liquid assets to total assets ratio (LIQUID). Liquid assets include currency, deposit accounts, and negotiable instruments that can be converted easily into cash. Liquid assets to total assets ratio is a liquidity ratio that measure how easily the banksà ¢Ã¢â€š ¬Ã¢â€ž ¢ assets can be converted into cash. Beltratti and Stulz (2009) found that LIQUID has positive and significant relation with profitability as banks with more liquid assets tend to perform better. Therefore, LIQUID is included in this study and expected to have positive relationship with profitability. Hypothesis 6: Profitability has a reverse and significant relationship with the deposits to assets ratio (DEPOSITS). Deposits to total ratio is another liquidity indicator but is considered a liability since they measure the impact of liabilities on profitability. Bashir and Hassan (2004) examined deposits in their study and found a negative relationship with profitability. Therefore, we expect that DEPOSITS to have negative relationship with profitability. Hypothesis 7: Profitability has a positive and significant relationship with the overhead to assets ratio (OVERHEAD). Overhead costs represent all bank expenses excluding interest expenses as they are considered as operations expenses. Overhead over total assets is a liability ratio that measures the operation efficiency of the bank. Alkassim (2005) included OVERHEAD in his research and found positive relationship to profitability. Therefore, OVERHEAD is included in this study and expected to have positive relationship to profitability. Chapter 3: Methods Data Sample From 2006 to 2008 2009 Country Islamic Banks Conventional Banks Islamic Banks Conventional Banks Bahrain 12 14 5 5 Saudi Arabia 2 9 1 7 Qatar 3 5 2 4 Kuwait 4 14 1 3 Oman 0 6 0 3 UAE 6 17 0 7 Total 27 65 9 29 The data used in this analysis were extracted from Bankscope data for all Islamic and Conventional Banks in the GCC for the period from 2006 to 2009. Using Bankscope has many advantages: it has information for over 30,000 banks, plus the accounting information is presented in a standardized format. Therefore, the accounting information of Islamic Banking is adjusted to be comparable with accounting information of conventional banks. The data used for this study are from a pooled time-series cross-sectional data. The data are taken from various countries. Sample period for this study is from 2002 to 2007. Cross-sectional data provide information on variables for a given period of time. While time series data give information about variables over a number of periods of time. The data for internal variables are obtained from BankScope database which is compiled by International Bank Credit Analysis Limited (IBCA). Using BankScope has two advantages. Firstly, it has information for 11,000 banks, accounting for about 90% of total assets in each country. Secondly, the accounting information at the bank level is presented in standardized formats, after adjustments for differences in accounting and reporting standards. The data for external variables are obtained from World Economic Outlook 2008 database, published by International Monetary Fund (IMF). A total of 60 Islamic banks from 18 countries were chosen in this study. The selected banks are those which are classified as Islamic bank in BankScope database. The Islamic banks have available data for at least one year between 2002 and 2007. This yielded an unbalanced panel data consisting of 260 observations. However, after eliminating cases with missing data, only 155 observations of balanced panel data are left. Variable Definition Independent Variable: Profitability Measures There are many ratios that have been used by researchers to measure bank profitability but the two most often used ratios are the return on assets (ROA) and the return on equity (ROE) (Iqbal et al., 2005). Return on Assets

Overuse of Technology Essay -- Technology, Health Risk

Everywhere I turn, I see someone on a cell phone, either talking or texting. Every car next to me in traffic has a GPS on the dashboard, including my own. It seems that everyone needs some help from technology on a daily basis. It both surrounds and intrigues us. Technology can be helpful, fun, and entertaining. Much of technology is created to assist with making projects faster or daily tasks more efficient. However, the collaboration of technologies in our lives has a few negative effects and I think we need to scale back a bit on our use of these much adored technologies. The over-use of technology is creating an impatient society and it is also diminishing once-valued personal interaction with others. More often now days, people would rather let a machine take a message instead of answering a call; missing the opportunity to have a personal conversation. Many of us would rather have the instant gratification of watching a movie instead of reading a book or sending a text or instant message instead of meeting with a friend for coffee and conversation. Therefore, society is becoming increasingly impatient and impersonal with interactions. Those types of behaviors create lonliness in our lives despite our â€Å"constant connection† with others through things like cell phones and Facebook ®. This way of life is also more common with the younger generations within our society. For instance, my sister is eight years younger than me and we had a visit with each other about two months ago. I don’t get to see my sister often; she lives six hundred miles away. When I do get to see her, it is a short visit and I cherish the time we may get to spend together. I have not lived close to my sister in ten years. So, it is disheartening to me th... ... portable so there is no reason not to! Another health risk that technology contributes to is obesity. In the past 20 years, there has been a dramatic increase in obesity. It is not a coincidence that the increase in technology and obesity is happening at the same time. The graph shown from the February 2011 issue of Scientific American Magazine illustrates the increase in obesity from the 1970s. The obesity rate is rising right along with our use of the internet and everything else technological. I must state that I am not against technology as a whole. I love technology! I just feel that we should be aware of the different risks that every new technology comes with and avoid over-exposure. When I start my own family, I will teach my children to be friends with technology; however, they will not be so dependent on technology for entertainment or otherwise.

Agrana Essay

The Austria-based company, Agrana was founded in 1988 with operations consisting of the production of sugar and starch. While relatively small, the company only operated two starch factories and three sugar factories. As the years passed, the company has also focused on the production of fruit preparation, fruit juice concentrate, and ethanol. The new business strategy has enabled the company to not only grow, but expand across multinational borders while increasing the number of buyers to whom they supply their goods and services to. In this paper, an analysis on Agrana’s emergence will be discussed from an industry-, resource-, and institutional-based view. The challenges in which AGRANA might face as it continues its expansion into other regions, such as East Asia will also be a topic of discussion. Since Agrana’s beginning, the industry has been quite challenging and competitive. Prior to European integration in 1989, the company had to operate on small economies of scale. Many markets in other countries were not open to outsiders, therefore limiting the scope of customers to only local buyers. When applying Porter’s Five Forces Framework, the industry consisted of fierce rivalry from larger competitors, threat of substitution, little to no differentiation which increased the threat of potential entrants, high bargaining power of its buyers, and low bargaining power from suppliers. However, with the integrations of the European Union (EU) and the Central and Eastern European (CEE) in 1989, Agrana was able to compete with larger rivals and expand to markets in other countries. The regional and global integration allowed Agrana to aggressively expand its foreign direct investment (FDI) throughout CEE (Peng, p. 82). This move increased their economies of scale. With their new profound strategy, the company was able to improve the quality of its products as they pursued and formed partnerships with larger buyers like Coca-Cola, Pepsi, Nestle, and Danone. As they have continued to grow, Agrana added to their production by focusing on fruit processing and through the acquisitions of other companies. The growth of Agrana is quite impressive as you consider how small the company was, their limitations, and how little they had in order to compete with their rivals. Despite these disadvantages, Agrana capitalized on its resources and capabilities through the improved manufacturing of high-grade products at competitive prices and by a strategy that promotes expansion. Prior to their emergence, the company had little value in its resources, no rarity in its industry, wide-spread imitability and no competitive advantage. The VRIO Framework for Agrana was in need of help. Through restructuring, and increased profits, Agrana diversified by adding a fruit processing division. With fruit being a complementary good to sugar and starch, this move fell in line with the business strategy and production already established. To further their diversification, the company turned to acquisitions of companies in the fruit industry. Between 2003 and 2007, the company acquired Denmark’s Vall Saft Group (fruit juice concentrate), Austria’s Steirerobst (fruit preparation and fruit juice concentrates), Belgium’s Dirafrost (fruit concentrate) Germany’s Wink Group (fruit juice concentrate), and acquired a 50% stake in a joint venture with Xianyang Andre Juice Co. Ltd (fruit juice concentrate) [p. 384-385]. The numerous acquisitions have not only added to its growth but its value as well as the company had gained access to numerous markets in various countries. The competitive advantage of Agrana is a result of the value added by its acquisitions and their integration, market knowledge, global growth, and their means of finding new ways to develop other products such as biofuel. An institution-based view is a perspective that argues that in addition to industry- and firm-level conditions, firms also need to take into account wider influences from sources such as the state and society when crafting strategy (p. 3). This includes formal and informal institutions surrounding laws, regulations, cultures and ethics. Early in Agrana’s existence, much of its challenges were a result of the restrictions placed on Western European companies to enter CEE markets and the EU. The opening of the CEE markets, in 1989, presented new opportunities for Agrana and others to expand regionally and i nternationally. FDI proved to be effective in CEE countries as it lead to be increased profits, production and growth. As stated earlier, Agrana was able to produce goods for major companies; allowing them to better cater to the expanding needs of its corporate buyers (p. 382). As the company reduced its challenges, the EU encouraged the company to diversify its operations in order to grow. Though the EU imposed challenges for Agrana prior to its integration, many of the CEE countries have become members which have helped the company increase its opportunities. However, with a strong EU presence in sugar reforms, regulating prices, and tariffs on imports and exports, Agrana has encountered new challenges and looks for new opportunities. Currently, Agrana has a huge presence in most European countries as well as plants in Mexico, China, South Korea, and China. Though China and South Korea are countries of East Asia, further expansion into other regions may present challenges surrounding culture. A presence in North Korea is far from foreseeable and while business in the CEE is similar to Vienna, Austria, the culture in East Asia are hugely different. There will also be challenges when you consider how Agrana plans to duplicate its European working environment in countries where employees and management operate on more of a hierarchical management style that stems of culture and tradition. More importantly, the biggest challenges that Agrana will face will be linked to the laws and regulations of the local government. Each country has different laws and regulations regarding imports/exports, employee relations, production, working conditions and acquisitions. Agrana will also face challenges in competition presented by local companies operating in similar industries. Agrana’s rise to dominance starting a small company is similar to the story of Google, Inc. With strict limitations and an overwhelmingly grounded industry, the company chose to remain and capitalize on the opportunities presented. Through FDI, restructure, innovation and expansion; Agrana has gained a competitive advantage in its industry. Their business strategy of this company is one to marvel over and imitate.

Distance still matters

Religion holds a mall part In distance because each religion has Its own values and beliefs therefore It makes It hard to understand one another. Administrative dimensions have a great absence of colonial ties. Each government has different views and political power. Government polices go back to cultural and political views. For example In some Muslim Countries they abide by the Shari law and in the u. S we have democrats and republicans. There's also an absence of shared monetary or political association.Geographic dimensions relate to stance because of physical remoteness. The size of a country can have an impact on power. The lack of sea or river access/ weak transportation can make it hard for goods to go in and out therefore it makes it hard to do business. The differences in climate can affect agricultural businesses. Economic dimensions have differences such as consumer incomes. In every country there are differences in costs and quality of material and natural resources. Eco nomic demand varies with income levels and the lifestyles that people are living.For example in the U. S. California has a higher rate of expenses compared to India, and that is because the nature of demand. Globally many foreign countries fear of no insurance in businesses. For example when a store is struck by a natural disaster there is no way of recouping the value of what that store costs unlike in America. In the four main dimensions: cultural, administrative, geographical, and economic, based on the art. Please describe them. Cultural dimensions have an impact on distance first off because of the different languages.There are different ethnicities ND there is a lack of communication between the different cultures, which makes it hard to understand each other. Religion holds a main part in distance because each religion has its own values and beliefs therefore it makes it hard to understand one government has different views and political power. Government policies go back to cultural and political views. For example in some Muslim Countries they abide by the Shari law and in the U. S we have democrats and republicans. There's also an levels and the lifestyles that people are living. For example in the U. S, California has a

Why The Vegetarian Diet Is Best Essays - Diets, Intentional Living

Why The Vegetarian Diet Is Best Essays - Diets, Intentional Living Why The Vegetarian Diet Is Best Why the Vegetarian Diet is Best The vegetarian diet is becoming increasingly popular all the time. Is the vegetarian or meat diet better? A decade ago and earlier, the impression was that a vegetarian diet was lacking in the nutrients found in meat products. Today though, through research and nutritional science, it has been proven that all the nutrients found in meat can also be found in the correct vegetarian diet. Some may argue that by only consuming meat that is low in fat, meat and vegetarian diets have identical benefits. This is true only if one eats only very low fat meat. The lack of meat is not necessarily the main benefit of to the vegetarian. Vegetarians tend to eat more fruits, vegetables and grains that the meat eater. They also tend not to use tobacco and excessive alcohol. In addition, vegetarians tend to get more exercise. The term vegetarian can be misleading. This diet can take on many different variations. A fruitarian eats only fruits, seeds and nuts while the vegan eats these and vegetables, grains and legumes. A lacto vegetarian consumes the same as a vegan as well as dairy products. A lacto-ovo vegetarian follows after the lacto vegetarian but also includes eggs while the ovo vegetarian excludes dairy products. Finally, the partial vegetarian eats anything except red meat, or at least strictly limits it. Because the term vegetarian is used to cover all facets and variations, it is difficult to identify health benefits resulting from the vegetarian diet including all of the above. Most meat eaters do not realize that there are so many variations to the vegetarian diet, which makes accurate studies even more difficult. As a whole though, vegetarians tend to have less body fat than nonvegetarians. This is most likely due to the low fat and high carbohydrate content of their diet. Vegetarians usually have lower blood pressure than meat eaters because of lifestyle and diet. Other factors probably include exercise and resistance to smoking and alcohol intake. Coronary artery disease is directly related to saturated fat intake. In studies testing cholesterol levels, vegetarians beat out all others including those that only ate lean meats. Milk, however, lowers blood cholesterol, as does soy. Another benefit is the lack of digestive disorders among vegetarians. It is possible that this is directly related to the high fiber content consumed. The last main benefit of the vegetarian diet is its relationship to cancer rate reduction, especially colon cancer. People who develop colon cancer tend to eat more meat, less fiber, and more saturated fat than those without colon cancer. This is the same case with lymphatic cancer. The only advantage a meat eater might have over a vegetarian would be during pregnancy and childhood. Studies have shown that children grow best when they eat meat products. Likewise, vegetarian women may enter pregnancy too thin and be lacking in stores of nutrients. Obviously, there are advantages and drawbacks to both diets however I feel the vegetarian diets advantages greatly outweigh its shortcomings. Whether a meat eater or vegetarian, both diets can contribute to good health with proper planning.

Summer Reading List Essay Example

Summer Reading List Essay Example Summer Reading List Essay Summer Reading List Essay Essay Topic: A Thousand Splendid Suns English 12 Summer Reading Teachers: Helen Dunning [emailprotected] or. kr, Jim Burwell [emailprotected] or. kr Here is the summer reading list for English 12- A Thematic Study of World-wide Literature. This is required summer reading. Reading these books will expand your vocabulary, build your personal library, start preparing you for university study, and guide the discussions for much of the first semester. 1. Order the TWO books and order them early. How to Read Literature Like a Professor: A Lively and Entertaining Guide to Reading Between the Lines, by Thomas C. Foster (336 pages) USD 14. 00 ISBN-10: 006000942X ISBN-13: 978-0060009427 AND Choose ONE of the following: Nectar in a Sieve by Kamala Markandaya (208 pages) ISBN-10: 0451528239 ISBN-13: 978-045152823 A Thousand Splendid Suns by Khaled Hosseini (432 pages) ISBN-10: 159448385X ISBN-13: 978-1594483851 A Handmaids Tale by Margaret Atwood (311 pages) ISBN-10: 038549081X ISBN-13: 978-0385490818 2. Read How to Read Literature Like a Professor. You may have already read parts of this, but reread them, and read the chapters you missed last year. 3. For ten of the chapters, write 1-2 questions that require someone to consider the topic of the chapter and apply it to any literature text. The questions cannot be questions that merely ask for something to be identified or defined. The questions should require you to evaluate or interpret characters, settings, plot, language or details (quests, food, vampires, etc) and their implied, connotative, symbolic (or otherwise) meaning in a literature text. Consider questions that would lead you to conclusions similar to those Foster discusses in the examples in his book. eg. If it’s not just rain, what is it? What is the purpose of the rain in the literature text? This references chapter 10, and in order to be answered it needs to be applied to a literature text as the answer could be different depending on how you read the text and which text you read. You will need 10-20 questions in total. 4. Read your novel. 5. Choose the three most challenging questions you wrote for How to Read Literature Like a Professor. Answer these questions, in no more than 200 words. Organize your answer appropriately. 6. Bring both books to class on August 13th, 2012. Books and the written assignment are due then. Be ready for: Discussions of gender and equality. Your book will form the basis of discussions, an essay and/ or a group or individual presentation. Checklist for August 13th: Bring the following to your first English class: ____ Your copy of How to Read Literature Like a Professor ____ Your copy of the novel. Be prepared for a reading comprehension quiz or essay ____ A hardcopy of your questions for How to Read Literature Like a Professor ____ A hardcopy of your answers to the three most challenging questions you wrote, as applied to your novel

Wedding Toast Quotes for the Father of the Groom

Wedding Toast Quotes for the Father of the Groom At a wedding reception or grooms dinner, the couples parents may be tasked with coming up with toasts. Here are a few quotes for the father of the groom to weave into his speech of well wishes, advice, and touching memories to share with the crowd and the newlyweds. Helen Rowland Falling in love consists merely in uncorking the imagination and bottling the common sense. J. Krishnamurti The moment you have in your heart this extraordinary thing called love and feel the depth, the delight, the ecstasy of it, you will discover that for you the world is transformed. Mother Teresa ï » ¿It is not how much we do, but how much love we put in the doing. It is not how much we give, but how much love we put in the giving. Tom Mullen Marriage- as its veterans know well- is the continuous process of getting used to things you hadnt expected. Andre Maurois A successful marriage is an edifice that must be rebuilt every day. Ogden Nash To keep your marriage brimming, with love in the loving cup, whenever youre wrong, admit it; whenever youre right, shut up. Victoria Secunda, Women and Their  Fathers, 1992 Sons are for fathers the twice-told tale. Jane Austen I pay very little regard to what a young person says on the subject of marriage. If they profess a disinclination for it, I only set it down that they havent seen the right person yet. Zsa Zsa Gabor A man in love is incomplete until he is married. Then hes finished. Joey Adams A psychiatrist asks a lot of expensive questions; your wife asks for nothing. Joseph Leunig Love one another and you will be happy. Its as simple and as difficult as that. Mignon McLaughlin A successful marriage requires falling in love many times, always with the same person. Henry David Thoreau There is no remedy for love but to love more. Nanette Newman A good marriage is at least 80 percent good luck in finding the right person at the right time. The rest is trust. Sir Harold Nicolson The great secret of a successful marriage is to treat all disasters as incidents and none of the incidents as disasters. Paul Tillich The first duty of love is to listen. Alfred A. Montapert The man or woman you really love will never grow old to you. Through the wrinkles of time, through the bowed frame of years, you will always see the dear face and feel the warm heart union of your eternal love. Winston Churchill A family starts with a young man falling in love with a girl. No superior alternative has been found. Alfred A. Montapert The secret of health, happiness, and long life: If you simply learn how to accept and express love, you will live longer†¦be happier†¦grow healthier. For love is a powerful force. Antoine de Saint-Exupà ©ry Love does not consist of gazing at each other, but in looking outward together in the same direction. Greek Proverb A heart that loves is always young. Hawkeye Pierce in M*A*S*H Without love, what are we worth? Eighty-nine cents! Eighty-nine cents worth of chemicals walking around lonely.

Health Promotion and Prevention Project for Elderly Essay

Health Promotion and Prevention Project for Elderly - Essay Example It is therefore crucial that a health care worker or a nurse should take utmost care of them keeping the primary and secondary preventive measures in apprehension. Various studies have been conducted to formulate that about 45% of the US population is known to have one or more chronic illness and this illness account for 78% of all health care spending. It is estimated that longevity in women is more as compared to men, women of the age group 65- 85 relates to 80% of the chronic condition whereas only 33% of men of that age are known to have chronic illness (http://www.ahrq.gov/news/ulp/chronic/ulpchron1.htm). Elderly are known to suffer from illness like Hypertension, Arthritis, Hearing impairment, Sinusitis, Orthopaedic impairments like replacement of knee joint, hip joint or accidents especially elderly population has more fall rate, Vision impairment, Heart disease, Hay fever, Cataracts. (http://hpi.georgetown.edu/agingsociety/pdfs/chronic.pdf). As people live longer more concern is required for chronic illness since immunity to chronic illness cannot be developed (http://hpi.georgetown.edu/agingsociety/pdfs/chronic.pdf). It is a matter of great apprehension as the entire family is involved and associates have to change their lifestyles.

Analyses and evaluate the micro-external environment of (two) Essay

Analyses and evaluate the micro-external environment of (two) international markets - Essay Example According to Mintel Oxygen (2012), fitted bedroom furniture contributes in large proportion to the total sales revenue earned by the bedroom furniture industry. Fitted bedroom furniture includes built-in wardrobes, built-in drawers, fitted beds etc, and Mintel Oxygen (2012) has also pointed out that fitted bedroom furniture is designed for large bedrooms. USP of fitted bedroom furniture lies on the ability to provide variety in design, systematic fittings and synchronise with large space in the room. Mintel Oxygen (2012) has reported that non-fitted furniture is generally preferred by bachelors and individuals who do not have large space in the room for using fitted bedroom furniture. Non-fitted furniture includes bedside tables, customized chests of drawers, dressing tables, beds etc. A unique selling proposition of non-fitted bedroom furniture depends on its ability to provide a high degree of customization in terms of assembling bedroom furniture to customers. The next section of the study will discuss the market composition of Germany for the bedroom furniture segment. The German bedroom furniture industry is going through a critical phase in terms of shrinkage in demand due to the slow economic growth rate and dwindling purchasing parity of customers. Lynn (2010) has pointed out that sovereign debt crisis has decreased the retail merchandising growth rate in most of the European countries. Market Line (2012a) has reported that almost half of the German furniture industry is dominated by the bedroom furniture segment. According to Market Line (2012a), the value of the bedroom furniture industry in Germany is more than $25 billion, which is proportionate to more than 50% of the overall industry composition. Industry analysts have forecasted a compound annual growth rate (CAGR) of 3%–4% for the bedroom furniture industry. The bedroom furniture market in the country is fragmented due to presence of both domestic and international players in large propor tion. Market Line (2012a) has been able to conclude that only 7% to 13% of buyers in the country prefer to purchase high priced premium luxury bedroom furniture for their home. The majority of buyers prefer to purchase mid-range bedroom furniture for their home. Customer segmentation for the German bedroom furniture industry can be done by using lifestyle criteria of Brassington and Pettitt (2007). According to lifestyle, bedroom furniture customers in Germany can be segmented as ‘singletons’ and ‘best agers’. Young professionals with a high spending capacity can be classified as ‘singletons’; these customers prefer to purchase customized non-fitted furniture, which can fit in their small bedroom. Couples with children and older people complemented with a high spending capacity can be classified as ‘best agers’; these customers prefer to purchase fitted furniture for their large bedrooms. De Mooij (2011) has pointed out that the pu rchasing behaviour of customer can be directed by personality and cultural orientation, which means that companies planning to expand their business in the bedroom furniture segment of Germany need to design their product in accordance with German culture for generating attraction among customers. The stable political condition of Germany will encourage retailers to invest in the bedroom furniture segment, which will help them to expand their business in the country. Gillespie et al. (2010) have pointed out that antitrust law in European countries such as Germany has

Take Home Final Exam Essay Example | Topics and Well Written Essays - 1250 words

Take Home Final Exam - Essay Example This time it’s the Eastern Ukraine that has become center of attention. Each of the region aims at establishing a pro government which would serve its strategic purposes. The recent event of Crimea Crisis has brought the two nations to a strangulating view point in the diplomatic and political activities. As a result the allies on each side have been brought into action as well as subsequently the United Nations Security Council as well. After the formal annexation and troops march in, the Russians have declared it a Crimean Federal District. Although this move has not been approved by the United Nations. The Crimean Peninsula is important on multiple accounts. One of the factors is its multi dimensional and multi ethnic population segmentation, the other factor that has caused the stir and attention is its affiliation and geographical capacity with the Black Sea which has since centuries served as the pivot towards the Russian interests in the region (Pavliï ¸  uï ¸ ¡k and Klympush-Tsintsadze, 68). Surveys conducted in this pursuit to determine the pulse of the people, it was revealed that over 40 percent of the Ukraine population desires becoming part of the E.U, while a meager 14 percent of the population wanted to get enrolled into a pro Russian economic union entity. United States of America cannot allow re occurrence of the Cold War expansionist policy of Russia through the influence establishment in the smaller states of the region. It at the same time does not want the natural resources to fall under the Russian influence as a result it badly wants Ukraine to be enrolled in the European Union. In bid to protect the central part of Ukraine from falling into the shade and influence of Russia, United States of America has released a fund and assistance of one billion dollars on immediate grounds (JOACHIM and WEISMAN). This has been done so to provide assistance to the already frail economy of

Foreign Policy Issues Faced by UK Essay Example | Topics and Well Written Essays - 750 words

Foreign Policy Issues Faced by UK - Essay Example The three issues of international concern to the U.K. are discussed in greater depth below. Discussion The United Kingdom has been in the forefront of international news lately and these three foreign policy issues are the fight against terrorism, the economic crisis in Europe and the on-going war in Libya of which Great Britain and France took the lead roles for all NATO members in cooperation with the United States of America. The three international issues are important to the United Kingdom because it is leading member of the European Union as well as a major player in the international arena of politics, economy and the oil industry. On the whole, an evaluation of the newspaper's approach to presenting the news will show it tries to present a balanced view of the news, without any sensationalism, slant or any personal opinion either of the reporter or the newspaper's news editors. This is as it should be as the task of any newspaper is to inform its readers and any views on the news should always be properly relegated to the opinion-editorial page (op-ed section). If ever, the personal views of the reporter are largely muted or very subtle an ordinary reader would hardly notice it. The fight against Islamist terrorism is of great interest to the United Kingdom. It is a primary concern to the country as it itself had once been a victim of these terrorists attacks. It was not too long ago when four suicide bombers detonated themselves in a well-coordinated attack by riding on London's trains and set off the bombs back in July 07, 2005 that targeted civilian train passengers. The four bombers declared themselves as jihadists and had links to the terror network of Al Qaeda. The recent successes of the American's anti-terrorism efforts should be of good cheer to the English people as well because it implies a safer environment for every British citizen. The killing of Osama bin Laden in Pakistan back in May this year is a great victory against international ter rorism. The recent news about the assassination of Mr. Anwar al-Awlaki in Yemen should be reason enough for a celebration (Hider 1) as this guy in a way had assumed the ideological leadership of Al Qaeda after Osama bin Laden was killed. The Central Intelligence Agency (CIA) of the United States which is the lead agency tasked to fight terrorism overseas had targeted him despite Mr. Awlaki being an American citizen. He is a native American of sorts, having been born in New Mexico but he took up jihad (Dozier and Apuzzo 1) and was responsible for several failed bombing attempts using airplanes also. The second news item of international significance for the United Kingdom is the on-going financial and economic crisis in Europe caused by the risk of default by Greece. The country is one of the strongest economies in Europe, besides Germany and France, It is only expected that it will also play a leading role in resolving this latest debt crisis by contributing to a bailout fund and st amping a seal of approval for any loans to be given out to Greece. But is it also in a quandary of sorts, as the country itself has not yet fully recovered from an earlier financial crisis brought about by the bursting of the American housing sub-mortgage bubble in 2007 and is also suffering from a large budget deficit that has necessitated big cutbacks. Great Britain had seemed headed for a mild economic recovery just six months ago but the situation today has completely deteriorated due

Retail Purchasing and Supply Chain ( about Zara ) read the case study Essay

Retail Purchasing and Supply Chain ( about Zara ) read the case study and answer the questions 1 and 2 - Essay Example The buying decision process at Zara Zara produces wears for the global consumer market; thus, the need to understand the buying process towards the fashion offers becomes a necessity in order to ensure that all programs target the needs of the consumer (Evans, et al 2004, p. 23). The garment store establishes that the emerging trends in the consumer market pose the feeling of deprivation as the female gender seeks to match with the prevailing trends in the market. For example, the company recognizes that the consumers realize that there is need to access the most current fashion on seeing other influential characters wear the item. In most cases, Zara depicts the consumer needs through fashion advertisements in the television media and analyzes that there could be relative consumer needs in the global market (Pahl and Mohring, 2008, p. 40). Therefore, Zara establishes consumer need recognition as the first approach the consumers take towards the company’s programs. Zara unders tands that consumers search for the right information concrning the emerging fashion trends. The company establishes that different sources of information may serve to deviate or enhance consumer knowledge and understanding; thus, the best initiative that the company establishes should focus on availing effective information (Evans, et al., 2004, p. 30). Zara creates an informative flow that affects efficiency in reaching the customers at the right time. The company depends on online and television advertisements to relay information to the consumers at a critical time, when the consumer seeks for the available fashions as advertised in the television shows. In response to the growing consumer anxiety to access information, Zara designs relevant fashions and distributes them throughout the chain stores while ensuring effective advertisement of the offer. This aspect tames consumer loyalty; thus, with the emergence of new fashion trends, the fashion consumer segments tend to search i nformation on Zara’s line of offer (Toru, 2007, p. 12). The clothing company researches and implements that the fashion business does not eradicate the problem of evaluation of alternatives as consumers seek to access the best offers out of the emerging trends (Rosenbloom, 2009, p. 70). Information linkages are turning the world into a global market place, and thus the consumer gains access to an effective criterion of assessing the value preposition of a trend over another. Zara establishes the aspect that the global consumer may vary its products with those of the H&M and other close competitors. However, this fails to yield consequential pressure over the company based on the delivery criteria (Evans, et al., 2004, p. 34). Although this is not a dependant aspect in marketing, Zara improves it through ensuring quality and progressive innovation, which controls all perceptions of the global consumer to assume that Zara offers the desired products duly and to the anticipated status. Consumers seem to establish different buying decisions with effect to their distinct perceptions towards products. The fashion market depicts convergence in the buying decisions as outweighing the differences. For example, the Zara company outlets tend to offer standardized products in the different countries they operate