The Business Review Journal

Vol. 26 * Number 2 * December  2018

The Library of Congress, Washington, DC  *  ISSN 1553 - 5827

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The primary goal of the journal will be to provide opportunities for business related academicians and professionals from various business related fields in a global realm to publish their paper in one source. The journal will bring together academicians and professionals from all areas related business fields and related fields to interact with members inside and outside their own particular disciplines. The journal will provide opportunities for publishing researcher's paper as well as providing opportunities to view other's work.  All submissions are subject to a double blind peer review process. The journal is a refereed academic journal which  publishes the  scientific research findings in its field with the ISSN 1553-5827 issued by the Library of Congress, Washington, DC.  No Manuscript Will Be Accepted Without the Required Format.  All Manuscripts Should Be Professionally Proofread Before the Submission.  You can use for professional proofreading / editing etc...The journal will meet the quality and integrity requirements of applicable accreditation agencies (AACSB, regional) and journal evaluation organizations to insure our publications provide our authors publication venues that are recognized by their institutions for academic advancement and academically qualified statue. 

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A Discussion on Socio-Economic Profitability as a Prerequisite for Investments in Security Measures

Henrik Langdalen, University of Stavanger, Norway

Dr. Eirik Bjorheim Abrahamsen, University of Stavanger, Norway

Dr. Jon Tømmerås Selvik, University of Stavanger, Norway

Dr. Sissel Haugdal Jore, University of Stavanger, Norway



In this paper, we discuss the use of socio-economic profitability as a fundamental prerequisite for investments in security measures. We conclude that, in general, it is not appropriate to use socio-economic profitability as a prerequisite for security investments if the term “profitability” is interpreted as the expected benefit minus the expected costs, which is the common interpretation among economists. A reference to costs and benefits is important prior to investment in security measures, but there is a need for stronger weight to be placed on uncertainties and the precautionary principle than is the case with expected values. Taking decisions under uncertainty would, in most security contexts, include using the precautionary principle to some degree. The purpose of the paper is to point out that the profitability of security measures must be assessed in a broader context than is the case in a traditional cost-benefit analysis.   Over recent decades, the security risk and the threat picture in most Western societies have changed in line with the continuous technological, demographical and security-related developments. The need to facilitate the protection of basic national functions, critical infrastructure and sensitive information against intended threats, such as terrorist acts, espionage, cyberattacks, sabotage and other serious crime, appears to be greater than ever (NOU, 2016). Experience from single events in recent years illustrates the complexity of societal security. Technological developments challenge security work with new ways to produce, share and save socially sensitive information. Our increased dependency on ICT-based information systems has increased our vulnerability to threats in the digital space. The numerous terrorist attacks that have unfolded in Europe in recent years have also led to a greater public demand for increased implementation of security measures in society.  Although security attacks are a great economic burden to those struck by them, in most instances the probability of an extreme attack, such as a terrorist strike, is low, meaning that investments in security measures will not pay off in most cases (Akhtar et al., 2010; Mueller and Stewart, 2011; Stewart and Mueller, 2013). However, this is not the case for all security-related risks, as the scope of security threats is wide, ranging from low-frequency events such as terrorism to high-frequency events such as cyberattacks. For the more “ordinary crimes”, such as cyberattacks, the defenders may have more available data, on which a security risk assessment can be based (Jore, 2017a). Although historical data may provide valuable information on the threats, security-related risks will always involve some degree of uncertainty, suffering from lack of knowledge regarding who, how, what, and when an attack will take place (Jore, 2017a).  Despite the aspiration to develop a secure society, in reality, deciding how to best achieve this is not straightforward. In practical security risk management, not everything can, or should, be protected, and security measures should be weighed against other values such as costs, democratic freedoms, etc. One of the main challenges in security risk management is the dynamic risk picture, in which a perpetrator is adaptable and may alter targets according to the defender’s risk management strategy (Dillon et al.2009). In the case of limited resources, the consequence of this is that it is impossible to secure all potential targets. Despite this, socio-economic profitability has been proposed by many governments and scholars as a prerequisite for investments in security measures. 


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The Royal Commission into the Banking Sector in Australia: The Long Road Ahead (1)

Carlo Soliman, LLM, Senior Lawyer, Notary Public, Part-time Academic TOP Education Institute New South Wales, La Trobe University and Victoria University Sydney, Australia



The Australian banking and finance sector has enjoyed unprecedented growth and success in recent decades, underpinned by a stable and well-regulated economy. The relative buoyancy of the economy witnessed an expansion in financial products and in turn a more aggressive shift by banking institutions from traditional service providers to a profit driven culture premised on commission and performance bonuses. With a sound regulatory framework in place since the Financial Services Inquiry, the misconduct revealed in the Royal commission is somewhat surprising. Even more troubling, it involves the very industry responsible for funding all investment activities.  As seen in the aftermath of the Global Financial Crisis (GFC), such problems can destabilise and rock the very foundation of any economy. This paper provides a preliminary overview into the Royal Commission and discusses some of the broader implications that may result from this seminal inquiry. It is postulated that the current regulatory architecture is effective and robust and what is readily needed is a stronger commitment from government to implement and apply the law more consistently.  The Federation of Australia on 1 January 1901 bore witness to the birth of the banking system where the Commonwealth Parliament, under Section 51 (xiii) of the Constitution of Australia, was authorised to pass laws with respect to banking. Historically, banks engaged in relatively conservative activities and confined themselves to the practices of being depositories of savings and lending funds to individuals and businesses. This is reflected in the early legislation, namely the Banking Act 1959 (Cth), which regulated a relatively simple financial landscape. Over several decades, the floating of the Australian dollar (2) and the later wholesale deregulation of the financial services industry have given way to a more competitive financial services market, a metastasis of financial products and the growth of a penumbral banking market with a range of previously unseen and little understood financial products, such as derivatives and subprime loans. In recognition of the need to maintain some stability, the Australian Government commissioned a number of inquiries, collectively known as the Financial Systems Inquiry (FSI), to investigate into and report on ways to strengthen the system whilst encouraging economic growth and competition. It is a well-accepted axiom that the banking and financial system represents the cornerstone of any modern economy. This is especially so in modern times where the impact of globalisation has seen traditional jurisdictional boundaries intrinsically merge the economies of the world. The pivotal importance that banking plays in the financing of all aspects of modern society highlights the necessity for a well-regulated system. This in turn serves to maintain a proper functioning economy.  In 1935 the Royal Commission on Monetary and Banking Systems, entitled Commonwealth of Australia, Report of the Royal Commission Appointed to Inquire into the Monetary and Banking Systems in Australia, Commonwealth Government Printer Canberra (1935), represented the antithesis of a well-regulated financial system which would serve seven decades later to shield the Australian Financial System from economic ruin. In fact, the Australian Government has regularly reviewed and enacted legislation in an attempt to create a stable, regulated financial system.


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New Proxy For Stock Index Futures Markets Speculation Trading

Dr. Po-Kai Huang, Shih Hsin University, Taiwan



This paper studies the impact of speculation trading on the futures market intraday volatility by providing new evidence in S&P 500 stock index futures market with the new proxy variable for speculative activities from 1982 to 2003. Our new proxy variable for speculative activities removes hedgers’ trading activities from volume. We find that that our new proxy for futures speculation trading shows more power to explain futures intraday volatility than volume and the ratio of the volume to the open interest. In addition, the results indicate that there is a positive and significant relationship between futures intraday volatility and speculation trading volume. It suggests that speculation destabilizes financial markets and that imposing regulatory limits on speculation. Speculation trading is necessary in futures markets. Speculators are willing to take positions and bear price risk that is transferred by hedgers when mismatch in contracts demanded by long and short hedgers occurs. Therefore, they expect to earn futures risk premiums. Futures markets cannot function without speculation trading.  Whether speculation trading stabilizes or destabilizes futures markets volatility is an ongoing debate. On one hand increased speculative activity is associated with stability of agricultural commodities futures volatility (Leuthold, 1983 and Garcia, Leuthold, and Zapata, 1986), and on the other hand speculation destabilizes financial markets theoretically (Hart and Kreps, 1986 and Stein, 1987) and empirically (Bessembinder and Seguin, 1993, Luu and Martens, 2003, and Bhargava and Malhotra, 2007)  The purpose of this study is to contribute to the ongoing debate about the impact of speculation trading on the futures market volatility by providing new evidence in Standard & Poor’s (hereafter S&P) 500 stock index futures market with the new proxy variable for speculative activities. The empirical findings point out that our new proxy for futures speculation trading shows more power to explain futures intraday volatility than volume and the ratio of the volume to the open interest. In addition, there is a positive and significant relationship between futures intraday volatility and speculation trading volume, as predicted by the mixture of distribution hypothesis. It suggests that speculation destabilizes financial markets and that imposing regulatory limits on speculation. The remainder of the paper is organized as follows. Section 2 presents our new proxy for speculation. Section 3 describes the data sample and source. Section 4 analyzes the testing methodology and empirical results. Section 5 concludes the paper.  Scalpers, day traders, and position traders are three kinds of speculators, which classed by the length of time they hold a position. Scalpers hold their positions for only a few minutes, and offset all of their positions before the end of daily trading periods (1). Day traders hold their positions for a few hours, and close out their all position before the end of trading each day. Position traders, however, hold their positions overnight or over days when the market is closed. Kolb (1997) notices that overwhelming majority of speculators are either scalpers or day traders. Therefore, it is reasonable that our study regards the trading of scalpers and day traders as speculation trading. Volume is used to measure the trading activities of speculator in many studies. Scalpers and day traders do not hold open positions overnight. This implies that when speculation activities are active, volume will increase, but not open interest. For example, Rutledge (1978) argues that changes in daily trading volume are largely a measure of variations in speculation.


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Interindustry Analysis of Healthcare in Taiwan

Chia-Mei Shih, Department of Resources Engineering, National Cheng Kung University, Tainan, Taiwan

Yu-Chieh Fu, Department of Resources Engineering, National Cheng Kung University, Tainan, Taiwan

Dr. Jung-Hua Wu, Department of Resources Engineering, National Cheng Kung University, Tainan, Taiwan



The National Health Insurance (NHI) of Taiwan covers more than 99% of the population. This study differs from previous research on the NHI system and the quality of medical services by focusing on the structure and linkages of the healthcare sector using interindustry analysis. Our empirical results identified value added as the most important input of the healthcare sector. The distribution of corresponding outputs was aimed primarily at satisfying final demand. Intersectoral linkages revealed that the healthcare sector is not strongly connected to other intermediate sectors. We also examined the structure of the healthcare sector before and after implementation of the NHI. We found that the proportion of employee compensation to total output by the healthcare sector increased by 9.76% between 1994 and 2011. Since the inclusion of brand-name drugs in the NHI payment scheme in 2011, the wholesale/retail trade sector became the primary intermediate input. Our findings indicate that decision-makers should refer to nurse-to-patient ratios in advanced countries and seek to promote the research and development of new drugs in the domestic pharmaceutical industry. According to the Ministry of Health and Welfare (2016), there were 13 types of health and medical insurance plan prior to 1995, which covered only 59% of the population. However, since its implementation in 1995, the NHI has been providing medical coverage to 99.6% of the population of Taiwan (Executive Yuan, 2016). Nonetheless, researchers, such as Chiang (1997), have proposed that the NHI fails to utilize medical resources effectively, indicating that further reforms are required. Numerous researchers have examined the quality of medical services. Chou, Grossman, and Liu (2014) reported a reduction in postpartum mortality among infants born in rural households since the implementation of the NHI. Chen, Peng, Lee, and Liu (2015) revealed a negative correlation between preventive care and the length of hospital stays among elderly patients. Hung and Chang (2008) reported that the NHI has improved the quality and quantity of medical services, albeit at considerable cost. The NHI initially adopted a fee-for-service payment method, under which the income of medical institutions is correlated to the number of outpatient visits; however, it imposed a huge financial burden on the NHI. The hospital global budget system was completed in 2002 with the aim of reducing this burden.


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Return On Investment (ROI) For Evaluating Safety Measures. Review And Discussion

Surbhi Bansal, University of Stavanger, Norway

Dr. Jon Tommeras Selvik, University of Stavanger, Norway

Dr Eirik Bjorheim Abrahamsen, University of Stavanger, Norway



Return on Investment (ROI) is a performance measure that quantifies the expected return of an investment, relative to the amount of money invested. In this paper we discuss the usefulness of this performance measure, with special attention on decision situations related to safety. We conclude that ROI should be used with caution, as focusing solely on the expected values does not in general give sufficient weight to the uncertainties. To improve the basis for prioritizing safety measures by using ROI, we recommend including assessments of ROI, given an accidental event. We also highlight the importance of reflecting the strength of knowledge on which the ROI values are based.    Organizations face risks that can threaten the safety of their assets, people, earnings, reputation or sustainability, in both the short and long run. To manage this risk and fulfil safety management objectives, organizations explore the options of investing in suitable safety measures. However, as these measures relate to both costs and benefits, a main issue is: how to prioritize among different safety measures.  One way is to calculate ROI (Return on Investment), which is a performance measure representing the amount of return on an investment, relative to the cost of the investment (see e.g. Sonnenreich et al. 2006). It is widely used to evaluate the efficiency of an investment or to compare the efficiency of different investments (Phillips et al. 2014), for example with safety management (see e.g. Zou et al. 2010). The safety measure with the highest ROI is considered the best investment, while the measure with the lowest ROI is considered the least attractive. The calculation is quite simple, it is relatively easy to interpret, and it is relevant for a range of safety applications, for example within construction and transportation. In the event of uncertainties, which is usually the case, expected values are used. ROI then represents the expected return on an investment, relative to the expected cost of the investment.  The use of ROI seems to provide a rational framework as a basis for prioritization of safety measures. In this paper we challenge this framework.


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The Globalisation of the International Student Market: The Australian Perspective

Anurag Kanwar, General Counsel, Part-Time Academic Top Education Institute, Australia

Carlo Soliman, Senior Lawyer, Notary Public, Part-time Academic Top Education Institute New South Wales and Victoria University Sydney, Australia

Gautam Dahima, CPA, Australia



Over the last 10 years Australia has become a destination of choice for international students. This has resulted in an export industry worth $20 billion. This paper will briefly consider the current legislative environment for organisations who deliver education to international students. The globalisation of international education has significant economic, social and political implications. All too often, most commentaries on the globalisation of education has tended to focus on the economic or income stream for countries. What is overlooked is the important impact on the future of the international community as a whole, the future of international leadership as a whole and the creation of a new breed of international citizens all of whom have one thing in common – international education. This paper will provide brief overview of the challenges and nuances faced by all stakeholders in the Australian international education industry.  International students have been coming to Australia for a number of years. It was only in the last 10 years the Australian Government has led education promotional campaigns. This has increased the visibility of the Australian education sector overseas. Australia now has a national education brand and streamlined visa policies and post study work opportunities for international students. These government led initiatives has resulted in International education becoming a $20 billion export industry (1). Over the next 10 years the aim is to increase the number of international students in Australia to one million and the number of students taught offshore to 10 million.  There is a strong global trend for enrolments in international students. Australia is now competing with countries such as Malaysia, Canada and the United Kingdom.  Australia is considered a top destination for international students. While student destinations have remained stable with the traditional destinations remaining popular these are USA and UK. The United States remains popular while France and Germany are most popular for European destinations. This is in part as a result of the 2014 decision to abolish tuition fees for undergraduate students’ at all public universities (2). 


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Revisiting the Penrose Effect and Managerial Capabilities

Lin-Yu Kung, National Taiwan University, Taiwan



Edith Penrose's (1959) seminal work asserted that managerial capabilities would be the key constraint of firm growth. The extant literature investigating the Penrose effect, however, remains controversial. To bridge the gap in the literature, this study encompasses multiple theoretical perspectives, including growth theory, top management team and dominant logic, to identify critical antecedents affecting the requirements of managerial capabilities that would in turn determine the likelihood of the Penrose effect emerging. In so doing, this exploratory study may reconcile the inconsistent results in prior research. Implications and avenues for further empirical research are also provided.  The existence of the Penrose effect, the growth of firms is limited by managerial capabilities (Penrose, 1959), has received a great deal of attention in previous research (e.g., Geroski, 2005; Goerzen & Beamish, 2007; Tan & Mahoney, 2005). For some researchers, the Penrose effect is a binding constraint on firms’ growth, and firms with business activities demanding a high degree of managerial capabilities are more likely to suffer by it (Shane, 1996; Tan & Mahoney, 2005; Thompson, 1994). Put differently, the Penrose effect is less likely to impede the growth of firms, if the firms increase the ability of supplying sufficient managerial capabilities (Goerzen & Beamish, 2007; Tan & Mahoney, 2007). For other researchers, corporate growing rates are nearly random, an opinion that is unreconciled with the literature (Geroski, 2000; Geroski, 2005). Economists have argued the existence of the Penrose effect for decades (Rubin, 1973; Rugman & Verbeke, 2002; Slater, 1980). The findings from prior research concerning the Penrose effect are inconsistent and confusing. It remains a puzzle: whether or not organizations adopt firm-specific alternatives; therefore, the likelihood of the Penrose effect occurring varies considerably among firms. Incorporating multiple perspectives, this study aims to propose various factors resulting in the divergent phenomenon of the Penrose effect and suggest the base for organizations designing specific alternatives. Building on Penrose’s growth theory (Penrose, 1959), the factor is identified as the path of increasing the organizational supply of managerial talent. On the other hand, combining the insight of dominant logic with the view of business complexity (Grant, 1988; Prahalad & Bettis, 1986), this study distinguishes the factor for expanding firms to consider the demand of managerial capabilities.


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