Editorial

Citation

Akbar, Y.H. (2010), "Editorial", International Journal of Emerging Markets, Vol. 5 No. 2. https://doi.org/10.1108/ijoem.2010.30105baa.001

Editorial

Article Type: Editorial From: International Journal of Emerging Markets, Volume 5, Issue 2

Below is a brief summary of the articles in this issue. As ever, the papers cover a range of disciplinary, area and empirical perspectives. Our issue has a strong Asia-Pacific focus and we have our first papers published on Sri Lanka and Fiji/Samoa. We also have two papers from Central and East Europe (CEE).

We open with a study on “Commodity trading advisors (CTAs) for the Indian commodity market” by Sheeba Kapil and Kanwal Nayan Kapil. The Indian commodity market requires large investments and enhanced trading activity both in the national as well as the regional commodity markets. The participation of non-professional people trading commodity markets makes the market a risky venture. Non-professional participants simply add to the volatility factor of the market. The paper offers arguments and insights as to why the Indian commodity market needs the participation of the CTAs. As a regulatory measure, the Indian market too can adopt guidelines structured for CTAs by Commodity Future Trading Commission and National Futures Association. The commodity trading advisors can bring the Indian commodity market at par with developed commodity markets like Chicago Board of Trade.

The recent expansion of Indian commodity market has not been very structured. There have been constraints through policy restrictions and at the same time there has been an effort for liberalization of the commodity market to bring them at par with international commodity market. Sheeba Kapil and Kanwal Nayan Kapil argue that participation of CTAs will provide much-required protection to commodity portfolios and they will also provide the expertise in commodity derivative trading to participants and help build the commodity inclusive portfolios with better return and lesser risk. This is the first paper that initiates thoughts on allowing CTAs to participate in Indian commodity market – a unique contribution to the literature.

Our second paper is a case study by Darek Klonowski and Daria Goł

biowska-Tataj. It is a study of high-tech start-ups in CEE and Poland in particular. The company is NC Software Applications Solutions. The study contributes to the literature in three distinct ways. The case is unique for at least three reasons. First, while academic literature highlights the importance of newly developed entrepreneurial firms in transforming centrally planned economies, there has been limited attention paid to the development of young entrepreneurial companies in the high-tech industry in these markets. This is especially important for countries in the CEE region, many of which have traditionally focused on commodity-type, low-margin businesses but are now aspiring to focus on value-added, high-margin business activities.

Second, the case demonstrates both company specific operating problems and the external market challenges of establishing a successful business in the high-tech industry in Poland. While some studies have focused on entrepreneurship, limited attention has been given to the development of high-tech businesses in the CEE region. Lastly, the case describes the dynamics of business failure in the high-technology industry. The case provides a unique opportunity to study the root causes of business failure in the CEE region, as these situations are scarce in the extant literature. The study highlights a number of factors that account for the failure of the company including difficulties in strategic and organizational transformation; difficulties in raising capital – a key problem for many emerging markets and problems of operational management structures and progresses. It is refreshing to examine managerial failure since most case studies analyse and report success.

The third paper continues the theme of small-medium sized enterprises but the focus is on Fijian and Samoan companies. Gurmeet Singh, R.D. Pathak and Rafia Naz’s paper specifically examines internationalization challenges. Using a structured questionnaire of approximately 80 and 120 enterprises from Fiji and Samoa, Gurmeet Singh, RD Pathak and Rafia Naz find that the principle challenges facing South Pacific entrepreneurs relate to both institutional voids – such as lack of governmental support and an unattractive fiscal environment but also to internal issues such as lack of management knowledge and competences.

Our fourth paper by Anura De Zoysa and Kathy Rudkin examines how Sri Lankan investors use annual company reports. Few studies exist that examine financial reporting practices in emerging markets, and moreover little is known about the user perceptions of company annual reports in these markets. This paper contributes to our understanding of such issues by examining the views of a wide spectrum of users on the usefulness of corporate annual reports in Sri Lanka. The quantitative empirical contribution is through a questionnaire survey, covering seven user groups – accountants, executives, bankers, tax officers, academics, financial analysts and investors. Using ANOVA methodology, the 264 responses were analysed using the Kruskal-Wallis one-way test.

The results reveal that most use annual reports for obtaining information for share transactions and that Sri Lankan users depend more on annual report information than on information provided by stockbrokers, newspapers and other media reviews. This implies that investors need to rely heavily on the assumption that annual reports of companies are accurate and do not seek to mislead investors. It may also suggest that in the absence of public third party analysis, insider knowledge may guide investment decisions too.

The fifth paper in this issue examines the link between consumer ethnocentrism and the attitudes of two consumer groups to a buy local campaign in a transitioning economy, Slovakia. Kojo Saffu, John H. Walker and Marica Mazurek employ a structured questionnaire, taking data collected from 211 non-students at shopping malls in Banská Bystrica (non-student group) and from 209 students at the University of Matej Bela, Banská Bystrica (student group) in Slovakia. Ethnocentrism was measured using the consumer ethnocentric tendencies scale (CETSCALE) while attitudinal statements were used to measure the attitudes toward locally made products and a buy local campaign. The attitudinal data were factor analysed and the correlations between the CETSCALE and the attitudinal statements were examined. Summative scales based on the factor analysis results were also developed.

The authors find that the role of the government and industry in encouraging Slovakians to buy local. We found the non-student consumers to be less ethnocentric than the student group was. The attitudinal statements of both groups toward Slovakian products were generally similar. Moreover, the attitudinal statements toward the buy local campaign were comparable. Exploratory factor analysis on the attitudinal statements resulted in three factors for the non-students, and four factors for the students. Finally, we found a significant relationship between the CETSCALE and a number of the attitudinal statements.

The authors conclude that the role of government and industry is needed to ensure the success of buy local campaign. Companies wishing to market to Slovakian consumers must pay attention to quality and price. Companies should evaluate the price-quality conscious or value-for-money segment further and develop appropriate marketing positioning strategies for this market segment. Age and education may also be considered as segmentation variables.

Yusaf H. Akbar