YARDISTIC INTERNATIONAL COLLEGE

Masters of Business Administration

EVENING PROGRAM

Section B

Business Research Methodology Group Assignment

Article Review

Submitted To:- Moges Logaw (Phd)

February 2021G.C
Group members
1.Getnet Tesema
2.Mekdelawit Wondifraw
3.Simret Mebrahtu
4.Biruk Alemayehu
5.Yonathan Fikre
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The interrelationship among bank profitability, bank stability, and loan growth: Evidence

from Vietnam

Abstract

This article aims to investigate the interrelationship among bank profitability, bank stability, and

loan growth in Vietnams bank system from 2006 to 2017 using a model called simultaneous

equations. The researchers used bank-specific information mainly obtained from financial

statements of individual commercial banks in Vietnam (Secondary data). The finding showed the

existence of bidirectional (one affecting the other) relationship between the three variables. To

mention that, bank profitability is positively associated with bank stability and vice versa. Loan

growth is negatively related to bank stability and vice versa. Also, the findings show a positive

interrelationship between bank profitability and loan growth. Loan growth to a certain level

reduces profitability and bank stability. The study has recommended bank supervisors and bank

managers to be cautious to pursue the strategy of massive loan growth and it also implies policy-

makers should carefully monitor the Vietnamese banking market when loan growth is too fast.

Introduction

Statement of the Problem

Credit expansion exposures banks to greater risk although it is the main income generating

activity. Thus there needs to be investigation to be done about the relationship between the loan

growth, profitability and risk absorbing capacity of the commercial banks as there are no

empirical studies that examine the interrelationship among these variables. The study tries to test

the following hypothesizes.

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H1: There is no bidirectional causality between loan growth and bank stability.

H2: There is no bidirectional causality between profitability and bank stability.

H3: There is no bidirectional causality between loan growth and bank profitability.

The study objectify to prove the existence of mutual relationship between the mentioned

variables but it somehow have a limitation as it didn’t quantify the degree of relationship as it

only have direction otherwise the journal have scientifically sound results.

The investigators have reviewed around fourteen literatures discussing about the matter of

interest. These literatures were very essential to formulate the hypothesis regarding the

interrelationship of profitability, loan growth and stability of banks. As the researchers point out,

there were no empirical studies that examine the interrelationship among bank stability,

profitability and loan growth in Vietnam.

Methodology

ZSCORE proxies bank stability as calculated by the standard deviation of ROA over the sample

period, in conjunction with the current ROA and EQUITY period values. As the distribution of

Z-scores is highly skewed, to mitigate this problem, the natural logarithm of Z-scores is used. In

the remainder of this analysis, we still use the name, ZSCORE, for brevity, to represent the

natural logarithm of the Z-score. The growth of loans (LOGR) is determined by the annual

percentage change in banks' total outstanding loans. As mentioned above, the three endogenous

variables in the simultaneous equation system are represented by ROE, ZSCORE, and LOGR,

with two right-hand endogenous variables in each of the three parameters. By inserting
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exogenous variables that have predictive value for each of the endogenous variables above, the

model is completed.

Participants

Bank-specific information was mainly obtained from financial statements of individual

Vietnamese banks (Only commercial banks) between 2006 and 2017. A total of 412 observations

were obtained and financial information has been filtered by using two criteria: outliers and those

banks without data for any of the considered variables have been dropped. The data for

macroeconomic variables are collected from the World Bank.

Data Collection Procedures

Secondary data from 41 banks including five state-owned commercial banks and 36 privately

owned commercial banks which together accounted for more than 80% of total assets in the

industry was used.

Data Analysis Procedures

The data was analyzed the simultaneous equation method. All versions are estimated with the

panel GMM method.

Results

In most instances, ROE, ZSCORE, and LOGR have bidirectional causal relationships, meaning

that these variables are significantly related. The outcome also indicates that the ROE influences

ZSCORE. This is therefore important to manage these feedback problems using a method of

system estimation because this simultaneous equation bias can lead to inaccurate estimators.
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Conclusions and Recommendations

This article utilizes the GMM estimator to analyze the simultaneous determinants of bank

stability, profitability, and loan expansion in Vietnamese banking between 2006 and 2017. The

findings demonstrate the bidirectional relationship between the stability of banks, profitability

and the rise of loans. However, it is possible that sound banks will be more profitable and that

credit growth is lower. Loan growth also enhances bank profitability but decreases bank stability,

while bank profitability has a positive effect on bank stability and credit expansion. More

notably, the results indicate a quadratic relationship between these variables. Loan growth

decreases profitability and bank stability to a certain extent. This means that bank managers

should be careful to follow the plan of massive loan growth and policymakers should track the

Vietnamese banking industry carefully when credit growth is too fast.

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References

Tan, Y. (2016) The impact of risk and competition on banking profitability in china. Journal of

International financial markets, institutions and money, 40, 85-110.

Le, T.D. (2018) Bank risk, capitalism and technical efficiency in the Vietnamese banking system

Australasian Accounting Business & Finance Journal, 12(3), 42–61.

Nguyen, J. (2012). The relationship between net interest margin and noninterest income using

a system estimation approach. Journal of banking & Finance, 36(9),2429-2437

Miller. S.M. & Noulas A.G.(1997). Portfolio mix and Large bank profitability in the USA.

Applied Economics, 29(4), 505-512.

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Reflection

As the findings of the study clearly depicts as the growth of loan is directly proportional to the

profit generated by the financial institute (the banks) but to only certain levels. It is logical to

think that way but it can also be linearly proportional if the process of giving loan follow a

strict procedures and it grows in large scale.

The banks could also be stable enough even though their loan percentage is growing in an

increasing rate keeping in mind that their exists strong system of loan tracing mechanism and

the rules and regulations enforcement capacity of the bank is intact.

Therefore there is a chance of maintaining profitability and stability while fast loan growth is

place in the contrary to the findings of the study.

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A study on the COVID-19 awareness affecting the consumer perceived benefits of online

shopping in Vietnam (Van Kien Pham , Thu Ha Do Thi & Thu Hoai Ha Le)

ABSTRACT

A research models as a moderator variable to consider the impact of this covid19 on online

consume behavior in Vietnam. How does this affect online shopping habits, and how does

consumer behavior change during and after the disease outbreak? A minimum sample that the

research needs to perform is at least 400 samples but the study collected more valid samples,

awareness of Covid-19 does not change the perception of ease of use in online shopping, and

marketing policy has no impact on online shopping, The findings show that there is a significant

change in the perception of the benefits of online shopping for consumers during the Covid-19

epidemic.

INTRODUCTION

Statement of problem

The research also aims to explore whether it is only temporary behavioral change because of the

benefits of online shopping during the Covid-19 pandemic or it is a real chance for many

businesses to be more aggressive with their digital strategies after the Covid-19 epidemic is

under control.

Purpose of the study

To explore the benefits of online shopping during covid-19 and investigate how differently

Covid-19 plays a moderating role in each type of perceived benefit towards Vietnamese

consumer’s online shopping behavior.

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Research question and hypothesis

What are Factors affecting online shopping habits? And how does consumer behavior change

during and after the covid19 disease outbreak? ,the researcher correlate 5 elements about

Perceived benefits analyzed those are awareness of utility (AU) easy to use awareness (EU)

awareness of marketing policy (MP) awareness of price and cost (PC) affection of society (AS) .

The hypothesis correlation is there is a correlation between AU and OS intention, There is a

correlation between EU and OS intention, There is a correlation between MP and OS intention

There is a correlation between PC and OS intention, There is a correlation between AS and OS

intention of Vietnamese shoppers in the context of COVID-19 pandemic.

Limitation

There exists a strong effect of age and gender on online shopping decisions, this article does not

focus on these factors but focused much on the effects of the epidemic the scope of the survey in

this study is only in one country Vietnam. The moderator variable selected in this article only

revolves around the emerging issue of 2020, which is the Covid-19 epidemic.

Literature review

Change occurs significantly after the Covid-19 outbreak in which 62% would eat at home more

post pandemic and 83% reduced eating or drinking away from home. Especially, there is 93% of

Vietnamese would like a 5 G phone and 67% believe in virtual shopping prospects in the future

and approximately 50% are interested in purchasing intelligent speakers or artificial Intelligent

assistants. After Covid-19 happened, the categories of online purchasing products are changing

gradually in towards of concerning health more than before, preventing of virus increase by

online shopping and percentage of online shopping is also increasing compared to traditional

shopping types. The literature review presents in clear way and support the pros and cons of
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covid19 outbreak, online shopping for peoples country and even for decreasing spread of virus

the study provide those usefulness’s, but there are various factor affecting online shopping other

than internet access like culture, attitude, risk but the online shopping organization mostly

focuses about their demand and profits. The harshest factors are customer perception of risk

factors and benefit factors. We perceive or the study contribution of this article is the

consideration of Covid-19 as a moderator variable to test its impact on Vietnamese consumers’

perception of online shopping benefits.

Methodology, data collection and analysis

The sample technique used by in the research calculation according to the formula n = N/ (1 +

N*e2). The questions including informational questions, questions for measuring independent

variables moderator variable, and the dependent variable using the Likert’s scale and other CFA,

SEM analysis .

Result 1: The AC does not have an intermediate role or regulate the impact of the EU on the OS

In other words, the awareness of Covid-19 does not change the perception of ease of use in

online shopping.

Result 2: AC has a significant impact on OS AU has no significant effect on the OS. This result

shows that the AU does not affect on its own to OS

Result 3: The AC does not have an intermediate role or regulate the effect of MP on the OS

because MP has no direct significant impact on the OS. In other words, marketing policy has no

impact on online shopping during the Covid-19 pandemic.

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Result 4: The AC has a significant impact on the OS and AS has a significant impact on OS.

There is a regulatory role of AC variable in the impact of AS on OS, but it is regulated in a

decreasing direction In other words, the influence of society through awareness of Covid-19 has

reduced the online shopping decision, but this decrease is still “positive” The results showed that

the Covid-19 epidemic had a significant influence on the online shopping behavior of

Vietnamese customers.

Conclusion and recommendation

Even in the epidemic period peoples are not eager to buy online so organizations need to

promote their services, not only these consumers try to ask other customers about OS before

buying. In this outbreak it is difficult to make physical contact so the organization needs to

preview contacts with supplier and even with consumer so they are confident to participate on

OS.
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REFERENCES

Nunnally, J.C, & Bernstein, I. H. (1994).Psychometric theory (3rd ed.) McGraw-Hil.Neilson,

(2020).

For sythe, S., Liu, C., Shannon, D., & Gardner, L. C. (2006). Development of a scale to measure

the perceived benefitsand risks of online shopping.Journal of Interactive Marketing, 20(2)

,55-75 https://doi.org/ 10.1002/dir.20061

Picodi.(2019). Ng ười tieu dung Việt mua sắm online ra sao?(How do Vietnamese consumers

Shop online ?]. https://www.picodi.com/vn/san-tim-khuyen-mai/ nguoi-tieu –dung-viet-mua

Sam online-ra-sao

Sarstedt, M., Bengart, P., Shaltoni, A. M., & Lehmann, S. (2018). The use of sampling methods

In advertising research: A gap between theory and practice.International Journal of Advertisin

g, 37(4), 650-663. https://doi.org/10.1080/02650487.2017.1348329

Zhang, K. Z. K., Cheung, C. M. K., & Lee, M. K. O. (2014). Examining the moderating effect of

Inconsistent reviews and its gender differences on consumers’ online shopping decision

International journal of Information management, 34(2), 89-98.

https://doi. org/10.1016/j.ijinfomgt.2013.12.001
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REFLECTION

The study project deals about online shopping on the COVID-19 awareness affecting the

consumer perceived benefits in case of Vietnam, the outbreak of COVID -19 provide an

opportunity to increase awareness and consumers of online shopping now a days almost 98% of

peoples use online shopping Vietnamese businesses have been facing challenges, like many

other countries, caused by Covid-19, which is an epidemic that spreads quickly through normal

human-to-human contact and occurred in Vietnam, COVID-19 impacts not only general

behaviors but shopping and out-of-home consumption.

Vietnamese consumers start recognizing the benefits of online shopping, especially during the

pandemic period. Covid-19 plays a moderating role in each type of perceived benefit towards

Vietnamese consumer’s online shopping behavior we think, on the epidemic period and the gov’t

tries to protect from the virus, reduce social interaction he supports online shopping. In all these

situations in Vietnam technological aspects and moderate come through because of OS.

This OS uses for Vietnam a huge success and opportunity for the overall country starting from

epidemic period peoples or consumers continues by OS these creates a different job opportunity

(like delivery job, packaging, call center…..), economic growth, innovations, minimize time

consumption. It looks like valuable for the country also for the whole world because of we

mentioned earlier economic growth, it leads the country to the better future and to the next

generation

The convenience of online purchase, or in other words, the ease of use of online shopping

services, which has a positive effect on customers’ intention in selecting this mode of shopping

consumers may be embarrassed when making an online purchase due to the lack of professional
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assistance from the employees or lack of social interaction with the sellers, so the consulting

staffs play an important role in supporting the experience of online shoppers there is some

factors affecting OS but the most thing to make it underlined is costs of installing applications or

software to use the e-shopping service, or costs of paying for the internet service while

processing the payment of purchases. Which is additional cost incur for using online shopping

this might lead the consumer loss apatite using of online shopping.

The research design focuses on five OS factors that assumed by the researcher those we

mentioned above AU, EU, MP, PC and AS and problem statement, questions and others stated in

a well-organized manner the factors affecting OS, influences, benefits, bottle necks and other

studied empirical also included in the research study, it is also trustworthy paper in somehow it

shows the evidences and cited in the reference but in neutral mind that can be logically right.

The test, hypothesis, accurate result provided clearly, the validity test presents in table form

numerically correlation between the 5 variables and online shopping, and there is also analysis

called CFA used to eliminate unnecessary item it can provide reliability un vague or clear and

relatively accurate results, mention of reliability there is also other analysis uses which is called

SEM used to confirm each construct of the research model has strong reliability.

The study provides/ gives us educational background about OS, the 5variable, and its correlation

with covid-19 but mainly in Vietnam. We think it is practically applicable because there is a say

called if you knew the problem you are 50% as near to the solution but in these study we know

both the solution and problem the rest is to let it to walk. The solution that means the implication

shows clearly easy to put to the ground, after covid-19 outbreak full solved the paper aren’t

going to be applicable or referable because it focuses on the virus and OS also consumers. The
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virus provides some chance for using OS but hill or fully removes of the virus makes

physical/social contact so, it might decrease usage of OS.

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Managerial cognitive capabilities, organizational capacity for change, and performance:

The moderating effect of social capital ( Beta Embriyono Adna & Badri Munir Sukoco)

Abstract

An organization is a structured system consisting of groups of individuals working towards

achieving some agreed-on objectives. Organizational management explores the nature and

functioning of all types of organizations, not just private sector, profit-oriented organizations.

The given articles have addressed multiple issues like strategic management, human resource

management, organizational change, public and nonprofit management. The main focus of the

article was to examine middle managers in the Directorate General of State Assets (DGSA),

Ministry of Finance, Republic of Indonesia.

Introduction

The article for the given written assignment is titled ‘Managerial Cognitive Capabilities,

Organizational Capabilities for Change, and Performance: The Moderating Effect of Social

Capital’. Badri Munir Sukoco, professor and author, published his article in Cogent Business

Management journal in July 2020. Statement of the Problem

The relationship between OCC with MCC shows that OCC is the generic trait of dynamic

capabilities that bridges strategic management theory with organizational change theory

demonstrating that organizations have the ability to achieve and maintain competitive advantage

in a constantly changing environment. Although there are stated behaviors for both OCC and

MCC, the article tries to find a deeper tie between the two elements.
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Purpose of the Study

The purpose of the study is to extend the dynamic managerial capability theory by examining

MCC relationship to organizational performance. In addition to that, the study extends the

concept of MCC to find that cognitive capability underpin dynamic managerial capability for

sensing, seizing, and reconfiguring, and explain their potential impact on strategic change of

organizations.

Research Question

As it is stated in the statement of the problem, basically, the research aims to demonstrate the

role of OCC as a mediator of MCC in improving organizational performance.

Literature Review

This section of the article begins with a brief discussion about managerial cognitive capabilities.

According to the article, managerial cognitive capability is the capacity of an individual manager

to perform one or more of the mental activities that comprise cognition. Cognitive capabilities

provide a foundation for dynamic managerial capabilities with respect to seizing opportunities

and responding to emerging threats. This can entail making large and sometimes irreversible

investments in tangible and intangible assets. To do so, cognitive capabilities for problem

solving and reasoning are likely to underpin the business model design as well as the capacity for

making sound strategic investments.

Then the article discussed organizational capacity for change (OCC). OCC can be defined as an

organization’s ability to develop and implement appropriate organizational changes to constantly

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adapt to its environment. OCC consists of three dimensions; they are organizational context,

change processes, and learning. Organizations can only develop capabilities to initiate and

implement change by undergoing change, by gaining experience from change, and by constantly

learning from the experiences.

This section has explored organizational performance as well. To survive competitive challenges

and compete successfully, organizations need to monitor processes through key performance

indicators (KPIs) and each circumstance requires companies to closely monitor performance

indicators so that it is possible to assess whether processes and activities are being performed.

Thus, the organization creates KPIs to measure performance.

Methodology

The research involved middle and lower managers and was obtained from the human resources

department of the Directorate General of State Asset, Ministry of Finance, Republic of Indonesia

(DGSA MOF). All vertical units consist of 17 regional offices and 71 operational offices and a

simple random sampling survey method was used; 100% was represented.

There were 75 middle-level managers participated in the survey (response rate 93.75%), for each

middle-level manager has a direct subordinates (2 to 4 lower-level managers) responded to the

survey (Table 1). There were 238 lower-level managers responded (response rate 95.20%).

Respondents’ profiles were categorized by gender, age, unit echelon III, title, zone, work length,

length of echelon experience. For the middle managers, 29% were aged 41 to 45 years, 29%

were aged 46 to 50, and the remainder was above 50 years. For middle managers, their length of

Echelon experience was mostly less than 10 years, for as much as 75%, and length of current
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position was less than 2 years for 69% and 2 to 4 years for 29%. Most respondents (57%) were at

an operational office and these employees directly served the stakeholders and ran a head office

policy.

Results

The researcher has used confirmatory factor analysis (CFA) and found that factor loading of each

item was greater than 0.500. Further results indicated Cronbach’s Alpha values are above 0.700.

The results showed that the model fit the data well, and the goodness-of-fit statistics were as

follows: 2 (df) = 1565.339 (743), p = 0.034; CFI (RMSEA) = 0.765 (0.093).

In order to test the discriminant validity, we employed three steps. First, a Harman’s one-factor

test was conducted that loaded all the variables into a principal component factor analysis.

Second, the variance-extracted percentages for any two factors were compared with the square of

the correlation estimate between these two factors.

The aim of this study is to analyze the role of organizational capacity for change as a mediator

between managerial cognitive capabilities with organizational performance. This paper is the

first empirical study to offer evidence that managerial cognitive capabilities play an important

role in forming organizational capacity for change which, in turn, improves organizational

performance, especially in the public context of an organization. This study expanded on

organizational capacity for change (e.g., learning, process, and context), building on a context

where previous studies only discussed this dimension conceptually.

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Conclusion

Once after the research was conducted, the researcher came to the following conclusions. First,

managerial cognitive capabilities positively influence organizational capacity for change.

Second, managerial cognitive capabilities do not significantly influence organizational

performance. Third, organizational capacity for change significantly influences organizational

performance. Fourth, organizational capacity for change to organizational performance is

positively moderated by social cognitive.

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REFERENCES

Helfat. C.E. & Petreraf. M.A.(2015) Managerial cognitive capabilities and the mcrofoundations

Of dynamic capabilities. Strategic Management jouranal

Feldman, M. S., & Rafaeli, A. (2002). Organizational routines as sources of connections and

Understandings. Journal of Management Studies

Cools, E., & Van Den Broeck, H. (2007). Development and validation of the cognitive indicator.

Journal of Psychology: Interdisciplinary and Applied

Podsakoff, P. M., MacKenzie, S. B., & Podsakoff, N. P. (2012). Source of method bias in social

Science research and recommendation on how to control it. Annual Review of Psychology.
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