ITJEMAST V11(13) @ 2020 by TuEngr.com

Volume 11 Issue 13 (2020) ISSN 2228-9860 eISSN 1906-9642

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MEDIA DEPENDENCY DURING INTERNAL MIGRATION: CASE OF INTERNALLY DISPLACED PERSONS IN PAKISTAN EFFECTS OF CULTURAL SPACE ON INTERNATIONAL BUSINESS INTERACTIONS

ECONOMIC AND BIOENERGY ASSESSMENT OF CROP CULTIVATION TECHNOLOGIES

A STUDY ON ERGONOMIC EGG-SHAPED FOUR-BAR LINKAGE PROPULSION MECHANISM FOR MANUAL WHEELCHAIRS

DEMAND-SIDE RENEWABLE PORTFOLIO STANDARD: A CASE OF THAILAND

PERFORMANCE OF BIG DATA ANALYSIS OF SENTIMENTS IN TWITTER DATASET USING SVM MODELS

DEVELOPING ENGINEERING STUDENT CREATIVITY IN MATHEMATICS CLASSES AT TECHNICAL UNIVERSITY ASSESSMENT OF INNOVATIVE DEVELOPMENT DIFFERENTIATION OF RUSSIAN REGIONS RUSSIAN FOOD INDUSTRY INNOVATIVE DEVELOPMENT NEEDS ESTIMATION OF PROVINCIAL MULTIDIMENSIONAL POVERTY INDEX (MPI) OF PAKISTAN

ENHANCED ENERGY EFFICIENCY OF CERAMICS MANUFACTURING DUE TO HEAT RECOVERY FROM SECONDARY ENERGY SOURCES CULTURAL HERITAGE OF THE PERANAKAN BATIK KIDANG MAS HOUSE OF LASEM, CENTRAL JAVA, INDONESIA CROSS-IMPACT ANALYSIS OF FACTORS INFLUENCING URBAN LAND PRICE: CASE OF CHIANG MAI CITY BANKRUPTCY DYNAMICS OF COMPANIES IN RUSSIA

EFFECT OF MOTIVATORS & BARRIERS ON GREEN BUILDING INTENTION: ARCHITECTS' PERSPECTIVES

ANALYSIS OF MENTAL MAPPING IN URBAN DESIGN FOR THE CASE OF KAMPUNG TELUK KECIL, PANGKOR ISLAND

ROLES OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE IN DIVIDEND SMOOTHING BEHAVIOR OF ASIAN FIRMS

IMPACTS OF STRESS AROUSAL AND ETHICAL ORGANIZATIONAL CULTURE ON THE RELATIONSHIP OF AUDIT QUALITY PRACTICES AND ETHICAL ORGANIZATIONAL CULTURE

RELATIONSHIP OF WORKING CAPITAL TO CORPORATE PERFORMANCE AND STOCK PRICE: EVIDENCE FROM THE MANUFACTURING SECTOR OF PAKISTAN

BEHAVIORAL PERSPECTIVES AMONG DIVIDEND POLICY AND ITS DETERMINANTS AND FIRMâ€™S FINANCIAL PERFORMANCE: A CB-SEM APPROACH BISCUITS WITH VEGETABLE FAT FOR A GLUTENFREE DIET

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International Editorial Board

Editor-in-Chief Ahmad Sanusi Hassan, PhD Professor Universiti Sains Malaysia, MALAYSIA

Executive Editor Boonsap Witchayangkoon, PhD Associate Professor Thammasat University, THAILAND

Editorial Board:

Assoc. Prof. Dr. Mohamed Gadi (University of Nottingham, UNITED KINGDOM) Professor Dr.Hitoshi YAMADA (Yokohama National University, JAPAN) Professor Dr. Chuen-Sheng Cheng (Yuan Ze University, TAIWAN ) Professor Dr.Mikio SATOMURA (Shizuoka University, JAPAN) Professor Dr.Chuen-Sheng Cheng (Yuan Ze University, TAIWAN) Emeritus Professor Dr.Mike Jenks (Oxford Brookes University, UNITED KINGDOM ) Professor Dr.I Nyoman Pujawan (Sepuluh Nopember Institute of Technology, INDONESIA) Professor Dr.Toshio YOSHII (EHIME University, JAPAN) Professor Dr.Neven Duić (University of Zagreb, CROATIA) Professor Dr.Dewan Muhammad Nuruzzaman (University Malaysia Pahang MALAYSIA) Professor Dr.Masato SAITOH (Saitama University, JAPAN)

Scientific and Technical Committee & Editorial Review Board on Engineering, Technologies and Applied Sciences:

Associate Prof. Dr. Paulo Cesar Lima Segantine (University of São Paulo, BRASIL) Associate Prof. Dr. Kurt B. Wurm (New Mexico State University, USA ) Associate Prof. Dr. Truong V.B.Giang (Vietnam National University, Hanoi, VIETNAM) Associate Prof. Dr. Fatemeh Khozaei (Islamic Azad University Kerman Branch, IRAN) Assistant Prof.Dr. Zoe D. Ziaka (International Hellenic University, GREECE) Associate Prof.Dr. Junji SHIKATA (Yokohama National University, JAPAN) Assistant Prof.Dr. Akeel Noori Abdul Hameed (University of Sharjah, UAE) Assistant Prof.Dr. Rohit Srivastava (Indian Institute of Technology Bombay, INDIA) Assistant Prof. Dr.Muhammad Yar Khan (COMSATS University, Pakistan) Assistant Prof. Dr. David Kuria (Kimathi University College of Technology, KENYA ) Dr. Mazran bin Ismail (Universiti Sains Malaysia, MALAYSIA ) Dr. Salahaddin Yasin Baper (Salahaddin University - Hawler, IRAQ ) Dr. Foong Swee Yeok (Universiti Sains Malaysia, MALAYSIA) Dr.Azusa FUKUSHIMA (Kobe Gakuin University, JAPAN) Dr.Yasser Arab (Ittihad Private University, SYRIA) Dr.Arslan Khalid (Shandong University, CHINA)

:: International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies

Volume 11 Issue 13 (2020) http://TuEngr.com

ISSN 2228-9860 eISSN 1906-9642

FEATURE PEER-REVIEWED ARTICLES

MEDIA DEPENDENCY DURING INTERNAL MIGRATION: CASE OF INTERNALLY DISPLACED PERSONS IN PAKISTAN

11A13A

EFFECTS OF CULTURAL SPACE ON INTERNATIONAL BUSINESS INTERACTIONS

11A13B

A STUDY ON ERGONOMIC EGG-SHAPED FOUR-BAR LINKAGE PROPULSION MECHANISM FOR MANUAL WHEELCHAIRS

11A13C

PERFORMANCE OF BIG DATA ANALYSIS OF SENTIMENTS IN TWITTER DATASET USING SVM MODELS

11A13D

ENHANCED ENERGY EFFICIENCY OF CERAMICS MANUFACTURING DUE TO HEAT RECOVERY FROM SECONDARY ENERGY SOURCES

11A13E

CULTURAL HERITAGE OF THE PERANAKAN BATIK KIDANG MAS HOUSE OF LASEM, CENTRAL JAVA, INDONESIA

11A13F

CROSS-IMPACT ANALYSIS OF FACTORS INFLUENCING URBAN LAND PRICE: CASE OF CHIANG MAI CITY

11A13G

BANKRUPTCY DYNAMICS OF COMPANIES IN RUSSIA

11A13H

ANALYSIS OF MENTAL MAPPING IN URBAN DESIGN FOR THE CASE OF KAMPUNG TELUK KECIL, PANGKOR ISLAND

11A13I

IMPACTS OF STRESS AROUSAL AND ETHICAL ORGANIZATIONAL CULTURE ON THE RELATIONSHIP OF AUDIT QUALITY PRACTICES AND ETHICAL ORGANIZATIONAL CULTURE

11A13J

BEHAVIORAL PERSPECTIVES AMONG DIVIDEND POLICY AND ITS DETERMINANTS AND FIRM’S FINANCIAL PERFORMANCE: A CB-SEM APPROACH

11A13K

BISCUITS WITH VEGETABLE FAT FOR A GLUTEN-FREE DIET

11A13L

ECONOMIC AND BIOENERGY ASSESSMENT OF CROP CULTIVATION TECHNOLOGIES

11A13M

DEMAND-SIDE RENEWABLE PORTFOLIO STANDARD: A CASE OF THAILAND

11A13N

DEVELOPING ENGINEERING STUDENT CREATIVITY IN MATHEMATICS CLASSES AT TECHNICAL UNIVERSITY

11A13O

ASSESSMENT OF INNOVATIVE DEVELOPMENT DIFFERENTIATION OF RUSSIAN REGIONS

11A13P

RUSSIAN FOOD INDUSTRY INNOVATIVE DEVELOPMENT NEEDS

11A13Q

ESTIMATION OF PROVINCIAL MULTIDIMENSIONAL POVERTY INDEX (MPI) OF PAKISTAN

11A13R

EFFECT OF MOTIVATORS & BARRIERS ON GREEN BUILDING INTENTION: ARCHITECTS' PERSPECTIVES

11A13S

ROLES OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE IN DIVIDEND SMOOTHING BEHAVIOR OF ASIAN FIRMS

11A13T

RELATIONSHIP OF WORKING CAPITAL TO CORPORATE PERFORMANCE AND STOCK PRICE: EVIDENCE FROM THE MANUFACTURING SECTOR OF PAKISTAN

11A13U

Contacts: Professor Dr.Ahmad Sanusi Hassan (Editor-in-Chief), School of Housing, Building and Planning, UNIVERSITI SAINS MALAYSIA, 11800 Minden, Penang, MALAYSIA. Tel: +60-4-653-2835 Fax: +60-4-657 6523, Sanusi@usm.my, Editor@TuEngr.com Associate Professor Dr.Boonsap Witchayangkoon (Executive Editor), Thammasat School of Engineering, THAMMASAT UNIVERSITY, Klong-Luang, Pathumtani, 12120, THAILAND. Tel: +66-2-5643005 Ext 3101. Fax: +66-25643022 DrBoonsap@gmail.com, Editor@TuEngr.com Managing Office TUENGR Group, 88/244 Moo 3, Moo Baan Saransiri, Klong#2, KlongLuang, Pathumtani, 12120, THAILAND. Tel/WhatsApp: +66-995535450. Postal Paid in MALAYSIA/THAILAND. Side images are Mangosteen (Garcinia mangostana), tropical fruits native to Southeast Asia. Mangosteen is dubbed “Queen of Fruit”.

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13A

MEDIA DEPENDENCY DURING INTERNAL MIGRATION: CASE OF INTERNALLY DISPLACED PERSONS IN PAKISTAN 1*

Muhammad Imran Khan , Noshina Saleem , Asghar Ullah Khan 2 , Mian Hanan Ahmad 3 1

Institute of Communication Studies, University of the Punjab, PAKISTAN. Department of Communication and Media Studies, Gomal University, PAKISTAN 3 Faculty of Media and Communication Studies, University of Central Punjab, PAKISTAN 2

ARTICLEINFO

A B S T RA C T

Article history: Received 06 April 2019 Received in revised form 05 June 2020 Accepted 16 June 2020 Available online 29 June 2020

Media System Dependency (MSD) theory predicts the tripartite relationship between perceived social change (PSC) during crises, access, and availability of media and dependency on that media. Scholars have used this theory in the situation faced by migrants, but most of such studies in the past have focused on external migrants. Keywords: There are very few studies focusing on the media use and dependency IDP; Internal Migration; FATA; Media use; MSD; of internally displaced persons (IDPs) (internal migrants). Therefore, Perceived social change; this paper tries to fill this gap by studying the relationship among the three constructs of the dependency theory in the situation of the IDPs Media system displaced from erstwhile FATA of Pakistan. Data were collected using dependency; Socioa closed-ended questionnaire. The findings suggested a positive cultural changes. relationship between the three constructs for television, radio, and newspapers. For social media, the relationship is positive when IDPs are interested in content related to home society. In the case of social media use for host society, the relationship was insignificant. Disciplinary: Multidisciplinary (Migration and Mobility Studies, Media and Information Technology, Community & Social Change). ©2020 INT TRANS J ENG MANAG SCI TECH.

1 INTRODUCTION People use media for information, entertainment, and other needs related to the social surveillance and connectivity (Katz, 1959), due to which they are becoming more and more dependent on media content (Ball-Rokeach & DeFleur, 1976). Researchers have already established that as our use of mass media and level of satisfaction from those uses increases, the dependency on these sources of need satisfaction also increases. Media System Dependency (MSD) theory holds that in societies with a higher concentration of media and drastic social changes, people will depend on media for information and understanding (Ball-Rokeach & DeFleur, 1976; Ball-Rokeach, 1985). *Corresponding author (M.Imran Khan). Email: Imran@gu.edu.pk ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13A http://TUENGR.COM/V11A/11A13A.pdf DOI: 10.14456/ITJEMAST.2020.247

On the other hand, contemporary societies are undergoing constant social and cultural changes. One of the major determinants of societal changes is the migration of people for different reasons from one society or area to another (such as poverty or disaster (Sarker et al. (2020)), due to which societies are becoming increasingly multicultural and multi-ethnic in their composition. The increasing conflicts around the world, the increased number of refugees, Internally Displaced Persons (IDPs), and asylum seekers had passed 60 million (UNHCR, 2015). Out of which, nearly 38 million were IDPs (internally displaced persons), nearly double the number of cross-border refugees worldwide (Bilak et al., 2015). Pakistan has hosted in the world as one of the highest numbers of IDPs. At the end of 2014, there were nearly 4.1 million IDPs in South Asia, 46 percent of which were in Pakistan, the majority of whom were displaced due to the military operations in the FATA (Federally Administered Tribal Areas) of Pakistan (Bilak et al., 2015). This study focuses on the IDPs displaced from the erstwhile Federally Administered Tribal Areas (FATA); how they perceive the social change that they faced after displacement and the relationship between their perceived social change (PSC), access to media and dependency on the media. This paper studied these relationships under the framework of the mass media dependency model effects developed by Ball-Rokeach and DeFleur (1976).

1.1 BACKGROUND OF STUDY FATA is comprised of seven districts of Pakistan along Durand Line; the border between Afghanistan and Pakistan. Until recently, these tribal areas were governed though special laws recognized as Frontier Crimes Regulations (FCR) which were presented by the British government. These rules gave FATA a special status of semi-autonomy where the government had little control over the social and civic life of the people of the area. Even after the independence of Pakistan in 1947, the tribal areas were run by the same colonial period laws, which are different from the laws of mainland Pakistan and its constitution. It provides for community councils (local jirgas) and collective responsibilities, which are in contrast to the judicial system of Pakistan and human rights ensured in the constitution of the country. Through the “25th Amendment in the Constitution of Pakistan”, areas of FATA were legally merged in the Khyber Pakhtunkhwa (adjacent province) of Pakistan on 31 May 2018 (Noor et al., 2018). FATA with its 27,224 square kilometers territory is divided into seven (7) tribal agencies, currently known as tribal districts and six frontier regions (Ali, 2018). The seven tribal agencies or districts are Mohmand, Bajaur, Khyber, Kurram, Orakzai, North Waziristan and South Waziristan. The six frontier regions (FR) include FR Peshawar, FR Kohat, FR Bannu, FR Laki Marwat, FR Tank, and FR Dera Ismail Khan (Ullah, 2013). Tribal people are connected and their tribe’s men through their traditions and culture (Ali, 2018). Though the tribal culture and society have undergone strong changes due to the displacement, still the culture and traditions play a dynamic role in matters of everyday life. Following the US invasion of Afghanistan against the Taliban after 9/11, the Taliban took refuge in Pakistan tribal areas. The government of Pakistan launched many military operations against the Taliban since 2003 in Tribal areas. These military operations resulted in a widespread exodus of tribal people who mostly took shelter in different parts of mainland Pakistan.

Muhammad Imran Khan, Noshina Saleem, Asghar Ullah Khan, Hanan Ahmad

2 LITERATURE REVIEW Previous studies on media and migration were mostly focused on media uses by external migrants: people who migrated “from one country to another” country. There are very few studies on the media use and dependency of Internally Displaced persons. A study in Syria found that IDPs “living in refugee camps had the least level of access to all types of media, and the” IDPs living outside the refugee camps in their arrangements had the uppermost access to media, particularly TV, internet and other types of satellite media (Melki & Kozman, 2019). IDP’s living in Iraqi camps consider access to communication channels as a key priority to overcome the situation which they were facing after their displacement, but the lack of access to reliable media, particularly the local media like satellite TV and radio, was hindering their ability to cope with the situation (Nilla et al., 2014). The same study by Nilla et al. (2014) found that the Iraqi IDP’s living outside camps in ‘unfinished buildings, schools, mosques, churches and public spaces’ are cut off from the world and their home society due to lack of access to media, and depend on people among host society and other sources of interpersonal communication to know about their host societies and what is happening back at home. People who are displaced, do not feel disconnected, anymore, from their community due to the availability and access to modern technologies of communication like the Internet and social media, but still, there are people for whom interpersonal communication is difficult with the people of their home community (Bates & Komito, 2012). International Organization for Migration (2012) in its study of Pakistani IDP’s concluded that mobile phones, television, and radio are widely used by these IDPs and they found mobile phones particularly useful for accessing information they need. A study by Weiskopf and Kissau (2008) of first-generation Jews migrants from Russia to Israel suggested that the Russian migrants established a new cultural identity for themselves and consider themselves different from the Israelis and this sense of being different do not subside with the time, which negatively affected their contact with the local people. Such migrants became more dependent on the Internet as a means to remain connected with their home Russian society and the like-minded Russians living in Israel (Weiskopf & Kissau, 2008). In South Africa, Ethiopian migrants did not have regular access to media to contact their home country as they became dependent on South African national media for information and entertainment-related needs (Steeneveldt, 2007). An ethnographic study by Gillespie (1995) of Indians living in London also concluded that the pattern and type of TV viewing of Indian families are related to their level of awareness of cultural changes among themselves and the host society. Based on the review of previous studies, the research hypotheses are H#1: IDP’s perception of socio-cultural change has a significant relationship with their access to various kinds of media. H#2: IDP’s perception of socio-cultural change has a significant relationship with its dependency on various kinds of media. H#3: IDP’s access to different kinds of media has a significant relationship with their dependency on the media. *Corresponding author (M.Imran Khan). Email: Imran@gu.edu.pk ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13A http://TUENGR.COM/V11A/11A13A.pdf DOI: 10.14456/ITJEMAST.2020.247

2.1 CONCEPTUAL FRAMEWORK The conceptual framework for the current study is based on the tripartite audience-mediasociety model of MSD theory. There are three major constructs in this study which are: Perceived socio-cultural change, access to media, and dependency on media. 2.1.1 ACCESS TO MEDIA MSD theory stresses on number and centrality of media in a society, which, according to the theory, is the combination of the functions’ media performs in a society (Ball-Rokeach & DeFleur, 1976). Media acquire power and centrality in society due to its control over those resources, access to which is necessary for individuals and other groups for the attainment of their goals, and in more complex societies with changes in cultures, need of access to mass media resources increases (BallRokeach, 1998). All the major forms of media (radio, TV, newspapers, social/internet media) are available in Pakistan, indicating higher centrality of media in Pakistani society, but how much access tribal IDPs have to these media is an important question. Therefore, in this study, the concept of Media Access means access of IDPs to the mainstream as well as regional media (Pashto language television channels, radio, and newspaper) and the internet and social media. 2.1.2 PERCEIVED SOCIO-CULTURAL CHANGE (PSC) Apart from media centrality, and individuals’ access to it, Ball-Rokeach and DeFleur (1976) identified “the degree of change and conflict in the society” as another condition which can increase individuals’ media system dependency. The current study will conceptualize the conflict in the society and degree of change as it is perceived by the tribal IDP’s after their displacement. 2.1.3 MEDIA DEPENDENCY Media-system dependency has been “defined as a relationship in which” individuals, for the satisfaction of their needs, are ‘contingent’ upon media resources (Ball-Rokeach, 1985). Media dependency “relations at micro-level vary according to the intensity of the dependency” relations (Ball-Rokeach, 1998; Jackob, 2010). Therefore, in the context of this study media dependency is conceptually defined as the intensity of the relationship between the needs of tribal IDPs and mass media resources (mainstream media, regional media, and Social media).

3 RESEARCH DESIGN This study adopted a survey method research with a cross-sectional research design. In this design, quantitative data is collected at one point in time. A closed-ended questionnaire was prepared through which the data was collected from the selected sample of IDPs. This data was collected from 1 September to 25 November 2019.

3.1 POPULATION AND UNIT OF ANALYSIS The tribal IDPs who left their homes and are living in different settled areas of Pakistan due to military actions in tribal areas comprise the population for this research study. Individual IDP is the unit of analysis in this study. Initially, residents of seven tribal agencies (Bajaur, Kurram, Khyber, Mohmand, Orakzai, South Waziristan Agency, and North Waziristan Agency) and one Frontier

Muhammad Imran Khan, Noshina Saleem, Asghar Ullah Khan, Hanan Ahmad

Region (FR Tank) were displaced (FDMA, 2016). Till 12th January 2017, 232,202 IDP families in Pakistan have been returned, while 71,969 were remaining (Ocha, 2017). Media reports suggested that many IDPs came back from tribal areas due to a lack of facilities in their home towns.

3.2 SAMPLING This study used a purposive sampling method. The researcher collected data from individuals at the refugee camps established at Jalozai and Togh Sarai in Peshawar division and Baka Khel in the Bannu district of KPK and also from the registration centers established for the IDPs from South Waziristan in Dera Ismail Khan and Tank districts of KPK. For a population higher than 5,000, a sample size of 400 is sufficient (Gay, 2003). For quantitative data, this study initially distributed 800 questionnaires. After screening and cleaning the data, 722 questionnaires remained which form the final sample size of this study.

3.3 MEASUREMENT TOOL The data was collected through a questionnaire adapted from (Adoni et al., 2006) with certain changes. The questionnaire included questions to measure the constructs of the study.

3.4 VALIDITY AND RELIABILITY Initially, the tool was analyzed by ten (10) faculty members of Media Studies departments in Khushal Khan University Karak, Gomal University Dera Ismail Khan, and Kohat University of Science and Technology. The faculty members were asked to analyze the face validity of the questionnaire. Questions accepted were included for further pretesting as it is. Questions with the option of accepting changes were modified as indicated by the faculty members. For analyzing the internal reliability of constructs, the study used Cronbach’s Alpha. As a general rule of thumb, studies mostly consider “Cronbach’s Alpha higher than 0.7” as acceptable. All the results of Cronbach’s Alpha are above acceptable range (see Table 1). The questionnaire was distributed among 300 respondents selected from tribal IDPs. Table 1: Reliability of Constructs using Cronbach’s Alpha (n = 300). No 1 2 3 4 5 6 7 8 9 10 11 12

Constructs Perceived socio-cultural change (PSC) Access to media Dependency on regional newspapers Dependency on Pashto language TV channels Dependency on Pashto language radio Dependency on regional media Dependency on National Urdu language newspapers Dependency on Urdu language TV channels Dependency on Urdu language radio channels Dependency on mainstream media Dependency on social media for home society related issues Dependency on social media for host society related issues

No. of items 6 7 5 5 5 15 5 5 5 15 7 7

Cronbach’s Alpha 0.82 0.80 0.96 0.89 0.94 0.95 0.91 0.89 0.94 0.93 0.94 0.81

4 DATA ANALYSIS Spearman rho correlation test was used to measure the relationship between all three variables: access to media, PSC, and dependency on media. Significance level α = 0.05, the outcomes are *Corresponding author (M.Imran Khan). Email: Imran@gu.edu.pk ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13A http://TUENGR.COM/V11A/11A13A.pdf DOI: 10.14456/ITJEMAST.2020.247

offered in Tables 2, 3, 4. Table 2: Correlation between PSC and Access to Media (p-values are in parentheses) (N = 722). PSC

Overall PSC In language In social gatherings In the Legal system In food In ways of interaction In-home environment

Overall access .38 (<.001) .41 (<.001) .29 (<.001) .13 (.001) .28 (<.001) .12 (.002) .33 (<.001)

Regional Newspapers .37 (<.001) .48 (<.001) .30 (<.001) .18 (<.001) .29 (<.001) .07 (.059) .25 (<.001)

IDPs Access to various types of Media Urdu Pashto-TV Urdu-TV Pashto newspapers channels channels radio .10 .20 .30 .28 (.007) (<.001) (<.001) (<.001) .17 .27 .31 .23 (<.001) (<.001) (<.001) (<.001) .15 .13 .33 .19 (<.001) (<.001) (<.001) (<.001) .01 .20 .15 .33 (.764) (<.001) (<.001) (<.001) -.03 .08 .35 .32 (.370) (.037) (<.001) (<.001) -.20 -.19 .14 .06 (<.001) (<.001) (<.001) (.090) .08 .17 .15 .20 (.026) (<.001) (<.001) (<.001)

Urdu radio .27 (<.001) .25 (<.001) .16 (<.001) -.03 (.474) .17 (<.001) .22 (<.001) .37 (<.001)

Social Media .12 (.001) .12 (.001) .06 (.085) -.03 (.456) .14 (<.001) .08 (.032) .11 (.002)

Table 2 shows that the relationship of overall access to media is statistically significant with the overall PSC (r=.38; p-value less than 0.001) and also with all the attributes of PSC. The relationship is higher with the perceived change in language (r=.41; p-value less than 0.001) than the other attributes of PSC. Similarly, overall PSC has a strong correlation with IDPs access to various types of media. These findings accept the research hypothesis H#1 that IDPâ€™s perception of socio-cultural change has a significant relationship with their access to various kinds of media. Perceived change in language and the in-home environment has a significant positive connection with access to all types of media. Perceived change in the social gathering has a significant positive association with access to all media except with access to social media. PSC has a significant relationship with access to regional newspapers (r=.18), regional TV channels (r=.20), national Urdu TV channels (r=.15) and with regional radio (r=.33). PSC in the legal system has no significant relationship with access to national newspapers, national radio, and social media. PSC in food is statistically significant with access to all forms of media except national newspapers. PSC regarding ways of interaction has a significant relationship with access to all types of media except regional newspapers and regional radio. Table 3: Correlation between PSC and Dependency on Media (n = 722; p-values are in parentheses). Dependency on Regional Media Regional Newspapers Pashto Language TV channels Pashto Language Radio Urdu Language Media Mainstream Newspapers Urdu Language TV channels Urdu Language Radio Social Media for Home society related issues Social Media for Host society related issues

M 2.94 2.62 3.09 3.12 3.00 3.21 3.14 2.66 3.55 3.46

SD 1.23 1.57 1.28 1.43 1.17 1.36 1.35 1.48 1.30 1.22

PSC .28 (<.001) .20 (<.001) .29 (<.001) .23 (<.001) .36 (<.001) .22 (<.001) .45 (<.001) .25 (<.001) .20 (<.001) .02 (.633)

Table 3 shows that the relationship of PSC is statistically significant with the dependency of IDPs on all kinds of media except for social media when it is used for host society related issues.

Muhammad Imran Khan, Noshina Saleem, Asghar Ullah Khan, Hanan Ahmad

The relationship of PSC is higher with dependency on Urdu language TV channels (r=.45; p<.05) than the dependency of IDPs on other forms of media. These findings partially support the research hypothesis H#2 except for dependency on social media for host society related issues.

Table 4: Correlation between Access to Media and Dependency on Media (N = 722).

National TV channels Urdu Language Radio Social Media for Home society related issues Social Media for Host society related issues

Social media

Mainstream Newspapers

Urdu radio

Urdu Language Media

Pashto Radio

Urdu TV channels

Pashto TV channels

Regional Newspapers

National newspapers

Regional Media

Regional newspapers

Media Dependency on

Overall Access to Media

Access to Media

.30 (<.001) .30 (<.001) .35 (<.001) .13 (.001) .58 (<.001) .35 (<.001) .57 (<.001) .57 (<.001) .13 (.001) -.04 (.246)

.55 (<.001) .54 (<.001) .46 (<.001) .38 (<.001) .58 (<.001) .38 (<.001) .54 (<.001) .56 (<.001) .18 (<.001) -.08 (.042)

.10 (.007) .08 (.025) .11 (.002) .05 (.178) .34 (<.001) .15 (<.001) .34 (<.001) .37 (<.001) .06 (.117) -.05 (.158)

.20 (<.001) .23 (<.001) .16 (<.001) .14 (<.001) .36 (<.001) .14 (<.001) .40 (<.001) .41 (<.001) -.02 (.644) -.24 (<.001)

.15 (<.001) .16 (<.001) .14 (<.001) .02 (.618) .31 (<.001) .13 (.001) .30 (<.001) .35 (<.001) -.12 (.001) -.16 (<.001)

.21 (<.001) .20 (<.001) .20 (<.001) .11 (.003) .26 (<.001) .10 (.006) .31 (<.001) .27 (<.001) -.11 (.002) -.19 (<.001)

.26 (<.001) .23 (<.001) .37 (<.001) .05 (.168) .54 (<.001) .41 (<.001) .49 (<.001) .46 (<.001) .32 (<.001) .20 (<.001)

-.04 (.251) -.03 (.497) .07 (.050) -.16 (<.001) .25 (<.001) .14 (<.001) .24 (<.001) .27 (<.001) -.03 (.370) -.01 (.790)

Table 4 shows that the relationship of overall access to media is statistically significant with the dependency of IDPs on all kinds of media except for social media when it is used for host society related issues. The relationship of overall access to media is higher with dependency on Urdu language media (r=.58; p-value less than 0.001) than the dependency of IDPs on regional media and social media. Among the Urdu language media, the relationship of access to media is high for Urdu language TV channels (r=.57; p-value less than 0.001) and also with Urdu language radio (r=.57; pvalue less than 0.001). These findings partially support the research H#3 except for dependency on social media for host society related issues. The relationship between access of IDPs to a particular media and their dependency on that media is also statistically significant, except for social media. The relationship of access to social media is not significant with dependency on social media for home society as well as for host society related issues. The relationship between access to traditional media (both regional and mainstream) has a mostly negative relationship with dependency on social media for either home society related issues or host society related issues. The relationship of regional newspapers and Urdu language radio is positive with dependency on social *Corresponding author (M.Imran Khan). Email: Imran@gu.edu.pk ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13A http://TUENGR.COM/V11A/11A13A.pdf DOI: 10.14456/ITJEMAST.2020.247

media for home society related issues. While only access to Urdu language radio has a positive relationship with social media for host society related issues.

5 DISCUSSION This study found mixed results, suggesting that IDPs who use mainstream and regional media can develop a dependency on that media, but did not found the same results for social media. Some scholars argue that trust is important for dependency on media (Jackob, 2010; Melki & Kozman, 2019) and that people who trust alternative sources of information (other than media) can have less or no dependency on media content (Jackob, 2010). IDPs using social media might have trust issues which might lead them to lower dependency. The media “system dependency theory” suggests that during a crisis, people rely on media that they are familiar with (Cheng et al., 2015). The same doubts were raised by Cassar et al. (2016) who argued that migrants may view online information as unreliable because they might not consider social media as the right source for such information. IDPs are the vulnerable segment of society, who depends on various sources of communication. It is necessary to use the right medium to reach the IDPs and help them in adjusting to the new realities. The youth can be reached over platforms of social media, but the majority of the population of IDPs prefers using traditional media sources like television and radio. Therefore, government agencies and NGOs who are working to integrate these IDPs should also use traditional media sources for communicating with them. The researcher realized that studies about the relationship between media and internally displaced persons are scarce. The majority of the literature about media and migration have focused on external migrants. Future studies can focus on the dependency of internal migrants on various types of media and how this dependency leads to socio-cultural changes.

6 CONCLUSION People, who perceive a higher level of socio-cultural change after displacement, have also higher level of access to different types of media, and have a higher level of dependency on all “types of traditional media” and also on social media when it used for issues related to home society. Similarly, IDPs with a higher level of access to different types of media have a higher level of dependency on traditional media and have no significant dependency on social media. IDPs’ PSC after displacement, do not depend on social media for host society related issues. Among the traditional media, IDPs with a higher level of PSC depend more on Urdu language TV channels than other forms of traditional media. Concerning social media, displaced persons who perceived socio-cultural change have no significant dependency on social media for host society related issues. Internally displaced persons with a higher level of access to Urdu language media develop a higher level of dependency on that media but the same cannot be said for people who have access to regional Pashto language media or social media. Particularly, those IDPs who perceive a higher level of change or difference in the language of the host community and home environment can have increased access and use of media. IDPs, who perceive a change in a social gathering in the host community, can have a higher level of access to traditional media but lower access to social media. Those who perceive a change in the legal system

Muhammad Imran Khan, Noshina Saleem, Asghar Ullah Khan, Hanan Ahmad

tend to use regional media more frequently than the national and social media. Similarly, IDPs who perceive a change in food and ways of interaction in the host society might use electronic media more often than print media. Those who have higher access to traditional electronic media both mainstream, as well as regional, have a lower level of dependency on social media. These findings can also suggest that internally displaced people, who are more dependent on social media for either purpose, their access for traditional media decreases. These findings also suggest that with the increase in IDPs' access to a particular media, their dependency on that media will also increase.

7 AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

8 REFERENCES Adoni, H., Caspi, D., & Cohen, A.A. (2006). Media, minorities, and hybrid identities: the Arab and Russian communities in Israel. Cresskill, New Jersey: Hampton Press. Ali, I. (2018). Mainstreaming Pakistan’s federally administered tribal areas. Special Report, 421p. Ball-Rokeach, S.J. (1985). The origins of individual media system dependency: A sociological framework. Communication Research, 12(4), 485-510. Ball-Rokeach, S.J. (1998). A theory of media power and a theory of media use: Different stories, questions, and ways of thinking. Mass Communication and Society, 1(1-2), 5-40. Ball-Rokeach, S.J., & DeFleur, M.L. (1976). A dependency model of mass-media effects. Communication Research, 3(1), 3-21. Bates, J., & Komito, L. (2012). Migration, community and social media. Transnationalism in the global city, 6, 97-112. Bilak, A., et al. (2015). Global Overview 2015: People internally displaced by conflict and violence. In J. Lennard (Ed.). Geneva: Internal Displacement Monitoring Centre, Norwegian Refugee Council. Cassar, C.M., Gauci, J.-P., & Bacchi, A. (2016). Migrants’ Use of Social Media in Malta: The People for Change Foundation. Cheng, J.W., Mitomo, H., Otsuka, T., & Jeon, S.Y. (2015). The effects of ICT and mass media in postdisaster recovery–a two model case study of the Great East Japan Earthquake. Telecommunications Policy, 39(6), 515-532. Gillespie, M. (1995). Television, ethnicity and cultural change: Psychology Press. International Organization for Migration. (2012). Do you hear me? Understanding Information needs for disaster, preparedness and compensation. http://www.cdacnetwork.org/contentAsset/rawdata/88fea078-ca59-4234-91dc-ab40c3296187/attachedFile. Retrieved November 2016 Jackob, N. G. E. (2010). No alternatives? The relationship between perceived media dependency, use of alternative information sources, and general trust in mass media. International Journal of Communication, 4, 589-606. Katz, E. (1959). Mass Communication Research and the Study of Popular Culture: An Editorial Note on a Possible Future for This Journal. Studies in Public Communication, 2, 1-6. Melki, J., & Kozman, C. (2019). Media dependency, selective exposure and trust during war: Media sources and information needs of displaced and non-displaced Syrians. Media, War & Conflict, 1-21. *Corresponding author (M.Imran Khan). Email: Imran@gu.edu.pk ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13A http://TUENGR.COM/V11A/11A13A.pdf DOI: 10.14456/ITJEMAST.2020.247

Noor, S., Hashmi, A. S., & Bukhari, S. T. (2018). FATA Merger with Khyber Pakhtunkhwa: Prospects and Opportunities. Constitution, 4. Ocha. (2017). Pakistan: FATA Return Weekly (from 06 to 12 January 2017)- Humanitarian Snapshot by United Nations Office for the Coordination of Humanitarian Affairs. https://www.humanitarianresponse.info/system/files/documents/files/ocha_pakistan_weekly_ret urn_snapshot_12_january_2017.pdf Retrieved January 2017. Nilla, J.Q., et al. (2014). Understanding the information and communication needs among IDPs in northern Iraq. http://www.internews.org/research-publications/understanding-informationandcommunication-needs-among-idps-northern-iraq. Sarker, M.N.I., Yang, B., Tingzhi, W., Chakrovorty, A., Salam, M.A., Huda, N. (2020). Impacts of Internal Migration on Poverty Alleviation in Bangladesh. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(11), 11A11F, 1-15. Steeneveldt, J. M. (2007). Negotiating spaces: The role of media in perceptions of identity among Ethiopian migrants in Johannesburg: a focus on consumption patterns. (Master Thesis), University of Witwatersrand. Ullah, A. (2013). Federally Administered Tribal Areas (FATA) of Pakistan: Study of a Special Model of Governance. Pakistan Journal of History and Culture, 34(2), 65-94. UNHCR. (2015). Mid-year report: IDP Returns Fact Sheet. Weiskopf, I., & Kissau, K. (2008). Internet and the Integration of Immigrants in Germany and Israel. Characteristics and Potentials. German Policy Studies, 4(4), 95. Muhammad Imran Khan is a Lecturer at the Department of Communication and Media Studies, Gomal University Dera Ismail Khan, Pakistan. He is a Ph.D. Scholar at the Institute of Communication Studies, University of the Punjab, Pakistan.

Professor Dr. Noshina Saleem is Director at the Institute of Communication Studies, University of the Punjab, Pakistan. She did Post Doctorate from York University Canada, and Ph.D. in Communication Studies from University of the Punjab. Email: noshina_2001 @ yahoo.com

Asghar Ullah Khan is a PhD scholar, Department of Communication and Media Studies, Gomal University, Dera Ismail Khan, Pakistan. His research includes Cyber Threat. Email: asgharullahadvocate @ gmail.com

Professor Dr. Main Hanan Ahmad teaches at Faculty of Media and Communication, University of Central Punjab, Lahore, Pakistan. He earned an M Phil. U.S. Studies from Quaid-I-Azam University, Islamabad, Pakistan, an M Sc. Defense and Strategic Studies from Quaid-I-Azam University, Pakistan, and an MA. Mass Communication (Journalism) from University of the Punjab Pakistan. He got a PhD from York University, Canada. Email: hanan_mian @ hotmail.com

Muhammad Imran Khan, Noshina Saleem, Asghar Ullah Khan, Hanan Ahmad

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13B

EFFECTS OF CULTURAL SPACE ON INTERNATIONAL BUSINESS INTERACTIONS 1

GHAZI BEN SAAD , MUZAFFAR ABBAS

Department of Business Administration, Community College, Prince Sattam Bin Abdulaziz University, Alkharj, SAUDI ARABIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 02 March 2020 Received in revised form 29 May 2020 Accepted 19 June 2020 Available online 29 June 2020

This paper’s main purpose revisits the traditional vision of a cultural approach to international management, and hence proposes some new insights with regard to the present context of transforming societies. Starting from the examination of cultural distance paradoxical effects, we show that both Hofstede's (1980) ideological perspective and Kogut Keywords: and Singh's (1988) mathematical conceptualization cannot fully explain Cultural distance; intercultural interactions. Hofstede’s methodology will be discussed to Cultural adjustment; point out some fallacies and how to overcome them; apart from the Cultural approach; Sociocultural adjustment; (ir)relevance of individualism and masculinity indexes, we argue that cultural distance must be regarded entirely independent from uncertainty Cultures and behaviors; avoidance. Besides, we suggest that Kogut and Singh’s mathematical International management; index is inadequate unless some key properties are included in the Globalization. construction of such the index. We suggest that temporal instability, asymmetry, intra-country heterogeneity, and transitivity of cultural distances are useful in understanding the process of sociocultural adjustment. Disciplinary: Multidisciplinary (Management Science (Cultural-based Business Management, International Business Management), Intercultural and Cross-cultural Studies, Globalization Study). ©2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION Reviewing the concept of cultural adjustment within international business studies with respect to a new approach to national culture's dimensions and cultural distance's properties and effects, this paper revisits the traditional cultural approach to international business management (IBM) to relieve some major fallacies and hence propose some new insights with regard to the present context of transforming societies resulting from the globalization process. The position we will be taking in this paper is to tie the problem of complexity with globalization process in the only purpose to focus on the consequences of such process and specifically to remediate to all *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

homogeneity- based globalization strategies encouraged by partisans of globalization and still adopted by multinational companies. We attempt to provide a more encompassing definition of the international environment, i.e. the international economic space where interactions are held, but certainly not as the place where attributes of exchanges between actors are adjusted until all individual decisions are mutually compatible, in such way we can benefit from a less restrictive hypothesis approach that a globalized world is strengthening meanwhile. It stands to reason that without distance, every being will be dissolved into something common and thereby there would be no complementarity and hence no need or benefit to exchange. Central to our perspective will be the benefits of the cultural approach. Over the last three decades, the cultural approach has been widely at the core of the international business theory. This approach evolution contributes to other disciplines e.g. sociology, anthropology, ethnology, linguistics and psychology which enlarged the context of the application of marketing as long as the number of quantitative and qualitative empirical methods. This gave rise to both a new definition of the market and a new framework to the analysis of the role of managers in the mechanisms of decision-making, strategic growth and internationalization, organizational coordination and dynamism and so forth. The cultural approach has been remarkably boosted by Hofstede's (1980) idea of cultural distance (CD). Besides, Kogut and Singh's (1988) seminal work has given further legitimacy to Hofstede's perspective by translating his uni-dimensional cultural scores into genuine CD measures. Since then on, both methodology and results have been exclusively explored and utilized in almost all inter- and cross-cultural studies. Although widely recognized, this did not prevent scholars from criticizing such 'traditional visionâ€™ whether explicitly (Lynn et al., 1993; Shenkar, 2001; McSweeney, 2002) or implicitly (Yang, 1989; O'Grady and Lane, 1996). From this perspective, and starting from paradoxical empirical results concerning the choice of foreign markets entry mode, we provide a critical analysis of this approach proving its disability to endure cultural studies contributions. Our critics will be imputed principally to both Hofstede's ideology and Kogut and Singh's mathematical conception of CD. The actualized cultural approach that we propose throughout our discussion will be then exploited to clarify how certain cultural dimensions evolve across time and space and accordingly how they do shape the strategic and organizational behavior of firms, mainly when it comes to deal with the process of the growth of firms. To do so, we focus on both Hofstede's (1980) and Kogut and Singh's (1988) seminal contributions, respectively relative to national culture's dimensions and cultural distance measurement. Hofstede's seminal work lacks external validity since no argument was advanced to ensure the representativity of IBM employees with regard to their respective nations. Besides, Hofstede's dimensions were too occidental to the extent that Yang (1989) uses naĂŻve to qualify Hofstede's perspective, aiming accordingly that it is indeed unable to involve or to explain many specific features that characterize Eastern (Asian) cultures. Hence, we firstly provide a new conceptualization of national culture' that we build based on ethnic, religious and linguistic considerations. We argue that these three components provide people with profound incentives as long as they do constraint them at the same time. Still, all over the world, there are struggles and fights for the recognition of these dimensions as the architecture of human beings, their knowledge, behavior, interaction and practices.

GHAZI BEN SAAD, and MUZAFFAR ABBAS

Secondly, on the contrary to Kogut and Singh's index, we argue that empirical studies can be more fruitful by rejecting the simplicity conveyed through a euclidian vision to cultural distances; their effects seem more complex than what has been previously assumed. We suggest that such distances must obey some key properties, specifically asymmetry, intracountry heterogeneity, transitivity and instability over time. We show how these properties can enlighten our understanding of international interactions and the process of mutual adjustment. Regarding Kogut and Singh's conceptualization, CD is implicitly assumed to be constant. If Shenkar (2001) claimed that cultures change over time, and it is true, we can't however predict exactly the direction of CD evolution over time. Two mechanisms (with contradictory effects) can be mentioned: the first pertains to the traditional assimilation model according to which some cultures will tend to converge to others; the second refers to migration movements which have generated intensive contacts between cultural groups and consequently strengthened the value of cultural membership among individuals, i.e., continuous changing in cultural identities as long as continually evolving over time both at the aggregate level, i.e., the identity of a specific cultural group, and at the individual level, i.e., the strength of membership or identification with a particular group (Dougals and Craig, 1997). Asymmetry, which O'Grady and Lane (1996) qualify as a 'paradox', is - in our position - a natural aspect of cross-cultural and intercultural interactions, for these latter refer systematically to a certain process of cultural adjustment. Since these adjustments are carried out based on one's values under constraint to values with which heâ€™s confronted - and since these values are different, then respective adjustments would be divergent and hence asymmetric. At this level, Adler and Graham (1989), point out that the lack of American adaptation was consistent with acculturation theory where the Japanese should tend to make more adjustment due to their history of dependence on the American economy in a more general perspective, by analogy to Frankel and Wei's (1993) gravitational economic model, we can draw a cultural gravitational one where we explicit asymmetry as a source of asymmetric behavior and more largely as a source of imperfect competition within and between organizations. Thirdly, Nadler (1979) suggested that almost any international experience must be crosscultural, but it is also possible to have a cross-cultural experience without leaving one's own country. Even if the concept Market/Country is a persisting reality, a more rigorous analysis of intercultural interactions should be based on cultural affiliation rather than on nationality membership. Problems faced at the intra-national level must be thus treated with the same care as those discussed on an international level. Through CD transitivity, we finally emphasize the role of organizational learning in the acquisition and improvement of knowledge about foreign markets. International relations do not escape from incremental and transitive experiences and organizations have to hold enough knowledge to enhance their capability and organizational flexibility. This paper analyses the recent metamorphosis of international economic space through which globalization is a close system that can only lead to nowhere. We then highlight the relative relevance of cultural approach in the examination of international commercial relations, as well as those carried out at an intra-national, may present the same issues and therefore should be treated with the same care. The next is devoted to a critical review of the traditional conceptualization of the cultural approach. Lastly, we develop a new look towards the cultural approach by providing new theoretical and empirical suggestions that would enrich such a paradigm. *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

2. A PRELIMINARY DISCUSSION ON INTERNATIONAL ENVIRONMENT Since the early 1980â€™s, the international environment has been the scene of diverse deep changes in which consequences have transformed the overall framework of international commercial relationships. The world economy is already globalized as more and more political reforms are enhancing a radically-new international environment. Globalization process is already considered as the major catalyst in transforming contemporary society, for it refers to all aspects of our daily life and since, furthermore, no individual could miSS its influences. Current observers of international business suggest indeed that the present environment poses important challenges on business organizations in the form of rapid changes in technologies and global markets (Levinthal, 2003). Furthermore, these shifts must be added to those relative to deregulation and liberalization in world trade. The elimination of geographic frontiers in the sense of abolition of trade barriers following the GATT, WTO and OECD agreements - has led to a global environment where both national and regional influences have been almost neglected, but not annihilated yet. Besides, unsuccessful international strategic alliances as long as the unstoppable waves of disinvestment were abundantly explained either by the hostility and variability of financial markets or by the veto of trade commissions. Everything seems to be material...all too material. "Are we not approaching a point of bifurcation involving fundamental aspects of our societies?" asks Prigogine (2003), and who adds that we do, and we are living uncertainty" in a particularly intense fashion, as long as the uncertainty introduced by globalization seems increasingly inevitable. On the other hand, the ex-president of the European Commission, Romano Prodi notices that when we use the word globalization we are affirming a specific vision of the world in which nationstates, with their deep and often ancient cultural roots, whether they want to or not, exercise increasingly limited control on their destinies. Except few, such nations, be they big or small, are regarded as passive elements in the globalization process. Consumers too are in a worse position since they are presumed to converge toward a representative agent' regardless of their socio-historical backgrounds nor its spatiotemporal evolutionary nature. Only companies are supposed to be active, if not to say re-active We had already passed through a phase where the propaganda for globalization seemed to work as a stock market conveying a whole range of illusions. Since we did overtake this phase, meanwhile in the favor of a disappointment stage in face of which, we are approaching a new one and on this account, we should prepare and work out the necessary means to put the problem right. We suggest that globalization cannot lead to a higher degree of integration of the world economy, for it was simply an insidious choice claiming for global and moral well being and happiness. When Levy-Livermore (1998) suggests that such process "is stimulated and fuelled by the inclination of individuals and societies to explore a large set of possibilities in the pursuit of well being and happiness", we retort by clarifying that these same individuals and societies did never take part in carrying out this process and are still bowing face to all global decisions made in this context. Besides, how can we pretend to seek somebody's happiness when he does not play a major role in producing it. Moreover, globalization is prejudicious as long as the pace it all recent macroeconomic reforms exceeds the pace at which individuals and organizations can adopt appropriate behaviors and

GHAZI BEN SAAD, and MUZAFFAR ABBAS

strategies (White and Linden, 2002), even if those organizations can survive by exploring their potential otherwise. Whatever might be the recognition one shall concede to the economic spirit upon which globalization is founded this very spirit that had never been embarrassed by its teachings. We should find out how to stop the praises that still keep on welcoming it. For instance, the elimination of geographic frontiers did not annihilate their preexisting effects nor the existence of other types of boundaries. In particular, the only distances that survived sparkly over all these macroeconomic reforms are sociocultural distances. Neglected by globalization, a whole set of barriers - with major importance to international management - is rooted in sociocultural variables which impact divides the 'small village into different blocks and people into heterogeneous sub-groups sharing different historical backgrounds and cultural systems. Furthermore, to understand the differences between domestic and global management it is inevitable to investigate, on the one hand, how national cultures vary all over the world, between countries as well as inside one single country, and on the other, how they influence interorganizational interactions. Although it may inspire an obsession with leveling or extinction in the crowd, a more thermodynamic world is unquestionably needed. Still, we have to split up with a naive plea for homogeneity. Beyond any will for conservatism, introducing a 'natural' order comes to introduce distinction, to divide the world into antagonist entities. It is also equivalent to delimitate frontiers between groups to enhance their specific singular identities. At an inter-group level, Bourdieu (1979) suggests that the institutionalization of distance, i.e., its registration in the durable and tough reality of things and institutions, is coherent with its corporation which is the easiest and a more certain way for restoring naturalization. A thermodynamic world, suggests Bourdieu, refers also to a physicalist perspective where distinctiveness and distances are generative of energy, creative energy, that denounces what opposes to distinction as entropy, and allows to prevent us from falling in the trap of homogeneity, conformism, indifference (whether being differentiated or indifferent). A natural distinction cannot be extracted from what Bourdieu calls "une absolutisation de la difĂŠrence". For it is predominantly unnatural, homogeneity was never a plausible, nor a fruitful assumption upon which we can build a robust perspective that could allow us to apprehend the sociocognitive structure of interactions as well as their outcomes.

3. FROM GLOBALIZATION TO CULTURAL APPROACH One of the crucial problems that firms face, when defining their marketing strategies, concerns making decisions according to the dilemma adaptation/standardization. That is adapting their products and managerial techniques to foreign markets specific characteristics or in the opposite standardize them. This latter alternative is essentially justified by the quest for experience effects, under their triple form of the economic scale, learning and technological development. Standardization relies basically on the globalization of supply and on diverse opportunities that may be presented to firms in practice, which consequently invite them to work out their comparative advantages over the global market, a small village where both national and regional influences have *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

been alas almost neglected. As repercussions, we could observe in practice, to a certain degree, universal domination of some managerial techniques and processes resting on the standardization of communication and production technologies and their transfer modes, under the tacit assumption of consumer preferences homogeneity, as claimed by Levitt (1983) However, on the contrary to what might appear, geographical frontiers elimination did not annihilate their preexisting effects nor the existence of other distances. Neglected by globalization, a whole set of barriers, of absolute importance to (international) management, takes 1ts origin from sociocultural variables, dividing the world into many regions, and people into many sub-groups sharing different historical backgrounds and cultural systems. International business complexity appears then deeply rooted in cultural diversity characterizing both organizational and operational components of cultures shared by diverse economic and organizational actors (Adler, 1994) The cultural approach states that countries vary systematically according to their socio-cultural characteristics. Therefore, the way cooperative strategies (i.e, choice of entry mode, postimplementation organization and governanceâ€Ś) are planned is closely dependent on socio-cultural values, attitudes and perceptions that managers share and find out within their environmental backgrounds. In other words, because managers are in part a product of their societies, it is relatively evident they would behave in the firm as if they were acting in society. To Nonaka and Takeuchi's position, they would just externalize and socialize what they have already interiorized and found out within their closer sociocultural context. Compared to globalization, the starting point of the cultural approach rests on the necessity of adopting an adaptive behavior depending on cultural differences separating managers from each other. It is ruining to extend intra-cultural managerial behavior into intercultural contexts. These latter seem to be largely different and more difficult to manage than the former: intercultural relations, as in the case of negotiations, imply that both processes and outcomes would be affected in a negative way (Adler and Graham, 1989). Hence, to be successful under the double constraint of cultural difference and diversity, firms are obliged to improve their knowledge on markets they tend to enter, through adaptive management based on specific variables related to those markets (Moran and Xardel, 1994). Briefly, every internationalization process inflicts a less or more elaborated cultural management ranging from adaptation minima to a radically cultural. After all, what firms would expend in extra, by developing a diverse market per market strategies, will be recuperated on every foreign market by avoiding consequences of vague and misappropriate global strategies. However, while Terpstra and Sarathy (1991) affirm that only non-economic factors can give significant explanations to economic phenomena, it is incorrect to pretend that everything is cultural. For instance, it is difficult to make sure that managers refer constantly to their cultural values at work as long as we expect that the degree of attachment to cultural values differs according to the cultural context level, as proved empirically by Ralston (1997) in the case of negotiations involving Chinese and American managers. At this level, the managerâ€™s behavior at work follows very likely the assumption of crossvergence where final decisions are driven by a mixture of economic and cultural ideologies. Besides, we can expect that the importance of cultural variables is less or more reduced by technological attributes whether of the product, of commercialization techniques or to the market competition structure. Hence, the systematic linear relationship between cultural variables and their

GHAZI BEN SAAD, and MUZAFFAR ABBAS

presupposed outcomes needs to be revised. Above all, cultural approach richness can be also illustrated at the empirical level, either in terms of fields of studies or in terms of techniques being used. A large part of these studies have focused on determining cultural variables effects: on managing international negotiations (Adler and Graham, 1989; Baird et al., 1990; Rao and Schmidt, 1996; Ralston et al, 1997; George et al., 1998), on administ rating and coordinating multi-cultural groups at work (Adler, 1994; Thomas and Peyretitte, 1996; Smith, 1997), on planning market segmentation strategies, mainly under an ethnic perspective (Hirschman, 1985; Schaninger et al., 1985; Belk, 1988; Askegaard and Masden, 1995), on multinational firms performance (OGrady and Lane, 1996; Mejia and Palich, 1997; Morosini et al., 1998) where empirical results remain different concerning the evolution trend whether it is linear or curvilinear, although a significant relationship remains to be proved, and finally, on the impact of CD on the choice of entry mode on foreign markets (Kogut and Singh, 1988; Erramilli, 1990; Benito and Gripsrud, 1992; Erramilli, 1996; Brouthers and Brouthers, 2001), though without achieving the same results and conclusions, leading to a great confusion among scholars. If this partial confusion has occurred, the problem must be created whether to the conceptualization of the relationship between cultural variables and their outcomes or second to the statistical manipulation of the variables included in both models of entry mode choice and performance analysis and/or interpretation of values obtained in the study. It is clear that through this brief examination, the measuring of such a multi-dimensional concept is not an easy task. In keeping with Mayrhofer (2000), we believe that the concept of national content needs to be clarified to determine the relevance of different factors since it seems that only uncertainty avoidance (UA), taken apart, can provide relevant results, though still ambiguous.

4. ON THE NATURE OF CD EFFECTS Empirically, results remain different and contradictory indeed. While Erramilli (1996) found no significant relationship between CD and entry mode, other scholars (Kogut and Singh, 1988; Kim and Hwang, 1992; Erramilli and Rao, 1990) argue that high CD is related to cooperative entry mode, i.e., joint ventures. High CD is supposed to incite firms to reduce their resource commitments and then to delegate some responsibilities to their local partners. This permits firms to reduce their entry costs one hand, and benefit on the other hand from partnersâ€™ knowledge of the particular cultural/economic context without wondering very consequent opportunistic attitudes. On the opposite, other scholars (Padmanabhan and Cho, 1996; Anand and Delios, 1997) suggested that as long as CD increases more control is preferred; wholly-owned entries were associated with high CD. t is argued that firms tend in such cases to reduce transaction costs, including political stability, financial volatility apart from increasing costs or negotiations and post-implementation coordination. See Mayrhofer (2000) for a comparison and a literature review of empirical studies dealing with {dimensions to) national context and entry mode choice.

4.1 ON CD EFFECTS SIMULTANEITY Traditional cultural studies used to consider a given effect of CD excluding at the same time (the possibility of occurrence of) other conflictual ones. In our thoughts, the CD does rather generate two simultaneous and contradictory consequences, i.e., two entry mode possibilities. First, *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

the more a foreign market is culturally distant, the more its sociocultural variables are different from those faced amid the market of origin. Consequently, firms will be unable to manage them efficiently unless they would be supported, if not to say rescued, by a local partner; this latter appears better placed to negotiate local cultural complexity. Thus, firms will be better if they give more responsibilities and incentives to their partners, implied they would enter cooperatively by a joint venture. In parallel, the more CD increases, the more cultural values of the two partners are different. At this level, three arguments can be settled in favor of entry by wholly acquisition. Cultural differences would first enhance the probability of administrative miss-functioning and organizational disturbances. Furthermore, this strengthens the probability of the emergence of opportunistic behavior. Under an industrial Economics framework, a multinational firm/local partner relationship can be seen as a vertical chain where everyone's share of profits (as long as total joint profits) depends on his strategic position inside the integrated firm. De facto, knowledge about local socio-cultural variables will be a genuine motivation for the local partner to utilize it unilaterally to increase his part of profits; accordingly, firms will tend to have more control over their subsidiaries. It is finally suggested that costs of enforcing a cooperative agreement contract are often greater than the costs of direct control that consequently discourages firms to invest cooperatively (Erramilli and Rao, 1990). Now the question is to determine which factors do condition managersâ€™ final choice in the presence of simultaneity of CD effects. That is how will they operate 13their marketing adjustments and slice between these two eventual choices.

4.2 SPLITTING UA FROM CD Under the cultural approach, a key issue rests on the way cultural values would influence managers' perceptions of investment risk |IR| involved in the evaluation of costs related to foreign investments and entry; it does not refer as it might be imagined to the level of risk itself. For instance, the problem in Brouthers and Brouthers (2001) conceptualization is not the consistency of IR as a fundamental variable in explaining entry mode choice. Rather, it concerns its significance under a cultural framework since it does not refer to uncertainty as it is culturally proved by managers but to tangible financial, monetary, or political risks which explains eventually the fact that authors experienced a lack of statistical correlation between such indicator and Hofstede's UA. Therefore, we believe that Hofstede's UA should be maintained, but independently from CD which needs implicitly an alternative definition of culture which we provide later in this paper. We find already in previous literature the idea of separation between Hofstede's cultural dimensions: authors (Hofstede, 1989; Ueno and Sekaran, 1992; Shane, 1994; Shane, 1995; Erramilli, 1996; Folta and Ferrier, 2000) suggests that each of the four dimensions may influence entry mode choice independently and should be then examined separately, but without any explicit or a settled mention in the favor of extracting UA from CD. UA reveals to us how comfortable people feel towards ambiguity but should never be comprehended as the financial capacity of firms to sustain risks resulting from intercultural relations. In practice, firms belonging to high UA cultures may avoid high IR countries (or make low investment entries) while firms which ranked low tend more likely to make higher investments in high IR markets simply because they are risk-seeking. A low perceived risk, even it is financially high, will be associated with cultures that are risk-seeking; and vice versa. To recapitulate, as nearly expressed by Brouthers and Brouthers (2001), we suggest that UA, as

GHAZI BEN SAAD, and MUZAFFAR ABBAS

a measurement of perceived IR in the target market should be seen as a regulator of CD effects on firms entry mode choice. Even if CD is traditionally supposed to generate almost the same consequences as UA, a small or high CD between two groups will not completely impede the effects of UA that may characterize one of them. Hence, under cultural approach, the study of entry mode choice assumes the examination of two essential aspects: on one hand, specific values of each culture and on the second the degree of resemblance (or difference) between different cultures, traditionally expressed in terms of CD. The first part of the crucial question is to determine if there exists a significant link between a firm's culture of origin and its choice of foreign markets entry mode. This comes down essentially to examine managers' preferences, attitudes and perceptions every time they clash with strange situations. In other words, this refers to their ability to recognize, manage and control perceived uncertainty inherent to intercultural relations that coincides with Hofstede's UA. Concerning the second point, it reflects the cultural gap separating partners from each other, which indicates the degree of adjustment needed to succeed in culturally distant markets and achieve a higher level of performance. When pushing more the analysis, we believe that it is unavoidable to integrate the firm's internationalization level into the model of entry mode choice: this indicator would serve as a complemental moderator of the two previous ones. The prevailing idea behind this suggestion is to assume that the dynamics of both opportunism and firms' managerial maturity are correlated to those of internationalization and performance/profits. Two arguments can be advanced in this sense. Firstly, the more important the level of internationalization of a firm is, the higher will be performance level, expected profits and volume of relational exchanges with local partners, which would consequently incite these latter to behave more and more opportunistically. On the opposite, when debuting their internationalization, firms do not expect financial profits; often, their optimization program translates costs minimization and safety-seeking which keeps us committed to more cooperation from local partners. This suggestion is rooted in the concept of corporate image/identity that can become a source of opportunism. Secondly, internationalized firms (compared to less internationalized ones) do not find many difficulties in managing local cultural complexity, due to what they have already acquired as managerial techniques during previous stages of internationalization. The more firms learn about foreign markets, the more they feel comfortable and efficient when allocating their resources according to their choice of entry mode. However, internationalization should be necessarily conceived qualitatively; it is helpless to restrain internationalization to the exportation activity to the firm through quantitative indicators as some authors (Geringer et al., 1989; Gomez-Mejia and Palich, 1997; Morosini et al., 1998) did. Internationalization has to be revealed as a genuine process, closely related to the growth of the firm, where we would be able to distinguish both internal and external dynamic developments as key factors of firmsâ€™ international strategies (Saad, 2001). Therefore, the level of internationalization should reflect outcomes of intercultural confrontations and related exchanges between economic agents being drive by knowledge generated by the formula "learning by doing". Finally, it is worth mentioning that learning does not affect the whole CD but only uncertainty. *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

As long as uncertainty is reduced, foreign markets get more and more closer which consequently incites firms to prefer gradually wholly acquisition on the detriment of joint ventures. In wrap-up, when debating on firmsâ€™ entry mode, confusion cannot be strayed unless we integrate into the analysis all three factors set above: CD and UA separately, and the level of the internationalization of the firm. Since this separation implies a new definition of culture, then we have to bring up the drawbacks of the traditional one. In this sense, we show in the next paragraph that contradictory results can be in effect explained, to some degree, by a certain inconsistency of Hofstede's perspective and next by its mathematical conceptualization by Kogut and Singh (1988).

5. REVISITING HOFSTEDE'S PERSPECTIVE There is no doubt that Hofstede's seminal work has been an interesting authentic contribution to (international) management. His four (now six) cultural dimensions (Power Distance, Uncertainty Avoidance, Masculinity and Individualism, Time Orientation, and Indulgence) were almost involved in all theoretical and empirical cross and intercultural studies. While it has been largely accepted among the scientific academy, Hofstede's perspective does not escape from some ideological drawbacks.

5.1 HOFSTEDE'S METHODOLOGY Can Hofstede's results be generalized? External validity implies possibilities of extending successfully both results and causality (between variables and phenomena under study) to other situations than those observed in the experimental field. In the case of Hofstede's study, this needs necessary a minimum of representativity of the sample under experiment (IBM workers) regarding the whole group (country) to which they belong. At this level, Lynn et al. (1993) and Sweeney (2002) notice that we cannot make sure about such representativity. Furthermore, we think that it is incorrect to gather some Arab (or African) countries under a unique homogeneous group. For instance, confusing Lebanon with Saudia Arabia assumes the refutation of wide ethnic and religious differences that do separate them. Such prejudgement does prevent us from distinguishing existing real differences. This may ease things in practice but certainly leads to a total misunderstanding of culture's consequences on intercultural interactions. Besides, working on IBM worldwide subsidiaries, Hofstede did not, a priori, take into consideration the technological influences of such sector on managers' behavior at work. It is suggested that results contradictions and low levels of their empirical rigor are very likely caused by little effort to control extraneous variation, mainly due to industry effects (Erramilli, 1996). We may expect that cultural variables influences would be inversely correlated to the technological intensity of the activity in question, which depends on the state of the alliance if it concerns R&D, marketing or manufacturing activities.

5.2 ON HOFSTEDE'S CULTURAL DIMENSIONS The second major critic concerns the low pertinence of Hofstede's individualism and collectivism indexes, as well as time orientation or indulgence. We believe that only UA and PD are to be maintained (and have to be treated separately from CD as we stated earlier). The major problem scholars encounter when dealing with intercultural and cross-cultural relationships consists of balking difficulties of fixing an objective framework that would explain subjective cultural behaviors heterogeneity. If an individual X studies an economic phenomenon Y,

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which is to some degree, unknown for him, there will be always some X in the explanation of Y and valid information about Y remains to be proven (Hofstede, 1997; p 249); that's unfortunately what Hofstede did when he had proposed both individualism and masculinity indexes. These latter are only an extrapolation of the occidental vision to human beings. In this sense of revolution, Yang (1989) noticed: So, we recently learned how it was to use an occidental terminology, individuaisımcollectivism (cf. for example, Hofstede, 1980) to define relations between individuals and groups to which they belong in a Chinese cultural context. Qualified Chinese, as collectivist, have total individual liberty to build their cultural groups (Yang, 1989). In the Confucius culture, the collective group is based on individual perceptions’ the groups defined, with high precision but vaguely conceived in such a way that its frontiers seem to be delimited by everyone's ego. Besides, regarding the evolution of roles played in society and the firm, it is not adequate to qualify organizations and cultures as feminine or masculine. In revisiting Hofstede's questionnaire, we remark that scores related to individualism and masculinity indexes were deduced from the same questions presented to interviewed workers and that Hotstede preceded by a unilateral interpretation of workers' responses. Nevertheless, though such correlation, some results were contradictory to Hofstede's theoretical expectations. We limit our discussion to Scandinavian countries and the Netherlands. These countries, among the most individualist countries, tend widely to prioritize the individual on the detriment of the group. Management in individualist cultures refers to where subordinates find more liberty to act, to innovate, and to participate in the activity of the firm: the performance of the firm depends on the performance of each worker. On the other hand, masculinity is highly associated with preferences to decisions made individually on the detriment of group decision making: masculine management is not oriented to the others (Bollinger and Hofstede, 1987; p144). Thus, Sweden, Denmark, and the Netherlands would appear among the most masculine countries, but not as the four most feminine countries as it appeared in Hofstede's results.

6. ON KOGUT AND SINGH VISION TO CD In this paragraph, we focus on the inadequacy of techniques used empirIcally to measure CD; our contribution comes up as a support to recent suggestions advanced by Shenkar (2001). In order of measurement techniques (compared to the role of theoretical hypothesis and arguments) on final results, we only expose the case of Bell et al. (1997): utilizing the same model as Erramilli (1996) and Shane (1994), the authors found, in a first stage, that CD effects were positive, but not significant, with preferences to entry through joints ventures; however, by changing these distances into a quadratic form, these effects have become curvilinear leading authors to conclude that CD effects seem to be more complex than what has been previously assumed in the literature.

6.1 ON INTRA-COUNTRY CULTURAL HETEROGENEITY First, we allude to the fallacy of the Market/Country concept on which this euclidean distance index is based. Even if this concept is a persisting reality, more deterministic analysis of intercultural interactions should be based on cultural affiliation rather on nationality membership. In Moran and Harris (1979) "Managing Cultural Difference" preamble, Leonard Nadler noticed that: Almost any international experience must be cross-cultural but it is also possible to have a crosscultural experience without leaving one's own country. This is true in many parts of the world and is *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

certainly true, especially now, of the United States. Many countries such as USA, Canada, India, Belgium and Switzerland are characterized by great cultural diversity, resulting essentially from ethnic, religious and linguistic differences. Thus, mathematically, CD has to be built under the constraint of the following property: if we consider a country C, then CDcc # 0. Empirically, the importance of culturally-based regional factors was proved both at an organizational framework (Adler and Graham, 1989) and at a consumption one where Calantone et al. (1985) and Schaninger et al. (1985) found that firms would have to take into account intra-country (i.e., regional) cultural diversity if they aim to optimize their market segmentation strategies. Finally, it is worth mentioning that parallel to the formation of geopolitical cartels Supported by globalization, an opposite tendency toward regionalization is still present and is notably getting more and more under the focus of macroeconomic policies.

6.2 ON CD ASYMMETRY Observing asymmetric performance levels achieved by Canadian firms on the American market and by American ones on the Canadian market, O'Grady and Lane (1996) concluded that the traditionally-expected small CD separating the two markets was not held but that furthermore, such distance is asymmetric. However, we think that such tact should not be seen as a paradox but as a logical result of the cultural adjustment process. Adaptive marketing implies that every individual is assumed to adjust his intra-cultural behavior when jumping into intercultural situations. Since this whole adaptation is drawn by reference to everyone's cultural values and that these latter are different, it is evident that related adjustments will be different and thus asymmetric. Cultural asymmetry can be also explained through the examination of managers' attachment degrees to their cultural values at work. This attachment appears closely related to cultural characteristics on one hand and the cultural assimilation process on the other. At this level, Adler and Graham (1989) pointed out that the lack of American adaptation was consistent with acculturation theory; the Japanese should tend to make more adjustments due to their history of dependence on the American economy. Moreover, nowadays, due to mass mediaÂ°, most of us know sufficiently the American way of life, the Japanese management style and some other widespread features of business related to specific cultures. But do we have ideas, information or knowledge about the Egyptian or Kenian management styles? Obviously, not relatively enough. In other words, some cultures are closer to others than these latter are to them. Therefore, it would be easier for some cultural groups to adjust their managerial behavior when facing these former cultures. As in the case of US-Japan interactions, cultural asymmetry will be beneficial for managers belonging to more known cultures: assuming their cultures celebrity and less For a more detailed analysis, see Douglas and Craig (1997). Managers would prefer to opt for a "pull strategy" which means they would not relatively invest in information seeking nor make efforts to adjust their behaviors. Finally, parallel to Frankel and Wei (1993) gravitational economic model, we can imagine a cultural gravitational one as a source of asymmetric behavior and more largely as a source of imperfect competition between economic Agents.

6.3 ON CD TRANSITIVITY When debating on the mathematical conceptualization of CD, one may evoke and even plead for transitivity of such distance; that is comparing two groups. This property is of great concern: at

GHAZI BEN SAAD, and MUZAFFAR ABBAS

first sight, it may lead to confusion but a deeper analysis does not. The property discussed here means apparently that in cooperating with managers from a given group one managers from group one would first consider adjustments they perform when facing another group two, and then see how these later operate their adjustments when facing managers from group two. This comes down finally to carry out two successive cultural adjustments while it is already difficult enough to operate only one adjustment. This task will be more difficult to achieve for firms lacking from great knowledge that may very likely occur in the early stages of internationalization. More useful interpretation should be done to emphasize the role of learning on the acquisition and the improvement of knowledge about foreign markets as they are generated through incremental and transitive experiences.

6.4 On CD stability Regarding Kogut and Singh (1988) conceptualization, the CD is implicitly assumed to be constant. If Shenkar (2001) claimed that cultures change over time, and it is true, we cannot however predict exactly the direction of CD evolution over time. Two conflictual mechanisms can be mentioned. First, not only cultural diversity is persisting, it looks even that differences within countries are increasing. This is explained by migration movements which have generated intensive contacts between cultural groups and consequently strengthened the value of cultural membership among individuals. For instance, at the consumption level, this gave rise to a continuous changing in cultural identities as long as continuous evolving both at an aggregate level, i.e., the identity of a specific cultural group, and at the individual level, i.e., the strength of membership or identification with a particular group (Douglas and Craig, 1997). Second, considering the traditional cultural assimilation model, immigrantâ€™s behavior pattern 15, on the opposite, revealed as a mixture of the two cultures (the culture of origin and culture of residence), even these changes are not always associated with changes in cultural values and attitudes (Schoen and Cohen, 1980; Wallendorf and Reilly, 1983). In fine, we rather stay committed to a convergence between cultures and behaviors. Adler (2002) reports that, for instance, Child's (1981) comparison of research on organizations across cultures is worth to explain the convergence/divergence dilemma. Child (1981) found that for two different groups of high reputable scholars, conclusions remained repeatedly unchanged claiming whether for divergence or convergence. The author realized in fact that divergence and convergence were correlated to scholars" perspectives whether they focus on a macro level or micro level 15Sues. Such as, we can conclude that worldwide organizations are evolving similarly while individual behaviors inside organizations are perpetually preserving a certain cultural distinctiveness. Further, we expect that as long as firms enlarge their relations with a given cultural group and learn more about its specific characteristics, the psychic distance separating the two groups would decrease, asymmetrically of course. Empirically, Davidson (1980) proved this, that greater experience (driven by learning by doing effects) on a given market was positively correlated with preferences for wholly acquisitions entry mode rather than joint ventures. The same idea was also given through the Uppsala model where Johanson and Vahlne (1977) explained the evolutionary internationalization process, from exporting to a joint venture and then to wholly acquisition, by the *Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

reduction of perceived risk related to foreign markets due to increasing experience and learning.

7. CONCLUSION A renewed culture should be conceived as a whole system defined through the sum of its diverse components that exercise on the group. To avoid making the confusing error between national and cultural affiliation, cultural dimensions have to subscribe, first, into a logic, coherent and compatible order, and second, one should think about the availability of required data which, in practice, are given most of the time in an aggregate form. Particularly, we believe that culture can be defined based on ethnic, linguistic and religious criteria. These dimensions, in parallel to several others, were often proposed (Moran and Harris, 1979; Terpstra and Sarathy, 1994). Hofstede (1997; p12) pointed out that: There remains a tendency for ethnic, linguistic and religious groups to fight for recognition of their own identity, if not for national independence; this tendency has been increasing rather than decreasing in the latter part of the twentieth century. Language is the most evident difference that may exist between cultures. Terpstra and Sarathy (1994) noticed that English is the richest language in terms of industrial and commercial vocabulary which is a revelation of the nature and the degree of socioeconomic development of English speaking countries. Language should be equally seen as a cultural barrier to the success of intercultural interactions (Marschan et al., 1997). In a bargaining framework, language refers also to gestures, mimics and distances negotiators take from each other. From the cultural context of negotiations and though it may complicate negotiation issues, Chinese, for example, express their reactions to partners' proposals through mimics and gestures (Ralston et al, 1997). Religion may not be the principal axis of cultural differences between cultural groups and nations but this does not exclude that once a religion has settled, it does reinforce the value patterns based on which it was adopted, by making these into core elements in its teachings (Hofstede, 1991; pl6). Empirically, Davidson and McFetridge (1985) proved that technology transfers were positively correlated to linguistic and religious similarities between the transmitter country and the receiver one. Ethnic-based researches are among intercultural and cross-cultural studies. Ethnic approach to cultural studies was most of the time, integrated at a consumption level, but much lesser at the organizational one. Consumer researches have shown the importance of ethnic backgrounds on consumer behavior (Hirschman, 1985) and accordingly its benefits for market segmentation (Calantone et al., 1985; Schaninger et al., 1985; Askegaard and Madsen, 1998). At first sight, ethnic values appear highly correlated to linguistic ones, but ethnic groups do differ regarding their thought systems, rituals, habits and daily way of life they share and transmit through generations. The major constraint in measuring CD resides on the aggregated form by which values of cultural dimensions are communicated. Under such constraint, and regarding our focus on asymmetry and intra-country cultural diversity. Beyond the rejection of a globalization-based paradigm, this paper's main purpose shows and enhances the value of the process of sociocultural adjustment that multinational companies should be adopting within their internationalization strategies. However, the cultural approach needs to be renewed. For a more rigorous conceptualization of the relationship between cultural distance and organizational strategic behaviors, we pleaded first for a separation between 'traditional concepts of

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cultural distance and uncertainty avoidance. We suggest that the former should be conceived differently than Hofstede did, though maintaining the author's power distance and uncertainty avoidance indexes. We argued that this latter is more significant, under cultural perspective, in measuring the perceived investment risks related to foreign markets. Furthermore, we suggested that the internationalization level of the firm can be involved in the model of entry mode choice. Explicitly, such a variable indicates possible changes in partners' behavior which affects outcomes of the integrated firm; implicitly, it reveals the importance of managers' experience, drawn from learning by doing, on conducting intercultural relations. Kogut and Singh CD mathematical index, this lacks key properties involving cultural distance asymmetry, intra-country heterogeneity, transitivity and instability over time. In particular, CD asymmetry should be treated with greater concern as a source of the emergence of opportunistic and conflictual behavior. Though the importance of cultural dimensions, it may appear they are just of a general and vague significance, and thus remain debatable, and needed improvements, in particular, redirecting cultural distance toward a purely psychic and sociocognitive distance, i.e., defining culture based on its operational components at work.

8. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

9. ACKNOWLEDGEMENT This research publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

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*Corresponding author (M.ABBAS) Tel:+966556407240. Email: mm.abbas@psau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13B http://TUENGR.COM/V10A/11A13B.pdf DOI: 10.14456/ITJEMAST.2020.248

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GHAZI BEN SAAD, and MUZAFFAR ABBAS

Morosini, P., Shane, S., & Singh, H. (1998). National cultural distance and cross-border acquisition performance. Journal of international business studies, 29(1), 137-158. O'grady, S., & Lane, H.W. (1996). The psychic distance paradox. Journal of international business studies, 27(2), 309-333. Padmanabhan, P., & Cho, K. R. (1996). Ownership strategy for a foreign affiliate: An empirical investigation of Japanese firms. MIR: Management International Review, 45-65. Ralston, D.A., Holt, D.H., Terpstra, R.H., & Kai-Cheng, Y. (1997). The impact of natural culture and economic ideology on managerial work values: a study of the United States, Russia, Japan, and China. Journal of international business studies, 28(1), 177-207. Rao, A., & Schmidt, S.M. (1998). A behavioral perspective on negotiating international alliance. Journal of International Business Studies, 29(4), 665-694. Schaninger, C.M., Bourgeois, J.C., & Buss, W.C. (1985). French-English Canadian subcultural consumption differences. Journal of Marketing, 49(2), 82-92. Schoen, R., & Cohen, L.E. (1980). Ethnic endogamy among Mexican American grooms: A reanalysis of generational and occupational effects. American Journal of Sociology, 86(2), 359-366. Shane, S. (1994). The effect of national culture on the choice between licensing and direct foreign investment. Strategic management journal, 15(8), 627-642. Shane, S. (1995). Uncertainty avoidance and the preference for innovation championing roles. Journal of international business studies, 26(1), 47-68. Shenkar, O. (2001). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of international business studies, 32(3), 519-535. Smith, K., & Berg, D. (1997). Cross-cultural groups at work. European Management Journal, 15(1), 8-15. Terpstra, V., & Sarathy, R. (1994). International Marketing. The Dryden Press, 6th Ed. Thomas, A., & Peyrefitte, J. (1996). The impact of managerial discretion on firm performance. Journal of Business Strategies, 13(1), 21-41. Ueno, S., & Sekaran, U. (1992). The influence of culture on budget control practices in the USA and Japan: An empirical study. Journal of International Business Studies, 23(4), 659-674. Wallendorf, M., & Reilly, M.D. (1983). Ethnic migration, assimilation, and consumption. Journal of Consumer Research, 10(3), 292-302. Yang, C.F. (1989). Une conception du comportement du consommateur chinois. Recherche et Applications en Marketing (French Edition), 4(1), 17-36. Dr.GHAZI BEN SAAD is an Assistant Professor, Community College, Department of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia. He is interested in International Culture-based Management.

Dr.MUZAFFAR ABBAS is a Lecturer, Community College, Department of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia. His research interest includes Organizational Cultures, Leadership, and Governance.

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13C

A STUDY ON ERGONOMIC EGG-SHAPED FOUR-BAR LINKAGE PROPULSION MECHANISM FOR MANUAL WHEELCHAIRS 1

Attakorn Suwananthawong , and Dulyachot Cholaseuk

Medical Engineering Program, Thammasat School of Engineering, Thammasat University, Pathumtani, 12120, THAILAND. 2 Department of Mechanical Engineering, Thammasat School of Engineering, Thammasat University, Pathumtani, 12120, THAILAND. ARTICLEINFO

A B S T RA C T

Article history: Received 14 March 2020 Received in revised form 19 May 2020 Accepted 15 June 2020 Available online 29 June 2020

Most manual wheelchair users use conventional push-rim wheelchairs. Although manual push-rim wheelchairs help promotes a good lifestyle, the non-ergonomic, high muscular demand of non-continuous push motions can trigger severe upper extremity injuries. In this study, a new four-bar linkage propulsion mechanism is introduced. The mechanism was designed to provide continuous propulsion while allowing the wrist movement to follow the ergonomic egg-shaped path. A prototype was built and tested. User opinions indicated that they experienced a more comfortable ride than in the conventional push-rim wheelchair. Overall, the use of the four-bar linkage mechanism causes less strain to muscles and should reduce fatigue during prolonged usages.

Keywords: Kinematic synthesis; Elliptical drive; Isokinetic; EEF propulsion mechanism; Push-rim wheelchairs; Four-bar linkage mechanism.

1. INTRODUCTION Ninety percent of manual wheelchair users use conventional push-rim wheelchairs for regular mobility and rehabilitation [1]. While manual push-rim wheelchairs help promotes healthy lifestyles, the non-ergonomic, high muscular demand, as well as non-continuous push motions can lead to acute upper extremity injuries [2]. Eighty-five percent of long time users of conventional wheelchairs (5-19 years) were found to suffer injuries to the tendons and muscles in the rotator cuff, deltoid, and long head muscle of the biceps brachii [3]. Even in light uses, a long period of rim contact during the push-rim stroke patterns can cause medial nerve injuries [4]. Moreover, the non-ergonomic movement often causes changes in the skeleton and muscle shapes, which in some cases cannot be healed [5]. *Corresponding author (D.Cholaseuk) Tel: +66-25643009 Ext 3149 Email: cdulyach@engr.tu.ac.th ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13C http://TUENGR.COM/V11A/11A13C.pdf DOI: 10.14456/ITJEMAST.2020.249

Many alternate manual propulsion mechanisms have been developed to improve the ergonomic. The major designs are lever drive [6] and hand cycle drive [7]. The use of lever drive provides a mechanical advantage, allowing wheelchairs to go through rough terrain with less effort. However, the arm movement is not continuous and the push-and-pull action is not comfortable for prolonged use. In another design, the use of a hand cycle drive allows continuous hand motion and provide mechanical advantage form chain reduction ratio. but it is still not ergonomic, because the effective drive range only occurs at 90-225 degrees and 270-30 degrees. It also increases the overall dimension of the wheelchair. Mixing of driving and steering action also makes it unpractical in many situations. The new isokinetic propulsion system proposed by Babu et.al [8] was claimed to be the most ergonomic form of manual propulsion to date. The key to ergonomic is the dynamically optimized propulsion path of the wrist movement. The idea was developed into a working prototype [9], which employed a cam and belt mechanism to direct the wrists to move along the dynamically optimized path to propel the wheelchair. In this study, a simple four-bar linkage propulsion mechanism was developed to create an ergonomic egg-shaped driving mechanism that closely follows the dynamically optimized propulsion path from [8]. Instead of using the complicated cam and belt mechanism. The following sections present design followed by force analysis, prototyping, and user test.

2. DESIGN This section presents the mechanism design process to achieve an ergonomic driving path.

2.1 REFERENCE PATH The dynamically optimized propulsion path suggested by Babu et al. [8] can be described by a set of parametric equations (1) and (2) that represents coordinate đ?‘ƒđ?‘ƒđ?‘Ľđ?‘Ľ and đ?‘ƒđ?‘ƒđ?‘Śđ?‘Ś on the path at any angle Î¸.

đ??´đ??´ and đ??ľđ??ľ were constrained by the range of wrist motion. The optimized shape parameters are đ??´đ??´ = 151 mm, đ??ľđ??ľ = 152 mm and the shape factor đ?‘›đ?‘› = 0.7. đ?‘ƒđ?‘ƒđ?‘Ľđ?‘Ľ (đ?œƒđ?œƒ) = đ??´đ??´ âˆ™ cos đ?œƒđ?œƒ

đ?‘ƒđ?‘ƒđ?‘Śđ?‘Ś (đ?œƒđ?œƒ) = đ??ľđ??ľ âˆ™ sin đ?œƒđ?œƒ sin đ?œƒđ?œƒ đ?‘›đ?‘› (0.5đ?œƒđ?œƒ)

(1),

(2).

According to [8], the dynamically optimized propulsion path was obtained by tilting the equations 15.9Â° clockwise. The final path looks like an egg shape as shown in Figure 1.

Figure 1: Dynamically optimized propulsion path (after [8]).

Pornprom Pahubutra, and Dulyachot Cholaseuk

2.2 FOUR-BAR LINKAGE DESIGN A four-bar linkage mechanism consists of base link a, input link b, follower link d, and coupler link c, see Figure 2. Variations of lengths of all links and position of a coupler point P on a coupler link, alter shapes of the tracked path, called coupler curves. Hrones and Nelson [10] presented atlas of approximately 7,300 coupler curves obtained from such variations. In fact, the number of coupler curves is infinite but limited in forms. In this study, the coupler curve will be used to guide the wrist movement along an ergonomic path to propel a wheelchair. By adjusting the parameters of the mechanism, which consist of the lengths of links a, b, c and d, and the location coupler point P of the four-bar linkage mechanism in Figure 2, an ergonomic drive path can be achieved from the coupler curve of point P.

Figure 2: Four-bar linkage mechanism. The parameters were adjusted to minimize the average difference between the coupler path of point P and the dynamically optimized propulsion path [8]. Figure 3 shows the final design of the mechanism that has the coupler curve matches the dynamically optimized propulsion path within 5%. Final values of the parameters are a = 321 mm, b = 138 mm, c = 339 mm, d = 198 mm, and location of point P as shown in the figure. This coupler path will be called an egg-shaped ergonomic drive path.

Figure 3: Final design four-bar mechanism.

2.3 PROPULSION MECHANISM DESIGN From Figure 4, a handle is attached to point P to drive the mechanism so that the wrist of a user follows the egg-shaped ergonomic drive path. Being driven at point P, link b rotate in a full circle. *Corresponding author (D.Cholaseuk) Tel: +66-25643009 Ext 3149 Email: cdulyach@engr.tu.ac.th ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13C http://TUENGR.COM/V11A/11A13C.pdf DOI: 10.14456/ITJEMAST.2020.249

Hence a drive sprocket was attached to the pivot point of link b. Power was then transmitted by the chain to the driven sprocket which is attached to the rear wheel of a wheelchair. From this point on the mechanism will be referred to as the EEF (Ergonomic Egg-shaped Four-bar linkage) propulsion mechanism.

Figure 4: EEF propulsion mechanism. Two ergonomic egg-shaped four-bar linkage propulsion mechanisms are then attached to the wheelchair on both left and right-hand sides, see Figure 5.

Figure 5: Installation of EEF propulsion mechanism to the wheelchair The ergonomic egg-shaped path was located according to the suggested position form Babu et.al [8]. This makes a proper drive position as shown in Figure 6.

Pornprom Pahubutra, and Dulyachot Cholaseuk

Figure 6. Right side view of the installation with the right rear wheel removed

3. PROTOTYPE AND TESTING The prototype was developed by assembling the EEF propulsion mechanisms to both sides of a conventional push-rim wheelchair, as shown in Figure 7.

Figure 7: Prototype with EEF propulsion mechanisms on both sides of a conventional push-rim wheelchair. It can be observed from Figure 8 that in the conventional wheelchair, at the start of the drive stroke, the lower arms make 60 degrees with a horizontal plane, whereas the required driving force is tangent to the wheel, in the horizontal direction. Hence there is a mechanical disadvantage. The user will have to push twice hander than necessary (form the 1/cos(60Â°) factor). In the wheelchair with the EEF propulsion mechanism, the upper arm angle is closely aligned with the required drive force along the egg-shaped ergonomic drive path, which results in a more efficient drive. *Corresponding author (D.Cholaseuk) Tel: +66-25643009 Ext 3149 Email: cdulyach@engr.tu.ac.th ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13C http://TUENGR.COM/V11A/11A13C.pdf DOI: 10.14456/ITJEMAST.2020.249

(a) (b) Figure 8. Comparison of driving positions between a conventional push-rim wheelchair (a), and a wheelchair with EEF propulsion mechanism Form the preliminary test, users found a more comfortable experience using the wheelchair with the EEF propulsion mechanism. They also indicated that the wheelchair needed less effort to propel and the arm positions are more natural and more comfortable.

4. CONCLUSION An ergonomic egg-shaped four-bar linkage propulsion mechanism for a manual wheelchair was developed. A prototype was built and tested. The test results were positive. Users could achieve higher velocity than in the conventional wheelchair while using less effort. This encourages further study and development of the propulsion mechanism based on the prototype.

5. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

6. REFERENCES [1] Alternative Modes of Manual Wheelchair Ambulation van der Woude LHV, Dallmeijer AJ, Janssen TWJ, et al: Alternative modes of manual wheelchair ambulation: An overview. American Journal of Physical Medicine & Rehabilitation. 2001, 80:765-777. [2] Arnet U, Drongelen S, Scheel-Sailer A, Woude L, Veeger D. 2012. Shoulder load during synchronous handcycling and handrim wheelchair propulsion in persons with paraplegia. Journal of Rehabilitation Medicine. 44(3):222-228. [3] Sie IH, Waters RL, Adkins RH, Gellman H. Upper extremity pain in the postrehabilitation spinal cord injured patient. Journal of Rehabilitation Medicine,1992, 73(1):44-8. [4] Jayaraman C, Beck CL, Sosnoff JJ. Shoulder pain and jerk during recovery phase of manual wheelchair propulsion. Journal of Biomechanics, 2015, 48: 3937-3944. [5] Yen-Sheng Lin, Boninger M, Lynn-Worobey, Farrokhi S. Effects of Repetitive Shoulder Activity on the Subacromial Space in Manual Wheelchair Users. Journal of Biomechanics. 2014, (1):583951.

Pornprom Pahubutra, and Dulyachot Cholaseuk

[6] Stanfill CJ, Jensen JL. Effect of wheelchair design on wheeled mobility and propulsion efficiency in less-resourced settings. African Journal of Disability (Online). 2017; 6:1-9. [7] Arnet U, van Drongelen S, Scheel-Sailer A, van der Woude LH, Veeger DH. Shoulder load during synchronous handcycling and handrim wheelchair propulsion in persons with paraplegia. Journal of rehabilitation medicine. 2012, 5, 44(3): 222-8. [8] N. Babu Rajendra Kurup, M. Puchinger, and M. Gfoehler, Dynamically Optimized Muscle Activity Patterns From a Novel Handle Based Propulsion Movement for a Wheelchair. In 35th Conference of the International Society of Biomechanics in Sports, 2017, 1, 698-701. [9] N.B.R. Kurup, M. Puchinger, K.Thomas, M. Gfoehler. Wrist Kinematics and Kinetics during Wheelchair Propulsion with a Novel Handle-based Propulsion Mechanism. Research supported by Austrian Science Fund, 2018, P25507- B24. [10] Hrones, J., G. Nelson. Analysis of the Four-Bar Linkage: Its Application to the Synthesis of Mechanisms, 1951, MIT Technology Press, Cambridge, MA. Attakorn Suwananthawong is a PhD student, Medical Engineering Program, Thammasat School of Engineering, Thammasat University, Thailand. He got a Vocational Certificate (Electronic) fromâ€“Suratthani Technical College, Thailand. He earned a Bachelor of Engineering degree (Electronics and TelecommunicationEngineering) from Rajamangala University of Technology Phra Nakhon. He obtained a Master of Science degree (Medical Engineering). His research encompassed Rehabilitation Engineering.

Dr. Dulyachot Cholaseuk is an Associate Professor at the Mechanical Engineering Department, Thammasat School of Engineering, Thammasat University. He obtained his Bachelor of Engineering degree (Mechanical Engineering) from Chulalongkorn University, Thailand. He earned his Ph.D. (Mechanical Engineering) from Columbia University, New York. His research interests include Robust Optimum Design of Mechanical Parts and Systems, Shape and Topology Optimization, Design of Foldable Vehicles, Biomimetics.

*Corresponding author (D.Cholaseuk) Tel: +66-25643009 Ext 3149 Email: cdulyach@engr.tu.ac.th ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13C http://TUENGR.COM/V11A/11A13C.pdf DOI: 10.14456/ITJEMAST.2020.249

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13D

PERFORMANCE OF BIG DATA ANALYSIS OF SENTIMENTS IN TWITTER DATASET USING SVM MODELS 1

Preethi Nanjundan , K. Maheswari , Jayabrabu Ramakrishnan 3, Dinesh Mavalur 4, Azath Mubarakali 5, S. Ramkumar 6 1

Department of Data Science, Christ (Deemed to be University), Lavasa, Pune, INDIA. Department of Computer Applications, School of Computing, Kalasalingam Academy Research and Education, Tamil Nadu, INDIA. 3 Department of Information Technology, College of Computer Science and Information Technology, Jazan University, SAUDI ARABIA. 4 Department of Information Technology, College of Computing and Informatics, Saudi Electronic University, SAUDI ARABIA. 5 Department of CNE, College of Computer Science, King Khalid University, SAUDI ARABIA. 6 School of Computing, Kalasalingam Academy of Research and Education, Tamil Nadu, INDIA. 2

ARTICLEINFO

A B S T RA C T

Article history: Received 06 March 2020 Received in revised form 09 June 2020 Accepted 24 June 2020 Available online 30 June 2020

Sentiment analysis uses supervised and machine learning algorithms. The analysis can be done on movie reviews, twitter reviews, online product reviews, blogs, discussion forums, Myspace comments, and social networks. The twitter data set is analyzed using a support vector machine (SVM) classifier with various parameters. The content of the tweet is classified to find whether it contains fact data or opinion data. The deep analysis is required to find the opinion of the tweets posted by the individuals. The sentiment is classified in to positive, negative and neutral. From this classification and analysis, an important decision can be made to improve productivity. The performance of SVM radial kernel, SVM linear grid and SVM Radial Grid was compared and found that SVM linear grid performs better than other SVM models.

Keywords:

Sentiment analysis; Machine learning; SVM linear grid; Twitter dataset; SVM model; SVM radial grid; Kappa value; SVM classifier; Negative sentiment; Neutral sentiment; Positive sentiment.

1. INTRODUCTION Sentiment analysis involves in research field of text mining analysis. Many people post their views, opinion, and ideas in an unstructured format. The views are taken from the views of public, customer, social media, entertainment, sports, climate analysis, and Industrial organization, etc. Millions and billions of people and the public are using social network websites such as Facebook, *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ©2020 International Transaction Journal of

Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13D http://TUENGR.COM/V11A/11A13D.pdf DOI: 10.14456/ITJEMAST.2020.250

Twitter, Google Plus and so on (Pandey & Iyer, 2009, Da Silva, 2014). The social media generates a huge volume of sentiment data in various forms such as tweet id, status updates, reviews, author, content, tweets type, and tweets status update. As the data size is going larger and larger, it is necessary to analyze and categorize the sentiment reviews or opinions of the various people to predict (Ortigosa et al., 2014; Pandey & Iyer, 2009). Machine learning Techniques is one of the frequently used techniques in sentiment data analysis to classify the tweets or author comments as positive, negative, or neutral based on the value of the tweet (Boiy & Moens, 2009). SVM is a classifier algorithm that separates hyperplane (Zainuddin et al., 2016; Tripathy et al., 2015; Abbasi et al., 2008). It is defined as đ?‘“đ?‘“(đ?‘Ľđ?‘Ľ ) = đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ đ?‘Ľđ?‘Ľ + đ?‘?đ?‘?

(1),

|đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ đ?‘Ľđ?‘Ľ + đ?‘?đ?‘? | = 1

(2),

where đ?‘¤đ?‘¤ is the weight factor and đ?‘?đ?‘? is the bias of the function. The optimal hyperplane is defined as đ?‘Ľđ?‘Ľ is a training example. The distance between đ?‘Ľđ?‘Ľ and đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ , đ?‘?đ?‘?is calculated as đ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇđ??ˇ =

ďż˝đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ đ?‘Ľđ?‘Ľ+đ?‘?đ?‘?ďż˝ â€–đ?‘¤đ?‘¤â€–

The margin đ?‘€đ?‘€ is the distance with closeness, đ?‘€đ?‘€ =

2 â€–đ?‘¤đ?‘¤â€–

(3).

(4).

The kernel function is a dot product of data inputs. The frequently used kernel functions are Linear, Polynomial, RBF and sigmoid. The linear kernel function is đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žďż˝đ?‘‹đ?‘‹đ?‘–đ?‘– , đ?‘‹đ?‘‹đ?‘—đ?‘— ďż˝ = đ?‘‹đ?‘‹đ?‘–đ?‘– âˆ™ đ?‘‹đ?‘‹đ?‘—đ?‘—

(5)

2. REVIEW OF LITERATURE

Nadia et.al.,[1] developed a method that automatically classifies the sentiment of Twitter data by using lexicons and classifier ensembles. A variety of public tweet sentiment datasets is experimented using SVM, Naive Bayes, Random Forest, multinomial Naive Bayes, and logistic regression to improve the classification accuracy. Medhat et al. (2014) survey the recent techniques used in sentiment analysis and the fifty-four articles were classified and summarized. By analyzing the article, the author was given a clear picture of sentiment Classification and feature selection that was used in the field of research. To solve the sentiment classification SVM and Naive Bayes were commonly used in the Machine Learning algorithms. Haddi et al. (2013) discover the responsibility of text pre-processing in sentiment analysis data, and the experimental results were done using support vector machines (SVM) with appropriate feature selection. Bifet and Frank (2010) used Twitter data provided by Firehouse API, which gave all messages from every user which are publicly available in real-time. The author experimented with multinomial naive Bayes, stochastic gradient descent, and the Hoeffding tree. Zainuddin et al *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

(2016) developed a method to classify the twitter-based sentiment using Principal Component analysis which is combined with Sentiwordnet lexicon-based method and incorporated with Support Vector Machine. Liao (2017) proposed a sophisticated neural network approach for analyzing Twitter data to perform sentiment analysis. Tripathy et al., (2015) compare the experimental result of Naive Bayes and SVM on the polarity movie dataset. The training and testing data is classified based on positive and negative reviews by applying the algorithms. Bifet and Frank, (2010) discuss the challenges faced during the sentiment classification of Twitter dataset flow and the author proposed the method called a sliding window kappa statistic to evaluate the time-changing data streams. Tan (2008) performed the sentiment classification on Chinese documents by applying the various feature selection methods such as IG, CHI, DF, MI, and other classification techniques KNN, SVM, Naive Bayes, and centroid classifier. Abbasi (2008) proposed the feature selection method entropy weighted genetic algorithm (EWGA) and the experimental result was done with the benchmark movie dataset. The results were compared with SVM and EWGA to indicate the rise in the level of performance. Go et al. (2009) worked with machine learning algorithms such as SVM, Maximum Entropy, and Naive Bayes with an accuracy of 80% and above, and the experiment was done using tweets with emoticon data. The preprocessing is a must to increase accuracy. Agarwal et al. (2011) proposed the method to repeatedly detect the sentiment analysis of twitter data and the experimental result shows the more abstract features are captured, in the removal of noise and more robust about bias. Shreevats & Gustav (2010) observed the sentiment analysis using Twitter data and introduced the POS specific prior polarity features, to discover the use of a tree kernel. Aramaki et al. (2011) contributed the novel investigation of stacked SVM based classification techniques to categorize some of the user attributes and they performed the complete analysis of components and features. Bifet & Frank (2010) proposed the technique to take out the twitter data related to influenza using twitter API and classify the influenza patients using the Support vector machine. The author portrays the Twitter data texts reflect the real world, and that NLP techniques can be applied to extract only tweets that contain useful information. Boiy & Moens (2009) proposed the sliding window kappa statistic to estimate the time-changing data flow and survey the twitter dataset using the machine algorithms for various data flows. Haddi et al. (2013) presented the machine learning to analyze the sentiment data-based review. blog and forum text data available in the WWW. The dataset is manually classified based on the tweet statements as negative, positive, and neutral. Ortigosa et al. (2014) investigate the responsibility of text preprocessing in sentiment analysis and experimental results explain with the suitable feature selection and demonstration using SVM. Moraes et al. (2013) proposed a new methodology for sentiment analysis for the Facebook dataset to mine the userâ€™s sentiment categories and to notice major emotional modification. Pandey & Iyer, (2009) presents the experimental result by comparing the SVM algorithm and ANN concerning the document-level to analyze sentiment. Li et al. (2017) contribute to the use of two different classifier approaches such as neutral-polar classifier and positive-negative or polarity classifier for the experimental analysis. Shihab (2020) discusses data security/reliability in big data environments.

*Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

3. METHODOLOGY Support Vector Machines (SVM) is a supervised learning method. This is associated with learning algorithms that analyze data in the data set used for classification. SVM model separates and constructs hyperplane. This hyperplane can be used for classification. SVM is a maximum margin classifier. The mapping is done through kernel functions. Some of the kernel functions used in this work are given below. The linear kernel functions are used to deal with large space data vectors and it is defined as đ?‘˜đ?‘˜(đ?‘Ľđ?‘Ľ, đ?‘Ľđ?‘Ľâ€˛) = (đ?‘Ľđ?‘Ľ, đ?‘Ľđ?‘Ľâ€˛)

(6).

đ?‘˜đ?‘˜(đ?‘Ľđ?‘Ľ, đ?‘Ľđ?‘Ľâ€˛) = đ?‘’đ?‘’đ?‘’đ?‘’đ?‘’đ?‘’(âˆ’đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ â€–đ?‘Ľđ?‘Ľ âˆ’ đ?‘Ľđ?‘Ľâ€˛â€–2 )

(7).

The Gaussian radial basis function is a general purpose kernel which is defined as

The radial basis function is

Kďż˝đ?‘Ľđ?‘Ľđ?‘–đ?‘– , đ?‘Ľđ?‘Ľđ?‘—đ?‘— ďż˝ = đ?‘’đ?‘’đ?‘’đ?‘’đ?‘’đ?‘’ ďż˝âˆ’đ?›žđ?›žďż˝đ?‘‹đ?‘‹đ?‘–đ?‘– âˆ’ đ?‘‹đ?‘‹đ?‘—đ?‘— ďż˝ ďż˝

(8).

An important issue of the SVM classifier is the selection of various parameters. The parameter tuning influences the effectiveness and efficiency of the classifier. The cost parameter đ??śđ??ś finds the penalty for misclassifications. Figure 1 details the framework of the proposed work.

Figure 1: Proposed framework.

4. EXPERIMENTAL RESULTS There are three different classes of sentiments in the twitter data set. They are â€˘

Positive

â€˘

Negative

â€˘ Neutral Positive Sentiment refers to the positive thinking nature of the person. The positive emotions sentiments are surprise, love, affection, happiness, joy, smile, etc. The positive tweet reviews, opinions, and sentiments will create a happy environment and good for the individual as well as for the society and country. Negative Sentiment reflects the negative nature of the individual. The negative sentiments will provide sadness, worry, jealousy, and hate, etc. The negative sentiments of a person will not be happy and it affects society. Neutral Sentiments reflects no participation. The person is not satisfied and could not take any decision. This is also very important for analysis. *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

This emotion will also affect society without creating more impacts. Twitter data is obtained from publically available internet. The 1000 tweets were taken for analysis and split into 70% Training set and 30% test set. The twitter dataset is in the form of a CSV file. CSV file is looking like a table structured spreadsheet program of Microsoft Excel. A tweet is a userâ€™s opinion and is expressed emotionally by different people. The twitter dataset used in this work is labeled into three classes viz. neutral, negative, and positive. The data may be redundant, inconsistent, unwanted blank spaces, special characters, and non-related information. Preprocessing is essential to clean the data and bring it into a structured one. The following preprocessing was performed (Haddi et al., 2013): â€˘

Removed all punctuations, @, _ symbols and numbers

â€˘

A removed sequence of repeated characters

â€˘

Replaced all the emotions with their Sentiment value.

â€˘

Replaced all missing values with NAN

â€˘

Removed Stop Words

â€˘ Removed unnecessary white spaces Machine learning methods can be applied to sentiment analysis. The supervised classification is made for sentiments in the data set. The data set is divided into the training set and test set in machine learning algorithms, there are many algorithms which acts as the main role in sentiment analysis. â€˘

Naive Bayes

â€˘

maximum entropy

â€˘ support vector machines SVM & RBF kernel Support vector machine is a non-probabilistic algorithm that is used to separate data linearly and nonlinearly. Here dataset is a set of attributes with its values. Dataset ďż˝đ?‘‹đ?‘‹đ?‘–đ?‘– , đ?‘‹đ?‘‹đ?‘—đ?‘— ďż˝, đ?‘‹đ?‘‹đ?‘–đ?‘– is a set of data present in the dataset as tuple and đ?‘‹đ?‘‹đ?‘—đ?‘— is a class label of data

in the form of tuples. Class labels are 0, 2, and 4 for neutral, negative, and positive category respectively. The objective of SVM is to classify or separate the sentiments as neutral, negative, and positive training by finding đ?‘›đ?‘› âˆ’ 1 hyperplane. Quadratic Programming (QP) problem is essential to

solving linear data using SVM model. A classifying hyperplane is written as đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ đ?‘Ľđ?‘Ľ + đ?‘?đ?‘? = 0, weight vector đ?‘¤đ?‘¤ of n number of attributes, đ?‘‹đ?‘‹đ?‘–đ?‘– is a set of data present in the dataset as tuple and đ?‘?đ?‘? are biased. A linear classifier has the form đ?‘“đ?‘“ (đ?‘Ľđ?‘Ľ ) = đ?‘¤đ?‘¤ đ?‘‡đ?‘‡ đ?‘Ľđ?‘Ľ + đ?‘?đ?‘?. Feature selection is a selection of relevant variables or features available in the dataset. It is also known as attributing selection. This is the initial process that is carried out before model construction. Identifying relevant features using the feature selection technique simplifies the task. The strongly correlated attribute provides the idea of classification on what basis. Like Feature selection, Feature extraction can also be used. Feature extraction generates new features from existing features, whereas feature selection creates and returns a new subset of the existing features. If the dataset contains many features and a few samples, then there is a necessity to select features. The Boruta feature selection method was performed in this work. The advantage of feature selection is: *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

• Models can be simplified • Training time is minimized • The dimensionality nuisance is minimized, • Overfitting is reduced

Boruta is a feature selection method that was proposed to find whether the feature is either strong or weak. The gsub() function was used to replace any unwanted expression into wanted one. Missing values were checked and are replaced by NAN. Blank spaces are cleaned. The syntax of the Boruta package is similar to the syntax of the regression lm method. Boruta provides a well significant call of variables in a data set. In this work, there are 5 attributes, 3 attributes were rejected and 2 attributes were confirmed. Some tentative attributes will be created by Boruta package which is also having importance when the original features are not able to take any decision. The plotting of the Boruta variable is shown in the importance chart. The attributes of the data set were given in the x-axis and its importance on the y-axis. The minimal, average, and maximum Z score of shadow attributes are tentative attributes generated by Boruta package. The tentative attributes will be classified as confirmed or rejected by comparing the median Z score of the attributes with the median Z score of the best shadow attribute. The feature selection of attributes is shown in Figure 2.

Figure 2: Feature Selection of Attributes.

Figure 3: Random Forest Selection.

Figure 4: Random Forest Selection of Attributes

The random forest selection function through the rfFuncs option was performed. The top one attribute out of five attributes was selected by this method. The retrain was plotted and is shown in Figure 3. The order of importance of attributes in feature selection by Boruta is shown in Figure 4. SVM model linear kernel was implemented to classify the sentiments in the twitter data set. Feature selection was performed by Boruta and two attributes confirmed important which are tweetid and sentivalue. The SVM model was plotted with a linear kernel method and is shown in Figure 5. The confusion matrix is used to calculate the accuracy and summarize the performance of data. It gives a clear idea about the efficiency of the model. It provides the user with how much is achieved and how much went wrong. Figure 6 shows the confusion matrix of the model.

Figure 5: SVM classification.

Figure 6: Confusion Matrix of SVM.

The performance of the above model was not satisfied, the improper prediction was performed in the SVM model, and therefore the minimum accuracy of 15% was achieved. So, the tuning of the parameter is necessary for improving performance. The next SVM model of c-classification with radial kernel was implemented. SVM model c â€“ classification with radial kernel was applied for the same 1000 tweets in the twitter data set with c type classification. This model classifies the data set sentiment value as shown in Table 1. Table 1: Classification sentiments table with radial kernel. pred 4

NEGATIVE 578

NEUTRAL 247

POSITIVE 175

This model has 701 training samples and 299 testing samples with four predictors (pred) and three classes. The 10 fold cross-validated was performed for three times for the sample sizes 631. The tuning parameter was kept constant with a value of 1. Table 2 shows the accuracy and kappa values. Table 2: Classification Prediction Accuracy Accuracy 0.8497393

Kappa 0.7063484

*Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

Kappa processes the percentage of data values in the diagonal elements of the Table. These values are adjusted for the agreement than expected. Kappa value is calculated by the observed level of agreement đ??žđ??ž0 = đ??žđ??ž11 + đ??žđ??ž22

(9).

đ??žđ??žđ?‘’đ?‘’ = đ??žđ??ž1 đ??žđ??ž1 + đ??žđ??ž2 đ??žđ??ž2

(10).

đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??ž = đ??žđ??ž0 âˆ’ đ??žđ??žđ?‘’đ?‘’ / 1 âˆ’ đ??žđ??žđ?‘’đ?‘’

(11).

This value needs to be compared to the value that you would expect if the two raters were independent,

The Kappa value is defined to be

The kappa result can figure out đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ?‘Žđ?‘Ž < 0. 20 đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??ž = 0.20-0.40 đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??ž = 0.40-0.60 đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??ž = 0.60-0.80 đ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??žđ??ž = 0.80-1.00

Poor agreement Fair agreement Moderate agreement Good agreement Very good agreement

The predicted accuracy of three classes sentiment counts was given in Table 3. Table 3: Prediction Accuracy pred neutral negative positive

0 78 0 0

2 0 168 1

4 0 45 7

The predicted accuracy of repeated cross-validation and cost is shown in Figure 7. The accuracy is 84% and the kappa is 70%. The kappa value indicates that there is a good agreement between individuals.

Figure 7. SVM Radial Kernal classification Accuracy *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

SVM_Linear_Grid is another model performed to increase the accuracy with 76 samples, 4 predictors, and 3 classes. The Resampling of the dataset is Cross-Validated with 10 fold and repeated three times with sample sizes 69, 67, and 68. The accuracy and kappa values of SVM_linear_grid are shown in Table 4. Table 4: Prediction Accuracy of SVM_linear_grid đ??śđ??ś 0.00 0.01

Accuracy NaN 0.8936508

Kappa NaN 0.7973095

Accuracy was used to select the optimal model using the largest value. The final value used for the model was đ??śđ??ś = 0.01. The accuracy is improved from 84% to 89%. The accuracy of various c values and cross-validation is shown in Figure 8. The SVM linear grid plot was applied in the same data set. The accuracy of predicted classification with SVM linear grid method is 89%.

Figure 8. SVM Linear grid Accuracy

Figure 9: SVM Radial Basis Function Kernel Accuracy

Support Vector Machines with Radial Basis Function Kernel with 76 samples, 4 predictors, and 3 classes of resampling of 10-fold cross-validation and is repeated 3 times was applied for varying cost value. The tuning parameter 'sigma' was held constant at a value of 0.003044357. Accuracy was used to select the optimal model using the largest value. The final values used for the model were sigma = 0.003044357 and đ??śđ??ś = 2. The accuracy obtained was 84%. Figure 9 plots the accuracy. SVM_Radial_Grid method is applied with 76 samples of 4 predictors and 3 classes. Support Vector Machines with Radial Basis Function Kernel summary sample size is 69, 68, 69, 68, 68. The prediction accuracy of the SVM Radial grid is shown in Tables 5 and 6. Table 5: Prediction Accuracy of SVM Radial grid prediction 0 2 4

0 7 3 0

2 0 16 0

4 0 5 0

Table 6: Prediction Accuracy of SVM_linear_grid Accuracy 0.8419

Kappa 0.5108

*Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

Figure 10: SVM Radial Grid Accuracy Accuracy was used to select the optimal model using the largest value. The final values used for the model were sigma = 0.01 and đ??śđ??ś = 1.5. The accuracy of 84% was maintained. The performance of various SVM model statistics by three classes is given in Table 7. Table 7: Comparative Analysis of SVM Models Pred Sensitivity SVM radial kernel SVM linear grid SVM Radial Grid Specificity SVM radial kernel SVM linear grid SVM Radial Grid Pos Pred Value SVM radial kernel SVM linear grid SVM Radial Grid Neg Pred Value SVM radial kernel SVM linear grid SVM Radial Grid Prevalence SVM radial kernel SVM linear grid SVM Radial Grid Detection Rate SVM radial kernel SVM linear grid SVM Radial Grid Detection of Prevalence SVM radial kernel SVM linear grid SVM Radial Grid Balanced Accuracy SVM radial kernel SVM linear grid SVM Radial Grid

1.0000 0.7000 0.7000

1.0000 1.0000 1.0000

0.13462 0.20000 0.0000

1.0000 1.0000 1.0000

0.6538 0.5333 0.4667

0.99595 1.00000 1.0000

1.0000 1.0000 1.0000

0.7887 0.6957 0.6667

0.87500 1.00000 NaN

1.0000 0.8750 0.8750

0.9884 1.0000 1.0000

0.84536 0.86667 0.8387

0.2609 0.3226 0.3226

0.5652 0.5161 0.5161

0.17391 0.16129 0.1613

0.2609 0.2258 0.2258

0.5619 0.5161 0.5161

0.02341 0.03226 0.0000

0.2609 0.2258 0.2258

0.7124 0.7419 0.7742

0.02676 0.03226 0.0000

1.0000 0.8500 0.8500

0.8240 0.7667 0.7333

0.56528 0.60000 0.5000

The true positive rate is test sensitivity and the true negative rate is test specificity. Sensitivity measures the correctly identified positives. Specificity measures the correctly identified true *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

negatives. The performance analysis of the algorithms can be estimated by using two measures, sensitivity đ?‘†đ?‘† and positive predictive value đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ. They are very much useful for the estimation of performance. Sensitivity đ?‘†đ?‘† is measured as đ?‘†đ?‘† = đ?‘‡đ?‘‡đ?‘‡đ?‘‡/(đ?‘‡đ?‘‡đ?‘‡đ?‘‡ + đ??šđ??šđ??šđ??š)

(12).

đ?‘†đ?‘†đ?‘†đ?‘† = đ?‘‡đ?‘‡đ?‘‡đ?‘‡/(đ?‘‡đ?‘‡đ?‘‡đ?‘‡ + đ??šđ??šđ??šđ??š)

(13),

đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ = đ?‘‡đ?‘‡đ?‘‡đ?‘‡/(đ?‘‡đ?‘‡đ?‘‡đ?‘‡ + đ??šđ??šđ??šđ??š)

(14).

đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ đ?‘ = đ?‘‡đ?‘‡đ?‘‡đ?‘‡/(đ?‘‡đ?‘‡đ?‘‡đ?‘‡ + đ??šđ??šđ??šđ??š)

(15).

Specificity S is measured as

where đ?‘‡đ?‘‡đ?‘‡đ?‘‡ is a number of truly relevant features recognized by an algorithm, đ??šđ??šđ??šđ??š is a number of truly relevant features that are not recognized by an algorithm and đ??šđ??šđ??šđ??š is a number of non-relevant features that are incorrectly recognized as relevant. Positive predictive value đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ is measured as The negative predictive value PPV is measured as

The SVM classifier with SVM kernel, SVM linear grid, SVM Radial Grid were performed for twitter data set and performance was analyzed with various tuning parameters. SVM linear grid achieves better performance than the other. The basic SVM model without parameter tuning achieves minimum level accuracy. The overall performance is shown in Table 8. From the experimental results, it is observed that, the performance of the SVM linear grid model shown better results which are shown in Figure 11. Table 8: Comparative Analysis of Accuracy of SVM Models Model SVM SVM radial kernel SVM linear grid SVM Radial Grid

Accuracy 0.15 0.8497393 0.8936508 0.8419

Kappa 0.12 0.7063484 0.7973095 0.5108

1 0.8 0.6 0.4 0.2 0

svm

Svm kernal

svm linear grid

svm Radial Grid

Accuracy

0.15

0.8497393

0.8936508

0.8419

Kappa

0.12

0.7063484

0.7973095

0.5108

Figure 11: Accuracy of SVM Models. The performance measures were selected to compare the SVM classifier with various parameter tuning model, the highest accuracy of 89.36% of SVM linear grid, 84.97% of SVM kernel, 84.19 of SVM radial grid was achieved. In SVM, the values of đ??śđ??ś and gamma were selected *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

using 5-fold cross-validation and 10-fold cross-validation.

5. CONCLUSION The experimental results of the SVM classifier attain satisfying results in the classification when compared with Li et al. (2017). There are many performance measures of the SVM model is available. In this work, the parameter tuning of various SVM model was proposed. SVM model Cross-Validated with 10 fold and repeated 3 times with sample sizes 69, 67 and 68 outperforms than the other models. The accuracy achieved was satisfied because twitter posts are emotional ones. The people post their emotions when they are not feeling comfortable. Neutral data plays a more important role because people could not take any decision. The concentration towards the neutral people will reflect either positive or negative. This idea is suited for election when the people are not ready to vote for any particular option. Future work will focus on implementing different algorithms with a different dataset.

6. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

7. REFERENCES Abbasi, A., Chen, H., & Salem, A. (2008). Sentiment analysis in multiple languages: Feature selection for opinion classification in web forums. ACM Transactions on Information Systems, 26(3), 1-34. Agarwal, A., Xie, B., Vovsha, I., Rambow, O., & Passonneau, R. J. (2011, June). Sentiment analysis of twitter data. In Proceedings of the Workshop on Language in Social Media (LSM 2011) (30-38). Aramaki, E., Maskawa, S., & Morita, M. (2011). Twitter catches the flu: detecting influenza epidemics using Twitter. Proceedings of the conference on empirical methods in natural language processing, 15681576. Bifet, A., & Frank, E. (2010). Sentiment knowledge discovery in twitter streaming data. International conference on discovery science, Springer, 1-15. Boiy, E., & Moens, M.F. (2009). A machine learning approach to sentiment analysis in multilingual Web texts. Information retrieval, 12(5), 526-558. Da Silva, N. F., Hruschka, E.R., & Hruschka Jr, E.R. (2014). Tweet sentiment analysis with classifier ensembles. Decision Support Systems, 66, 170-179. Go, A., Bhayani, R., & Huang, L. (2009). Twitter sentiment classification using distant supervision. CS224N project report, Stanford, 1(12). Haddi, E., Liu, X., & Shi, Y. (2013). The role of text pre-processing in sentiment analysis. Procedia Computer Science, 17, 26-32. Liao, S., Wang, J., Yu, R., Sato, K., & Cheng, Z. (2017). CNN for situations understanding based on sentiment analysis of twitter data. Procedia computer science, 111, 376-381. Medhat, W., Hassan, A., & Korashy, H. (2014). Sentiment analysis algorithms and applications: A survey. Ain Shams engineering journal, 5(4), 1093-1113. Moraes, R., Valiati, J.F., & Neto, W.P.G. (2013). Document-level sentiment classification: An empirical comparison between SVM and ANN. Expert Systems with Applications, 40(2), 621-633. Ortigosa, A., MartĂn, J. M., & Carro, R.M. (2014). Sentiment analysis in Facebook and its application to elearning. Computers in human behavior, 31, 527-541. Pandey, V., & Iyer, C. (2009). Sentiment analysis of microblogs. CS229: Machine learning final projects, Cite seer. *Corresponding author (K. Maheswari). Email: maheswarisnr@gmail.com ÂŠ2020 International Transaction Journal of

Shreevats, A., & Gustav, M. (2010). Classifying latent user attributes in twitter, Proceedings of the 2nd international workshop on Search and mining user-generated content, 37-44. Shihab, L.A. (2020). Technological Tools for Data Security in the Treatment of Data Reliability in Big Data Environments. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(9), 11A9M, 1-13. Tan, S., & Zhang, J. (2008). An empirical study of sentiment analysis for chinese documents. Expert Systems with applications, 34(4), 2622-2629. Tripathy, A., Agrawal, A., & Rath, S.K. (2015). Classiﬁcation of Sentimental Reviews Using Machine Learning Techniques. Procedia Computer Science, 57, 821-829. Zainuddin, N., Selamat, A., & Ibrahim, R. (2016). Twitter feature selection and classification using support vector machine for aspect-based sentiment analysis. International conference on industrial, engineering and other applications of applied intelligent systems, Springer, 269-279. Dr. Preethi Nanjundan is an Assistant Professor in Christ(Deemed to be University) , Lavasa campus, Pune. She received her Ph.D degree in Semantic Web in 2014 from Bharathiar University, Coimbatore, India. Her research interests are Semantic web, Machine learning, Deep Learning etc. preethi.n @ christuniversity.in

Dr. K. Maheswari is an Assistant Professor, the Department of Computer Applications, Kalasalingam Academy of Research and Education, Krishnankoil, India. Her research areas include Data Mining, Image Processing, Computer Networks, Cloud Computing and Text Analysis.

Dr Jayabrabu Ramakrishnan is at Department of Information Technology, College of Computer Science and Information Technology, Jazan University, Saudi Arabia. He obtained a Ph.D in Computer Science from Bharathiar University, Coimbatore, Tamil Nadu, India. His area of research includes Data Mining, Intelligent Agents and Information Systems. Jayabrabu @ gmail.com Dr. Dinesh Mavalur Balasubramanyam is an Assistant Professor at Department of Information Technology, College of Computing and Informatics, Saudi Electronic University, Saudi Arabia. His research interests span both data science and network science. Much of his work has been on Improving the Understanding, Design, and Performance of Parallel and Networked Computer Systems, mainly through the application of Data Mining, Statistics, and Performance Evaluation. d.mavaluru @ seu.edu.sa Dr. Azath Mubarakali is an Assistant Professor at Department of CNE, College of Computer Science, King Khalid University, Saudi Arabia. He had his Bachelor’s, Master’s, and Doctorate degrees from Anna University. His research interest includes Network Security, Software Defined Networks, Block Chain Technology, Networking, Wireless networks and Mobile Computing. Mailmeazath @ gmail.com Dr. S. Ramkumar: is an Assistant Professor, the Department of Computer Applications, Kalasalingam Academy of Research and Education, Krishnankoil. His field of interest is biosignal processing, AI, HCI, BCI, and machine vision. He authored the textbook Java for Beginners and Magic Book for Quantitative Aptitude and Reasoning (Master the Tricks in 10 days). ramkumar.drl2013 @ gmail.com

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International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13E

ENHANCED ENERGY EFFICIENCY OF CERAMICS MANUFACTURING DUE TO HEAT RECOVERY FROM SECONDARY ENERGY SOURCES A.I. Sharapov 1

, A.G. Arzamastsev , A.V. Peshkova , M.N. Neklyudov

Department of Industrial Energy, Lipetsk State Technical University, Lipetsk, RUSSIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 14 March 2020 Received in revised form 19 May 2020 Accepted 15 June 2020 Available online 29 June 2020

The article describes a method for increasing the energy efficiency of ceramics manufacturers by renewable energy via recovery of heat from kilns used for firing ceramic products. For ceramics manufacturings, there is a heat recovery scheme that has been developed to use heat released during the cooling of kilns, which makes it possible to reduce energy consumption for heating the air entering an air-drying plant, the specific energy effect from this scheme has been calculated.

Keywords: Energy efficiency improvement; Heat recovery; Waste energy sources; Waste heat recovery; Drying plant.

1. INTRODUCTION Most ceramics factories use electricity for the firing process in kilns and heating the air used for drying. Saving electricity purchased by the Company from outside will reduce the cost of manufacturing the finished product. One of the ways to reduce electricity consumption at such enterprises is to use secondary energy resources of the enterprise (SER). SER is understood as the energy potential of used heat transfer media, finished products, by-products, and intermediate products generated in process units, which can be used to supply power to other units [1]. In energy-intensive industries, the most representative group, which accounts for more than 60% of the energy-saving potential, is secondary thermal energy resources, which are the sensible heat of waste gases from process units, sensible heat of main and by-products, heat from fluids of cooling systems of process units and installations. Ceramic factories have the potential for thermal energy generated during heating and cooling of process heaters. This heat can be used to reduce energy consumption for heating a drying agent in the air heater. *Corresponding author (A.I. Sharapov) Email: sharapov-lipetsk@yandex.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13E http://TUENGR.COM/V11A/11A13E.pdf DOI: 10.14456/ITJEMAST.2020.251

2. CERAMICS MANUFACTURING PROCESS Figure 1, ceramics manufacturing takes place in several stages. At the initial stage, the raw material is subjected to crushing, grinding, settling, and stirring, passing through a forming die, which gives the clay its final shape. After that, the clay workpiece is placed in a convective dryer with intermediate air heating. In the drying unit, products are losing moisture contained in them due to its evaporation. This process takes place when the heat is supplied to the clay by convection from the heated air. Then dried products are sent to electric resistance furnaces of indirect heating, where heat is transferred to the heated product from heating elements located on the furnace walls, roof, and bottom. During firing, hydrated moisture is being removed from products, and complex silicates are being formed. The time of firing products in the furnace is 18-24 hours, of which 10 hours are taken by heating, and the remaining time is used for holding at constant temperature (about 1120Â°ĐĄ). Further, the cooling process begins, it lasts 8-15 hours and consists of several stages, during each of which, when a certain temperature in the furnace is reached, the door will be partially and slightly opening until fully opened. After cooling, the finished product leaves the furnace and goes to the cutting and packaging unit.

Figure 1: A general ceramic factory. The drying plant with intermediate heating of the air consists of several zones, in either of each the air participates in the drying process [2], warms up on intermediate heating surfaces 2, 3, 4 to the required temperatures, then it comes into contact with the wet material due to which it is being cooled and humidified at the same time (Figure 2).

A.I. Sharapov, A.G. Arzamastsev, A.V. Peshkova, M.N. Neklyudov

Figure 2: Schematic diagram of a drying unit with staged heat supply: 1-fan; 2-1st stage heater; 3-2nd stage heater; 4-3rd stage heater; 5-drying unit.

Figure 3: Calculation of the theoretical drying process with staged heat supply. Drying is carried out with the air taken from the workshop with tair = 24°С. Before each stage of drying, the air is heated in the corresponding heaters with heating elements and enters the stage with the temperature of tinlet = 220°С, during the drying process at each stage outlet the air has the temperature of toutlet = 200°С [3, 4]. After the last 3rd stage, the exhaust system removes humid air *Corresponding author (A.I. Sharapov) Email: sharapov-lipetsk@yandex.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13E http://TUENGR.COM/V11A/11A13E.pdf DOI: 10.14456/ITJEMAST.2020.251

with a temperature of 200Â°ĐĄ. With this scheme, the greatest energy consumption falls on the 1st stage heater, in which the air needs to be heated from 24 to 220Â°ĐĄ. In the heaters of the 2nd and 3rd stages, energy consumption will be significantly lower, since in these heaters the air is heated from 200 to 220Â°ĐĄ. The drying process on the I-d diagram is shown with broken line ĐžB1 C1B2C2B3C3 (Figure 3). OĐ’1 -heating of the air taken from the shop in the first stage heater; AB1 -additional heating of the air coming from the zone above the furnace in the first stage heater; B1C1 -cooling and humidification of the air after the first stage; C1B2 -heating the air in the second stage heater; B2C2 -cooling and humidification of the air after the second stage; C2 B3 -heating of the air in the third stage heater; B3C3 -cooling and humidification of the air after the third stage. According to the technical data, when opening the furnace, the temperature under the crown is about 100Â°ĐĄ. Energy costs for drying can be reduced by taking the air directly from the zone above the furnace, which accumulates the air escaping from furnaces during the cooling period. This diagram is shown in Figure 4. Heat for recovery is taken directly from the furnaces using exhaust hoods. An exhaust hood is located above each furnace, considering the unhindered opening of sliding gates and a door. Air valves are provided for all sections of the air intake from the furnace to automatically control the air intake during the furnace cooling. The air heated from cooling furnaces to a temperature of 100Â°ĐĄ enters the air heater through the air duct system for additional heating to the temperature of 220Â°ĐĄ and then goes to drying. In the I-d diagram (Figure 3.), the air condition after heating is determined by point A. The process of additional heating of the air by heating elements in the 1st stage heater up to t inlet = 220Â°ĐĄ goes along the AB1 line [5-8].

Figure 4: Schematic diagram of a drying plant using heat from kilns: 1-zone above the furnace; 2-fan; 3-1st stage heater; 4-2nd stage heater; 5-3rd stage heater; 6-drying unit. For the scheme using the air taken from the workshop, the specific energy consumption in the 1st stage heater was đ?‘žđ?‘žđ?‘’đ?‘’đ?‘’đ?‘’ = ďż˝â„Žđ??ľđ??ľ1 âˆ’ â„Žđ?‘‚đ?‘‚ ďż˝/3600, kWh/kg of air,

where â„Žđ??ľđ??ľ1 , â„Žđ?‘‚đ?‘‚ - for this scheme of air enthalpy in the 1st stage heater at the inlet and outlet,

A.I. Sharapov, A.G. Arzamastsev, A.V. Peshkova, M.N. Neklyudov

respectively, kJ/kg of air. According to I-d diagram, we determine â„Žđ??ľđ??ľ1 = 258.51 kJ / kg of air, â„Žđ?‘‚đ?‘‚ = 54.43 kJ/kg of air, â„ŽĐ? =

135.4 kJ/kg of air

đ?‘žđ?‘žđ?‘’đ?‘’đ?‘’đ?‘’ = (258.51 âˆ’ 54.43)/3600 = 0.0567 kWh/kg of air

For the scheme using the air from the zone above the ovens, the specific electricity consumption in the 1st stage heater was đ?‘žđ?‘žđ?‘’đ?‘’đ?‘’đ?‘’ = ďż˝â„Žđ??ľđ??ľ1 âˆ’ â„ŽĐ? ďż˝/3600, kWh/kg of air,

where â„Žđ??ľđ??ľ1 , â„ŽĐ? - for this scheme of the air enthalpy in the 1st stage heater at the inlet and outlet,

respectively, kJ / kg of air

đ?‘žđ?‘žđ?‘’đ?‘’đ?‘’đ?‘’ = (258.51 âˆ’ 135.4)/3600 = 0.0341 kWh / kg of air

Analyzing the energy efficiency of the proposed scheme with a constant airflow rate, we conclude that electricity costs in the 1st stage heater are reduced by 40%.

3. CONCLUSION From the results of this work, we can say that the air heat from ceramic kilns is a valuable secondary energy resource. The use of this heat makes it possible to reduce the cost of electricity for heating the air entering the drying unit in the 1st stage heater by 40% and thereby reduce the economic costs per unit of final output production.

4. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

5. REFERENCES [1] O.L.Danilov, A.B.Garyev, I.V., Yakovlev. Energy saving in heat power engineering and heat technologies: university textbook. Đœ.: MEI Publishing House, 2010, 424p. [2] P.D. Lebedev. Heat exchangers, drying and refrigeration units. Textbook for students of Technical universities. 2 nd Ed., rev. M., Energy, 1972, 319p. [3] D.B. Ginzburg et al. Furnaces and dryers for silicate industry. Ed. P.P. Budnikov. Promstroyizdat, 1963, 344p. [4] P.V. Levchenko Calculation of furnaces and dryers of Silicate industry. Publishing house "Higher school", 1968, 363p. [5] A.I. Sharapov, E.Y. Myakotina, A.V. Peshkova Energy saving in ventilation and air conditioning systems. Problems of modern science: collection of scientific papers of Lipetsk State Technical University conference. Lipetsk, 2016, 296-298 [6] A.I. Sharapov, E.Y. Myakotina, Y.V. Shatskikh, A.V. Peshkova Increase of energy efficiency of the mechanical ventilation system, In the collection: IOP Conference Series: Earth and Environmental Science. Electronic edition, 2019, 022218. *Corresponding author (A.I. Sharapov) Email: sharapov-lipetsk@yandex.ru ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13E http://TUENGR.COM/V11A/11A13E.pdf DOI: 10.14456/ITJEMAST.2020.251

[7] A.I. Sharapov, A.S. Parkhomov, A.V. Peshkova Program for calculating the process of heat recovery from kilns for firing ceramic products. School of young scientists: the regional profile seminar on problems of technical sciences, Lipetsk: LSTU, 2019, 132-135. [8] A.I. Sharapov, A.S. Parkhomov, A.V. Peshkova Development of software for calculating the process of heat recovery from kilns for firing ceramic products. Youth and the XXI century: the X International Youth Scientific Conference, Kursk: SWSU, 2020, 4, 289-291. Dr. Sharapov Alexei Ivanovich is an Associate Professor of the Industrial Heat Power Engineering Department, Lipetsk State Technical University, Lipetsk, Russia. He is a Candidate of Engineering Sciences. His research interests include Thermal Physics of Metallurgical Processes, a study of Heat Transfer in Two-Phase Flows, engineering networks and Systems of Buildings and Structures of Industrial and Civil Facilities: Heating, Ventilation, Air Conditioning, Water Supply and Wastewater Disposal.

Dr. Arzamastsev Alexei Gennadievich is an Associate Professor of the Industrial Heat Power Engineering Department, Lipetsk State Technical University, Lipetsk, Russia. He is a Candidate of Physical and Mathematical Sciences. His research interests include Heat and Mass Transfer during Two-Phase Flows, Thermal Modes of Heat-Processing Installations, Energy Saving.

Peshkova Anastasia Valeryevna is a Post-graduate at the Industrial Heat Power Engineering Department, Lipetsk State Technical University, Lipetsk, Russia. Her research interests are Heat and Mass Transfer during Two-phase Flows, Thermal Modes of various heat processing Installations, Engineering Networks and Systems of Buildings and Structures of Industrial and Civil Facilities, Energy Saving.

Neklyudov Maxim Nikolaevich is a Master's degree student of the Industrial Heat Power Engineering Department, Lipetsk State Technical University, Lipetsk, Russia. His Research interests are Heat and Mass Transfer Processes and Devices, Energy-efficient Technologies, Energy Saving.

A.I. Sharapov, A.G. Arzamastsev, A.V. Peshkova, M.N. Neklyudov

ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies

International Transaction Journal of Engineering, Management, & Applied Science & Technologies http://TuEngr.com

PAPER ID: 11A13F

CULTURAL HERITAGE OF THE PERANAKAN BATIK KIDANG MAS HOUSE OF LASEM, CENTRAL JAVA, INDONESIA Tessa Eka Darmayanti 1 2

1,2*

, and Azizi Bahauddin

School of Housing, Building & Planning, Universiti Sains Malaysia, MALAYSIA. Department of Interior Design, Faculty of Art and Design, Maranatha Christian University, INDONESIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 09 July 2019 Received in revised form 19 June 2019 Accepted 28 June 2019 Available online 02 July 2020

Peranakan houses are becoming more marginalised due to the changing times in Lasem and various identities crisis regarding the houses that appear among the local community. Even though the houses are the legacy of tangible artefacts and intangible attributes of society that are inherited from the past generations; they have to be maintained in the present and preserved for the benefit of future generations for indepth cultural understanding. This qualitative research used phenomenology and narrative approaches to seek the cultural heritage elements within the Peranakan Houses in the area of Chinatown, Lasem. The findings of the study indicate that the embodiment of cultural heritage elements within the houses has become an essential role in constructing and identifying building identity, which is a part of cultural preservation.

Keywords: Peranakan houses; Tangible cultural heritage (TCH); Intangible cultural heritage (TCH); Cultural heritage identity; Narrative research; Lasem Chinese house; Phenomenology; Javanese house.

Disciplinary: Architecture, Interior Design (Phenomenology), Southeast Asia History, Religious and Believes Studies. 2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION This paper discusses the value of cultural heritage within one Peranakan house in China Town in Lasem, called Babagan village. Cultural heritage sites are legacies that must be preserved (Febro, 2020). This study tries to explore the legacy of tangible and intangible cultural heritage from the house, which has been inhabited for seven generations. This house is known as Rumah Batik Kidang Mas. Cultural heritage is a strategy for preserving our sense of place, which means, in this case, protecting the sense of historical Lasem. Some academic and non-academic researchers have made Lasem as a research idea, both concerning history and culture. Lasem keeps a lot of exciting stories that are not enough to be seen only, but need to be explored from various perspectives so *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

that they can be better understood. Why is it important to discuss this? Firstly, nowadays, where “the modern world” is full of technology and mass communication to create an “internationalglobal” culture, it is of primary importance to identify “national-local” cultural heritage to avoid any loss of identity. Secondly, the existences of Peranakan houses have been abandoned and destroyed or usually become “invisible” because the owner chose to become an introvert. Another reason is that the house (Kidang Mas) has been changed in zoning systems that occur inside the home based on the alteration of residents’ perspectives that could become a new angle in seeing cultural heritage. In this housing complex, the zoning system is divided into four areas, there are public, semi-public and semi-private, private. Public area means everybody is welcome to enter, while semi-public area can be accessed if you are invited, and anyone in the house is possible to come to the semi-private area, whereas the only owner may enter the private area, such as the bedroom. This article aims to show the embodiment of the cultural heritage elements of the Peranakan House - Kidang Mas that it is possible to strengthen architectural language as an Indonesian identity.

2. LASEM AND CHINA TOWN Nowadays, Lassem or Lasem is a small region within the administrative district (Kabupaten) of Rembang, in the north side of Central Java (Figure 1). Furthermore, Lasem is famous for its most influential Chinese culture, especially within their Batik Tulis (hand-drawn batik).

Figure 1: The Location of Lasem from Map in 1695 (6.6986° S, 111.4445° E) (Source: Modified from KITLV Leiden’ Archive, 2018) Based on the interview with Njo Tjoen Hian or Sigit Wicaksono in 2017, a Lasem public

Tessa Eka Darmayanti, and Azizi Bahauddin

Figure and a batik entrepreneur stated that Batik Lasem is even sent to foreign countries such as Singapore, Malaysia, and Thailand. The batik industry in Lasem is one of the oldest batik production centres in Java. Its establishment is associated with the Majapahit Kingdom era starting from 1293 until 1478. Another significant characteristic of Lasem is the embodiment of the Peranakan style architecture. Despite Lasem being a small area but in the 16th century, Lasem was one of the essential and well-known cities and dynamic ports under the Majapahit Kingdom. According to history, Admiral Cheng Ho from the Ming Dynasty in China regularly visited ports in the North of Java, and he found many Chinese communities at Lao Sam or Lasem. It was then known as the place of the most prominent Chinese immigrants in Java which occurred in the 14 to 15 centuries. That caused the strong influence of Chinese culture into the local Javanese culture (Darmayanti, 2017). In the Dutch Colonialism era, the trade through Lasem harbour was crowded due to the presence of Chinese traders who eventually stayed in Lasem. At that time, the Chinese people in Lasem were led by a Captain and two Chinese Lieutenants to show their existence in the area. The proof of the arrival of the Chinese people in Lasem could be seen in the historical sites called Punjulharjo, Rembang, where a lifeboat with two skeletons was found. Based on radiocarbon found on the boat, derived from seven to eight centuries and the findings of the only boat in Southeast Asia the was most complete and intact (Yogyakarta Archaeological Centre). Another noteworthy background of Lasem around the year of 1860, Lasem was once a necessary area for opium trade in Indonesia and even Asia. Those who stayed in Lasem in this 19th century grew very rich as opium traders. They owned large houses and boats that allowed them to undertake their trading activities (Suroyo et al., 1994; Pratiwo, 2002). Today, Lasem is part of the main traffic areas from the west to the east of Java. The main traffic road is known as Jalan Raya Pos or De Groote Postweg, which was constructed in the Dutch colonial era under the command of Governor-General Herman Willem Daendels from 1808 to 1811. After De Groote Postweg was built, it changed the cosmological notion of the place. For example, Indonesian Chinese did not develop their new temples at riverside anymore. The “new” temple of Lasem that was built in the 20th century wasn’t oriented towards the Lasem River as was the case with the old temple but facing the Groote Postweg (Nas & Pratiwo, 2002). The location of Lasem can be reached by road, approximately thirty minutes from Rembang and three hours from Semarang, the capital of Central Java. For those who are visiting Lasem for the first time, they will probably have difficulty finding the area, because there is no written sign which shows it has entered the Lasem area. However, Lasem is possible to be recognised with the embodiment of Masjid Jami or the Great Mosque of Lasem with a green dome on the right side of De Groote Postweg - main road (from Semarang). Across the mosque, there is a market area which often referred to as the square called Alun-Alun of Lasem, and the opposite the square is the main entrance to one of Chinatown area known as Soditan-Dasun (Figure 2). The establishment of Chinatown or known as Pecinan was generally based on two factors, namely social and political. Social factors were formed because of the needs of the Chinese people in carrying out their various daily activities and any traditional-cultural activities. *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

Figure 2: The Location of Lasem, Central Java. Besides, this area also functioned as an economic centre through its trade activities. On the other hand, political factors originated in the Dutch colonial era of Wijkenstelsel imposed regulations around the 18th century to all major cities in the Dutch East Indies (Indonesia). Generally, the Chinatown area consists of residential, market or pasar, and temple or kelenteng areas. Furthermore, Chinatown in Lasem is divided into three regions based on the history of its formation, namely Soditan, Karangturi, and Babagan Village. Based on the interviews with Danang Swastika, a historian of Lasem, and Gandor Sugiharto, a local public Figure in 2017 in Lasem, saying that the Soditan was the first Chinatown in Lasem. This village is the closest to the port and was formed around 1470. The statement supported based on the fact contained in the map produced in 1477, depicts the oldest temple in Lasem, Cu An Kiong. Then, Karangturi Village was established approximately in the 1740s. The people came through the massive migration of Chinese from Jakarta who escaped from the genocide of Chinese people in Jakarta. The Chinatown area then was extended to the west, namely to Babagan that was established approximately in 1800 (Darmayanti & Bahauddin, 2019). Previously, the majority of people in Lasem embrace Hindu - Shiwa as their religion, the statement based on the artefacts - lingga which found in Kajar Village. In general, if lingga is found, yoni is also around it. But in this village, the only lingga was found. Yoni and lingga are known as the symbols of female and male sexuality in the Hindu traditions, which is related to the cosmic power that produces virtues, not merely a carnal representation of the human body

Tessa Eka Darmayanti, and Azizi Bahauddin

(Magioglou, 2014). Today, the majority of people in Lasem embrace Islam as their religion; the rests embrace Hindu, Buddha, Christian, and Catholic. Since Lasem becomes the central dissemination of Islam and was included in one of the ancient cities in Java, many Pesantren or Islamic Boarding School spread within Lasem. Even though the people have faith over particular religion, some of the communities believe in supernatural powers (Animism) and are marked by some traditional ceremonies intended for the safety and wealth of the believers (Suroyo, et.al, 1994). This diversity also influences the cultural wealth owned by Lasem.

3. METHODOLOGY The study is qualitative research in nature which involves the individual experience of the researcher during fieldwork within the Peranakan house of Kidang Mas. Interviews and conversation are designed to be less structured and more open to encourage the participant to share details regarding their experiences (Moustakas, 1994). The activity started in September- November 2017 and continued in September 2018. The researcher could stay and talk with the house’s owner, and the owner of Kidang Mas invited researchers to experience the various activities that had taken place. Based on this experience, more detailed and authentic information are obtained. Through phenomenology and narrative approaches, this study documents the experiences, in the form of retelling the lived experience through comprehensive and descriptive writing. The term of cultural heritage is a broad concept. There is no exact definition of the idea of cultural heritage. The terminology adopted reflects the specific characteristics of particular cultures, according to UNESCO’s Declaration Concerning the Intentional Destruction of Cultural Heritage in 2003 states that cultural heritage is an essential component of the cultural identity of communities, groups and individuals, and or social cohesion. Cultural heritage is the legacy of physical artefacts and intangible attributes of a group or society that is inherited from generation to generation, including customs, practices, places, objects, artistic expressions, and values (Icomos, 2002). There are two expressions of cultural heritage known as tangible cultural heritage (TCH) that relate to objects. In contrast, intangible cultural heritage (ICH) is very close to performances, representations, expressions, skills, and knowledge.

4. PERANAKAN HOUSE The Chinese people in Indonesia are divided into two; Totok (full-blooded) Chinese and Peranakan (half-breed) Chinese (in Malaysia they are called Baba Nyonya). According to Onghokham (1990) in the 17th and 18th centuries, the term Peranakan was regularly used by Javanese to mention the Chinese people who were born on Java island and had settled in for generations. The existence of Chinese communities has led to the acculturation of cultures in Lasem; one of the existing artefacts to the present day is a residential house called Rumah Peranakan. The Peranakan house is included in the Straits Chinese architecture, which is generally divided into two types, namely shophouses or ruko and bungalows. The Chinese never built a wall separating their settlement from other communities for the reason of security. Still, in the case of Lasem, most of the Peranakan houses with the bungalow *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

type are surrounded by high walls and massive gateways as the main entrance. According to the way it was constructed, Peter Nas (2002) stated that there were two methods of construction implemented in this Rumah Peranakan in Lasem. First is through establishing the surrounding wall of the complex, and then constructing the building inside the complex and eventually constructing the gate. The second way is by firstly establishing the surrounding wall of the compound, the gate, and finally forming the buildings inside the complex. The main house was built in the centre of the complex and surrounded by the side and rear buildings. The space between these buildings forms the front and the middle yards (courtyard) and if there any backyard is usually a waste space no matter how large it is and considered to be a garden with a lot of plants and trees (Figure 3).

Rear house Main house

Side house House gate

Figure 3: The Components of Peranakan Houses in Lasem (Modified from Pratiwo (1990)). The Peranakan houses in Lasem generally occupied by extended families consisting of parents and their children. Each family had its room, but the kitchen, bathroom and family room were communal. When the parents died, the house was divided among the children, and when the town went into decline, families preferred to move out and leave behind the house. Besides the explanation above, according to Pratiwoâ€™s research in 1990, Peranakan houses in Lasem can also be characterised by the type of roof expansion which is a combination of Chinese and Javanese culture (Figure 4). The Peranakan house Kidang Mas is not the first batik home industry in Lasem area, especially in Babagan Village. The name is not as famous as Sekar Kencana owned by Njo Tjoen Hian or known as Sigit Wicaksono. They lived there in the same generation, but Sigit has opened the house to the public earlier. This matter was realised and acknowledged by the owner of Kidang Mas. However, the Peranakan house of Kidang Mas remains unique because it inhabited for several generations. The batik business also has been carried out for generations.

Tessa Eka Darmayanti, and Azizi Bahauddin

Chinese House

Javanese House

Lasem Chinese House

Figure 4: The Roof Type of Peranakan Houses in Lasem (Modified from Pratiwo (1990)).

5. PERANAKAN HOUSE - KIDANG MAS, BABAGAN VILLAGE

Figure 5: The Peranakan House - Kidang Mas, Lasem (Source: Taken by Author, 2017 - 2019). This house located in Babagan street, gang (alley) 5, number 1, Babagan village, Lasem were selected as a case study for several reasons (Figure 5). Firstly, most of the family generations have been living in the house. The first generation was called Mak Klepon (Mak means grandma), and Engkong Tay Tjian directly came from South China. Tay Tjian returned to mainland China and did not return, while his wife and his daughter called Mak Lian settled in Lasem. Mak Lian as the second generation moved out from the house to follow her husband - Lie Je Siu who had a colonial Peranakan house on the main road of Lasem. They had eight children, and one of them who inherited the Peranakan house was Lie Hie Nio. Tjan Liong Khoen, the fourth generation, was born as the son of the mother Lie Hie Nio who married Tjan Liang Thay. The name of Tjan Liong Khoen became a legacy of the family and a trademark stamp on every piece of Kidang Mas batik. He married his cousin Lie Ing Nio or called Mak Ing. She passed away at the age of 74 years old in 1976 when her youngest daughter - Tjan Djoen Nio was pregnant the first child. Rudi, the youngest son of Tjan Djoen Nio as the sixth generation who lived in the house, a modern generation, had moved out from Lasem to Jakarta and came back to Lasem with his wife named Vina and his daughter in 2014 and until now. Secondly, the owner was friendly and willing to share information related to culture, tradition and even batik business. Lastly, the house represented not only the daily activities of the family member but also public activities in the house (Darmayanti et al., 2019). The Peranakan house Kidang Mas also included in the bungalow type, consist of the main gateway, garden (A) in front of *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

veranda (B), main house as a private area - prayer hall (C), bedrooms (D), family room (E) and terrace (F) behind the house facing the courtyard (H). Outdoor-bathroom (J), kitchen and dining area (I) are placed behind the courtyard. Another bathroom within the main building (G) is new, requested from Rudi’s wife before a move back from Jakarta to Lasem (Figure 6). The material used to build this house employed a combination of bricks and teak wood for walls, floors, and pillars. But over time, some elements have been replaced with newer materials such as wooden floors inside the house and classic tile in veranda replaced with broken-white ceramic tile (Figure 7).

Figure 6: The Layout Sketch of Peranakan House - Kidang Mas.

Figure 7: The Flooring Material Changes in the house. Left: Inside House; Right: Veranda.

Through observation, the researcher found that the house has its charm, which is possible to “read” through activities and traditions around it. The charm is like mysteries that made researchers think for solutions. The statement reminds of the quotes of a famous architect from the modern era Zaha Hadid is as follows: “I don’t think that architecture is only about shelter, is only about a very simple enclosure. It should be able to excite you, to calm you, to make you think.” This house is like embracing various experiences with exciting stories from across generations. But, it is rather difficult to trace the activities of the first generation in this house because of the lack of stories from previous generations. The story has begun when Rudi as the sixth generation and his wife narrates about the second generation - Mak Lian. In this generation, batik making has already

Tessa Eka Darmayanti, and Azizi Bahauddin

started, but only for personal use, and it continues until the third generation. Making batik for commercial purposes began in the fourth generation - Mak Ing because many people admired the beauty the motifs she made and continues until today. The batik business gives a considerable influence for zoning (private and public) changes within the house. In the beginning, the housing complex only up to the kitchen area (Figure 6). Afterward, expanded by bought another house located behind the complex and using it as a batik workshop (K, Figure 6) until now (Figure 8). The researcher was fortunate to get the experience many times in seeing the process of making batik at the workshop. Starting from covering batik motifs with a special wax, boiling the cloth to dissolving wax, washing fabric after boiling and colouring cloth that was painted. From the several Peranakan houses visits by the researcher, it was found that something unique about this house came from the smell of the batik process. From a direct experience and full consciousness, the researcher can detect not only smell but also any typical sound or noise and even colours which were produced by this house. Based on the experience, the researcher expresses it through the following quote - “The sound of stamping the worker’s feet on the batik cloth that being washed. The sound of splashing water when dipping the batik cloth into the giant brick-pot.. the sound of workers who are mutually talking and joking (guyon) about life and the sound of flapping the batik cloths when it will be dried” and all of these descriptions are within one line with the words of Merleau - Ponty (1964), “We see the depth, speed, softness and hardness of objects. We see even their odor”. Through the use of multi-sensory which involves the eye, ear, nose, skin, tongue, skeleton, and muscle, which possible to screening whole senses to find something that other places don’t have (Steven Holl et al., 1994). Eye to see the typical daily activities; ear to hear from various activities such as membatik process, cooking, playing, talking; nose to smell the batik cloth, the malam (wax) and the colouring material from the workshop, and also the dupa (incense) from prayer hall; skin to feel the batik surface, feel the walls, floors, even trace the space temperature; tongue to taste the traditional food cooked by the owner, and skeleton-muscle to feel the energy surround the house. It is called house identity.

Figure 8: The Workshop Area - Kidang Mas. *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

Darmayanti and Bahauddin (2020) stated that initially, the Kidang Mas owner - Tjian Djoen Nio or known as Bu Kian, the fifth generation, did not allow guests to enter the housing complex and only in 1980, the obeng or batik workers were allowed to work inside the house. For her, that rule is to keep family tradition from generation to generation and to keep family intact. Moreover, in the time of Mak Lian and Mak Ing, the obeng did not work inside the house. The making of batik motifs was done at the obeng’s homes and delivered back for the colouring process. The colouring process is done by themselves because it dealt with secret formulas. But the next generation, her youngest son of Bu Kian - Rudi Siswanto approached his parents to allow guests to enter the area of the house, especially for those who are interested in batik. Nonetheless, that does not mean this generation is not respecting the previous tradition, but from the influence of the environment and knowledge when he was living in the big city (Jakarta) has opened up his mind to see something from a different angle. And another reason is about political conditions related to the discrimination against the Chinese community has been better compared to his parents’ era. Therefore, there is no reason for the house to be closed to outsiders the see the batik making. This house was private, only for families and close relatives. The garden of the house and front veranda are semi-private, where outsiders can look in through the gate or the grid of the gate layer called Hek (Figure 9). The terrace is used for a family gathering as well as the reception area, while the bedrooms inside the main building and the other areas behind the house are private. Based on that explanation, some changes occurred and can be seen visually, such as activities and zoning of space. In contrast, the intangible values are possible to see from the changes of thinking that affect tradition (table 1 & Figure 11). Although there are some changes, the basic principles relating to spiritual values do not change, such as respecting the ancestors and God on the altar in the prayer hall or the kitchen (pawon altar) always being carried out. Since the family, converted into Christianity from Kong Hu Cu (Confucianism) except Mak Lian, some rituals are only conducted by her. The rituals, such as sembahyang coki to commemorate the day of her parents’ death engkong Liong Khoen and Mak Ing, sembahyang ronde, sembahyang rebutan, ceng beng and imlek which is also known as the Chinese New Year celebration. Mak Lian still holds the belief because she has to maintain the tradition and need to “keep in touch” with her parents.

Figure 9: Curious eyeing through the gateway grid.

Tessa Eka Darmayanti, and Azizi Bahauddin

The zone changes slowly took place after 1980, where the owner started batik production for the public. Garden becomes a public area, while veranda is for those who are genuinely interested in batik and also batik workers who make motifs on the fabric. The house owner, Rudi, and family often use front veranda as leisure space, such as eating bakso (meatball) with his family or guest (Darmayanti & Bahauddin, 2020: 8) and this area also be interpreted as a play or relaxation area for Rudi's children. Usually used to play bicycles or just enjoy online videos, while for the second daughter, it is used as an arena for learning to walk (Figure 10) (Darmayanti et al., 2020: 270). The prayer area has changed slightly because other than the families can enter. Significant changes occur at the back of the house since many guests want to see the process of making batik in the workshop and the courtyard. In this case, the value of cultural heritage from the tangible and intangible views involves a slight shift, but this shows in what characterises the construction of the identity of a Peranakan house in Lasem.

Figure 10: The activities within the Front Veranda - Kidang Mas. Table 1: The Changes of Zoning Area within Peranakan House of Kidang Mas. The House Area 1. Garden 2. Front Veranda 3. Prayer Hall 4. Bedrooms 5. Family room 6. Back Porch 7. Bathroom 8. Bathroom (outside) 9. Courtyard 10. Kitchen & Dining room 11. Batik Workshop

Before 1980 Semi-Private Semi-Private Private Private Private Private Private Private Private Private

After 1980 - Present Public Semi-Public Semi-Private Private Private Semi-Private Private Public Public Semi-Private Public

*Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

Figure 11: The Zoning Change of the Peranakan House - Kidang Mas

6. CONCLUSION The existence of Peranakan houses in Lasem as a part of cultural heritage provides a sense of identity and continuity of culture and possible to convey the richness of history for the future. This Peranakan house is just a tool to better understand the cultural heritage values that Indonesia has in general and Lasem in particular through different perspectives. The Peranakan house in Lasem is not only a shelter, a visual or a tangible object, but also explore and experience the senses mediate not only information, but also a means of articulating sensory thought. This study aims to show that Peranakan houses in Lasem are a legacy of Lasem which genuinely needs to be preserved in both material and non-material values. The values that were found adapted elsewhere made the cultural heritage stronger. In general, the Peranakan residences are private. It can be seen physically through the high walls surrounding the housing complex, also the use of the â€œtwo layersâ€? door at the main gateway. Both included the identity of the Peranakan community house related to their origins. But, in the findings, a zone changes from the private to the public which is related to the economic aspects. In this case, is the batik business. The strength of family tradition and the monetary situation make the building partly commercialised. However, besides that there are also the historical and cultural

Tessa Eka Darmayanti, and Azizi Bahauddin

powers of Lasem which create a lot of curiosity among researchers or even tourists who become heritage or cultural enthusiasts that cause this house to be opened as a place to conduct interviews, data collection observe the batik process. According to the UNESCO, the architecture of the Peranakan houses in Lasem should belong under the category group of heritage. Based on that statement and through this research, there is a suggestion for the government to give more attention and provide property protection. The Peranakan house in Lasem is a cultural heritage. It must be remembered, must be dynamic, used and shown, rather than being static and abandoned.

7. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

8. ACKNOWLEDGEMENT The authors appreciate the financial supports from the Universiti Sains Malaysia.

9. REFERENCES Darmayanti, T.E. (2017). Third Space within the Gates of Rumah Peranakan at Chinatown Area, Lasem, Central Java, Indonesia. The 5th PSU-USM International Conference on Arts and Sciences, Phuket, Thailand, 73-82. http://www.researchgate.net/publication/319311604_Third_Space_within_the_Gates_of_Rumah_Pe ranakan_at_Chinatown_Area_Lasem_Central_Java_Indonesia Darmayanti, T.E., & Bahauddin, A. (2020a). Pengaruh perubahan sirkulasi terhadap fungsi ruang di rumah Peranakan, Kampung Babagan, Lasem. ARTEKS : Jurnal Teknik Arsitektur, 5(2), 265-276. DOI: 10.30822/arteks.v5i2.403 Darmayanti, T.E., and Bahauddin, A. (2019). Rebuilding Space In Peranakan House In Lasem, Indonesia: Perceived Space Concept. DOI: 10.15405/epms.2019.12.65 Darmayanti, T.E., and Bahauddin, A. (2020b). Understanding Vernacularity through Spatial Experience in the Peranakan House Kidang Mas, Chinatown, Lasem, Indonesia. Journal of the International Society for the Study of Vernacular Settlements, 7(3), 1-13. http://isvshome.com/pdf/ISVS_73/ISVS_ej_7.3.1_Tessa_Eka_Damayanti_Final.pdf Febro, J.D. (2020). 3D Documentation of Cultural Heritage Sites Using Drone and Photogrammetry: A Case Study of Philippine UNESCO-Recognized Baroque Churches. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(8), 11A8M, 1-14. Holl, S.; Pallasmaa, J., & Alberto. (1994). Questions of Perception: Phenomenology of Architecture. Icomos. (2002). International Cultural Tourism Charter. Principles and Guidelines for Managing Tourism at Places of Cultural and Heritage Significance. ICOMOS International Cultural Tourism Committee. Magioglou, T. (2014). Culture and Political Psychology: A Societal Perspective. Charlotte, NC: Information Age Publishing, Inc. Merleau-Ponty, M. (1964). The Primacy of Perception: And other Essays on Phenomenological Psychology. The Philosophy of Art, History and Politics, ed. J. M. Edie. Evanston: Northwestern University Press. Moustakas, C. (1994). Phenomenological Research Methods. London: Sage. *Corresponding author (Tessa E. Darmayanti). Email: tessaeka82@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.252

Nas, P.J.M & Pratiwo. (2002). Java and De Groote Postweg, La Grande Route, the Great Mail Road, Jalan Raya Pos. In: Bijdragen tot de Taal-, Land- en Volkenkunde, On the road The social impact of new roads in Southeast Asia 158 (2002), 4, Leiden, 707-725. Nas, P.J.M. (2002). The Indonesian Town Revisited. Singapore: Institute of Southeast Asian Studies. Onghokham. (1990). Pertumbuhan Kapitalisme Cina Perantauan di Indonesia. Prisma, 4, 21. Pratiwo. (1990). The Architecture of Lasem: A typo-Morphological approach for redefining architecture in Lasem. Master Thesis, Volume II, Leuven: Katholieke Universiteit Leuven. Suroyo, A.M. Djuliati; Jahmin; Supriyono, Agust; Sugiyarto; Sulistiyono, Singgih Tri; Os, Indriyanto; Indrahti, Sri. (1994). Laporan Penelitian: sejarah dan Budaya Maritim Di Lasem. Semarang: Universitas Diponegoro. Tessa Eka Darmayanti is a PhD (Interior Design) candidate of School of Housing, Building and Planning at Universiti Sains Malaysia (USM), Penang, Malaysia, and also an Academician at Art and Design Faculty in Maranatha Christian University, Bandung, Indonesia. She obtained a Bachelor of Art from Maranatha Christian University with Cum Laude Honors, and she earned her Master of Science in Interior Design from USM. Her research interests involve Design with Cultural Influence, especially on issues on Third Space and Phenomenology. Professor Dr.Azizi Bahauddin is a Professor in Interior Design at the School of Housing, Building and Planning, Universiti Sains Malaysia, Penang, Malaysia. He obtained a Bachelor of Architecture degree from Texas Tech University, Texas, USA, received a M.A in Interior Design from De Montfort University, Leicester, United Kingdom and a Doctor of Philosophy (PhD) degree from Sheffield Hallam University, Sheffield, the United Kingdom. His main research areas focus on Art and Design, especially on Cultural issues on Ethnography and Phenomenology and in Architectural and Cultural Heritage.

Note: The original of this article was reviewed, accepted, and presented at the 4th International Conference-Workshop on Sustainable Architecture and Urban Design (ICWSAUD2019) conference held in Penang, Malaysia during 24-26 June 2019.

Tessa Eka Darmayanti, and Azizi Bahauddin

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13G

CROSS-IMPACT ANALYSIS OF FACTORS INFLUENCING URBAN LAND PRICE: CASE OF CHIANG MAI CITY 1,2*

Thitipong Chiracharoenwong , Puttipol Dumrongchai , 1 3 Poon Thiengburanathum , Praopun Asasuppakit 1

Department of Civil Engineering, Faculty of Engineering, Chiang Mai University, THAILAND. Department of Highways, Ministry of Transport, Government of Thailand, THAILAND. 3 Department of Industrial Technology, Faculty of Science and Technology, Chiang Mai Rajabhat University, THAILAND. 2

ARTICLEINFO

A B S T RA C T

Article history: Received 10 April 2020 Received in revised form 30 June 2020 Accepted 03 July 2020 Available online 06 July 2020

This study identifies factors affecting urban land price and analyzes interrelationship and probability of these factors. Chiang Mai city was used as a practical case in this study. The EDFR and CIA techniques were applied to achieve these objectives. Ten experts from public and private sectors with more than ten years’ experience in land price Keywords: evaluation and real estate development in Chiang Mai city were invited Land price change; to be an expert panel. The results of this study revealed ten factors Influencing factor; affecting land price in Chiang Mai city, and the most important factors Monte-Carlo technique; are housing demand, accessibility, and distance to the city center. Three Infrastructure project events of each influencing factor; optimistic, pessimistic, and most development; Land probable, with its occurrence and conditional probability, were acquisition valuation; Cross-Impact Analysis determined. The Monte-Carlo technique was applied to random future (CIA); Chiang Mai situations. Thirteen scenarios occurred as a result of the scenario Comprehensive Plan; simulation. The change in probability of each event was a result of an Cross-impact index; Land interaction of its influencing factors. The event with many interrelated price probability change. factors had more changing in its probability; for example, urban land price. From this study, the identified factors affecting urban land prices of the Chiang Mai city can be used as variables in land price determination to support decision-making in the urban planning and urban infrastructure project development. Disciplinary: Civil Engineering, Urban Real Estate Business and Management, Urban City Planning. ©2020 INT TRANS J ENG MANAG SCI TECH.

1 INTRODUCTION Urban land price is considered as the main index of urban land market information, which is an important reflection of the allocation of land resources in the city and the macroeconomic *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ©2020 International

Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13G http://TUENGR.COM/V11A/11A13G.pdf DOI: 10.14456/ITJEMAST.2020.253

environment (Zhenyu, Meichen, Yuelong, & Jizhou, 2011). Moreover, it plays a crucial role in guiding the allocation of land for urban planning and development, especially in big cities of rapidly developing countries where frequent changes in infrastructure and population (Hu, Yang, Li, Zhang, & Xu, 2016). Furthermore, urban land price is considered as an important factor in infrastructure project development because it influences the compensation for land expropriation. Therefore, the study of land price trends and its influencing factors are important for support decision making in urban planning and infrastructure project development (Hu et al., 2016; Sampathkumar, Santhi, & Vanjinathan, 2015). The price of land in Thailand is generally classified as an appraisal price and market price. The appraisal prices are appraised by the Treasury Department of Thailand. At present, the market prices in Chiang Mai city are generally higher than the appraisal prices, as shown in Figure 1.

Figure 1: The 2019 land price of Chiang Mai city - the comparison of the appraisal price by the Treasury Department of Thailand and the market price (1 sq. wah = 4 m2). During the past several years, there have been numerous studies analyzing land prices and influencing factors. Kilpatrick (2000) showed the usefulness of a time-series regression model that used economic data to provide more accurate forecasts of the central business district (CBD) land prices in rapidly moving land price markets. Sampathkumar et al. (2015) modeled and forecasted land prices in Chennai metropolitan area, India, by using multiple regression and neural network techniques. Even though both models were well fit to the trend of land price, the neural network model shown better accuracy. Hu et al. (2016) revealed the study of spatially non-stationary relationships between urban residential land price and impact factors in Wuhan city, China, by using geographically weighted regression analysis. Kheir and Portnov (2016) presented the use of time trend analysis and multivariate regressions to study economics, demographic, and environmental factors affecting urban land prices in the Arab sector in Israel. Since the price of land depends on several factors (Kheir & Portnov, 2016), then the most crucial

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

thing in analyzing land prices is to identify these influencing factors. Many factors affect the level of land price and its changing trend, and these factors may occasionally fluctuate according to social and economic development and people’s demand (Song et al., 2011). Wang et al. (2009) employed statistical methods; for example, T-test and Pearson correlation, to explore the driving forces of residential land prices in Beijing. This study indicated that the primary factor influencing residential land price was the distance to the central area, followed by the plot ratio and accessibility. Besides, urban subways and cultural and sports infrastructure had a significant value-added function to residential around. Song et al. (2011) studied the influences and interactions of factors affecting land prices in China by using hierarchical linear models. Both urban construction land area and real estate investment are the most important factors which have a significant influence on land price growth rate. Still, farmland protection policies have a significant effect on controlling the level of land price and its growth rate. At present, most research on factors affecting urban land price mainly focuses on the identification and importance determination of factors influencing urban land price. In contrast, the interactions between influencing factors with the occurrence probabilities and conditional probabilities of events of each influencing factor are not determined. For these reasons, the cross-impact analysis (CIA) method was employed to analyze these influencing factors and their events in this study. The CIA method is a well-known technique specifically designed to predict future events by analyzing the interactions among variables (Han & Diekmann, 2001b). It was originally developed by Theodore Gordon and Olaf Helmer in 1966, as a result of a simple question: can forecasting be based on perceptions about how future events may interact? (Gordon, 1994; Han & Diekmann, 2001b). It appeared as a methodological tool for dealing with the complexity and could be described as a high-level system modeling approach (Panula-Ontto et al., 2018). The initial experiments with the CIA method of forecasting were published in 1968 (Gordon & Hayward, 1968). The CIA is a set of related methodologies that enable to analyze events; for example, the occurrence probabilities of events and the conditional probability of one event given another (Blanning & Reinig, 1999; Moutinho & Witt, 1994; Schuler, Thompson, Vertinsky, & Ziv, 1991; Thorleuchter & Van den Poel, 2014). It has been combined approaches to increase its functionality and improve its outcome (Bañuls & Turoff, 2011). The CIA can be used for creating a model from a set of significant events (Bañuls & Turoff, 2011). There are different ways of calculating the CIA (Friðgeirsson & Steindórsdóttir, 2018). The critical step in the CIA method is to define the events by interviewing key experts in the field being studied (Gordon, 1994). Since this step can be crucial to the success of the study, the Ethnographic Delphi Futures Research (EDFR) was applied to collect data. The EDFR is a synthesis of Ethnographic Future Research (EFR) (Textor, 1979) and the Delphi technique. It was first introduced by Poolpatarachewin (1980). The EDFR was designed to combine the strengths of both procedures while minimizing their methodological weakness. Its advantage is a certainty that the participants will be intensely involved in generating the issues to be considered for group response. For this reason, the scope and focus of the issues under consideration cannot be significantly narrowed or distorted by the biases of the researcher (Passig, 1998). *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ©2020 International

Chiang Mai city is the economic, investment, and transport center of northern Thailand. Nowadays, Chiang Mai city has rapid expansion and increasingly faces problems common to large cities; for example, unplanned and sprawling development, and traffic congestion (Chiang Mai Municipality, 2014). The uncontrollable land developments and urban sprawl affect the transport network of the city. The public transportation system unable to support the needs of people; therefore, ninety percent of the Chiang Mai population uses a private vehicle as to the first mode of transportation (ExCITE, 2017). These days, the government has an effort to reduce traffic congestion and improve urban transportation by using the road network expansion policy. For this reason, Chiang Mai city has many road network expansion projects in the present and more in the near future. These projects need land expropriation. As a result, many households will be affected by land expropriation, while the government has not yet clarified the appropriate compensation for land expropriation. The objectives of this study are (1) to identify factors affecting urban land price and (2) to analyze interrelationship and probability of these factors. The future research techniques; EDFR and CIA, were applied to achieve these objectives. Chiang Mai city was used as a practical case in this study. The results of this study can be used as important data in land price-determining for support decision making in urban planning and infrastructure project development.

2 MATERIALS AND METHODS 2.1 OVERVIEW OF THE STUDY AREA: CHIANG MAI CITY â€“ CHIANG MAI COMPREHENSIVE PLAN AREA Chiang Mai province is the second-largest province by land area (20,107 square kilometers) and the fifth-largest province by population (approximately 1.7 million people) of Thailand. It is located in the northern part of the country, approximately 685 kilometers from Bangkok. It is situated on the Mae Ping River basin and surrounded by high mountain ranges.

Figure 2: The Doi Suthep-Pui National Park on the west edge of the CMCP area. Chiang Mai city in this study is referred to as the Chiang Mai Comprehensive Plan (CMCP) area, which locates in the center of Chiang Mai province. The CMCP area has been determined by the Town Planning Act, B.E.2518 of Thailand, in 2012. It covers an area of 429 square kilometers and covers 49 sub-districts in 7 districts, i.e., Muang, Mae Rim, San Sai, Doi Saket, San Kamphaeng,

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

Saraphi, and Hang Dong. The Muang district is the center of the CMCP area. The west edge of the city is adjacent to the mountain (the Doi Suthep-Pui national park), as shown in Figure 2. Accordingly, the urban area has expanded to the north, south, and east direction of the city during the last twenty years from the year 1990 to 2010, as shown in Figures 3 and 4.

Figure 3: A comparison of land uses of the Chiang Mai Comprehensive Plan (CMCP) area between 2000 and 2010. Figure 1, the market prices of land in Chiang Mai city in the year 2019 are generally higher than the appraisal prices by the Treasury Department of Thailand. Also, the prices of land areas in Muang district are higher than the other districts. The highest appraisal price of land is in the Chang Khlan sub-district. But the highest market price of land is in the Si Phum sub-district and Phra Sing sub-district, respectively; besides, there are higher than the market price of land in Chang Khlan sub-district. The Si Phum and Phra Sing sub-district are located in the city center of Chiang Mai city. The city center is located in Muang district, and it is characterized by the ancient rectangular wall and surrounded by the moat. It is known as the old town neighborhood, which is full of historical and cultural sites. On the other hand, the Chang Khlan sub-district is located outside the old town; it is known as the commercial area of Chiang Mai city.

2.2 RESEARCH METHODOLOGY The research methodology (Figure 5) involves identifying factors affecting urban land price. The influencing factors are gathered from literature and expert interview. These influencing factors are screened using five-point Likertâ€™s scale for scoring and using statistical techniques to analyze data. The CIA method and the EDFR technique were used to determine interrelation, interaction, occurrence probability, and the conditional probability of influencing factors. *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ÂŠ2020 International

Figure 4: The expansion of the residential area in the Chiang Mai Comprehensive Plan (CMCP) area in 1990, 2000, and 2010.

Figure 5: Research Methodology.

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

2.3 DATA AND ANALYSIS 2.3.1 IDENTIFICATION OF FACTORS AFFECTING URBAN LAND PRICE At first, sixteen factors affecting urban land prices were gathered by reviewing literature and consulting with a few experts. The list of these influencing factors is illustrated in Table 1. All sixteen gathered influencing factors in Table 1 were employed to develop a five-point Likert scale questionnaire (1 is “least important,” and 5 is “most important”). The questionnaires were transited to an expert panel to screening these influencing factors. In this study, an expert panel comprised of ten experts. It consists of five experts from the public sector (two from the Department of Highways and three from the Treasury Department of Thailand) and five experts from the private sector (real estate investors). All of them have more than ten years’ experience in land price evaluation and real estate development in Chiang Mai city. Table 1: Factors affecting land price. No. 1 2

Factor Housing demand Accessibility

3 4

Distance to center city Economy

Land use planning

6 7 8 9 10 11 12 13 14 15 16

Public policy Infrastructure investment Political situation Population Household income Investment demand Land environment Interest rate Construction cost Tax policy Fuel price

References Kilpatrick, 2000; Reed, 2001; Song et al., 2011 Cervero & Duncan, 2004; Cervero & Kang, 2011; Hu et al., 2016; Mirkatouli, Samadi, & Hosseini, 2018; Wang et al., 2009 Cervero & Duncan, 2004; Hu et al., 2016; Mirkatouli et al., 2018; Wang et al., 2009 Kheir & Portnov, 2016; Mirkatouli et al., 2018; Sampathkumar et al., 2015; Song et al., 2011 Cervero & Duncan, 2004; Cervero & Kang, 2011; Mirkatouli et al., 2018; Song et al., 2011 Cervero & Duncan, 2004; El Araby, 2003 Cervero & Kang, 2011; Song et al., 2011; Wang et al., 2009 El Araby, 2003 Mirkatouli et al., 2018; Sampathkumar et al., 2015; Song et al., 2011 Cervero & Duncan, 2004; Mirkatouli et al., 2018; Song et al., 2011 Song et al., 2011 Song et al., 2011; Wang et al., 2009 Sampathkumar et al., 2015 Sampathkumar et al., 2015 Song et al., 2011 Sampathkumar et al., 2015

Table 2: An analysis of the influencing factors. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Factor Housing demand Accessibility Distance to center city Economy Land use planning Public policy Infrastructure investment Political situation Population Household income Investment demand Land environment Interest rate Construction cost Tax policy Fuel price

1 5 5 5 4 5 4 3 3 4 4 4 2 3 3 2 3

2 5 5 4 5 3 5 5 3 1 3 3 3 2 2 2 1

3 5 5 5 5 4 4 4 3 4 3 4 4 4 4 4 3

Importance score Expert No. 4 5 6 7 4 4 5 4 4 4 4 5 5 5 4 4 3 5 5 4 3 4 4 5 4 4 5 3 4 4 4 4 4 4 4 4 4 4 4 4 3 5 3 4 3 3 4 3 3 3 4 4 3 3 3 3 2 3 4 3 3 4 3 3 2 3 3 4

Mean Median 8 5 4 4 4 5 4 4 4 3 3 3 3 4 3 3 3

9 5 5 3 4 5 5 4 5 4 4 4 3 3 4 4 3

10 5 4 5 4 4 4 5 3 4 4 3 4 5 4 3 3

4.7 4.5 4.4 4.3 4.2 4.2 4.1 3.7 3.6 3.6 3.4 3.3 3.3 3.2 3.1 2.8

5 4.5 4.5 4 4 4 4 4 4 3.5 3 3 3 3 3 3

Median Mode

IQR

0 -0.5 -0.5 0 -1 0 0 0 0 0.5 0 0 0 0 0 0

0.75 1 1 1 1 0.75 0 1 0 1 1 1 0.75 1 0.75 0

2.3.2 INTERRELATIONSHIP AND PROBABILITY OF INFLUENCING FACTORS The first round EDFR questionnaire was a semi-opened end form question regarding ten appropriateness and compatibility influencing factors from Table 2. Experts were asked to define the interrelation of all influencing factors and define three events of each influencing factor based on the EFR technique; optimistic, pessimistic, and most probable (Mitchell, 2002). Also, an initial probability (occurrence probability) of each event was given simultaneously by the experts. The interrelation of all factors affecting urban land price is shown as a causes-effect relation map in Figure 6. The initial probability of each event of all influencing factors is demonstrated in Table 3.

Figure 6: Causes-effect relationship map of factors affecting urban land price in Chiang Mai city. Table 3: The initial probability of each event of influencing factors. Variable A

Variableâ€™s name Political situation

Economy

Public policy

Infrastructure investment

Population

Household income

Accessibility

Distance to the city center

Land use planning

Housing demand

Land price

Event A1 A2 A3 B1 B2 B3 C1 C2 C3 D1 D2 D3 E1 E2 E3 F1 F2 F3 G1 G2 G3 H1 H2 H3 I1 I2 I3 J1 J2 J3 K1 K2 K3

Eventâ€™s name Good Balanced Poor Good Balanced Poor Good Fair Poor Increase Stable Decrease Increase Stable Decrease Increase Stable Decrease Good Fair Poor Short Medium Long Good Fair Poor High Average Low Increase Stable Decrease

Initial probability 0.455 0.385 0.160 0.455 0.325 0.220 0.375 0.445 0.180 0.590 0.330 0.080 0.620 0.250 0.130 0.575 0.330 0.095 0.675 0.240 0.105 0.700 0.205 0.095 0.540 0.295 0.165 0.630 0.240 0.130 0.675 0.255 0.070

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

The results from the experts’ responses in the EDFR first round, all events of all influencing factors were employed to construct the cross-impact relationship table in the second round EDFR questionnaire. Experts were requested to give a cross-impact index value of each interaction event in a cross-impact relation table by using the patterns (Alarcón & Ashley, 1998; Han & Diekmann, 2001a; Honton, Stacey, & Millett, 1985) in Table 4. Table 5 shows the example of an experts’ response in the EDFR second round. Table 4: Cross-impact relation patterns. Index value +3 +2 +1 0 -1 -2 -3

Signification Significantly increases the probability in the same direction Moderately increases the probability in the same direction Slightly increases the probability in the same direction No effect on the probability Slightly increases the probability in the opposite direction Moderately increases the probability in the opposite direction Significantly increases the probability in the opposite direction

Table 5: An example of an experts’ response in the EDFR second round. Factor Factor's name A

Political situation

Economy

Public policy

Infrastructure investment

Population

Income

Accessibility

Distance to city center

Land use planning

Housing demand

Land price

Event A1 A2 A3 B1 B2 B3 C1 C2 C3 D1 D2 D3 E1 E2 E3 F1 F2 F3 G1 G2 G3 H1 H2 H3 I1 I2 I3 J1 J2 J3 K1 K2 K3

A B C D E F G H I J K A1 A2 A3 B1 B2 B3 C1 C2 C3 D1 D2 D3 E1 E2 E3 F1 F2 F3 G1 G2 G3 H1 H2 H3 I1 I2 I3 J1 J2 J3 K1 K2 K3

1 1 -1 1 1 -1

1 2 -2 1 1 -1

-1 -1 1 -1 -1 1

1 1 -1 1 1 -1 1 -1 1

3 2 -3 3 1 -3

2 3 -2 1 3 -1

-3 -2 3 -3 -1 3

3 2 -2 0 2 0 -3 -1 2

3 1 -3 1 3 -1 -3 -1 3

3 2 -3 3 0 -3

2 3 -1 2 3 -2

-3 -2 3 -3 0 3

3 2 -3 3 2 -3 2 3 -2 2 3 -2 -3 -1 3 -3 -2 3

2 0 -2 2 0 -2 2 0 -2 2 0 -2 0 2 0 0 2 0 0 2 0 0 2 0 -2 0 2 -2 0 2 -2 0 2 -2 0 2

In general, if the results (from the experts’ responses in the second round of the EDFR) are not reaching the consensus, the results will be developed to the questionnaire for the panelists in the next round. This process will be repeated until the experts’ responses are reaching the consensus. For this study, the experts’ responses reached a consensus in the third round. The cross-impact index of each interaction event pair was employed to calculate the coefficient value (CV) and the *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ©2020 International

posterior probability (posterior Pi) by using Equation (1) and (2), respectively. đ??śđ??śđ??śđ??ś

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Posterior đ?‘ƒđ?‘ƒđ?‘–đ?‘–

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đ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??ź đ?‘ƒđ?‘ƒđ?‘–đ?‘–Ă—đ??śđ??śđ??śđ??śđ?‘–đ?‘–đ?‘–đ?‘– 1âˆ’đ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??ź đ?‘ƒđ?‘ƒđ?‘–đ?‘–+(đ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??ź đ?‘ƒđ?‘ƒđ?‘–đ?‘–Ă—đ??śđ??śđ??śđ??śđ?‘–đ?‘–đ?‘–đ?‘– )

if cross-impact indexâ‰Ľ 0

(1),

if cross-impact index< 0

(2),

Monte-Carlo technique, using OracleÂŠ Crystal Ball, was applied to generate 10,000 random numbers with every 10,000 trials, which for use in event sequence scenario simulation.

3 RESULTS AND DISCUSSION The results of the event sequence scenario simulation for 10,000 times revealed 13 scenarios have occurred, as shown in Tables 6 and 7. Table 6: The result of event sequence scenario simulation for ten thousand times.

A B C D E F G H I J

Event sequence scenario No. 1 2 3 Frequency of occurrence 4,548 224 752 A1 Good 1 0 0 Political situation A2 Balanced 0 1 1 A3 Poor 0 0 0 B1 Good 1 1 1 Economy B2 Balanced 0 0 0 B3 Poor 0 0 0 C1 Good 1 0 0 Public policy C2 Fair 0 1 1 C3 Poor 0 0 0 D1 Increase 1 1 1 Infrastructure D2 Stable 0 0 0 investment D3 Decrease 0 0 0 E1 Increase 1 1 1 Population E2 Stable 0 0 0 E3 Decrease 0 0 0 F1 Increase 1 1 1 Income F2 Stable 0 0 0 F3 Decrease 0 0 0 G1 Good 1 1 1 Accessibility G2 Fair 0 0 0 G3 Poor 0 0 0 H1 Short 1 1 1 Distance to city center H2 Medium 0 0 0 H3 Long 0 0 0 I1 Good 1 1 0 Land use planning I2 Fair 0 0 1 I3 Poor 0 0 0 J1 High 1 1 1 Housing demand J2 Average 0 0 0 J3 Low 0 0 0 K1 Increase 1 1 1 Land price K2 Stable 0 0 0 K3 Decrease 0 0 0

4 158 0 1 0 1 0 0 0 1 0 0 1 0 1 0 0 1 0 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0

5 16 0 1 0 0 1 0 0 1 0 0 1 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0

6 148 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0

7 8 9 10 281 656 1,571 83 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 1 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 1 0 0 0 0 1 0 0 0 0

11 694 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 0 0 1 1 0 0

12 13 363 506 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 0 1 0 0 1

Initial prob. 0.46 0.39 0.16 0.46 0.33 0.22 0.38 0.45 0.18 0.59 0.33 0.08 0.62 0.25 0.13 0.58 0.33 0.10 0.68 0.24 0.11 0.70 0.21 0.10 0.54 0.30 0.17 0.63 0.24 0.13 0.68 0.26 0.07

Freq. of occurrence 4,548 3,889 1,563 5,682 2,755 1,563 4,548 3,889 1,563 5,524 2,913 1,563 5,698 2,739 1,563 5,682 2,755 1,563 5,846 2,591 1,563 6,127 2,310 1,563 4,772 3,665 1,563 6,783 1,654 1,563 9,048 446 506

Posterior prob. 0.45 0.39 0.16 0.57 0.28 0.16 0.45 0.39 0.16 0.55 0.29 0.16 0.57 0.27 0.16 0.57 0.28 0.16 0.58 0.26 0.16 0.61 0.23 0.16 0.48 0.37 0.16 0.68 0.17 0.16 0.90 0.04 0.05

The most likely event sequence scenario was scenario No.1, with the frequency of occurrence equal to 4,548. Table 7, the sequence of events of scenario No.1 ( A1C1B1E1F1J1D1I1G1H1K1) starts from a good political situation (A1) that affects the good public policy (C1) and the good economy (B1). Other than the good political situation which affects the good economy, the good public policy is also. The good economy affects to increasing population (E1) and increasing income (F1), and these two factors affect increasing housing demand (J1). The good public policy affects to increasing

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

infrastructure investment (D1) and the good land use planning (I1). The increase in infrastructure investment affects good accessibility (G1) and a short distance to the city center (H1). Eventually, the four events, i.e., the increasing housing demand, the good land use planning, good accessibility, and the short distance to the city center, affect the increasing land price (K1). Table 7: The occurrence event sequence scenarios. Scenario No. 1 2 3 4 5 6 7 8 9 10 11 12 13

Event sequence scenario A1C1B1E1F1J1D1I1G1H1K1 A2C2B1E1F1J1D1I1G1H1K1 A2C2B1E1F1J1D1I2G1H1K1 A2C2B1E1F1J1D2I2G1H1K1 A2C2B2E1F2J1D2I2G1H1K1 A2C2B2E2F2J1D2I2G1H1K1 A2C2B2E2F2J1D2I2G2H1K1 A2C2B2E2F2J1D2I2G2H2K1 A2C2B2E2F2J2D2I2G2H2K1 A2C2B2E2F2J2D2I2G2H2K2 A3C3B3E3F3J3D3I3G3H3K1 A3C3B3E3F3J3D3I3G3H3K2 A3C3B3E3F3J3D3I3G3H3K3 Total

Frequency of occurrence 4,548 224 752 158 16 148 281 656 1,571 83 694 363 506 10,000

Percentage 45.48 2.24 7.52 1.58 0.16 1.48 2.81 6.56 15.71 0.83 6.94 3.63 5.06 100.00

The frequency of occurrence of each event was calculated to be a posterior probability by using the CIA method. Table 6, percent changes of all events can be noticed between the posterior probability and initial probability. The initial probability and the posterior probability of the political situation not changed because it was not affected by any factors. In contrast, the initial probability and the posterior probability of the other factors were different. For example, the economy was affected by the political situation and public policy; therefore, its event probabilities changed. The probability of a good economy increased while balanced and poor economy decreased. The change in probability of each event was a result of an interaction of its influencing factors. The factor with many interrelated factors, it will have more changing in a probability; for example, urban land price. Accordingly, the calculated posterior probability is more accurate than the initial probability. The posterior probability can be used in another model to evaluate the urban land price of Chiang Mai city. Also, this urban land price can be used to support decision making for policy planners in urban planning and urban infrastructure project development.

4 CONCLUSION This study analyzed factors influencing urban land price with the interaction between these factors and its conditional probabilities. The research techniques, EDFR and CIA were used to analyze factors influencing urban land prices. The EDFR was applied to collect important data, identify the influencing factors and events with the occurrence probability of each event by interviewing the key experts. The CIA method was used to analyze the conditional probability of one event given another. This study result revealed ten factors affecting urban land price and their interrelation. These influencing factors were (1) political situation, (2) economy, (3) public policy, (4) infrastructure investment, (5) population, (6) household income, (7) accessibility, (8) distance to city center, (9) land use planning, and (10) housing demand. The political situation affected the economy and public policy. The public policy affected *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ÂŠ2020 International

infrastructure investment, land use planning, and the economy. The economy affected the population and household income. The population and household income affected the housing demand. The infrastructure investment affected the accessibility and the distance to the city center. The accessibility, the distance to the city center, the housing demand, and the land use planning affected the land price. The Monte-Carlo technique was applied to random future scenario simulation, resulted in thirteen scenarios. The most likely event sequence scenario of the urban land price of Chiang Mai city was scenario No.1, with a frequency of occurrence equal to 4,548. This sequence of events was a good political situation, good public policy, good economy, increasing population, increasing income, high housing demand, good land use planning, increasing infrastructure investment, good accessibility, short distance to the city center, and increasing land price. The change in probability of each event was a result of an interaction of its influencing factors. The event with many interrelated factors will have more changes in its probability; for example, urban land price. The factors affecting urban land prices of the Chiang Mai city identified in this study can be used as variables in land price determination to support decision-making in the urban planning and urban infrastructure project development.

5 AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

6 ACKNOWLEDGEMENT The authors are grateful to the Department of Highways (DOH), Thailand, for financial support through the doctoral degree scholarship for the first author.

7 REFERENCES Alarcón, L. F., & Ashley, D. B. (1998). Project management decision making using cross-impact analysis. International Journal of Project Management, 16(3), 145-152. Bañuls, V. A., & Turoff, M. (2011). Scenario construction via Delphi and cross-impact analysis. Technological Forecasting and Social Change, 78(9), 1579-1602. Blanning, R. W., & Reinig, B. A. (1999). Cross-impact analysis using group decision support systems: an application to the future of Hong Kong. Futures, 31(1), 39-56. Cervero, R., & Duncan, M. (2004). Neighborhood Composition and Residential Land Prices: Does Exclusion Raise or Lower Values? Urban Studies, 41(2), 299-315. Cervero, R., & Kang, C. D. (2011). Bus rapid transit impacts on land use and land values in Seoul, Korea. Transport Policy, 18(1), 102-116. Chiang Mai Municipality. (2014). Chiang Mai Sustainable Urban Transport Project. El Araby, M. M. (2003). The role of the state in managing urban land supply and prices in Egypt. Habitat International, 27(3), 429-458. ExCITE - Excellence Center in Infrastructure Technology and Transportation Engineering. (2017). The Study and the Making of Chiang Mai Public Transit Master Plan: Chiang Mai University. Friðgeirsson, Þ. V., & Steindórsdóttir, F. D. (2018). A cross-impact analysis of eight economic parameters in Iceland in the context of Arctic climate change. Tímarit um viðskipti og efnahagsmál, 15(1), 55-73.

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

Gordon, T. J. (1994). Cross-impact method Future Research Methodology. Washington DC: AC/UNU Millennium Project Gordon, T. J., & Hayward, H. (1968). Initial experiments with the cross-impact matrix method of forecasting. Futures, 1(2), 100-116. Han, S. H., & Diekmann, J. E. (2001a). Approaches for Making Risk-Based Go/No-Go Decision for International Projects. Journal of Construction Engineering and Management, 127(4), 300-308. Han, S. H., & Diekmann, J. E. (2001b). Making a risk-based bid decision for overseas construction projects. Construction Management and Economics, 19(8), 765-776. Honton, E. J., Stacey, G. S., & Millett, S. M. (1985). Future scenarios: The BASICS computational method Economics and Policy Analysis Occasional Paper Number 44. Columbus, Ohio: Battelle. Hu, S., Yang, S., Li, W., Zhang, C., & Xu, F. (2016). Spatially non-stationary relationships between urban residential land price and impact factors in Wuhan city, China. Applied Geography, 68, 48-56. Kheir, N., & Portnov, B. A. (2016). Economic, demographic, and environmental factors affecting urban land prices in the Arab sector in Israel. Land Use Policy, 50, 518-527. Kilpatrick, J. A. (2000). Factors Influencing CBD Land Prices. Real Estate Issue, 25(3), 39-49. Mattavarat, S., Viseshsiri, P., & Siribanpitak, P. (2017). Proposed policy for preparation of high-quality primary school teachers in Thailand. Kasetsart Journal of Social Sciences, 38(2), 105-110. Mirkatouli, J., Samadi, R., & Hosseini, A. (2018). Evaluating and analysis of socio-economic variables on land and housing prices in Mashhad, Iran. Sustainable Cities and Society, 41, 695-705. Mitchell, M. (2002). Exploring the Future of the Digital Divide through Ethnographic Futures Research. First Monday, 7(11). Moutinho, D. L., & Witt, D. S. F. (1994). Application of Cross-Impact Analysis in Tourism. Journal of Travel & Tourism Marketing, 3(1), 83-96. Passig, D. (1998). An applied social systems procedure for generating purposive sound futures. Systems Research and Behavioral Science, 15(4), 315-325. Poolpatarachewin, C. (1980). Ethnographic Delphi futures research: Thai University pilot project. Journal of Cultural and Educational Futures, 2(4), 11-19. Reed, R. (2001). The significance of social influences and established housing values. The Appraisal Journal, 69(4), 356-361. Sampathkumar, V., Santhi, M. H., & Vanjinathan, J. (2015). Forecasting the Land Price Using Statistical and Neural Network Software. Procedia Computer Science, 57, 112-121. Schuler, A., Thompson, W. A., Vertinsky, I., & Ziv, Y. (1991). Cross impact analysis of technological innovation and development in the softwood lumber industry in Canada: a structural modeling approach. IEEE Transactions on Engineering Management, 38(3), 224-236. Song, J., Jin, X., Tang, J., Zhang, Z., Ding, N., Zhao, J., & Zhou, Y. (2011). Analysis of influencing *Corresponding author (T. Chiracharoenwong). Tel: +66-81-5941883 Email: thitipong.chira@gmail.com ÂŠ2020 International

factors for urban land price and its changing trend in China in recent years. Acta Geographica Sinica, 66(8), 1045-1054. Textor, R. B. (1979). The natural partnership between ethnographic futures research and futures education. Journal of Cultural and Educational Futures, 1(1), 13-19. Thorleuchter, D., & Van den Poel, D. (2014). Semantic compared cross-impact analysis. Expert Systems with Applications, 41(7), 3477-3483. Wang, Z., Guo, H., He, C., LI, N., Yu, Y., & Liu, H. (2009). Driving Force Analysis of Residential Land Price in Beijing Based on Statistical Methods. Acta Geographica Sinica, 64(10), 1214-1220. Zhenyu, W., Meichen, F., Yuelong, Y., & Jizhou, Z. (2011). Prediction of urban land price based on Grey-Markov model. Paper presented at the International Conference on Computer Science and Network Technology. Thitipong Chiracharoenwong is a a doctoral student in Civil Engineering at the Department of Civil Engineering, Faculty of Engineering, Chiang Mai University, Chiang Mai, Thailand. He obtained his Masterâ€™s degree in Construction Engineering and Management from Chiang Mai University, Thailand. His research focuses on Sustainability in Civil and Construction Management.

Dr. Puttipol Dumrongchai is an Assistant Professor in Civil Engineering at the Department of Civil Engineering, Faculty of Engineering, Chiang Mai University, Chiang Mai, Thailand. He obtained his Doctoral Degree in Geodesy from the Ohio State University, Ohio, United States. His research focuses on Local Geoid Modeling, Geometric and Physical Geodesy, Gravimetry, gradiometry, Satellite Altimetry, and Natural Disaster Management.

Dr. Poon Thiengburanathum is an Assistant Professor in Civil Engineering at the Department of Civil Engineering, Faculty of Engineering, Chiang Mai University, Chiang Mai, Thailand. He obtained his Doctoral Degree in Construction Management from the University of Colorado Boulder, Colorado, United States. His research focuses on Smart Cities, Climate Change Adaptation, and Urban Infrastructure Management. Dr.Praopun Asasuppakit is an Assistant Professor in Civil Engineering at the Department of Industrial Technology (Construction Engineering Technology Program), Faculty of Science and Technology, Chiang Mai Rajabhat University, Chiang Mai, Thailand. She obtained her Doctoral degree in Civil Engineering from Chiang Mai University, Chiang Mai, Thailand. Her research focuses on the Sustainable City, Urban Infrastructure Management, and Sustainability in Civil and Construction Management.

Trademarks Disclaimer: All product names including trademarks TM or registeredÂŽ trademarks mentioned in this article are the property of their respective owners, using for identification and educational purposes only. The use of them does not imply any endorsement or affiliation.

Thitipong Chiracharoenwong, Puttipol Dumrongchai, Poon Thiengburanathum, Praopun Asasuppakit

ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13H

BANKRUPTCY DYNAMICS OF COMPANIES IN RUSSIA Evgeny A. Kuzmin

, Marina V. Vinogradova , Andrey S. Novitsky

Department of Enterprises Economics, Ural State University of Economics, RUSSIA. Department of Tourism and Hospitality, Russian State Social University, RUSSIA. 3 Department of Promotion and Sales of Civilian Products, JSC Production Association, Ural Optical and Mechanical Plant named after Mr. E.S. Yalamov, RUSSIA. 2

ARTICLEINFO

A B S T RA C T

Article history: Received 06 April 2020 Received in revised form 19 June 2020 Accepted 28 June 2020 Available online 10 July 2020

Economic instability is embodied in the dynamics of company bankruptcies. This process is gaining theoretical and practical importance. The paper performs a structural analysis of Russian company bankruptcies for 2011-2019 by the types of ownership. The research results show that the relative number of bankruptcies among Keywords: state-owned enterprises does not exceed the same indicator for private Company bankruptcy; ones. However, there are dissimilarities within the group of state-owned Type of ownership; enterprises: the share of municipal unitary enterprises declared bankrupt State-owned company; is significantly greater than that of federal state and regional unitary Private company; enterprises. This study finds that bankruptcies are becoming more Structural analysis; Russian bankruptcy court frequent as the lifespan (age) of state-owned enterprises and their judgment; Demography authorized capital are increasing. The same trend is predominantly of organizations; typical of private companies revealing a significant proportion of Bankruptcy cases; insolvent enterprises with a small-authorized capital. The largest share Business dynamics. of bankruptcies in the public commercial sector falls on companies aged 25-30, and the lifespan of private companies is 10-15 years. The findings conclude that the effect of the type of ownership on the dynamics of company bankruptcies in Russia is statistically insignificant. At the same time, there are notable disproportions at the threshold of the economic viability of state-owned companies over private ones. Disciplinary: Enterprises Economics and Management. 2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION Aggravating global uncertainty makes the problem of bankruptcies especially urgent. Crises, price shocks, and a general deterioration in market conditions in foreign markets resulted in a situation where less diversified export-oriented economies quickly lost their sustainability *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.254

(GarĹĄkaite-Milvydiene, 2012; Ali & Ur Rehman, 2018). In this context, the issue of company bankruptcies has become one of the most acute problems in Russia. According to the statistical bulletin of the Russian Unified Federal Register of Bankruptcy Information (EFRSB, 2019), there were 12,401 bankruptcies in the country in 2019, which is 5.5% less than in 2018, but almost twice the level of 2011. The rapid growth in the number of insolvent and liquidated enterprises in Russia stimulates the search for causes and factors contributing to such trends (Zakirova et al., 2018). A wide array of studies on the problem of company bankruptcies indicates the magnitude of the problem and the need for finding solutions to it as early as possible. At the same time, not enough research is being undertaken on the statistical assessment and determination of the level of company bankruptcy by the type of ownership. This issue has been beyond the scope of the research interest. For a long time, state-owned enterprises managed to stay afloat and kept functioning despite their negative performance indicators. Subsequently, public funding cutbacks caused some state enterprises to go bust. The nature of these bankruptcies leaves open the question of the ultimate sustainability threshold for companies partly or fully owned by the state. The current research is designed to clarify the threshold of the economic viability of state-owned companies over private ones and establish to which extent the type of ownership affects the bankruptcies dynamics. This fact determines the applied nature of the topic under discussion. This studyâ€™s purpose is to analyze the scale and dynamics of bankruptcies taking into account the types of ownership. We aim to accomplish the following objectives: To assess the share of bankruptcies among state-owned enterprises; to investigate how the lifespan of enterprises affects the frequency of bankruptcies, and to establish if there is a correlation between the number of bankruptcies and the size of authorized capital by the types of ownership.

2. LITERATURE REVIEW Examining the problems associated with the dynamism and variability of the economic environment revealed a plethora of unresolved issues in the field of sustainable development of entrepreneurship in Russia (Smirnov, 2017; Litau, 2019; Ponomarev & Petrov, 2019). One of them is the task of preventing insolvency (bankruptcy). Azizov and Dzhumaniyazova (2016) explore the changes in the number of bankruptcies in Russia in 2005-2015. They identify the positive dynamics of bankruptcies of legal entities, which takes place since 2007 and pinpoint the regions, where the growth of bankruptcies is above the national average. Karzaeva (2017) presents the analysis of insolvency dynamics for a shorter period of 2010-2016. The data obtained indicate that the number of bankruptcies in Russia has doubled over 7 years, and, given the decrease in the number of registered enterprises, this can result in an economic recession. Many authors (Kovalev & Mnatsakanyan, 2016; Poleshchuk & Markova, 2016) perform a statistical analysis of bankruptcies by the industries and regions of the Russian Federation. The researchers conclude that more than half of all bankrupt enterprises operate in trade, construction, and real estate. As Marina (2018) puts it, among the industries that are most disposed to go bust are wholesale and retail trade, construction, commercial services, agriculture and forestry, transport and

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

communications, electric power industry, financial services, food production, mechanical engineering, and metallurgy. Other studies (Stroganova, 2016; Melay & Ustinkova, 2017; Kuzmin & Guseva, 2016; Kuzmin, 2018) support these conclusions. As practice demonstrates, there are principal differences in the bankruptcy of state-owned and private companies. The advantages of companies with state participation over private ones can take the form of direct subsidies, concession financing, guarantees, preferential regulation, exemptions from antitrust laws or bankruptcy laws, etc. (Kowalski et al., 2013; OECD, 2004). In many scenarios, state-owned enterprises enjoy soft budget constraints and use direct or indirect state funding (Bai & Wang, 1998; MacCarthaigh, 2011; Liu, Tian & Wang, 2011). Specific features of state participation in the corporate segment may reduce management efficiency and impair the economic performance of companies (Batkovskiy et al., 2016; 2018). In this regard, it is relevant to study the scale and dynamics of the bankruptcies of state-owned enterprises in comparison with private ones. The public sector remains an important part of the Russian economic system. According to various estimates, its share equals 60-70% (CDB, 2019). Enterprises and associations are termed state-owned when 50% or more of their capital is owned by the state, regional or local authorities (Kozlova, Bratchenko & Zvyagintsev, 2019). There is research (Panfilova, 2013; Mogilat, 2015; Tantsarin, 2018) dedicated to the analysis of bankruptcies of state-owned and private companies in Russia. Based on a statistical examination of bankruptcies in 2010-2017, Tantsarin (2018) states that the share of unitary enterprises declared insolvent demonstrates an upward trend. Mogilat (2015) highlights that bankruptcies among private companies and those with foreign ownership are less intense if compared with the public sector. Panfilova (2013) emphasizes that bankruptcies of state-owned enterprises exhibit the following peculiarities: the majority of state-owned enterprise bankruptcies are initiated by the creditor; in state-owned companies, accounts payable are many times greater than accounts receivable; in contrast to the private sector, in the bankruptcy proceedings of a state-owned enterprise, reorganization procedures prevail over liquidation ones. According to Bazunova (2016), the disproportionality of the functions of the institution of bankruptcy is manifested in the uneven use of procedures and the dominance of liquidation procedures (bankruptcy proceedings) over recovery ones (financial rehabilitation and receivership). The main trend in bankruptcies in Russia was revealed: in most insolvency cases, where the debtor was a state-owned and municipal unitary enterprise, the procedure of bankruptcy proceedings was not initiated, while the cases were closed at the stage of supervision or going into receivership was considered, even if the chances for the debtorâ€™s solvency recovery were minimal. In bankruptcy cases of state-owned enterprises, accounts payable usually many times exceed both accounts receivable and the book value of the property. Such selectivity is largely explained by the fact that the state, as the owner of organizations in which public funds are invested, is interested in them to work efficiently and not be at risk of alienation of property in bankruptcy proceedings (Kovan, 2009). The literature review indicates that no comprehensive research is being undertaken on identifying the factors and establishing the scale, major trends, and particularities of bankruptcies of *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

state-owned and private enterprises in Russia. The issues that have not been debated in detail are the following: the analysis of the share of bankruptcies among state-owned enterprises, the analysis of the effect of enterprises’ age on the frequency of bankruptcies, and the analysis of how the size of companies’ authorized capital affects the frequency of bankruptcies.

3. METHOD The purpose and objectives of the present research imply conducting a multi-stage analysis which includes the following operations: a) analyzing statistical data on Russian company bankruptcies in 2011-2019; b) analyzing summary statistical data on the activities of arbitration courts in 2014-2019 on the insolvency (bankruptcy) of legal entities (companies); c) evaluating the distribution of company bankruptcies by the types of ownership. Based on data from the SPARK-Interfax, we obtain a statistical sample of 1,432 bankrupt enterprises of all types of ownership. The data demonstrate that 37.6% of the enterprises were owned by regional authorities (subjects of the Russian Federation (RF), 27.9% were under the joint ownership of the RF subjects and foreign partners, 27.7% were owned by federal authorities, 5.87% were private companies, and the share of companies with other types of ownership was under 1%. Statistics of the arbitration practice in Russia on insolvency (bankruptcy) of companies for the period of 2014-2019 allows one to arrange bankruptcy applications received and bankruptcy decisions made (Table 1). Table 1: Number of bankruptcy applications received and bankruptcy decisions made by arbitration courts in Russia according to the types of ownership (SCRF, 2019). Bankruptcy applications received/bankruptcy decisions made 2014 2015 2016 2017 2018 2019* 1. Private enterprises 41,905 44,697 42,833 42,676 40,964 46,950 15,081 14,846 12,822 16,241 15,542 14,690 2. State-owned enterprises, 702 605 530 652 575 426 including 236 186 186 161 160 160 State unitary enterprises 186 108 132 198 134 76 37 25 39 31 17 30 Municipal unitary enterprises 516 497 398 454 441 350 199 161 147 130 143 130 Total 42,607 45,302 43,363 43,328 41,539 47,376 15,317 15,032 13,008 16,402 15,702 14,850 Note: (*) is a projection based on data for the 1st half of 2019. Type of ownership

The statistical data obtained allow us to test the following hypotheses for each research stage: H1: due to the relatively low efficiency of state-owned enterprises, the share of bankruptcies among such companies will be higher than among private enterprises. H2: the number of insolvencies decreases as the lifespan of enterprises grows. At that, the largest share of bankruptcies should occur among relatively “young” companies (with a lifespan under 10 years). H3: the number of insolvencies decreases as the size of companies’ authorized capital grows. At that, the largest share of bankruptcies should occur among companies with small authorized capital.

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

To test the hypotheses, the following methods are applied: statistical analysis of the dynamics and structure; structural-dynamic analysis, which consists in determining individual and generalizing indicators of structural changes (coefficients of absolute and relative structural shifts with a variable and constant comparative base (Sivelkin & Kuznetsova, 2002)). The structural indicator is calculated from đ?‘‘đ?‘‘đ?‘–đ?‘– =

đ?‘Ľđ?‘Ľđ?‘–đ?‘– đ?‘ đ?‘

Ă— 100

(1),

where đ?‘‘đ?‘‘đ?‘–đ?‘– denotes the share of the i-th structural element; i = N,1; đ?‘Ľđ?‘Ľđ?‘–đ?‘– denotes absolute value by the i-th element; đ?‘ đ?‘ denotes a total of absolute values of the i-th structural elements.

The individual indicator of absolute structural shifts with a variable comparative base is determined by đ?›Ľđ?›Ľ = đ?‘‘đ?‘‘đ?‘—đ?‘— âˆ’ đ?‘‘đ?‘‘đ?‘—đ?‘—âˆ’1

(2),

where đ?‘‘đ?‘‘đ?‘—đ?‘— is the proportion of the group in the j-th period; đ?‘‘đ?‘‘đ?‘—đ?‘—âˆ’1 is the proportion of the group in the period đ?‘—đ?‘— âˆ’ 1.

The individual indicator of absolute structural shifts with a constant comparative base is calculated by đ?›Ľđ?›Ľ = đ?‘‘đ?‘‘đ?‘—đ?‘— âˆ’ đ?‘‘đ?‘‘0

(3),

where đ?‘‘đ?‘‘0 is the proportion of the group in the basis period.

The individual indicator of relative structural shifts with a variable comparative base is determined by đ??˝đ??˝đ?‘‘đ?‘‘ =

đ?‘‘đ?‘‘đ?‘—đ?‘—

(4).

đ?‘‘đ?‘‘đ?‘—đ?‘—âˆ’1

The individual indicator of relative structural shifts with a constant comparative base is calculated by

Jd =

(5),

where dj refers to the proportion of the group in the j-th period; d0 refers to the proportion of the group (element) in the basis period. The linear coefficient of absolute structural shifts with a variable comparative base (chain-weighted) is calculated in percent using đ??żđ??żđ??´đ??´đ??´đ??´ đ?‘§đ?‘§ =

ďż˝

đ?‘›đ?‘›

đ?‘–đ?‘–=1

|đ?‘‘đ?‘‘đ?‘—đ?‘—âˆ’đ?‘‘đ?‘‘đ?‘—đ?‘—âˆ’1| đ?‘›đ?‘›

(6),

where đ??żđ??żđ??´đ??´đ??´đ??´ đ?‘§đ?‘§ is the linear coefficient of absolute structural shifts (chain-weighted or with a variable comparative base); d is the proportions of attributes; n is the number of gradations in the structures; j is the periods compared. *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

4. RESULT AND DISCUSSION In 2011-2019, the number of Russian company bankruptcies increased by 86.48% (Figure 1). The basis growth rates of bankruptcies exceeded the chain-weighted ones, which was attributed to the financial and economic instability in 2013-2014. The progressive increase in the number of insolvencies in 2011-2017 was due to the low efficiency of the institution of subsidiary liability. The reforms enacted improved the situation. As a result, controlling entities were more often held liable for the company debts, and the number of bankruptcies reduced.

15000 14000 13000 12000 11000

y = 623.65x + 8551.4 RÂ˛ = 0.5977

12,923

13,044

2014

2015

13,541 12,549

13,117

12,401

10,762

10,040

10000 9000 8000 7000

6,650

6000 5000

2011

2012

2013

2016

2017

2018

2019

Figure 1: Dynamics of Russian company bankruptcies in 2011-2019, (number of bankruptcies) (Source: EFRSB (2019)). 5300 5,044

5100 4900

4,867

4,886

4,843

4,886

4,765

4700

4,562

4500

y = -121.75x + 5251.2 RÂ˛ = 0.6201 4,215

4300 4100 3900

3,715

3700 3500

2011

2012

2013

2014

2015

2016

2017

2018

2019

Figure 2: Dynamics of the number of legal entities in Russia in 2011-2019, thousands Source: (Rosstat, 2016; 2018; 2019) Figure 2 presents the dynamics of changes in the number of legal entities (companies and associations) in Russia in 2011-2019. There is a steady downward trend in the number of organizations amounting to 1,151.3 thousand entities, or 31%, during the same period. Lately, the

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

international audit and consulting network FinExpertiza has detected a tendency towards the number of liquidated companies to prevail over the number of newly established ones. In 2019, the number of dissolved companies exceeded the number of start-ups 2.3 times. As a whole in Russia in 2019, every fifth company closed (FinExpertiza, 2020). When assessing the scale of bankruptcies, it can be noted that their share increased from 0.14% in 2011 to 0.33% in 2019, or 2.4 times (EFRSB, 2019; Rosstat, 2016; 2018; 2019). A growing number of insolvencies is an extremely adverse trend indicating an unfavorable business climate and declining entrepreneurial activity. Every second bankruptcy in Russia occurs in trade, construction, and real estate, which is caused by the high base effect: these industries are leaders in the number of companies operating in them. If one juxtaposes the number of bankruptcies and the number of enterprises working in the sector, then the cases of insolvency will be under 2% (Almakunova, 2019). Table 1 presents an analysis of summary statistical data on activities of federal arbitration courts in Russia in 2014-2019. The data show that the number of private and state-owned companies filing for bankruptcy in 2014 equaled 41,905 and 702, respectively. Of these, 15,081 (35.98%) and 236 (33.61%) cases were closed declaring the companies to be insolvent. In 2014, the share of bankruptcies among state unitary enterprises (SUEs) was 19.89%, and among municipal unitary enterprises (MUEs) - 38.56%. In 2019, the number of applications for declaring companies insolvent amounted to 47,376, and 14,850 (31.34%) of them were approved. At that, the share of private enterprises was equal to 31.29%, and the share of state-owned enterprises declared bankrupt - 37.56% (including SUEs (39.47%) and MUEs (37.14%)). Figure 3 provides a summary of the data from Table 1. We can conclude that the share of bankruptcies among state-owned enterprises in 2016 and 2019 was higher than among private enterprises. The opposite situation was observed in the rest of the periods. 45 40 35 30 25 20 15 10

2014

2015 Private enterprises

2016

2017

State unitary enterprises

2018

2019

Municipal unitary enterprises

Figure 3: Percentage of arbitrage court judgments with respect to state-owned and private enterprise bankruptcies, % (Source: SCRF (2019)). Under Russiaâ€™s laws, the following procedures can be used when considering a bankruptcy case (Federal Law No. 127-FZ): supervision; financial rehabilitation; receivership; bankruptcy *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

proceedings; and settlement. Almost half of all judgments made by courts were about declaring enterprise bankruptcy and starting bankruptcy proceedings. At that, in 2015 this indicator amounted to 50.84%, and by 2019 it decreased to 46.66%. The proportion of judgments to introduce supervision decreased to 38.13% by 2019 from 39.75% in 2015. The greatest change occurred in the number of judgments to terminate proceedings: the share of such judgments grew from 7.57% in 2015 to 14.36% in 2019 (Figure 4). 100 Judgements to terminate proceedings 80

Judgements to initiate financial rehabilitation Judgements to initiate receivership

Judgements to initiate supervision 40

Judgements to declare bankruptcy and open proceedings

2015

2016

2017

2018

2019

Figure 4: Structure of court judgments with respect to Russian companiesâ€™ insolvency (%) (Source: EFRSB, (2019)) In 2019, the main claimants in bankruptcy cases were creditors in insolvency proceedings (78.1% of claims), debtors (companies) themselves (12.6%), and the Russian Federal Tax Service (8.7%). The share of employeesâ€™ claims amounted to 0.6%. To analyze the structure of bankruptcies by the type of ownership, we calculate the number of court-approved bankruptcies in relative terms. The share of approved bankruptcies of private enterprises was more than 98%, and for state-owned companies, this share was under 2%. Bankruptcy cases of other organizations took the largest share of approved insolvencies - 85.15% in 2014, and 82.41% in 2019. The share of SUEs bankruptcies was 0.24% in 2014, and it declined to 0.20% by the end of 2019. The share of MUEs bankruptcies accounted for 1.30% in 2014, and it dropped to 0.88% by the end of 2019. Using the statistical data, we determine the linear coefficient of absolute structural shifts in the dynamics of bankruptcy judgments (L2015/2014=0.105; L2016/2015=2.05; L2017/2016=2.05; L2018/2017=0.35; L2019/2018=0.53). The largest amount of shifts in the structure of Russian enterprise bankruptcies was observed in 2015-2017. During 2018-2019, subtle structural shifts were noted. During the entire period under consideration, the coefficient of absolute structural shifts was 8.18. The major structural shifts were noticed in such types of enterprises as peasant farms, agricultural organizations, city-forming enterprises, and other organizations. Table 2 shows the results of the distribution of bankruptcies by the types of ownership in 2019

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

based on the sample from the SPARK-Interfax information system. Table 2: Distribution of bankruptcies of Russian companies by the types of ownership in 2019, Source: (EFRSB, 2019). Enterprise Status Total In bankruptcy Active Under liquidation Inactive Private ownership 23 1 42 18 84 Federal ownership 109 0 274 14 397 Joint ownership of Russia’s subjects and foreign ownership 110 0 275 14 399 Ownership of Russia’s subjects 94 0 416 29 539 Mixed Russian ownership with a share of federal ownership 0 0 0 6 6 Mixed Russian ownership with the share of federal 0 0 0 6 6 ownership and ownership of Russia’s subjects Type of ownership

Of the sample presented, 23 private enterprises were in bankruptcy, which was 27.38% of their total and 1.6% of the entire sample. As for enterprises owned by the federal government, 109 of them were in bankruptcy, which made up 27.45% of their total and 27.72% of the sample. 110 enterprises jointly owned by Russia’s subjects and foreign countries were in bankruptcy, which amounted to 27.56% of all enterprises of this type of ownership or 27.86% of the total sample. 94 enterprises owned by Russia’s subjects (constituent territories) were in bankruptcy, which equaled 17.39% of their total or 37.64% of the sample. As a whole, 313 state-owned enterprises of the sample presented were in the state of bankruptcy. The distribution of the frequency of companies’ bankruptcies according to their lifespan (age) is given in Table 3. The majority (45%) of state-owned enterprises at the stage of bankruptcy were at the age of 25-30 years; 18% were between 20-25 years, and 15% were between 10-15 years. Private enterprises going bust demonstrated the opposite trend. Most of them (35%) were between 10-15 years; 22% 25-30 years; and 17% - 5-10 years. Table 3: Distribution of the frequency of bankruptcies of state-owned and private enterprises in Russia according to their lifespan (age) in 2019 (Source: (EFRSB (2019); SPARK-Interfax (2019)). Lifespan (age (years)) State-owned enterprises, %* Private enterprises, % Under 5 3.2 4.3 5 to 10 5.3 17.4 10 to 15 14.6 34.8 15 to 20 10.5 8.7 20 to 25 18.2 13.0 25 to 30 44.9 21.7 30 to 35 1.6 35 to 40 0.0 40 to 45 0.4 45 to 50 0.4 50 to 55 0.4 55 to 60 0.0 Over 60 0.4 Note: (*) denotes enterprises of the types of ownership, such as federal ownership; joint ownership of Russia’s subjects and foreign countries; ownership of Russia’s subjects; mixed Russian ownership with a share of federal ownership; mixed Russian ownership with shares of federal ownership and ownership of Russia’s subjects.

At the following stage, the frequency of bankruptcies was analyzed depending on the size of *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13H http://TUENGR.COM/V11A/11A13H.pdf DOI: 10.14456/ITJEMAST.2020.254

authorized capital (Table 4). Table 4: Distribution of the frequency of bankruptcies in Russia by the size of enterprisesâ€™ authorized capital in 2019 (Source: SPARK-Interfax, 2019). Size of authorized capital, rubles

State-owned enterprises, %*

Private enterprises, %

10.3 21.4 13.2 7.0 5.3 3.3 2.1 4.1 1.6 0.8 1.2 1.2 28.4

34.8 8.7 0.0 0.0 8.7 0.0 0.0 8.7 0.0 0.0 0.0 0.0 39.1

Up to 100,000 100,000 to 1,000,000 1,000,000 to 5,000,000 5,000,000 to 10,000,000 10,000,000 to 15,000,000 15,000,000 to 20,000,000 20,000,000 to 25,000,000 25,000,000 to 30,000,000 30,000,000 to 35,000,000 35,000,000 to 40,000,000 40,000,000 to 45,000,000 45,000,000 to 50,000,000 Over 50,000,000

Table 4 indicates that the largest share of state-owned enterprise bankruptcies (28.4%) was recorded among those with an authorized capital of more than 50 million rubles, followed by state-owned enterprises with an authorized capital of between RUR 100,000 to RUR 1,000,000 (21.4%). 39.1% of bankruptcies were recorded among private companies with an authorized capital of more than 50 million rubles. The second-largest share of insolvencies (34.8%) was registered among private companies with an authorized capital of fewer than 100,000 rubles. Having analyzed the statistical data on bankruptcies of state-owned and private enterprises, we can conclude that the scale of insolvencies is modest, which is evidenced by the low share of bankruptcies in the total number of registered enterprises. At the same time, over the last 6 years, there has been a negative upward trend in the number and the share of bankruptcies, which indicates an unfavorable business environment. Its deterioration is due to both an increase in the tax burden and an objective worsening of macroeconomic conditions caused by the sanctions policy and the chaotic situation in commodity markets. Table 5: Regression statistics Index F Significance F p value (Y) p value (X1) Standard error (Y) Standard error (X) t-statistics (Y) t-statistics (X) alpha

Hypothesis 1 10.401 0.0145 0.151 0.145 389642.343 193.3707 -3.195 3.225 0.05

Hypothesis 2 11.404 0.0118 0.106 0.117 72635.014 36.047 3.440 -3.377 0.05

Hypothesis 3 0.242 0.637 0.668 0.637 75845.310 37.640 -0.447 0.492 0.05

For hypothesis testing data, Table 5 gives regression statistics. The share of bankruptcies among state-owned and private companies is somewhat equal. Hypothesis H1 was not confirmed (confidence level 95%). Private and municipal unitary enterprises exhibit a downward trend in the

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

proportion of bankruptcies in the total number of applications filed; however, for state unitary enterprises, this share demonstrates a significant growth. The majority of enterprises at the state of liquidation are recorded among those owned by Russia’s constituent territories (regional authorities). There are approximately equal numbers of enterprises under liquidation with a mixed type of ownership of Russia’s constituent territories and foreign countries, as well as federal ownership. The frequency of bankruptcies in the sample shows that the largest share of insolvencies is registered among state-owned enterprises with a lifespan of 25-30 years, followed by enterprises aged 20-25 and 10-15. Private companies going bankrupt are significantly younger: about a third of private companies included in the sample is at the age of 10-15, almost a quarter - from 25 to 30, and nearly a fifth - from 5-10 years old. The hypothesis H2 was not confirmed (confidence level 95%). Hypothesis H3 about the correlation between the number of bankruptcies and the small size of authorized capital was not confirmed (confidence level 95%). The largest proportion of state-owned enterprise bankruptcies was recorded among those with an authorized capital of more than 50 million rubles. This conclusion is true for private companies as well. However, they also have a large share of bankrupt enterprises with a small size of authorized capital (less than 100,000 rubles).

5. CONCLUSION The scale of the Russian company bankruptcies is relatively modest. Nevertheless, there is an alarming tendency towards an increase in the number of insolvencies against the background of a general decrease in the number of legal entities (enterprises and associations) in Russia. Negative shifts in the dynamics can be traced for 2013-2014. The analysis of the general structure of bankruptcies by ownership types indicates that the vast majority (over 98%) of court-approved insolvencies is recorded among private enterprises. For state-owned companies, this share was under 2%. From the structural and dynamic analysis of bankruptcy cases, the fundamental structural shifts were observed for 2015-2017; no significant changes occurred before and after this period. All the hypotheses were not confirmed. The research results prove that the relative number of bankruptcies among state-owned enterprises does not exceed the same indicator for private companies. However, there are dissimilarities within the group of state-owned enterprises: the share of MUEs declared bankrupt is significantly greater than that of SUEs. With the extension of the lifespan of state-owned enterprises, the number of bankruptcies grows. The largest share of bankruptcies falls on companies aged 25-30. In contrast to state-owned enterprises, most private bankrupt companies were at the age of 10-15. Depending on the increase in the size of authorized capital, the number of bankruptcies does not decrease but grows. The largest share of bankruptcies was recorded among enterprises with an authorized capital of over 50 million rubles. Thus, the study of the dynamics and the nature of enterprise bankruptcies by the types of ownership (state-owned and private) did not reveal significant differences between them.

6. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author. *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

7. ACKNOWLEDGEMENT The study was funded by the Russian Foundation for Basic Research (RFBR), project № 19-010-00994.

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Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

Kuzmin, E. A. (2018). Data on empirically estimated corporate survival rate in Russia. Data in Brief, 16, 850-864. DOI: 10.1016/j.dib.2017.12.011 Kuzmin, E.A., & Guseva, V.E. (2016). Survival rate and lifecycle in terms of uncertainty: Review of companies from Russia and Eastern Europe. Journal of Advanced Research in Law and Economics. DOI: 10.14505/jarle.v7.7(21).23 Litau, E. Y. (2019). Concept of entrepreneurship anti-ideology. Entrepreneurship and Sustainability Issues, 7(2), 1308-1318. DOI: 10.9770/jesi.2019.7.2(35) Liu, Q., Tian, G., & Wang, X. (2011). The effect of ownership structure on leverage decision: New evidence from Chinese listed firms. Journal of the Asia Pacific Economy, 16(2), 254-276. DOI: 10.1080/13547860.2011.564755 MacCarthaigh, M. (2011). Managing state-owned enterprises in an age of crisis: An analysis of Irish experience. Policy Studies, 32(3), 215-230. DOI: 10.1080/01442872.2011.561688 Marina, M.M. (2018). Analysis of the structure and dynamics of the bankruptcies of Russian companies in 2007-2017. Science and Education Development Trends, 39(2), 16-18. DOI: 10.18411/lj-06-2018-21 Melay, E.A., & Ustinkova, A.S. (2017). Dynamics and analysis of bankruptcy of legal entities in the Russian Federation. Bulletin of the Tula Branch of the Financial University, 1, 37-39. Mogilat, A. N. (2015). Bankruptcy of companies in the real sector in Russia: Main trends and financial “portrait” of a typical bankrupt. Scientific works: Institute of Economic Forecasting of the RAS, 13, 156-186. OECD. (2004). Comparative report on corporate governance of state-owned enterprises. Retrieved from: DAFFE/CA/PRIV(2004)2/REV2. Panfilova, E.A. (2013). Comparative analysis of bankruptcy of state-owned and private business entities. The Russian Journal of Entrepreneurship, 18(240), 2-11. Poleshchuk, T.A., & Markova, D.A. (2016). Bankruptcy of legal entities in Russia. Society: Politics, Economics, Law, 8, 63-67. Ponomarev, V.A., & Petrov, M. V. (2019). Territorial interaction is the basis for the development of a small innovative enterprise and other territorial enterprises. Radio Industry (Russia), 29(1), 61-66. DOI: 10.21778/2413-9599-2019-29-1-61-66 Rosstat. (2016). Russia in Figures. Concise statistical book of the Russian Federal State Statistics Service. Moscow. Rosstat. (2018). Russia in Figures. Concise statistical book of the Russian Federal State Statistics Service. Moscow. Rosstat. (2019). Russia in Figures. Concise statistical book of the Russian Federal State Statistics Service. Moscow. SCRF. (2019). Judicial Department at the Supreme Court of the Russian Federation. Retrieved from: http://www.cdep.ru/index.php?id=79 Sivelkin, V.A., & Kuznetsova, V.E. (2002). Statistical analysis of the structure of socio-economic processes and phenomena. Orenburg, Russia: OGU Publ. P. 6. Smirnov, R.O. (2017). Issues of commercialization of innovative technologies in the Russian Federation in the field of entrepreneurial activities. Radio Industry (Russia), 3, 110-112. DOI: 10.21778/2413-9599-2017-3-110-112 *Corresponding author (Evgeny A. Kuzmin). Tel: +7-343-283-12-39. Email: kuzminea@gmail.com

SPARK-Interfax. (2019). Bankruptcy data. Accessed: November 2019.

http://www.spark-interfax.ru/ru/features/bankruptcy.

Stroganova, E.A. (2016). The analysis of statistical data on bankruptcy of the enterprises in the Russian Federation for 2012-2015. Scientific Almanac, 4-1(18), 235-243. Tantsarin, O.A. (2018). A brief analysis of the dynamics of bankruptcies in the Russian Federation and its individual regions for 2010-2017. Scientific-Analytical Economic Journal, 4(27), 33. Zakirova, D.F., Panteleev, D.S., and Zakirova, E.F. (2018). Estimating Bankruptcy Probability of Credit Organizations. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 9(4), 307-315. Evgeny A. Kuzmin is a Researcher of Department of Regional Economic Policy and Economic Security of the Institute of Economics of the Ural Branch of Russian Academy of Sciences, and a Senior Lecturer of the Department of Enterprises Economics of the Ural State University of Economics (Ekaterinburg, Russian Federation). His research interests are Risk, Uncertainty, Economic Crises, Sustainability, Public-Private Partnerships, Economic and Food Security, Investments, Business Planning, Industrialization, Industrial Policy, Industry Markets, Modeling, Economic Growth and Development, Entrepreneurship, Business Activity. ORCID ID: orcid.org/0000-0002-8805-135X Professor Dr.Marina V. Vinogradova is at the Department of Tourism and Hospitality of the Russian State Social University (Moscow, Russian Federation). She received a Doctor of Science degree from the Russian State University of Tourism and Service. Her research interests include Economic Development of Macro- and Microsystems, Socio-cultural Problems, Forecasting, Planning and Monitoring the Development of Socio-economic Systems, Regional Clusters, Public-Private Partnership, Economic and Information Security. ORCID ID: orcid.org/0000-0002-5051-9404 Andrey S. Novitsky is a Director of the Department of Promotion and Sales of Civilian Products of the JSC Production Association, Ural Optical and Mechanical Plant named after Mr. E.S. Yalamov. He received an MBA degree in Economics from the Ural Federal University. He is interested in the Strategic Development of Industrial Enterprises, Marketing, Reconfiguration of Production. ORCID ID: orcid.org/0000-0002-9423-4697

Evgeny A. Kuzmin, Marina V. Vinogradova, Andrey S. Novitsky

International Transaction Journal of Engineering, Management, & Applied Science & Technologies http://TuEngr.com

PAPER ID: 11A13I

ANALYSIS OF MENTAL MAPPING IN URBAN DESIGN FOR THE CASE OF KAMPUNG TELUK KECIL, PANGKOR ISLAND 1

Badrul Munir Daut , Ahmad Sanusi Hassan , 1 2 Muhammad Hafeez Abdul Nasir , Boonsap Witchayangkoon 1 2

School of Housing, Building and Planning, Universiti Sains Malaysia, MALAYSIA. Department of Civil Engineering, Thammasat School of Engineering, Thammasat University, THAILAND.

ARTICLEINFO

A B S T RA C T

Article history: Received 06 April 2019 Received in revised form 19 June 2019 Accepted 28 June 2019 Available online 10 July 2019

This study investigates and identifies the urban design elements in Kampung Teluk Kecil, Pangkor Island, and an observation on the architecture and urban settlements of the area influenced by the Dutch colonizers. The study is conducted to approach the five main urban design elements namely path, edges, district nodes and landmarks. Keywords: Through observation and open-ended interviews, the urban design Urban design elements; elements were identified. Based on the findings, the case study is Malay coastal city; Dwelling pattern; Coastal considered as inland water village where the linear dwelling patterns were built along the bay. Besides that, due to their scattered housing village; Mental Map; formation where the urban design pattern is known as disorientation. Floating mosque; Urban This study shows that urban design elements are not adopted since there settlement; Dutch fort; Town planning. is no proper design of urban planning. Therefore, an appropriate urban design method should be referred to as the future to improve the urban settlement of the village. Disciplinary: Architecture and City Planning, Southeast Asia History. ©2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION Urban design elements draw together the numerous strands of place-making-environmental obligations, social values and economic feasibility. Urban design is derived from, however, rises above related issues, for example, arranging and transportation arrangement, structural plans, economic development, landscape and engineering (Moughtin et al., 2003). Urban design is like painting an area to become a dream city in the future (Sassen, 2009). Based on a book Image of The City written by Lynch (1960), there are a few elements we need to consider while designing and identify a city. Based on the book, a citizen can successfully react in his environment as well as communicate and interact with the other citizens. By characterizing a smart city as portrayed through a visual nature of open spaces, a pleasant city can be an image for the public. This character *Corresponding author (A.Sanusi Hassan). Tel: +604 6532844. Email: sanusi.usm@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13I http://TUENGR.COM/V11A/11A13I.pdf DOI: 10.14456/ITJEMAST.2020.255

enables the city to be perceived and organized into coherence design, for instance, the city's points of interest, a pattern of streets and district that can assemble and effortlessly distinguishes. The objective is to investigate urban design elements for the case study of Kampung Teluk Kecil, Pangkor Island in the formation of mental maps namely paths, edges, districts, nodes and landmarks Lynch (1960).

2. LITERATURE REVIEW Urban design draws many strands of place-making-environmental responsibility, social equality and economic viability. Based on a study of the image of the city by Lynch (1960), five main elements of urban design contribute to the formation of the mental image. Tan et al. (2019) investigate urban design elements of fisherman villages at George Town, Penang, Malaysia.

2.1 URBAN DESIGN ELEMENTS Five main elements can be identified in the case study area seems to be a public image of an urban area to show a good quality of the mental mapping of a city. These elements include paths, edges, districts, nodes and landmarks (Lynch, 1960). 2.1.1 PATH The path is a direction to channel a point to another point like alleys, canals, pedestrian and highway. The path is something that links and addresses the connections between people and places by considering the people's needs to access jobs and critical services. There are three components to enhance the paths within an urban, which are identity, continuity and quality of direction. The continuity in paths is something that can be measured by a concentration and variation of activities along with it, which will lead the inhabitants by following the mainstream of traffic (Moughtin, 2007). Besides, the similarity of names can also contribute to their continuity. The importance of paths can be identified by the materials or elements of building such as pavement textures and plantings. Moreover, the road width and narrowness can be recognized to create wayfinding of the image of the city. The designing of paths within a city should blend with the surroundings to avoid the problem of wayfinding difficulties. 2.1.2 EDGES Edges act as a boundary to separate between two different phases, such as the sea and the land. It is the linear elements that create the boundaries of the place, which contributes to a sense of place by forging links with surrounding areas. For example, shores, railroad cuts, edges of development and walls. Generally, edges are an element that separates two or more areas that have the degree of differentiation, be it by a natural boundary such as topography, viaducts and rivers, or artificial forms such as highways, greenbelts, elevated motorways or waterfronts. 2.1.3 DISTRICTS The district is a section of a city including the two-dimensional extent. It is represented by a separation line to indicate the different functional spaces of an area. Common examples include commercial areas and residential areas. Differences of the typologies can be the component of the district that can control the quality of the image of the city. Besides that, the characteristics of the district must be continuous and homogeneous in terms of facade's materials, forms, symbols,

Badrul Munir Daut, Ahmad Sanusi Hassan, Muhammad Hafeez Abdul Nasir, Boonsap Witchayangkoon

textures, building types, inhabitants, activities, skyline topography as well as colors. The primary clue of the city is generally identified by these features which help to generate intimacy between its constituent segments. 2.1.4 NODES Node is a strategic area or place that becomes a spot for public activities. The highest concentrations of activity emerge as points of convergence. Locations, nature of streets network and overall densities will influence the variations in the size of the activities. Nodes are not necessary to have a specific form. The users can recognize nodes, which are objectless. The nodes can be more memorable if its elements have value-added fixtures such as lighting, colour, planting, type of activities, etc. Excellent public facilities or amenities must be provided for human comforts such as street furniture and a public toilet. All this component usually easy to found in a central park as a place for community gathering. 2.1.5 LANDMARKS Landmarks can be anything like a point reference. Contrary to nodes, a landmark is something that visually outstanding and unique objects. Among notable examples are buildings, statues and mountains. Make people quickly find the way around. Moreover, the landmarks will emphasize the hierarchy of a place. According to Salmi (2002), tourists who cannot read and understand the native languages typically rely on the city's landmark to mark and remember their paths. Useful landmarks can be identified by their ability to stand out from other physical elements of the environment as well as their character and element of colour, size, height, location and visibility. They act as places of spatial decision making by the public in the city, and they unnecessarily must be located at a focal point since they are easy to recognized and create a strong figure-image of a city.

2.2 SELECTED CASE STUDY Kampung Teluk Kecil is located on the south coast of Pangkor Island of Malaysia, see Figure 1 which is one of the largest islands and the most beautiful islands in Malaysia. It takes a 1.9km or 6minute drive from Pangkor Island Jetty or a 25-minute walk from the Pangkor Island Jetty (Figure 1). The Dutch colonized the Pangkor Island in colonial times. The traces of the Dutch settlement in Pangkor Island can be identified at the fort that was built during the Dutch era to control the Perak tin trade the fort today has now become an area of the tourist attraction (Mat Raschid, 2010). The urban design patterns of the Kampung Teluk Kecil are mainly categorized as linear in the south of Pangkor Island along the bay (Hassan, 2004). The culture and architecture in the case study area have been greatly influenced by colonization by the Dutch (Hassan, 2010). Therefore, the objective is to identify the quality of the existing urban design elements at Kampung Teluk Kecil, Pangkor Island by adopting Kevin Lynch's approach which including the five urban design elements path, district, node, edges and landmark.

*Corresponding author (A.Sanusi Hassan). Tel: +604 6532844. Email: sanusi.usm@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13I http://TUENGR.COM/V11A/11A13I.pdf DOI: 10.14456/ITJEMAST.2020.255

Figure 1: Key plan and layout plan of Kampung Teluk Kecil, Pangkor Island, Malaysia (Geolocation 4.200125, 100.576156; Courtesy of Google Earth).

The layout patterns of the urban area (Figure 1) have two types which are linear and scattered (Hassan, 2004). The north and south part of the study area can be categorized as a scattered pattern while in the middle part as a linear pattern (Hassan & Hassan, 2001). All the buildings are built facing the main road to allow a good vehicle movement for the villagers since no traffic congestion occurs in the village. Most buildings do not exceed two storeys in height and have similarities in terms of architecture, materials and colour. The sea east view becomes the best panorama from the building, while the west view has a beautiful mountain view (Ghollasimood, 2011).

3. METHODOLOGY By referring to the quality of the urban elements, a qualitative method was used as a research approach of the study. A fieldwork study by a site visit to Kampung Teluk Kecil, Pangkor Island had been done to collect and matched the data on the quality of urban design elements for a record in the layout plan. For example, qualitative research had been used by Lynch (1960) as his research methodology to identify the urban design elements in three American cities, i.e. Boston, Jersey City and Los Angeles. Besides that, Lynch methodology focused on five elements, namely path, edges, districts, nodes and landmarks. This theory showed the relationship between both locations of the case study and the community's navigation through the places. Furthermore, qualitative research is also used to understand the quality of mental mapping of the case study area of Kampung Teluk Kecil, Pangkor Island. By observing the site of the case study, the quality of urban design elements in the site can be understood. Other than that, a cognitive mapping of the site gives a strong visualization of five elements of urban design.

4. ANALYSIS Referring to the five urban elements, the mental mapping of Kampung Teluk Kecil can be determined. Through observations, there are several urban elements identified which create the urban settlement of Kampung Teluk Kecil as depicted in Figure 2.

Badrul Munir Daut, Ahmad Sanusi Hassan, Muhammad Hafeez Abdul Nasir, Boonsap Witchayangkoon

Figure 2: Urban Elements in Kampung Teluk Kecil.

4.1 PATHS Based on Lynch (1960), the path is considered as the most critical element in urban design, and it is the first element designed in any plan. Users can identify the path of Kampung Teluk Kecil, Pangkor Island. There are three types of paths, which are arterial road, local road and pedestrian walkway. The arterial road is highlighted in red, which is the primary access for the villagers connecting the Pangkor Island Jetty to Kampung Teluk Kecil, see Figure 3. These roads are considered as the main factor in creating the mental mapping of the study area. They are connected to a series of local roads (brown colour) which connect the residential area with the main road and allow freely vehicle movements since there is no traffic congestion in this area. The main road is designed with a gateway as a starting point or entrance of Kampung Teluk Kecil, see Figure 4.

Figure 3: Paths in Kampung Teluk Kecil

Figure 4: A gateway as an entrance of Kampung Teluk Kecil, Pangkor Island.

Usually, the characteristics of the roads are based on the size of the road length and width. But, in this area, the road is commonly designed to accommodate a low-density population, so the width of the road remains relatively small as compared to the roads in the city since the area is just a rural area. All types of vehicles are sharing the same road as the primary access. At the same time, a proper pedestrian walkway is provided for the public, especially for the tourist, see Figure 5.

Figure 5: Images of the arterial road and pedestrian walkway in Kampung Teluk Kecil, Pangkor Island

4.2 EDGES Lynch (1960) defined edges as linear elements that act as boundaries between two kinds of areas and serve as lateral references. The natural terrain and typology of Kampung Teluk Kecil indicate edges. The coastal line on the eastern side and the forest on the western side from the site's edges. The seawater elements that separate the island and the land become the large edges as shown in Figure 2. Also, a linear line of houses and buildings with a seamless boundary of the arterial road creates an edge and become a boundary that separates the building on the east and west side.

4.3 NODES AND LANDMARKS Based on the observation, several areas or buildings can be classified as landmarks. The floating mosque located in the south of the case study area, Masjid Badr Seribu Selawat, is one of the major nodes (Figure 8) in this area for the Muslim community to perform their pray especially on Friday. The mosque was designed with a significant blue coloured gateway as an entrance and also a decorated blue coloured dome that makes it more beautiful, see Figure 9. The features, characteristics, size and colour of the mosque make it easy for the public to recognize the building as the landmark of the area. Since the mosque itself is located beside the main road and easy to be seen by the public. Moreover, the mosque is open daily for local and foreign tourists to visit and appreciate the design and uniqueness of the mosque. Because of that, there are many Muslims, and non-muslim tourists visit the mosque, and it becomes a secure node and landmark for Kampung Teluk Kecil.

Badrul Munir Daut, Ahmad Sanusi Hassan, Muhammad Hafeez Abdul Nasir, Boonsap Witchayangkoon

Figure 8: Nodes and Landmarks in Kampung Teluk Kecil.

Figure 9: Masjid Badr Seribu Selawat: the floating mosque of Pangkor Island. Besides that, the Dutch Fort also is one of the nodes at Kampung Teluk Kecil. It is considered a historical building that gives a sense of attraction for the tourist to visit that place. The architecture of the building makes it different from other buildings. The building was designed by using a reddish clay brick during the colonization era of Dutch, now become a historical landmark for the area. The characteristic and colour of the Dutch fort, Figure 10, itself make it one of the memorable landmarks in this area. Because of the colour and the different architectural styles, the Dutch fort becomes a landmark for Kampung Teluk Kecil. *Corresponding author (A.Sanusi Hassan). Tel: +604 6532844. Email: sanusi.usm@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13I http://TUENGR.COM/V11A/11A13I.pdf DOI: 10.14456/ITJEMAST.2020.255

Figure 10: Dutch Fort from the entrance. The floating mosque and the Dutch Fort are the nodes as well as the landmarks for the villagers. The reason is that these buildings are strategically located in the area that becomes a spot for public activities. Furthermore, the architectural styles of the buildings are different from other buildings in Kampung Teluk Kecil and make both structures as influential nodes and landmarks of the area. The floating mosque of Pangkor Island is located on the southern side of the study area while the Dutch Fort is located on the northern side of Kampung Teluk Kecil.

5. DISCUSSION The overall master plan of Kampung Teluk Kecil shows irregularity in its planning. As Kampung Teluk Kecil is a tourist attraction place, the area could be seen as properly planned and laid out based on the elements of urban design.

5.1 PATHS The paths of Kampung Teluk Kecil show a linear pattern and easy access for the villagers with all the types of roads carefully laid out to avoid congestion. The arterial roads were designed properly linear along the bay and connecting the residential area with the north side of the Pangkor island, especially to the Pangkor Island Jetty. Interestingly, the paths in Kampung Teluk Kecil curvilinear patterns that surrounded by the villagers' house and public building. The separation of arterial roads and collector roads are distinctive, and the intersections of each residential are located strategically to avoid the issue of traffic congestion.

5.2 EDGES Kampung Teluk Kecil in Pangkor Island has clear and distinct edges. It is located nearby nature (Ghollasimood, 2011), costal linear on the eastern side and mountains of on the western side (Sulaiman et al., 2018). The road also marks an edge bordering the eastern and western side of the residential area.

5.3 DISTRICTS Based on the observation, it is clear that there are no districts that can be determined on the physical ground plan of Kampung Teluk Kecil. Most of the buildings are the residential building

Badrul Munir Daut, Ahmad Sanusi Hassan, Muhammad Hafeez Abdul Nasir, Boonsap Witchayangkoon

types with a linear pattern in the middle of the Kampung Teluk Kecil while the scattered pattern on the northern and southern sides.

5.4 NODES The nodes in Kampung Teluk Kecil is clearly can be classified as a tourist attraction. The Dutch Fort and the floating mosque have unique features and physical uniqueness to be an attraction and public gathering places.

5.5 LANDMARKS The landmarks of Kampung Teluk Kecil are becoming the image of the place. Both floating mosque and Dutch fort are prominent landmarks that emphasis the hierarchy of the place. The buildings are points of reference for the users to indicate their location, especially for the tourists.

6. CONCLUSION A few urban design elements exist in the Kampung Teluk Kecil village, Pangkor Island. All the urban elements give an image of urban design development for the village. But, numbers of the urban design elements in Kampung Teluk Kecil should be improved by providing particular aspects and facilities, e.g., the signboard of a famous building can be proper and comfortable seen by the visitors, mainly foreign and local tourists, to indicate the direction of the building. Furthermore, improvement in infrastructures needs to be made to create a better urban settlement in the future, to separate the community area and the residential area to become a clear district for Kampung Teluk Kecil. Cultural diversity is a unique factor in Malaysia and can be improved by providing excellent infrastructure for the tourism industry. Finally, the interaction between foreign and local tourists with the community will result in a more positive image of tourism and strengthen the efforts to turn Malaysia into a premier world tourist destination.

7. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

8. ACKNOWLEDGEMENT The authors appreciate financial supports from Universiti Sains Malaysia (USM), the Bridging Grant, Number 304.PPBGN.6316521.

9. REFERENCES Ghollasimood, S. (2011). Floristic Composition, Diversity and Economic Valuation of a Coastal Hill Forest in Pulau Pangkor, Malaysia (Doctoral dissertation, Universiti Putra Malaysia). Hassan, A. S. & Hassan, K.A.K. (2001), Konsep Perumahan Tradisional Berkelompok dan Berdensiti Tinggi di Pantai Barat Semenanjung Malaysia, P. Pinang: Penerbit USM. Hassan, A. S. (2004). Sustainable future urban patterns and socio-economic activities of tropical wetlands in Southeast Asia. Sassen, S. Encyclopedia of Life Support Systems (EOLSS). Eolss Publishers, Oxford. http://www.eolss.net. *Corresponding author (A.Sanusi Hassan). Tel: +604 6532844. Email: sanusi.usm@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13I http://TUENGR.COM/V11A/11A13I.pdf DOI: 10.14456/ITJEMAST.2020.255

Hassan, A. S. (2010). Fishing Villages: Resemblance to the pre-colonial city landscape at the Straits of Malacca in Peninsular Malaysia. The Arab World Geographer, 13(2), 93-107. Lynch, K. (1960). The Image of the City. Boston: MIT Press. Mat Raschid, M. Y. (2010). Tourism, community and environment: siting strategies to enhance the tourists' experience in coastal resorts of the West Malaysian Peninsula (Doctoral dissertation). Moughtin, C. (2007). Urban design: street and square. Routledge. Moughtin, C., Cuesta, R., Sarris, C., & Signoretta, P. (2003). Urban design: Method and techniques. Routledge. Salmi, P. (2002). An exploration of critical factors for accessibility and wayfinding for adults with mental retardation (Doctoral dissertation, University of Minnesota). Sassen, S. (2009). Human Settlement Development: The Central Role of Cities In Our Environmentâ€™s Future-Constraints And Possibilities. Human settlement development, 4. Sulaiman, F. C., Jaini, N., Jamaluddin, E. R., & Hashim, N. I. (2018). The Impact of Marine Tourism Towards the Local Community at Pulau Pangkor, Perak. Asian Journal of Quality of Life, 3(13), 168-176. Tan, Y.E., Aripin, D.B., Hassan, A.S., Nasir, M.H.A., Witchayangkoon, B. (2019). Analysis of Urban Design Elements with a Case Study at Heritage Buildings and Fisherman Villages, George Town, Penang. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 10(19), 10A19J, 1-17. Badrul Munir Daut earned a Bachelor of Science Architecture from Universiti Sains Islam Malaysia, Selangor. He graduated a Master of Architecture at Universiti Sains Malaysia. He is a registered graduate architect in the Board of Architect Malaysia.

Professor Dr.Ahmad Sanusi Hassan is a Professor in Architecture Programme at the School of Housing, Building and Planning, Universiti Sains Malaysia, Penang, Malaysia. He obtained a Bachelor and Master of Architecture degrees from University of Houston, Texas, USA, and Doctor of Philosophy (PhD) degree focusing on Sustainable Architecture and Urban Design Development for Southeast Asia from University of Nottingham, United Kingdom.

Muhammad Hafeez Bin Abdul Nasir is a PhD student at Universiti Sains Malaysia under the School of Housing Building and Planning. He got a Bachelor of Design Studies from University of Adelaide. Further, He received a Master of Architecture degree from the same university. He is interested in Architecture Functionings.

Dr.Boonsap Witchayangkoon is an Associate Professor at Department of Civil Engineering, Thammasat School of Engieering, Thammasat University, Thailand. He received his B.Eng. from the King Mongkutâ€™s University of Technology Thonburi with Honors. He continued his PhD study at University of Maine, USA, where he obtained his PhD in Spatial Information Science & Engineering. His interests involve Applications of Emerging Technologies to Engineering.

Badrul Munir Daut, Ahmad Sanusi Hassan, Muhammad Hafeez Abdul Nasir, Boonsap Witchayangkoon

International Transaction Journal of Engineering, Management, & Applied Science & Technologies http://TuEngr.com

PAPER ID: 11A13J

IMPACTS OF STRESS AROUSAL AND ETHICAL ORGANIZATIONAL CULTURE ON THE RELATIONSHIP OF AUDIT QUALITY PRACTICES AND ETHICAL ORGANIZATIONAL CULTURE 1

Fahdah Sultan Alsudairi , Komal Khalid

Department of Accounting, Faculty of Economics and Administration, King Abdulaziz University, Jeddah, SAUDI ARABIA. 2 Department of Human Resource Management, Faculty of Economics and Administration, King Abdulaziz University, Jeddah, SAUDI ARABIA. ARTICLEINFO

A B S T RA C T

Article history: Received 12 February 2020 Received in revised form 05 June 2020 Accepted 28 July 2020 Available online 14 July 2020

This paper investigates the effect of stress arousal on the relationship between audit quality practices and ethical organizational culture and the mediating role of ethical organizational culture. The study collected data through a survey of ﬁnancial auditors in Saudi Arabia. The reliability and validity of the scale were assessed prior to data collection. The data was analysed using moderated logistic regression analysis. The ﬁndings indicated a relationship between ethical organizational culture and reduced audit quality practices and time budget pressure. Similarly, results indicated stress arousal mediates the relationship between time budget pressure and reduced audit quality practices and ethical organizational culture influence the relationship of stress arousal and reduced audit quality practices.

Keywords: Reduced audit quality practices (RAQP); Time budget pressure (TBP); Ethical Organizational Culture (EOC); Stress arousal (SA).

1. INTRODUCTION Audit quality is emphasized as an extreme issue due to massive corporate failure and financial crisis. Scholars have pinpointed the quality of audit performance and failures in several companies such as Parmalat, Enron, and WorldCom [1]. Therefore, high audit quality becomes an essential need to mitigate the impact of these failures [2]. The definition of high audit quality is based on the adequate dealing of material components under the consideration of the financial reporting framework. The improvement in contracting efficiency and resource distribution can help in achieving this quality [3]. The role of auditors is optimum in aiding investors to make viable decisions by offering information related to the financial market trend and financial statements. *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

From a global perspective, regulators attempt to upsurge the auditing service quality [4]. From the perspective of an auditor, one of the reasons for stress arousal (SA) is the audit time budget to incorporate auditing tasks as performance assessment and sustainability in audit companies is associated with the capability of auditors in a limited time budget [5]. An auditor can be under the pressure of a limited time budget, which can impact his/her behavior to incorporate auditing program. Time budget pressure (TBP) is a limitation, which emerges from the limited time assigned for incorporating auditing assessment [6]. The evaluation of audit quality has encountered significant issues because of the comparatively unidentified pattern of the audit program and the criticality of corporate governance. In this regard, surrogates are used by researchers for overcoming this issue with respect to audit quality [7]. The quality of audit work is also assessed through a â€œbehind the audit veilâ€? strategy on how the audit program steps are executed by the auditor. In this realm, reduced audit quality practices (RAQP) explains activities conducted by an auditor for mitigating evidence collected for inadequate audit program [8]. This program conducted by auditors has not been embarked appropriately due to limited TBP. The goal of RAQP is not to explain the inadequate audit viewpoint created by the audit firm [9]. On the contrary, the likelihood of an inadequate audit viewpoint will be increased if such steps are not adequately performed and explained in the auditing subject. This study's core objectives are to 1) reinforce the academic viewpoint that limited TBP, SA, and ethical organizational culture (EOC) influence RAQP negatively and 2) explore the influence of EOC on TBP, SA, and RAQP relations in auditing firms of Saudi Arabia. This study is significant in improving audit quality by improving the decision behavior of auditors and their professional opinions. Further, this study presents the impact of limited TBP, SA, and EOC experienced by auditors throughout peak season and their behavior in this condition. Auditors can overcome flawed decisions and activities, and maintain their professional ethics as regularized by the International Ethics Standards Board for Accountants by acknowledging the output of different conditions. Also, this study is significant in emphasizing the significance of resources available in extant quality control measures. Hypotheses development and conceptual framework are presented to support the theoretical foundation.

2. LITERATURE REVIEW The competence of appropriately assessing and measuring the audit quality is of significant importance to audit companies, regulators, society, users of financial statements, and standardsetters comprehensively. This section addressed the importance of audit quality, the pressure of time and cost associated with quality audit service, the nature of audit firms and TBP, SA, and EOC.

2.1 EMPIRICAL FRAMEWORK The importance of audit quality is further revealed from the association between audit input and outcome proxies of audit quality for examining the associated factors, independence, tenure, rotation, and expertise of an auditor. Rezaee [10] indicated that audit quality is an important tone of the auditing process to promote integrity, public trust, reputation, good image, and competency.

Fahdah Sultan Alsudairi, Komal Khalid

Moreover, the importance of audit quality is improved from the importance of communication between the auditors and the audit committee. The study has also revealed the importance of partner industry specialization in improving audit quality. Rezaee [10] stressed upon the information provided by investors that it should be pertaining to the companies in which they are investing in promoting better quality audit services. Hoopes [11] have asserted the importance of audit quality based on audit personnel salaries and office-level audit quality. The rationale for stressing upon the relationship is the role of personnel salaries played to increase the effort or talent level of audit personnel, which eventually leads to a higher quality audit. According to Farouk and Hassan [12], an appropriate and sound audit can assist in reinforcing strong risk management, firmsâ€™ internal control, and corporate governance; therefore, contributing to financial performance. The occurrence of a time budget is observed when an inadequate number of hours is allocated for auditors for competing particular audit processes. The responsibility of auditors emerges from the assurance that audit activities are completed throughout the allocated budget by management and auditing standards accordingly [13]. Budget emphasis and budget attainability are the two wider perspectives to understand TBP [14]. The ability of the auditors to execute their tasks according to their audit engagement is focused on the budget attainability when sustaining high-quality audit services. On the other hand, budget emphasis is observed as a measure of auditor efficiency [15].

2.2 HYPOTHESIS DEVELOPMENT 2.2.1 THE RELATION BETWEEN TBP AND SA AND RAQP The mediating effect of SA positively shows the relationship between the TBP and the RAQP [16]. The quality of audit is at a hidden danger when time budget relates to arousal of pressures within the EOC. The auditor involvement in RAQP holds significant potential. An in-depth analysis of the TBP sources and RAQP of an auditor is widely researched from different stressors and antecedents such as culture and organizational structure [16]. The auditor should complete the audit steps before they get stressed from the time budget set for their assignments [16]. The majority of the auditors engage in at least one of the aberrant behaviors in relation to the activities associated with RAQP, which shows that they are neither making professional judgments nor maintaining skepticism and; thus, conducting audit with reduced quality due to stress factor. The study conducted by Ettredge, Fuerherm [17] investigated the relationship of SA with audit quality, recent recessions, and misstatements in audited data. The results showed that the fee concessions made by the auditors are linked with a reduction in the quality of audit in the following years. H#1: Stress arousal mediates a positive relationship between time budget pressure and reduced audit quality practices. 2.2.2 INFLUENCE OF TBP ON RAQP It has been hypothesized that the TBP can exist when the amount of budget is less than the total time available and auditors react to this by using their individual time regardless of reporting the actual amount of time used to complete the audit task [14]. While auditing, the main aim of the auditors to minimize the excessive budget with respect to the time. Under-reporting of time will continue over to the next period, which shows that the budget time is not evaluated and revised to *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

plan the audit [18, 19]. Therefore, the auditors are pressurized to complete the audit in a specified time and budget. It has been shown that in the auditing profession, RAQP tends to receive consistent and seriously negative consequences. The behaviors of auditors under high pressure are concerned related to the issue surrounding the auditing profession [14]. A similar study conducted by Goal [20] examined the impact of audit TBP on RAQP conducted by the auditors. The results clearly showed that RAQP has emerged as a concern in the audit profession in the audit assignment practices. Moreover, there is a significant association between audit quality reduction behavior and TBP [20]. H#2: Time budget pressure is directly and positively related to reducing audit quality practices. 2.2.3 THE RELATIONSHIP BETWEEN EOC AND TBP AND SA The use of penalties and an ethical environment is negatively associated with SA when enforcing ethical norms. Del Pozo-Antunez, [21] has discussed the relationship between EOC, TBP, and SA. The demand for obedience to authorities is positively associated with SA and TBP. This work [21] analyzed the association between the characteristics of labor and occupational health by investigating the impact of job demands on occupational health. The results showed that the health of the workers is significantly affected as a result of certain stress factors influencing the recognition of superiors in occupational health. Stress arousal is not associated with EOC but is positively associated with TBP [22]. A causal relationship has been indicated between EOC and TBP. Therefore, it is important to investigate the direct effects and moderators of these stressors on occupational health. H#3a: Ethical organizational culture moderates the first and the second stage of the indirect (negative) relationship of time budget pressure to reduced audit quality through stress arousal. 2.2.4 THE RELATIONSHIP BETWEEN EOC AND TBP AND RAQP Higher EOC can moderate the direct relationship between TBP and RAQP [23]. The commitment of auditors toward the organizational culture allows them to behave functionally. The organizational commitment is considered significant in the competitive business environment as the organizations are increasingly relying on their human capital [23]. The freedom of auditors can be compromised in conducting the standard audit procedures if tensions are created into strict time budgets and audit personnel under crucial pressure to acquire budgets. This information is likely to be derived based on the nature of the auditorâ€™s job [24]. Svanberg and Ohman [9] studied the impact of EOC on quality audit considering the conditions of TBP. The results also revealed the association between TBP and EOC. A negative association is shown between EOC and the use of penalties for enforcing ethical norms. However, there was a positive association between the demand for obedience to authorities and a reduction in audit quality acts. These results clearly showed the impact of EOC on dysfunctional auditor behavior in the light of reduced audit quality acts [9]. In terms of coping, the increased acceptance of auditors for the audit quality reduction behavior is influenced by increased TBP. On the other hand, there is no empirical evidence related to the moderating impact of EOC on TBP and RAQP. Firstly, the influence of TBP might be difficult to predict audit quality and ultimately the adverse effects might remain uncovered to evade corrective measures [25]. Secondly, the freedom of audit staff is impaired due to the stricter time budgets to conduct the essential audit procedures.

Fahdah Sultan Alsudairi, Komal Khalid

H#3b: Ethical organizational culture moderates the direct (positive) relationship of time budget pressure to reduced audit quality practices. 2.2.5 THE RELATIONSHIP BETWEEN EOC AND SA AND RAQP The investors and creditors rely on the auditors as they are responsible for auditing financial statements in making investment decisions. They possess a unique nature to perform within the EOC. It can be deemed that the TBP perceived by auditors can be different in integrating auditing program [19, 26]. The study hypothesis is given as H3c: Ethical organizational culture moderates the direct (positive) relationship of stress arousal to reduced audit quality practices

Ethical Organizational Culture

H#3a H#1 Time Budget Pressure

H#3b

Stress Arousal

H#3c Reduced Audit Quality Practices

H#2 Figure 1: Theoretical Framework

3. METHOD The respondents of this study are auditors (i.e. junior auditors, senior auditors, managers, and partners) attached to audit firms working in the Kingdom of Saudi Arabia. The sampling method utilized in this study was non-probability sampling with a purposive sampling technique, this helps the researchers in selecting cases with specific goals [27]. A total self-administered 100 questionnaires were distributed and another 150 auditors were sent questionnaires through email. After excluding the incomplete questionnaires and outliers (detected through Cook’s distance and Leverage test), 181 complete and usable questionnaires were received, accounting for 72.4% rate. As Saudi Arabia is a male dominant society and auditing firms are generally considered as a male-dominant profession so, this study’s respondents have 91.7% males. The respondents 66% were age 25-35 years and having experience of more than 5 years.

3.1 MEASURE The measures (RAQP, EOC, SA, TBP) utilized in the study have proven valid and reliable in prior research. The survey form encompassed five parts, covering demographic items, RAQP items responded based on ﬁve-point Likert scales ranging from strongly disagree to strongly agree and EOC, SA and TBP items responded to ﬁve-point Likert scales ranging from never to always. The first part of the questionnaire covered demographic information about the respondent’s age, gender, tenure as auditor, and position. The second part of the questionnaire included 15-items for EOC developed from Shafer and *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

Wang [28]. This scale measured the ethical behavior of the respondents and their peers, ethical behavior of the organizational leaders, and their conformity to ethical code of conduct. The third part of the questionnaire included 7-items about TBP developed from Otley and Pierce [29]. This scale measured pressures [budgeted time, fee, and deadlines] on respondents. The fourth part of the questionnaire included 4-items about SA developed from Smith [30]. This scale measured the negative reoccurrence (concerned and cogitation) component of SA. The last part of the questionnaire included 10-items about RAQP developed from Pierce and Sweeney [31]. This scale measured ďŹ ve actions of the auditors resulting in reduce audit quality and material misstatement. The reliability (Cronbach alpha) values of the variables (i.e. TBP, EOC, SA, and RAQP) range from 0.73-0.88. Exploratory factor analysis revealed that the construct validity of the variables (i.e. TBP, EOC, SA, and RAQP) also ranges from 54.19-73.46%.

4. DATA ANALYSIS 4.1 DESCRIPTIVE AND CORRELATION STATISTICS Table 1 represents descriptive, multicollinearity, and correlation statistics of the study variables. The mean values of variables range from 1.08-3.84 and SD ranges from 0.27-1.67. To measure relationships among variables Pearsonâ€™s correlation analysis was conducted. The data were examined for normality (i.e. Skewness and Kurtosis), outliers (Cook and Leverage), and missing values. Ethical organizational culture is negatively correlated with RAQP (r = -.46), TBP (r = -.34) and SA (r = -.39). While RAQP are positively related with TBP (r = .12) and SA (r = .33). TBP and SA show a strong positive relationship with each other (r = .48). These results can be described better with further tests. Table 1: Descriptive, Collinearity and Correlations among Constructs Descriptive, Reliability and Validity Collinearity Statistics Pearson Correlation Statistics No Variables M SD AVE VIF Tol 1 2 3 4 5 6 đ?›źđ?›ź 1 Gender 1.08 .27 2 Age 2.77 1.67 -.17* 3 TBP 3.52 .39 .73 54.19 1.83 .52 .08 -.02 4 SA 2.95 .68 .87 73.46 1.62 .36 .27** -.21** .48** 5 RAQP 2.14 .66 .88 71.02 1.57 .38 -.10 .02 .12** .33** 6 EOC 3.84 .62 .86 57.85 1.28 .47 -.07 .18* -.34** -.39** -.46** Note: N = 172; đ?›źđ?›ź = Cronbach Alpha, AVE = Average Variance Explained, TBP= Time Budget Pressure, SA = Stress Arousal, RAQP = Reduce Audit Quality Practices, EOC = Ethical Organizational Culture, *p < .05; **p < 0.01

4.2 LOGISTIC REGRESSION ANALYSIS Moderated logistic regression analysis was performed with RAQP as the dependent variable. Gender and age were entered in the first stage as control variables. TBP (centered) and EOC (centered) were entered in the second step. In the third step, the product term of TBP and EOC were entered, and SA was entered in the last step. Findings of second step highlights that TBP positively (Î˛ = .19, p<.001) and EOC negatively (Î˛ = -.48, p<.01) influence RAQP. Product terms of EOC and TBP also reflect a negative influence on RAQP (Î˛ = -.24, p<.001). Whereas, in the last step the significant values of coefficient variables reveal that TBP, EOC, and SA influence RAQP. Table 2 also presents associations between odds ratios and logistic regression coefficients.

Fahdah Sultan Alsudairi, Komal Khalid

These odd ratios disclose the factor by which the probability increase in RAQP is multiplied for each unit increase in the TBP. Ratios that are significant and below one is related to the likelihood of an increase in RAQP. In the last step, EOC (β = .42, p < .001) and SA (β = .58, p < .001) were significant predictors of increase in RAQP, whereas the product term of EOC and TBP was also significant (β = -.26, p < .001) and coefficient of TBP become non-significant (β = .07, NS). These results imply that TBP, SA, and EOC are engaged in mediation and moderation relationships. Table 2: Moderated Logistic Regression Analysis for Reduced Audit Quality Practices Step Variable(s) entered B Exp (B) B Exp (B) B Exp (B) B Exp (B) * * * * 1 Age -.24 .68 -.17 .54 -.19 .45 -.14 .35 Gender .03 .74 -.07 .85 .06 0.90 .09 .82 2 TBP .19** 1.27 .29** .47 .27** 1.09 EOC -.48* .62 -.53* .38 .42** .33 ** 3 EOC x TBP -.24 .49 -.26** .31 4 SA .58*** .62 2 * ** *** *** ∆R .03 .35 .46 .61 Note: Exp (B) refers to the odds ratio. The ΔR2 row includes Nagelkerke ΔR2 values. Final model statistics: χ² (10) = 102.29, p < .001, −2LL = 470.54, Constant =.536; Nagelkerke R2 = .78. *p < .05; **p < .01; ***p < .001.

4.3 HAYES MODERATED MEDIATION ANALYSIS Hayes [32] moderation and mediation analytical framework were used for hypothesis testing. Figure 1 of the hypothesized framework, EOC will moderate (a) TBP to RAQP path, (b) TBP to SA (the first stage of indirect effect), (c) SA to RAQP path (the second stage of indirect effect). Hayes Process macro (model 59) can be utilized to evaluate this model. Estimation of the following equations was required to evaluate this moderated mediation model: SA = α1 + β1TBP + β2EOC + β3TBPEOC + e1

(1)

RQAP = α2 + c1 TBP + c2 EOC + c3 TBPEOC + β1xSA + β2xSAEOC + e2

(2)

The terms β1, β2, β3, c1, c2 , c3, β1x, and β2x are the regression coefficients. The symbols α1 and α2 are the model constants. The symbols e1 and e2 indicate the respective error terms. Equation (1) evaluates the impact of TBP and moderation influence of EOC on SA; whereas Equation (2) evaluates the moderating impact of EOC on the relationships of TBP, SA to RAQP. Thus, presenting a total moderated-mediation effect model containing direct, indirect, and total effects. By utilizing Hayes Process macros model 59, coefficients of Equations 1 and 2 were estimated while age and gender of respondents as control variables. Table 3 represents coefficients for equation 1, whereas coefficients of Equation (2) are represented in Table 4.

Mediators

Table 3: Results for Equation 1. β1 β2 β3

SA .46** .28* .21** .41 Note: N=172; Entries are unstandardized coefficient estimates from Equation 1, which use SA, as the dependent variable; β1TBP refer to the effects of TBP on SA; β2EOC refer to the effects of EOC on SA; and β3TBPxEOC refer to the interaction of TBP with EOC on SA. *p < .05; **p < .01; ***p < .001.

Coefficients of Equation 1 are reported in Table 3, whereas coefficients of Equation 2 are *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

presented in Table 4. As shown in Table 3, TBP has significant and positive association with SA (β1TBP = .46, p < .001), on the other hand Table 4 SA has an influence on RAQP (β1SA = .41, p < .001).

c1 ***

Table 4: Results for Equation 2 c3 β1x

***

β2x

***

1.34 .88 1.09 .41 .49 .80 225.31*** Note: N=172; Entries are unstandardized coefficient estimates from Equation 2, which uses RAQP as the dependent variable; c1′TBP refers to the effect of TBP; β1x represent the effect of SA; c2EOC refers to the effect of EOC;

c3TBPEOC represents the effect of the interaction between time budget pressure and EOC, and β2x SAEOC refer to the interaction between SA and EOC. *p < .05; **p < .01; ***p < .001

In addition to that, a similar bootstrap approach was utilized reporting the significant and indirect association of TBP to RAQP through SA (.049, 95% CI = .061, .037). Thus, it provides support to Hypothesis 1. Moreover, Table 4 reports that TBP has positive and direct relation with RAQP (c1 = 1.34, p < .001), thus confirming Hypothesis H#2. As per the result of Table 3 to estimate SA and TBP interacted with EOC (β3 = .21, p <.01), and according to the results of Table 4 SA also interact with EOC to predict RAQP (β2x = .49, p < .01). Table 5: Analysis of Simple Effects Stress Arousal Ethical Organizational Culture

Stage 1st **

2nd *

Direct ***

Effect Indirect

Total

.26 .32 .28 .23 .51** Note: First stage coefficients signify the EOC effect on the TBP to SA path; second stage coefficients signify the effect of SA to RAQP path. Direct effect coefficients show the direct effect of EOC on TBP and RAQP; indirect effect coefficients show the effect of EOC on TBP to RAQP through SA, and total effects show a combined direct and indirect effects. *p < .05; **p < .01; ***p < .001

The first and second stage moderation and direct and indirect relationships among the study variables are shown in Table 5. From Table 5 results, the first stage of indirect effect (path from TBP to SA) and the second stage of the indirect effect (i.e. path from SA to RAQP) were positive and significant, thus support H#3a. The results of Table 5 indicate these relationships by illustrating the first and second stages of moderation and direct and indirect relationships. The first stage of indirect effect (path from TBP to SA) and the second stage of the indirect effect (path from SA to RAQP) were both significant and positive, thus support Hypothesis H#3b. Table 4 results revealed that to estimate RAQP, the TBP interacted with EOC (c3 = 1.09, p < .01). Table 5 results show the direct effect of TBP on audit quality practices was significantly positive with the presence of low EOC (Direct = .28, p < .001). This moderating effect of EOC is shown in Figure 1, which represents that audit quality practices increase more as TBP increases when EOC is low than when it is high, thus support H#3c.

Fahdah Sultan Alsudairi, Komal Khalid

5. DISCUSSION This study has examined the roles of TBP, EOC, and SA on the incidence of RAQP. The findings indicate that the ability of an auditor can effectively address the SA based on their better EOC. These findings have indicated that SA significantly mediated a positive relationship between TBP and RAQP and; therefore, accepts H#1. This study has also offered evidence that burnout and SA are theoretically and empirically different antecedents, and extended these outcomes to develop the conceptual difference of each of those factors from that of EOC [16]. These findings have indicated that TBP was a critical issue experienced by auditors in conducting the auditing assessment. TBP was positively and significantly associated with RAQP and; therefore, accepted H#2. The RAQP is prohibited by audit firms’ policies in conducting the audit program, which was a continuation of evidence from the past thirty years [8]. The occurrence of RAQP is observed when the TBP is perceived by auditors in conducting audit assessments. The study has found that EOC significantly moderated the relationship between TBP and RAQP and; therefore, accepted H#3b. The difference between reduced audit quality programs and TBP can be interpreted by a difference in how unethical behaviors are perceived. This refers to the sensitivity of RAQP in supporting EOC, while TBP is majorly a subject of auditing with respect to unethical cultural norms. These outcomes emerge to have essential implications for future studies and auditing professionals. From the perspective of audit firms, audit quality should be identified through progressively riskier behaviors, which can be encouraged by the performance assessment system. Management in audit firms should ensure that RAQ behavior cannot be tolerated and such unethical behavior cannot be pleased. This aspect can be achieved by emphasizing other determinants including lack of ability and the work quality for undertaking budget as a segment of the assessment process. The social and economic environment in which auditors act reflects a series of conditions likely to worsen this risk. The fundamental importance of time budget and the budgetary information can be beneficial in the assessment of performance. Therefore, audit firms have to pay significant attention to budget preparation processes to assure that costing methods are observed feasible for auditors. This study provides implications for audit firms about the significance of the identification of auditor’s stress levels associated with RAQP. This study suggests that audit firms have to work on developing EOC that could reduce stress levels of auditors. Smith [33] suggested that ﬁrm’s support ethical behavior so that can not only reduce the stress level of the auditors but also enhance audit quality practices. Moreover, Amalia, Sutrisno [34] suggested that auditors should be allowed to decide to accept an auditing job because to complete the audit the auditors have limited time. The findings of the influence of TBP on RAQP through SA was aligned to the expectancy theory [35], which explains that an individual’s belief to achieve his/her targets under his/her ability with expected outcome and in time parameters. But, if the time parameters do not fit with the auditor’s volume of work activities, it could fail to achieve the expected outcomes.

6. CONCLUSION Based on the results of the study, it was concluded that TBPs had a significant effect on RAQP *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

through SA. When the direct effect of EOC was measured on TBP and RAQP it showed more significant influence as compared with the indirect effect of EOC on TBP to RAQP through SA. However, when the mediating effect of SA was measured, there was a significant mediating effect in TBP and RAQP relationships through work stress.

7. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

8. REFERENCES [1] Al-Qatamin KI. The impact of time pressure on the audit quality: A case study in Jordan. IOSR Journal of Business and Management (IOSR-JBM). 2020, 22(1):8-16. [2] Diem TLT. The Effect of Auditors’ Workload Pressure and Compression on Audit Quality. Master’s Thesis, University of Oulu, 2016. [3] DeFond M, Zhang J. A review of archival auditing research. Journal of Accounting and Economics. 2014, 58(2-3):275-326. [4] Shahzad K, Pouw T, Rubbaniy G, El-Temtamy O. Audit quality during the global financial crisis: The investors’ perspective. Research in International Business and Finance. 2018, 45(C):94-105. [5] Zahmatkesh S, Rezazadeh J. The effect of auditor features on audit quality. Tekhne. 2017, 15(2):79-87. [6] Coram P, Ng J, Woodliff D. A survey of time budget pressure and reduced audit quality among Australian auditors. Australian Accounting Review. 2003, 13(29):38-44. [7] Abdullah A, Mazaloomi S, Poordadashi A. Time pressure, fee pressure and audit quality. International Journal of New Studies in Management Research. 2016, 1(1):9-12. [8] Silaban A, Harefa MS. Gender, time budget pressure and audit quality reduction behaviors. South East Asia Journal of Contemporary Business, Economics, and Law. 2017, 14(1):12-7. [9] Svanberg J, Ohman P. Auditors' time pressure: Does ethical culture support audit quality? Managerial Auditing Journal. 2013, 28(7):572-91. [10] Rezaee Z, Abernathy J, Causholli M, Michas PN, Roush PB, Rowe S, et al. Comments of the auditing standards committee of the auditing section of the American accounting association on PCAOB concept release on audit quality indicators. Current Issues in Auditing. 2016, 10(1): C11-C27. [11] Hoopes JL, Merkley KJ, Pacelli JM. Do audit personnel salaries impact audit quality? Review of Accounting Studies. 2018, 23(2):1096-136. [12] Farouk MA, Hassan SU. Impact of audit quality and financial performance of quoted cement firms in Nigeria. International Journal of Accounting and Taxation. 2014, 2(2):1-22. [13] Majidah M, Isynuwardhana D, Anna YD, editors. Audit quality: Time budget pressure, dysfunctional auditor behavior, and the understanding of information technology as moderator. 7th International Conference on Sustainable Collaboration In Business, Technology, Information and Innovation, 2016, Bandung, Indonesia.

Fahdah Sultan Alsudairi, Komal Khalid

[14] Al Kautsar M. The influence of time budget pressure on dysfunctional audit behavior. South East Asia Journal of Contemporary Business, Economics, and Law. 2016, 10(1):88-94. [15] Broberg P, Tagesson T, Argento D, Gyllengahm N, Martensson O. Explaining the influence of time budget pressure on audit quality in Sweden. Journal of Management & Governance. 2017, 21(2):331-50. [16] Smith KJ, Emerson DJ. An analysis of the relationship between resilience and reduced audit quality within the role stress paradigm. Advances in Accounting. 2017, 37:1-14. [17] Ettredge M, Fuerherm EE, Li C. Fee pressure, and audit quality. Accounting, Organizations, and Society. 2014, 39(4):247-63. [18] Espinosa-Pike M, Barrainkua I. An exploratory study of the pressures and ethical dilemmas in the audit conflict. Revista de Contabilidad. 2016, 19(1):10-20. [19] Nehme R, Al-Mutawa A, Jizi M. Dysfunctional behavior of external auditors the collision of time budget and time deadline evidence from a developing country. The Journal of Developing Areas. 2016, 50(1):373-88. [20] Goal MBL. The influence of audit time budget pressure on reduced audit quality behavior Journal of Accounting Research, Organization and Economics 2018, 1(1):57-64. [21] Del Pozo-Antunez JJ, Ariza-Montes A, Fernandez-Navarro F, Molina-Sanchez H. Effect of a job demand-control-social support model on accounting professionals’ health perception. International Journal of Environmental Research and Public Health. 2018, 15(11):24-37. [22] Bik O, Hooghiemstra R. The effect of national culture on auditor-in-charge involvement. Auditing: A Journal of Practice & Theory. 2016, 36(1):1-19. [23] Leow KL. The Organizational Commitment: The Study of Mentoring and Leader-member Exchange (Lmx) Among Auditors in Malaysia-moderating Effects of Gender. The International Journal of Interdisciplinary Social Sciences: Annual Review. 2011, 6(1):123-46. [24] Brierley JA, Gwilliam DR. Human resource management issues in audit firms: a research agenda. Managerial Auditing Journal. 2003, 18(5):431-8. [25] Baldacchino PJ, Tabone N, Agius J, Bezzina F. Organizational culture, personnel characteristics, and dysfunctional audit behavior. IUP Journal of Accounting Research & Audit Practices. 2016, 15(3):34-63. [26] Herda DN, Martin KA. The effects of auditor experience and professional commitment on acceptance of underreporting time: A moderated mediation analysis. Current Issues in Auditing. 2016, 10(2):14-27. [27] Neuman WL. Social Research Methods: Qualitative and Quantitative Approaches. 6th ed: Pearson International Edition, 2006. [28] Shafer WE, Wang Z. Effects of ethical context on conﬂict and commitment among Chinese accountants. Managerial Auditing Journal. 2010, 25(4):377-400. [29] Otley DT, Pierce BJ. Audit time budget pressure: consequences and antecedents. Accounting, Auditing & Accountability Journal. 1996, 9(1):31-58. *Corresponding author (Komal Khalid). Email: kmuddassar@kau.edu.sa ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13J http://TUENGR.COM/V11A/11A13J.pdf DOI: 10.14456/ITJEMAST.2020.256

[30] Smith K, Jr G, Haight T. SAS4: Validation of a Four-Item Measure of Worry and Rumination. Advances in Accounting Behavioral Research. 2012, 15. [31] Pierce B, Sweeney B. Cost-quality conﬂict in audit ﬁrms: An empirical investigation. European Accounting Review. 2004, 13(1):415-41. [32] Hayes A. Introduction to Mediation, Moderation, and Conditional Process Analysis. New York: Guilford Press, 2013. [33] Smith K, Emerson D, Boster C. An examination of reduced audit quality practices within the beyond the role stress model. Managerial Auditing Journal. 2018, 33(8/9):736-59. [34] Amalia FA, Sutrisno, Baridwan ZI. Audit quality: Do time pressure influence independence and audit procedure compliance of auditors? Journal of Accounting and Investment. 2019, 20(1):130-44. [35]

Vroom VH. Work and Motivation. New York: Wiley, 1964. Dr.Fahdah Alsudairi is an Associate Professor of Accounting And Auditing at King Abdulaziz University in Jeddah, Saudi Arabia. Her work focuses specifically on the Ethical Perspectives of the Audit Profession in addition to the effects of Social Relations and Interactions within Audit Firms. Fahdah has published a book in Arabic titled “Advanced topics in auditing”. Dr.Komal Khalid is an Assistant Professor of Human Resource Management at King Abdulaziz University, Jeddah. She holds a Master's and a Ph.D. in Human Resource Management. Her research focuses on HRM, Employee Attitudes, and Job Outcomes. She is mainly interested in Talent Management, Performance Management, Employee Development, and Employee Outcomes.

Fahdah Sultan Alsudairi, Komal Khalid

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13K

BEHAVIORAL PERSPECTIVES AMONG DIVIDEND POLICY AND ITS DETERMINANTS AND FIRM’S FINANCIAL PERFORMANCE: A CB-SEM APPROACH 1*

Sarfaraz Ahmed Bhutto , Hassan Jawad Soomro , Saifullah Shaikh , 2 1 Hussain Amar , Qamar Abbas Mangi 1 2

Institute of Commerce, Shah Abdul Latif University Khairpur, Sindh, PAKISTAN. Government Islamia Arts & Commerce College, Sukkur, Sindh, PAKISTAN.

ARTICLEINFO

A B S T RA C T

Article history: Received 01 April 2020 Received in revised form 15 June 2020 Accepted 04 July 2020 Available online 15 July 2020

Dividend policy is the prime concern for every shareholder. Financial managers formulate the necessary dividend policy that increases shareholders’ affinity towards the company. This study examines the relationship between determinants of dividend policy (anticipated level of future earnings, stakeholders’ interest, the pattern of past dividends, corporate social responsibility (CSR), and uncertainty) and financial performance. Moreover, this study empirically investigates the untapped mediating effect of dividend policy between determinants of dividend policy and financial performance. Financial managers are highly integrated into formulating dividend policy, the present study indulged with the behavioral responses taken from Chief financial officers (CFOs) of listed manufacturing firms of Pakistan. Questionnaires are used as a study tool. The population frame includes CFOs of different financial and non-financial sectors. From the Covariance-based Structural Equation Modelling (CB-SEM) analysis, results show a significant relationship between the determinants of dividend policy and financial performance. Further, dividend policy mediates the relationship between its determinants (except uncertainty and CSR) and the firm’s financial performance. The practical implication would be recommended for financial managers and other corporate policymakers.

Keywords: Effective dividend policy, Company’s financial performance, SEM analysis; Stakeholders’ interests; Structural Equation Modeling (SEM); Chief financial officer (CFO); Corporate finance; Anticipated level of future earnings; Patterns of past of dividends; Investment uncertainty; Manufacturing firms.

1. INTRODUCTION Financial managers show their prime concern towards maintaining the firm’s financial performance. Of this interest, every financial manager has a core objective to determine and stabilize *Corresponding author (Sarfaraz A. Bhutto). Email: sarfaraz_ahmed0333@yahoo. International Transaction Journal of

Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13K http://TUENGR.COM/V11A/11A13K.pdf DOI: 10.14456/ITJEMAST.2020.257

the firm’s performance. However, the determinants of the financial performance vary with respect to the nature, type, and size of the firm (Capon et al., 1990). Meanwhile, researchers have given a bit attention to the intervening effects of dividend policy on the relationship between the anticipated level of future earnings, stakeholders’ interest, Pattern of past dividends, corporate social responsibility, uncertainty, and financial performance. Moreover, this untapped intervening mechanism of dividend policy has been hardly focused on the context of evolving financial markets, even though, these markets contribute their accumulated market share in the development of a global economy. The economy of Pakistan is considered as one of the leading emerging economies, however, this economy has been going through with various challenges. Therefore, CFOs need to study essential factors that might affect the financial performance of their respective firms and this study intend to contribute a crucial mediating mechanism to uplift and overcome the prevailing issues faced by CFOs of listed companies of Pakistan. Kajola et al. (2015) traced out the direct effect of dividend policy and financial performance had been, however, this study located divided policy as an intervening variable between Anticipated level of future earnings, stakeholders’ interest, Pattern of past dividends, corporate social responsibility, uncertainty, and financial performance. It is seen that the evidence regarding dividend policy, determinants of dividend policy (like the anticipated level of future earnings, stakeholders’ interest, Pattern of past dividends, corporate social responsibility, uncertainty), and financial performance are being well reported. Therefore, it becomes crucial to understand and to contribute a mediating mechanism that might bridge the existing research gap. It is assumed that having appropriate financial analysis and financial forecasting the anticipated level of future earnings may be increased which increases the financial performance. Moreover, holding a good financial performance increases the stakeholders’ interest. Adding with that, trend analysis must be done by every stakeholder before to take an active part in the firm, when the patterns of past dividends seemed smoother, the ultimate effect would be created on the financial performance of the firm. Lastly, fully corporate socially responsibly (CSR) may win the confidence of shareholders. In nutshell, all these determinants could be mediated with effective dividend policy. However, it is argued that most of the firm’s financial performance is indulged with technical components rather than subjective ones. Here, the technical component is referred to as sales revenue. These determinants are helpful to make a sudden increase in the firm’s financial performance, but, in the long-run firms show their position and ability to make persistent dividend payout, which gives the impression of high profitability ratio at firm and investors start believing on the stable financial position of the firm. In this connection, it can be stated that the anticipated level of future earnings, stakeholders’ interest, Pattern of past dividends, corporate social responsibility, and uncertainty may not only hold a direct effect on financial performance but the existing relationship between mediated by corporate’s dividend policy. Hence, among the core objectives, this study deeply explains the existing relationship determinants of dividend policy and financial performance. It is ambiguous for financial managers to draw one straight line for the betterment of financial performance. Firms are different and they face different economic challenges. Moreover, firms are restricted to follow certain rules and regulations and need sufficient funds generated from satisfied shareholders. In this regard, once shareholders become satisfied so the willingness to retain and to invest more money will be increased. This refers to a focus on dividend policy and its determinants. The persistent dividend payout keeps the existing shareholders satisfied with the prevailing firm’s financial performance. The stable payouts lead to a positive sense among outside investors, and

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

firms may attract new investments as well. Thus, this study has tapped the burning issue (financial performance) among listed companies (financial and non-financial) of Pakistan. The outcomes of this study give a way forward for financial managers in abstracting certain dividend policy which increases the financial performance. This study observes the relationship between the anticipated level of future earnings, stakeholders’ interest, Pattern of past dividends, corporate social responsibility, uncertainty, and financial performance among listed firms of Pakistan. Moreover, the relationship between the determinants of dividend policy and financial performance through dividend policy is also being the principal purpose of this study.

2. LITERATURE REVIEW The volatility in the financial environment is turning rapidly. Corporate dividend policy has been reflected as a core element for constructing the upmost corporate financial environment. Globally, the importance of dividend policy is recognized by researchers and financial analysts. During the last decade, researchers have given focus and reviewed extensive theories affecting dividend policy.

2.1 DETERMINANTS OF DIVIDEND POLICY Lintner (1956) discussed the concept of factors of dividend policy, with the Partial Adjustment Model (PAM). Lintner’s behavioral model revealed that aggregate volatility in dividends can be explained as “net payment of dividends (target dividends - dividends outstanding) multiplied with the prevailing percentage of factor adjustment. The dividends payment mainly depends on the income generated during the period. Furthermore, Lintner (1956) considered cash dividends as offline earnings for investors. According to Lintner (1956), stockholders observe a firm’s cash flow and believe to invest in, where they gain constant dividends. It is because there could not be a dramatic change in the dividend payment except periodic adjustments (short-term dividend-cuts). Hence, the dividend forecast can be made more appropriately following the PAM model. Fama (1974) documented behavioral models for dividends. In support of Lintner’s PAM model, Fama stated that managers give preference to stable and smooth dividend policy and ignore massive expansions in dividend percentages. Fama (1974) and Lintner (1956) reported the firm’s earning as a core determinant of dividend policy. Bond and Mougoue (1991) investigated the PAM model among 430 US-based manufacturing firms and found that the PAM model does not fully contain all determinants in abstracting dividend policy. Therefore, they recommended studying more determinants for apt and prompt dividend policy. Baker et al. (1985) and Farrelly et al. (1986) included past dividend patterns and expected future income as key determinants of dividend policy, and when compared to Lintner (1956) PAM model, past dividend patterns and expected future income tend to be more useful in formulating dividend policy.

2.2 ANTICIPATED LEVEL OF FUTURE EARNINGS, STAKEHOLDERS’ INTEREST, PATTERN OF PAST DIVIDENDS AND FINANCIAL PERFORMANCE Friedman and Miles (2006) stated that a firm’s management must comprehend itself as concerned parties and overall activities of business must reflect and imitate their needs and interests. Firms should determine stakeholders’ interests and contribute activities to satisfy stakeholder’s interests, though, it expands financial performance (Mitchell et al., 1997). Freeman (1984) stated that *Corresponding author (Sarfaraz A. Bhutto). Email: sarfaraz_ahmed0333@yahoo. International Transaction Journal of

EMT (Efficient market hypotheses) robustly explain the positive association between stakeholder’s perception and financial performance. More the stakeholders’ interests lead to more investment that brings more prosperity in the firm and such interests generate a firm’s value that is also an integral part of the firm. Meanwhile, a smooth environment must be sustained that reaps the knowledge and skills of stakeholders in improving business performance (Freeman et al., 2004). Furthermore, Freeman (1984) stated that speculators willing to examine prevailing trends to the abstract anticipated level of future earnings. Investors’ expectations in forecasting a firm’s future earnings work as a key determinant of dividend policy. Hence, investors track past payments of dividends to forecast future earnings (Freeman (1984). Ayuso et al. (2014), Freeman et al. (2004) and Baker et al. (1985) reported positive relationships between the anticipated level of future earnings, stakeholders’ interests, patterns of past dividends and financial performance. They revealed having appropriate financial analysis and financial forecasting the anticipated level of future earnings may be increased which increases the financial performance. Moreover, holding a good financial performance increases the stakeholders’ interest. Adding with that, trend analysis must be done by every stakeholder before to take an active part in the firm, when the patterns of past dividends seemed smoother, the ultimate effect would be created on the financial performance of the firm.

2.3 UNCERTAINTY AND FINANCIAL PERFORMANCE There are several concepts regarding “uncertainty”, portraying an unclear or unequivocal situation is one mind. This unequivocalness can be about the incongruity of information. In the context of corporate finance, it is considered as financial ambiguity and financial administration needs to reduce the level of uncertainty (Walkup, 2016). The appropriate decline in a firm’s uncertainty means the firm has taken defensive measures, and, it can lead to prosperity in dividend payout (Walkup, 2016). Jensen & Meckling (1976) stated that the management of firms thinks about their interest (Managerial interest) rather than the interest of shareholders, so, this conflict may increase the level of uncertainty for shareholders. Additionally, they stated that managerial interests could lead certain increase in financial performance as managers are curious to satisfy their interests (like salary, bonuses, etc.) by protecting the firm from bankruptcy. Hence, financial managers would become efficient to prevent uncertainty. Moreover, Jensen & Meckling (1976) contributed the term “Agency Conflict” which reflects to satisfy managerial interest rather than shareholders. Previously, it had been seen that this agency conflict produces negative effects on payouts. Chay and Suh (2009) revealed that uncertainty in cash flows reduces agency costs and increases investment opportunities. According to walkup (2016) among several determinants of dividend policy, uncertainty is considered as a significant determinant that negatively influences dividend policy and firm performance. Moreover, in a scenario where financial markets become uncertain, simultaneously, firms de-accelerate their financial activities which results in a decline in the firm’s financial performance. Dixit et al. (1994) reported a negative effect of uncertainty on the firm’s dividend policy. According to Harash et al. (2014), uncertainty leads to slowing down the firm’s operation (productivity, etc.) which results in a decline in the firm’s profitability and negatively affects financial performance.

2.4 CSR AND FINANCIAL PERFORMANCE Since the 1970s, discussion regarding corporate social responsibility (CSR) and its relationship with financial performance had in progress. Cochran (1984), Torugsa et al. (2012) showed positive

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

effects of CSR on financial performance. Van et al. (2008) depicted that CSR is positively observed for financial performance, like value gaining or image building phenomena among people of society, thus, firms having CSR programs gain the attention of society. Van et al. (2008) considered CSR as a promotional activity that increases the positive attitude of consumers towards buying of product/service, thus, there would be an increase in sales and expansions in the firm’s profits, thus positively affects firm’s dividend policy. Ross (1977) revealed CSR programs give inclination to investors that the firm is financially stable, so, more people start investing in (Signaling concept). Brine et al. (2007) supported that firms that offer CSR programs tend to be less risky. Firms can improve and expand their respective performance by taking necessary initiatives for CSR (Chih et al., 2014). Additionally, they stated that the expenditure incurred on CSR may not affect profitability. The firm’s value increases by indulging in CSR activities (Harjoto and Jo, 2015). Dividend policy and performance are positively related to CSR (Hirigoyen and Poulain-Rehim, 2015).

2.5 DIVIDEND POLICY AND FINANCIAL PERFORMANCE A set of rules and guidelines sustained by firms in distributing dividends among shareholders can be simply referred to as dividend policy (Nissim & Ziv, 2001). The concept regarding dividend policy and financial performance traced through the theoretical contribution of Modigliani & Miller (1961), where they considered dividends policy as an irrelevant factor to determine financial performance, that financial performance is completely independent and not affected by dividends delay or timely payout. However, Amindu (2007) reported a positive relationship between dividend policy and financial performance, and Fakuda (2000) revealed a negative relationship between them. Moreover, (Michaely et al., 2005; DeAngelo et al., 1996) documented the irrelevancy of dividend policy with financial performance and consistent with the concept of M&M (1961). Conversely, recent studies, Kajola et al. (2015); Hoang and Hoxha (2016) reported a positive relationship between payouts and financial performance. This study proposes a mediating mechanism (which is hardly sparked) of dividend policy between its determinants and financial performance. Figure 1 illustrates the study model and hypotheses, developed following the criteria of Barron & Kenney (1986).

Figure 1: Conceptual Framework (see the abbreviations in Table 1).

2.6 HYPOTHESES DEVELOPMENT Based on the available literature, the following hypotheses have been developed in this study. H1: Anticipated level of future earnings has a significant and positive effect on financial performance. H2: Stakeholders’ interest has a significant and positive effect on financial performance. H3: Patterns of past dividends have a significant and positive effect on financial performance. *Corresponding author (Sarfaraz A. Bhutto). Email: sarfaraz_ahmed0333@yahoo. International Transaction Journal of

H4: Uncertainty has a significant and negative effect on financial performance. H5: Corporate social responsibility has a significant and positive effect on financial performance. H6: Anticipated level of future earnings has a significant and positive effect on dividend policy. H7: Stakeholders’ interests have a significant and positive effect on dividend policy. H8: Patterns of past dividends have a significant and positive effect on dividend policy. H9: Uncertainty has a significant and negative effect on dividend policy. H10: Corporate social responsibility has a significant and positive effect on dividend policy. H11: Dividend policy has a significant and positive effect on financial performance. H12: Dividend policy mediates between the anticipated level of future earnings and financial performance. H13: Dividend policy mediates between stakeholders’ interests and financial performance. H14: Dividend policy mediates between patterns of past dividends and financial performance. H15: Dividend policy mediates between uncertainty and financial performance. H16: Dividend policy mediates between corporate social responsibility and financial performance.

2.7 DATA AND METHODOLOGY 2.7.1 NATURE & TYPE OF RESEARCH This study investigates the effects of determinants of dividend policy on financial performance among the listed firms of Pakistan. Thus, it is considered as causal in nature. In terms of research type, it is quantitative and based on primary data which is cross-sectional. This study has behavioral perspectives. Therefore, it is based on a cross-sectional survey method through questionnaires, 2.7.2 DATA SOURCES, POPULATION & SAMPLE In this regard, behavioral responses have taken from Chief financial officers (CFOs) of listed manufacturing firms of Pakistan. The population frame includes CFOs of different financial and non-financial sectors such as Banking, Insurance, Telecommunication, Automobile, Cement, Fertilizer, Oil and Gas, Sugar, Textile, Tobacco, Pharmaceutical, out of 280 questionnaires distributed among these companies only (N=232) were used in the study. Hence, sample size 232 is good enough to perform SEM as the required sample size should be >200 (Nachtigall et al., 2003). 2.7.3 RESEARCH INSTRUMENTS Being a survey-based, the adopted and modified questionnaire (five-point Likert Scale) was used for determinants of dividend policy, dividend policy, and financial performance. The reliability (internal consistency) of the instrument was determined through Cronbach’s alpha. Table 1, it is seen that reliability has been established for all constructs’ scales. Moreover, the validity of scales will be examined while testing the measurement part of the SEM. Table 1, all Alpha scores are >0.70, all constructs are thus considered reliable. Table 1: Research Instrument & Reliability Score Constructs Anticipated Level of Future Earning (ALOFE) Stakeholders’ Interest (SI) Patterns of Past Dividends (POPD) Uncertainty (UNCER) Corporate Social Responsibility (CSR) DividendPolicy (DP) Financial Performance (FP)

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

Items 4 5 6 5 6 4 5

Alpha Score .82 .78 .74 .80 .77 .72 .87

3. RESULT AND DISCUSSION 3.1 DESCRIPTIVE STATISTICS Table 2 shows respondentsâ€™ profile which includes age, experience, marital status, and gender. The response from the age group of 36-50 years was largely observed with a frequency of 144 (62%). Experience shows that majority of respondents (Frequency=164, Percent=71%) were from 5-10 years of managerial experience. Most respondents were married and in terms of gender classification, most were male. Table 2: Respondentsâ€™ Profile. Demographics Age (years) Experience (years) Marital Status Gender

Categories 30 to 35 36 to 50 50 and above 5 to 10 11 to 20 Single Married Male Female

Frequency 38 144 50 164 68 78 154 192 40

Percent 16 62 22 71 29 34 66 83 17

3.2 STRUCTURAL EQUATION MODELLING (SEM) This study has used a significant and comprehensive approach that reconciles to objectives and hypotheses of this study. This robust approach is Structural Equation Modelling (SEM), for a large sample size (N>200). This study has used the two-step CB-SEM approach (Covariance-based SEM). The covariance or measurement part (1st step) is examined to establish validities and hypotheses will be assessed through structural analysis (2 nd step) (Prabhu, 2007; Nachtigall, 2003). Confirmatory Factor Analysis (CFA) has been performed for validities. 3.2.1 CFA OUTCOMES Figure 2 demonstrates the results of the CFA (modified) model. This model shows factor loading >.50 and low intercorrelations (covariance) >.40 among latent constructs (Cua et al., 2001). CFA analysis confirms that chosen items for each construct intend to explain the same construct, and items being validated through convergent validity, where, AVE and CR of each construct fall under the recommended threshold. However, some items were removed and followed modification indices to improve the goodness of fit of the model. In this regard, predictive fit (chi-square), comparative fit (Comparative Fit Index (CFI), Tucker-Lewis Index (TLI)), and other fits such as Goodness of Fit Index (GFI), adjusted goodness of fit index (AGFI), and root mean square error of approximation (RMSEA) explained suitable model fitness. Moreover, it is seen that discriminant validity is also justified as criteria suggest that correlation (r 2) should not be more than AVE of each pair of latent constructs (Fornell & Larcker, 1981). Figure 2 shows very small intercorrelations among latent constructs, hence, discriminant validity confirms that each construct has sole-identity and not much covariance with other constructs, thus, discriminant validity was established (Keramati et al., 2010). Furthermore, the p-value of every item of a particular factor was observed below <.05 or .01 level of significance. Therefore, nomological validities were also proved.

*Corresponding author (Sarfaraz A. Bhutto). Email: sarfaraz_ahmed0333@yahoo. International Transaction Journal of

ALOFE= Anticipated level of future earnings, SI= Stakeholders’ Interest, POPD= Patterns of past of dividends, UNCER= Uncertainty, DP= Dividend Policy, FP= Financial Performance

Figure 2: CFA (Modified). Table 3: Convergent Validity (Fornell & Larcker, (1981)). Criteria If AVE score >.50 If CR >.70

ALOFE .783 .915 Proved

SI .725 .913 Proved

POPD .751 .937 Proved

UNCER .729 .931 Proved

CSR .783 .947 Proved

FP .748 .922 Proved

DP .703 .904 Proved

3.2.2 SEM OUTCOMES Figure 3 reveals the results of the structural model. Anticipated level of future earnings has a significant and positive effect on financial performance or it can be stated that a 1% change in anticipated level of future earnings can generate or 62% positive impact on financial performance, hence, H1 was retained. Further, the path coefficient for stakeholders’ interest and financial performance shows the significant and positive effect with (b=.48, p=.01), these results are consistent to retain H2. Patterns of past dividends have a significant and positive impact on financial performance (b=.39, p=<.05), thus, H3 was accepted. Uncertainty  Financial performance revealed (b=.57, p=.31), thus, H4 was failed to retain. However, Corporate social responsibility is significantly and positively influenced on financial performance by (b=.62, p=.01) respectively. Therefore, H5 has been retained. Meanwhile, Path-C was significantly observed (under .05 or =.01 level of significance) for all latent constructs (except uncertainty  financial performance) and fit indices shows apt

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

goodness of fit of the model (McAulay et al., 2006; Roh et al., 2005; Hair et al.,1998).

Figure 3: Structural Part (1st order) of SEM (Path-C Analysis).

Figure 4: Structural Part (1st order) of SEM (Path- A, Path-B, and Path-Câ€™). *Corresponding author (Sarfaraz A. Bhutto). Email: sarfaraz_ahmed0333@yahoo. International Transaction Journal of

Figure 4 shows the results for Path-A, Path-B, and Mediating effect (Path-C’). It was observed that the anticipated level of future earnings has a significant and positive effect on DP (b=.63, p<.05), hence, H6 was retained. Furthermore, path-A demonstrates stakeholders’ interest and dividend policy that shows the significant and positive effect with (b=.40, p=.01), these results are in line to retain H7. For H8, patterns of past dividends have a significant and positive impact on dividend policy (b=.53, p=.01). Uncertainty and corporate social responsibility are also significantly and positively influence dividend policy by (b=.57, p=.01) and (b=.76, p<.05) respectively. Therefore, H10 has been retained and H9 was failed to retain because it was proposed that uncertainty  dividend policy is negatively related. Meanwhile, Path-A was significantly observed (under .05 or =.01 level of significance) for all latent constructs along with suitable fit indices. Path-B, dividend policy  financial performance was significantly and positively observed, based on results (b=.44, p=.01) H11 was stand accepted. Now, moving ahead to determine the mediating effect of dividend policy on the relationship between the anticipated level of future earnings, stakeholders’ interest, patterns of past dividends, uncertainty, corporate social responsibility, and financial performance, Path-C’ was observed. Path, anticipated level of future earnings dividend policy  financial performance (C’) shows (b=.18, p=.301), previously, it was significantly observed, as dividend policy inducted as meditator the path anticipated level of future earnings  financial performance became insignificant and confirms that dividend policy mediates the relationship between the anticipated level of future earnings and financial performance (H12 was retained). In the same manner, stakeholders’ interest  dividend policy  financial performance (C’) revealed (b=.21, p=.410) which confirms H13 and stated as dividend policy mediates the relationship between stakeholders’ interest and financial performance. Moreover, a path like the pattern of past dividends  dividend policy  financial performance (C’) and uncertainty dividend policy  financial performance (C’) shows (b=.10, p=.210) and (b=.31, p=.010) which confirm H15. However, the mediating effect for H14 is not useful because it had not qualified or significantly observed among path-c and path-a as suggested by Barron & Kenney (1986). Lastly, it was observed that dividend policy does not mediate the relationship between corporate social responsibility and financial performance, the path outcomes for corporate social responsibility  dividend policy  financial performance (C’) revealed (b=.29, p=.021), it was observed that intervening emphasis of a dividend policy does not help to mediate the relationship of corporate social responsibility  financial performance and it also at significant (p=.021). Hence, H16 was failed to retain. Meanwhile, the results of the structural model were in line with the studies of Bae, Kang, and Wang (2011), Ittner and Larcker (2001), Chih et al. (2014), Niazi et al. (2011) and Freeman et al. (2004).

4. CONCLUSION The main objective of this study was to identify the behavioral perspective and mediating mechanism of dividend policy on the relationship between determinants of dividend policy (Anticipated Level of Future Earnings, Stakeholders’ Interest, Patterns of Past Dividend, Uncertainty, and Corporate Social Responsibility) and financial performance among CFOs of different financial and non-financial sectors such as Banking, Insurance, Telecommunication, Automobile, Cement, Fertilizer, Oil and Gas, Sugar, Textile, Tobacco, Pharmaceutical. The rationale behind observing this particular set of variables was to confirm the possible causes that solve issues regarding financial performance. In this connection, determinants of dividend policy worked as an independent variable

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

and dividend policy a mediating variable between its determinants and financial performance. The primary data was collected, and the survey method was used to collect responses from CFOs of Pakistani financial and non-financial firms. The collected data was analyzed through SEM statistical approach. The outcomes revealed that dividend policy mediates the relationship between its’ determinates (Anticipated Level of Future Earnings, Stakeholders’ Interest, Patterns of Past Dividend, Uncertainty, and Corporate Social Responsibility) and financial performance except for uncertainty and corporate social responsibility. The research is helpful for financial managers in formulating dividend policy and to have better financial performance. Moreover, this study is also essential for stakeholders associated with companies.

5. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

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Van Beurden, P., & GĂśssling, T. (2008).The worth of values-A literature review on the relation between corporate social and financial performance. Journal of Business Ethics, 82(2), 407. DOI: 10.1007/s10551-008-9894-x Walkup, B. (2016). The impact of uncertainty on payout policy. Managerial Finance, 42(11), 1054-1072. DOI: 10.1108/MF-09-2015-0237 S.A Bhutto is a PhD Scholar at the Institute of Commerce, Shah Abdul Latif University, Pakistan. He got his M.Phil in Corporate Finance from SALU Kahirpur, Pakistan. His researches are mainly on Corporate Finance, Investments, Financial Markets, Portfolios, Behavioral Finance, Econometrics, and some on HRM.

Dr. Hassan Jawad Soomro is a Professor at Institute of Commerce, Shah Abdul Latif University, Pakistan. He got his Ph.D. in Consumer Behaviour Marketing from SALU Kahirpur, Pakistan. His research focuses on Behavioral fields like customersâ€™ psychology and Behavioral Finance.

Dr. Saifullah Shaikh is an Assistant Professor at Institute of Commerce, Shah Abdul Latif University, Pakistan. He recently earned Ph.D. in HRM from SALU Kahirpur, Pakistan. His research focuses on Behavioral fields like Occupational Psychology.

Dr. Hussain Amar is a Lecturer at Govt. Islamia Arts & Commerce College, Sukkur. He got his PhD in HRM from SALU Khairpur, Pakistan. His core research interest is Behavioral Sciences.

Dr. Qamar Abbas Mangi works at Institute of Commerce, Faculty of Management Sciences, Shah Abdul Latif University, Pakistan. He completed his Ph.D. in HRM from SALU Kahirpur, Pakistan. His Key research interests are in Behavioral fields.

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13L

BISCUITS WITH VEGETABLE FAT FOR A GLUTEN-FREE DIET 1

Julia Ushakova , Margarita Domakhina , Gulsara Rysmukhambetova , 1 2 Nina Konik , Anastasia Marakova 1

Department of Food Technology, Saratov State Vavilov Agrarian University, 1, Theater Square, Saratov, 410012, RUSSIA. 2 Department of Project Management and Foreign Economic Activity in the Agro-Industrial Complex, Saratov State Vavilov Agrarian University, RUSSIA. ARTICLEINFO

A B S T RA C T

Article history: Received 07 May 2020 Received in revised form 24 June 2020 Accepted 03 July 2020 Available online 16 July 2020

This work studies the effect of a composite mixture of coconut, buckwheat, and corn-flour and coconut oil on the organoleptic and physicochemical parameters of the gluten-free biscuit. The optimal ratio of the selected ingredients was selected and the preparation technology developed for the developed gluten-free biscuit from the Keywords: composite mixtures of coconut, flaxseed, corn at 10:30:60; coconut, Biscuit ingredients; linseed, corn at 8:25:67; and coconut, buckwheat, cornmeal at 8:25:67. Gluten-free biscuits; Physical and chemical studies showed that for the developed Celiac disease, Diet food, sample, the solids content was 66.9%, the mass fraction of moisture Coconut oil; Celiac enteropathy; Therapeutic was 33.1%, 0.8% ash, 44.4% sugar, and 10.6% fat. The per developed product 100 g has nutritional and energy value nutrition; Biscuit composite mixture. 11.38g protein, 15.14g fat, 51.59g carbohydrates, energy 375.2 kcal, and the biscuit is enriched with macro- and microelements, such like iron, calcium, magnesium, vitamins B1 and E. These substances are necessary for people suffering from gluten intolerance due to metabolic disorders in the gastrointestinal tract in large quantities. Disciplinary: Food and Nutrition Sciences, Health Sciences. ÂŠ2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION Confectionery production is one of the leaders in the food industry. Although the range of confectionery products is very diverse, however, in most cases, consumers are healthy people. Although in recent years, more and more people suffer from various types of diseases, which leads to the restriction or prohibition of the consumption of confectionery products based on wheat flour, so the development of such products for dietary and specialized purposes is an urgent task. A large proportion of consumers with dietary restrictions are people suffering from intolerance to *Corresponding author (J.Ushakova). Email: ushakovaj1990@gmail.com. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13L http://TUENGR.COM/V11A/11A13L.pdf DOI: 10.14456/ITJEMAST.2020.258

cereal protein - gluten. At the same time, the most common and traditional raw materials are wheat, rye, barley, oats, which are just prohibited in a gluten-free diet. To solve this problem, manufacturers and scientists suggest searching for alternative raw materials, for example, flour from rice, corn, buckwheat, flax, pumpkin, coconut, etc. According to the information outlined in the National Technology Initiative (STI) of December 4, 2014, supported by the President of the Russian Federation V.V. Putin has proposed two innovative modern directions in areas related to human health and nutrition. First, HealthNet [1] aims to create a market for personalized medical services and medicines that provide growth and longevity, as well as obtaining new effective means of prevention and treatment of various diseases. The second direction, Foodnet’s [20] trend is the development of the production and sale of nutrients and final types of food products (personalized and general, based on traditional raw materials and its substitutes), as well as related solutions (for example, providing logistics and individual nutrition selection services). The national idea to address these initiatives is the creation by 2035 of smart services and products that will become competitive in the world market due to the best technological solutions for human food security. According to the forecasts of the Government of the Russian Federation, domestic companies should occupy significant shares of the world market and makeup from 5-15% depending on the segment [1]. Currently, in most developed countries, the development and production of gluten products are at a high level and widespread. At the same time, in Russia - this direction is at the initial stage. In most trading enterprises, food products with the gluten-free marking, which are produced abroad, are offered to potential consumers, which in turn affects the price. Of course, if these products would be produced in Russia, then they would be in demand and available to a wide range of consumers, including those with different income levels. Thus, domestic experts are faced with the urgent need to create a wide line of confectionery products from gluten-free types of flour, new technological solutions that provide high-quality, competitive products. The work [21] experimented on gluten-free flour mixes and fat powders to produce gluten-free biscuits and the products’ quality was observed. A study [22] tested enriched biscuit using gluten-free tiger nut to inspect nutritional value and sensory profile. An evaluation [23] was to observe the storage-associated changes in the fatty acid profile of oat-based gluten-free cookies. For the first time about the disease “Celiac disease” or “Gluten enteropathy” was described in 1888, and in 1951 it was proved that cereal products containing gluten are part of the products that cause enteropathy - celiac disease. In Russia, they became interested in celiac disease in the 90s. However, there are still whole regions in which screening of this disease is not carried out. It should be emphasized that celiac disease is not an allergic disease, but belongs to the group of diseases associated with food intolerance, and products due to enzyme deficiency [2]. According to statistics, the prevalence of the celiac disease in many countries of Europe and America is about 1% of the total population. At the same time, an increase in the diagnosis of the disease became possible due to the widespread use of immunological methods allowing epidemiological studies of the population and screening of risk groups [3]. It should be noted that as a result of screening studies, it was shown that most patients with celiac disease have a low-symptom or asymptomatic course of the disease. Besides, the results of screening studies have identified a wide range of other diseases associated with the consumption of gluten. In a separate group, patients with extraintestinal manifestations of

Julia Ushakova, Margarita Domakhina, Gulsara Rysmukhambetova, Nina Konik, Anastasia Marakova

celiac disease (herpetiform dermatitis, gluten ataxia) began to be assigned. Part of the patients having allergic reactions to gluten was determined. This work aims to develop a technology for biscuit cake mix with the addition of vegetable fat for a gluten-free diet.

2. MATERIALS AND METHODS The object of the study was a biscuit cake mix on coconut oil from a composite mixture of buckwheat, corn, and coconut flour. As a control sample was taken the recipe and technology of biscuit "Prague" No.7 [4]. Research method 1. Organoleptic studies of prototypes of gluten-free biscuits were carried out according to GOST 5897 - 90 [5]; 2. The determination of the mass fraction of moisture and solids was carried out according to GOST 5900 - 2014 [6]; 3. The determination of the mass fraction of fat was carried out according to GOST 10846-91 [7]; 4. The determination of the mass fraction of sugar was carried out following GOST 5903-89 [8]; 5. Nutrition and energy values were determined using data on the chemical composition of Russian food products [9]. Materials: corn flour "S. Pudov", Moscow. Manufacturer LLC "Khlebzernoprodukt, 347913" STO 535458590-018-2013; sugar - sand “Russian sugar” of OJSC “Valuikisahar” GOST 33222 2015 [10]; fresh chicken eggs C1, JSC Simonovskaya poultry farm GOST 31654 - 2012 [11]; coconut flour "econutrena" LLC "Helsi Market"; Buckwheat flour “Sorceress” of PJSC “Petersburg Mill Plant” TU 9197-023-00941903-2009 [12]; refined bleached deodorized coconut oil "Delicato" JSC "Nizhny Novgorod Oil and Fat Combine" GOST R ISO 22000 [13].

3. BISCUIT’S INGREDIENT PROPERTIES In the course of research on personalized gluten-free food products, they began to use a new type of unconventional raw material - coconut flour, which is obtained from coconut pulp, dried, and ground [14]. The chemical composition of this flour is also remarkable. It contains more than 40% dietary fiber, it is enriched with mineral elements (per 100 g) such as: potassium 356 mg, phosphorus 113 mg, magnesium 32 mg, calcium 14 mg, iron 2.4 mg, copper 0.4 mg, zinc 1.1 mg, selenium 10.1 mg; B vitamins (B1 0.06 mg, B2 0.1 mg, B5 0.8 mg), C 1.5 mg, E 0.44 mg, PP 0.6 mg [15]. The next component that we have used is more studied is cornmeal. It has a pleasant taste and yellowish color, as it was widely used in the nutrition of some peoples, its positive properties are better known, namely, it strengthens the immune system and also has a beneficial effect on metabolism and maintaining normal balance in the body [16]. Buckwheat flour is also a gluten raw material, but basically, cereals were traditionally used in the human diet. Although buckwheat flour is noted for the presence of eighteen essential amino acids with a rich mineral and vitamin composition - iron, calcium, potassium, phosphorus, copper, iodine, zinc, boron, fluorine, molybdenum, cobalt, with vitamins B1, B2, B9 (folic acid), PP, vitamin E [17]. Because the celiac disease has the character of comorbidity, that is, combined intolerance of other food ingredients, often cow's milk protein, the use of coconut is proposed as a substitute for *Corresponding author (J.Ushakova). Email: ushakovaj1990@gmail.com. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13L http://TUENGR.COM/V11A/11A13L.pdf DOI: 10.14456/ITJEMAST.2020.258

butter. Coconut oil is a vegetable fat obtained by hot or cold pressing of dried coconut pulp. Coconut oil, in its vitamin and mineral composition, is similar to breast milk and contains antioxidants and polyunsaturated fatty acids, which have beneficial effects on the skin, hair, nails, and the entire human body. The composition contains lauric acid 50%, myristic acid 20%, palmitic acid 9%, oleic acid 6%, caprylic acid 5%, capric acid 5%, stearic acid 3%, linoleic acid 1 %, caproic acid 0.5% [18].

4. RESULTS AND DISCUSSION During the study, the following changes were made to the control formulation: the complete replacement of wheat flour with a mixture of corn, buckwheat and coconut flour in different ratios, the replacement of butter with coconut oil, while reducing it by 20%, as well as the exclusion of cocoa powder (possibly the presence of hidden gluten). Prototypes are presented in Table 1. Table 1: Options developed gluten-free biscuits. Sample No. 1 2 3

The composition of the composite mixture coconut flour: linseed flour: corn-flour coconut flour: linseed flour: corn-flour coconut flour: buckwheat flour: corn-flour

The ratio of ingredients,% 10:30:60 8:25:67 8:25:67

As can be seen in Figure 1, the best organoleptic indicators are sample No. 3, which had a mild taste typical of a biscuit, has a slight aftertaste of corn and buckwheat flour, and a pleasant aroma. The recipes of the test samples are presented in Table 1. Defects of the test samples not selected by us include the presence of grains, friable consistency. Also, in samples with flax flour and cocoa powder, the smell of flax flour is too pronounced.

Figure 1: Organoleptic profile of the studied gluten-free biscuit samples. In the course of the research, it is necessary to reduce the amount of coconut oil by 20%, as compared to butter, they have different chemical composition, the specific gravity of fat, and melting point.

Julia Ushakova, Margarita Domakhina, Gulsara Rysmukhambetova, Nina Konik, Anastasia Marakova

Figure 1: Sample №1 of developed gluten-free biscuit.

Figure 2: Sample №2 of developed gluten-free biscuit.

Figure 3: Sample №3 of developed gluten-free biscuit. As can be seen from the data in Table 2, during the studies we noted an increase in the dry matter by 6.8%, a slight decrease in the mass fraction of sugar by 0.7%, and an increase in the mass fraction of fat by 1.1%. Table 2: Quality indicators developed biscuit Sample No.3 with a mixture of coconut, buckwheat, and corn-flour at a ratio of 8:25:67. Indicators Proteins, g Fats, g Carbohydrates, g Energy value, kcal Mass fraction of solids,% Mass fraction of sugar,% Mass fraction of fat,%

Control 11.6 14.4 45.6 358.7 60.1 ± 3.0 45.1±1.0 9.5±0.3

Sample No. 3 11.4 15.1 51.6 375.2 66.9±0.4 44.4±1.0 10.6±0.3

In the course of the study, we analyzed the fractional composition of wheat flour and the composite mixture we selected, which are presented in Table 3. According to the literature, it is known that gluten is the glutelin and prolamin fraction of cereal protein: wheat, rye, barley, oats, and *Corresponding author (J.Ushakova). Email: ushakovaj1990@gmail.com. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13L http://TUENGR.COM/V11A/11A13L.pdf DOI: 10.14456/ITJEMAST.2020.258

they are allergens. By the calculation method, we noted that the developed composite mixture is gluten-free since it contains glutelin and prolamin fractions in the amount of 16.2 mg/kg, which is acceptable for the gluten-free diet (no more than 20 mg/kg) [19]. Table 3: Composition of protein fractions of certain types of flour. Type of flour Wheat Corn Buckwheat Coconut A composite mixture of coconut, buckwheat, and corn flour

Mass fraction of protein fractions, % Albumin Globulins Glutelins Insoluble proteins Prolamins (gliadin) 5.2 12.6 28.2 8.7 35.6 8.1 5.9 80.0 21.7 42.6 12.3 1.1 1.1 0.7 0.9 3.1

4.2

16.1

0.1

Zein 5.9 -

Figure 2 presents a flow chart for the preparation of a gluten-free biscuit. Compared with the classical scheme for the preparation of oily biscuit, the developed sample has a baking time increased by 10 - 15 minutes, the temperature was 170-180°С, and in the control 205-225°С. During the kneading process, the yolks were beaten together with sugar in the test samples, while in the control sample 50% sugar was whipped together with the proteins and the remaining 50% together with the yolks. Coconut oil was added after whipping the yolks, and in the control sample, the butter was added immediately to the egg-sugar mass.

Figure 2: Technological schematic preparation of a developed gluten-free biscuit from a composite mixture.

Julia Ushakova, Margarita Domakhina, Gulsara Rysmukhambetova, Nina Konik, Anastasia Marakova

5. CONCLUSION From the total three biscuits composite mixtures, the formulation, and technology for the preparation of biscuit cake mix from a composite mixture of coconut, buckwheat, and corn flour with a ratio of 8:25:67 with the addition of coconut oil. Physical and chemical studies have shown that in the developed biscuit semi-finished product, the solids content was 66.9%, 0.8% ash, 44.4% sugar, fat 10.6%. The nutritional and energy value of the developed biscuit cake mix was calculated, which amounts to 11.38 g per fat product of protein, 15.14g of fat, 51.59g of carbohydrates, and 375.2 kcal of energy value. Thus, studies have shown that the use of non-traditional types of raw materials allows you to create gluten-free products with high-quality indicators, including organoleptic, structural-mechanical, and enriched in nutritional value.

6. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

7. REFERENCES [1] NTI. (2019). Health Net. National Technology Initiative. http://nti2035.ru/markets/healthnet Accessed May 2019. [2] Kutkina, M.N., Linich E.P. (2016). Catering to children and adolescents. Book. St. Petersburg. 117-118. [3] Michetich-Turk D. (2007). Epidemiology of celiac disease. Proceedings of the 2007 International Meeting on Celiac Disease, University Medical Center Maribor, 37-48. [4] Pavlov A.V. (2004). Collection of recipes for flour confectionery and bakery products, St. Petersburg: PROFI INFORM, 296p. [5] SAC. (1992). Methods for determining the organoleptic indicators of quality, size, net weight, and components. GOST 5897-90, State Agroindustrial Committee of the USSR, 12p. [6] SAC. (2016). Methods for determination of moisture and solids, Confectionery. GOST 5900, 2016. 18p. [7] Zelinsky G. S., et al. (1993). Grain and products of its processing. Method for determination of protein. GOST 10846-91, 12p. [8] SAC. (1991). Methods for the determination of sugar: GOST 5903-89, State Agroindustrial Committee of the USSR, 61. [9] Tutelian V.A. (2012). The chemical composition and calorie content of Russian food. Reference book. M. DeLi plus, 284p. [10] SAC. (2016). Interstate standard white sugar. GOST 33222-2015, State Agroindustrial Committee of the USSR, 32p. [11] SAC. (2014). Interstate standard for food eggs. GOST 31654 - 2012. State Agroindustrial Committee of the USSR, 17p. [12]

TU. (2010). Packaged cereal flour (rice, buckwheat). TU 9197-023-00941903-2009. 2p.

[13] SAC. (2008). Food Safety Management Systems. Requirements for organizations involved in the food chain. GOST R ISO 22000-2007. State Agroindustrial Committee of the USSR, 67p. *Corresponding author (J.Ushakova). Email: ushakovaj1990@gmail.com. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13L http://TUENGR.COM/V11A/11A13L.pdf DOI: 10.14456/ITJEMAST.2020.258

[14] HN. (2020). Coconut flour: beneficial properties and how to use it. http://happyandnatural.com/kokosovaya-muka-poleznye-svojstva-kak-ispolzovat Accessed January 2020. [15] OZ. (2016). The benefits of spicy coconut flour and its use for delicate delicacies. Kernels of life. https://orehi-zerna.ru/kokosovaya-muka-polza-primenenie Accessed May. 2019. [16] Artemova, E.N., Ushakova, S.G. (2010). Justification of the possibility of using cornmeal in the technology of custard cake. Scientific principles of food technology, 1:9-12. [17]

Xcook. (2020). Buckwheat flour. http://xcook.info/product/grechnevaja-muka.html.

[18]

Calorizator. (2020). Coconut oil. http://www.calorizator.ru/product/butter/coconut-oil.

[19] CU. (2012). On the safety of certain types of specialized food products, including dietary therapeutic and preventive dietetic nutrition. Technical regulation of the Customs Union No. ТР ТС 027/2012. http://www.consultant.ru/document/cons_doc_LAW_131290 Accessed June 2019. [20] NTI. (2019). Health Net. National Technology Initiative. http://nti2035.ru/markets/foodnet Accessed May 2019. [21] Schober, T.J., O'brien, C.M., McCarthy, D., Darnedde, A., & Arendt, E.K. (2003). Influence of gluten-free flour mixes and fat powders on the quality of gluten-free biscuits. European Food Research and Technology, 216(5), 369-376. [22] Ahmed, Z. S., Abozed, S. S., & Negm, M. S. (2014). Nutritional value and sensory profile of gluten-free tiger nut enriched biscuit. World Journal of Dairy & Food Sciences, 9(2), 127-134. [23] Culetu, A., et al. (2020). Evaluation of the storage-associated changes in the fatty acid profile of oat-based gluten-free cookies prepared with different fats. Food Sci Biotechnol, 29, 759-767. Julia Ushakova is an Assistant Professor at the Department of Food Technology. Her research interests are dietary and functional nutrition

Margarita Domakhina is a student at the Department of Food Technology. Her research interests encompass: dietary and functional nutrition

Gulsara Rysmukhambetova is an Associate Professor, Department of Food Technology. She is a Candidate of Biological Sciences. Her research interests pertain to Nutrients of microbial origin.

Nina Konik is an Associate Professor, Department of Food Technology, Doctor of Agricultural Sciences. Her research interests are Technological management of livestock production quality; Improvement of technological regulators of agricultural production quality

Anastasia Marakova is an Associate Professor of the Department of Project Management and Foreign Economic Activity in the Agro-Industrial Complex. She holds a Ph.D. Her research involves Formation and evaluation of consumer characteristics of lamb and products based on it, evaluation of the economic efficiency of rearing young sheep of different genotypes

Julia Ushakova, Margarita Domakhina, Gulsara Rysmukhambetova, Nina Konik, Anastasia Marakova

ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13M

ECONOMIC AND BIOENERGY ASSESSMENT OF CROP CULTIVATION TECHNOLOGIES Vasiliy Tkachenko 1 2

, Elena Popova , Natalia Tkachenko

Department of Computer Technologies and Systems, Kuban State Agrarian University, RUSSIA. Department of Information Systems, Kuban State Agrarian University, RUSSIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 20 April 2020 Received in revised form 01 July 2020 Accepted 14 July 2020 Available online 18 July 2020

To determine the energy efficiency of crop production, bioenergy assessment of technological processes involves a comparative analysis of the energy intensity of technologies in producing agricultural products. The implementation of energy consumptions is evaluated and assessed using the cost of direct and indirect energy per unit of consumed objects and means of labor. To consider the amount of energy per unit mass of production, total energy costs include the costs of electrical, thermal energy, and fuel consumed in all stages of the process. This work analyzes and evaluation of the economic efficiency of crop cultivation technologies. As a case study of applying the technology to winter wheat, corn for grain, sunflower, and silage corn of a private company, it finds significant improvements in productivity for all crop types with enhanced energy efficiency. The automated economic crop information management system is built to include all relevant cost and energy factors.

Keywords: Bioenergy indicators; Integrated automation systems; Automated crop management; Bioenergy assessment of crop cultivation technology; Agriculture energy cost reduction; Agriculture production cost-saving.

Disciplinary: Green and Sustainable Agriculture and Crop Farming, Agriculture and Energy Economics. ÂŠ2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION The problems of crop management and support for managerial decision-making are relevant at the moment. Despite the number of studies on crop management in an agro-industrial enterprise, the use of mathematical models, methods, and means of information support for the analysis and evaluation of the economic efficiency of technological processes in crop production remain poorly understood. The relevance of these problems determined the choice of topic and the setting of goals and objectives of the study. Maslov et al. (2020) present the improvement of cultivating field crops by combining operations *Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13M http://TUENGR.COM/V11A/11A13M.pdf DOI: 10.14456/ITJEMAST.2020.259

on tillage, sowing, fertilizing, harvesting, and technically based on the optimization of machines, energy, multifunctional technology. The research improved technical and economic efficiency, such as labor productivity, the energy intensity of processes and the cost of investing in the mechanization of technological processes. Raising the level of agricultural development in Russia requires finding ways and means to increase the efficiency of agricultural production. The rational use of the existing technical potential, the development of a regional investment strategy are possible economic levers for the stable growth of agricultural production. Under conditions of the market, the main criterion for the economic efficiency of agricultural production is to obtain the maximum possible profit per unit area by increasing production at the lowest cost of living labor based on the rational use of material and labor resources, as well as the profitability of product sales. Crop management is a complex dynamic process to adopt the selection, evaluation, and optimal use of limited production resources. For example, when cultivating winter wheat, scientists from the Kuban State Agrarian University developed and experimentally tested more than 48 alternative technologies for winter wheat cultivation in experimental plots and production conditions. Variants of these alternative technologies differ from each other in the level of application of fertilizers, plant protection products, the multiplicity of tillage, and other resources. These are essentially energy and resource-saving technologies for cultivating winter wheat in a crop rotation with various predecessors, providing stable crops, saving production resources, and also ensuring the conservation of black soil fertility (Burda et al., 2016). The enlarged alternative technologies are recommended for four groups of agricultural enterprises depending on their economic potential: economically strong, economically medium, economically weak farms and nature protection zones. When choosing the technology of crop cultivation, the agronomist has at his disposal a database of more than one hundred different alternative technologies for each of the crops. The decision-maker (DM) has the task, according to certain criteria, to select the technology of cultivating the crop that is most suitable for the given economy, climate zone (Baranovskaya et al., 2016). Table 1 shows a fragment from a set of economic indicators for assessing and selecting technology for the cultivation of winter wheat. Table 1: Economic indicators of winter wheat cultivation technology in prices for 2019 (Authorsâ€™ result). Indicator Grain productivity (kg/ha) Costs per 1 ha: person-hr Fuel, kg The number of costs (rubles) total direct Fertilizers means of protection

Winter wheat cultivation technologies 0113 1113 0330 2222 3132 50 53 65 70 76 9.903 82.49

10.12 85.82

17.21 98.43

15.26 91.01

16.89 99.85

8041.36 1064.20 994.80

8094.86 1064.20 994.80

18512.58 7844.80 4598.36

10724.32 4024.40 2005.60

14479.26 2064.20 5598.30

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

Next, the process of compiling and calculating technological maps for the cultivation of agricultural crops, followed by their assessment and selection. For these purposes, a set of models and methods for the economic assessment of technologies has been developed. At the first stage of the selection of the technological technique, the method of binary decision matrices is used, which makes it possible to select from the database a set of six to eight technologies that most satisfy the restrictions set by the agronomist. In recent years, the problem of fuel and energy supply for agricultural production has become especially acute. This necessitates the rational consumption of electricity and fuel. The use of the subsystem of bioenergy assessment of technological processes in crop production, which allows you to choose the most effective energy and resource-saving technologies, can contribute to solving this problem in agriculture (Petrik et al., 2016). Bioenergy assessment of technological processes involves a comparative analysis of the energy intensity of agricultural technology, determining the energy efficiency of production. At the same time, the energy intensity of the technological process is understood as the energy consumption for its implementation. Energy efficiency is characterized by an indicator that establishes the ratio between the energy contained in agricultural products and the energy spent on the production of this quantity of products. The total energy costs per 1 hectare of the sown area, that technological process is calculated taking into account the energy costs expended using: fuel; fertilizers and pesticides; seed; living labor; agricultural machinery, machinery, and implements; electricity; production facilities for storing products, seeds, and other material resources. Energy costs for these types of resources are calculated based on the datasheet of the production process and energy equivalents. The accuracy of the results of bioenergy assessment of crop cultivation technologies largely depends on the completeness of the accounting of technological operations, and bioenergy efficiency on the fulfillment of agrotechnical requirements, the composition of units, production, and fuel consumption per unit of work, organizational, soil-climatic and other factors (Tkachenko et al., 2016). A complete list of technological operations and agricultural requirements (depth of tillage, frequency of operations, seed sowing rate and a dose of fertilizer for the content of nutrients and active substance, a dose of herbicides and pesticides by their types, headland distance of transportation of crops, fertilizers, etc.); the composition of the unit and the number of trailed implements, the capacity of the unit for 1 hour of working time or the unit time per 1 ha; the number of staff: tractor drivers, drivers, auxiliary workers and labor costs per 1 ha for each category of these contractors; consumption rate and actual fuel consumption per 1 ha, depending on agricultural requirements, Table 2. Having this information, they begin to calculate the energy expenditure per 1 ha of agricultural cultivation area. To do this, use energy equivalents and data on the costs of material and labor resources per 1 hour and 1 ha. Using this information, the energy expended is calculated per 1 hectare of agricultural crop cultivation. To do this, use energy equivalents and data on the costs of material and labor resources *Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

per 1 hour and 1 ha. Table 1 shows an example of bioenergy performance indicators for winter wheat cultivation technologies. Table 2: Bioenergy efficiency of winter wheat cultivation technologies (authorsâ€™ work). Indicator Grain productivity, kg/ha Energy output from 1 ha, GJ, total Total energy consumption per 1 ha, GJ Energy increment, GJ The ratio of received and expended energy Net efficiency ratio Labor costs, person-hr - on 1 ha - per 1 centner of grain Liquid fuel consumption (kg) - on 1 ha - per 1 centner of grain - 1 GJ of energy expended - 1 kg of liquid fuel - 1 person-hr

1122 58 181.65 28.31 153.44 6.41 5.41

Technology code 1132 0232 66 67 206.92 162.04 29.33 38.15 177.59 123.89 7.05 4.24 6.05 3.24

12.71 0.21

13.73 0.2

14.81 0.22

40.71 0.7 2.04 1.42 4.56

46.43 0.7 2.25 1.42 4.8

47.34 0.7 1.75 1.41 4.52

With such a time-consuming process, such as forming a technological map and conducting an economic and bioenergy analysis of technological processes, one of the specialists (the so-called human factor) is likely to make mistakes. That is why it became necessary to automate such labor-intensive processes, and this problem must be solved within the framework of creating an enterprise management information system as a whole (Vasilko et al., 2016). Based on the analysis of the subject area and the bioenergy technology assessment methodology, a conceptual model of information flows of the crop production management process was developed, based on which an information subsystem of the economic and bioenergy assessment of technological processes of crop production of agricultural enterprises using the methods of economic and mathematical modeling will be designed. Therefore, the development and implementation of the crop management information system and the automated assessment of technological maps by the bioenergy method will allow agricultural enterprises to promptly, in a short time, make decisions on choosing the most energy and resource-saving technology for cultivating crops, save production costs of one or another type of agricultural product, and increase production profitability products will help the agricultural organization become more competitive in the world like agricultural products.

2. MATERIALS AND METHOD Bioenergy assessment of technological processes involves a comparative analysis of the energy intensity of technologies, agricultural products, determining the energy efficiency of production. At the same time, the energy intensity of the technological process is understood as the energy consumption for its implementation. The energy intensity of a product is the expended energy to produce a unit mass of agricultural products. The energy equivalent is the cost of direct and indirect energy per unit of consumed objects and means of labor. The energy supply of agricultural products the amount of energy per unit mass of production. Total energy costs or total energy costs are the

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

costs of electrical, thermal energy, and fuel consumed in the process. Indirect energy costs are energy costs for objects and means of labor, through which the production process is carried out. The energy intensity of mechanization means is the energy consumption for the manufacture and repair of agricultural machinery, machines, and implements. The energy intensity of labor costs is the energy costs of performers of technological processes of production. Energy efficiency is characterized by an indicator that establishes the ratio between the energy contained in agricultural products and the energy spent on the production of this quantity of products. This indicator is calculated by đ?‘…đ?‘… =

đ?‘ƒđ?‘ƒ đ??¸đ??¸

(1),

where đ?‘…đ?‘… is the energy efficiency of the technology; đ?‘ƒđ?‘ƒ is the energy contained in the final agricultural product, MJ; đ??¸đ??¸ - energy spent on obtaining products, MJ.

The energy contained in the final agricultural product is determined by đ?‘ƒđ?‘ƒ = đ?›źđ?›ź Ă— đ?›žđ?›ž

(2)

where đ?›źđ?›ź is the energy equivalent of the main product, MJ/c; đ?›žđ?›ž - crop productivity, kg/ha.

The total energy costs for the entire production technology are đ??¸đ??¸ = âˆ‘đ?‘›đ?‘›1 đ??¸đ??¸đ?‘–đ?‘–

(3)

where đ??¸đ??¸đ?‘–đ?‘– is total energy costs per 1 ha of agricultural crop area of the đ?‘–đ?‘–-th technological process, MJ; đ?‘›đ?‘› is the number of technological operations.

The total energy costs per 1 hectare of the sown area - that technological process is calculated taking into account the energy costs expended using: fuel; fertilizers and pesticides; seed; living labor; agricultural machinery, machinery, and implements; electricity; production facilities for storing products, seeds, and other material resources.

Energy costs for these types of resources are calculated based on the datasheet of the production process and energy equivalents. đ??¸đ??¸đ?‘–đ?‘– = (đ?‘†đ?‘†đ?‘–đ?‘– Ă— đ??žđ??žđ?‘ đ?‘ ) + (đ?‘?đ?‘?đ?‘–đ?‘– Ă— đ??žđ??žđ?‘§đ?‘§ ) + (đ?‘‡đ?‘‡đ?‘–đ?‘– Ă— đ??žđ??žđ?‘Ąđ?‘Ą ) + ďż˝đ??šđ??šđ?‘–đ?‘– Ă— đ??žđ??žđ?‘“đ?‘“ ďż˝

where đ?‘†đ?‘†đ?‘–đ?‘– is the amount of planting material per 1 ha (kg/ha); đ??žđ??žđ?‘ đ?‘ - energy intensity factor of planting material; đ?‘?đ?‘?đ?‘–đ?‘– - the amount of plant protection products, fertilizers per 1 ha (kg/ha) or (l/ha); đ??žđ??žđ?‘§đ?‘§ - energy intensity coefficient of plant protection products, fertilizers; đ?‘‡đ?‘‡đ?‘–đ?‘– - the amount of fuel and lubricants consumed per 1 ha (kg/ha) or (kW/ha); đ??žđ??žđ?‘Ąđ?‘Ą - the coefficient of energy consumption of fuels and lubricants and electricity; đ??šđ??šđ?‘–đ?‘– - the number of man-hours of staff per 1 ha; đ??žđ??žđ?‘“đ?‘“ - the energy intensity coefficient of farmworkers.

*Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

(4)

The accuracy of the results of bioenergy assessment of crop cultivation technologies largely depends on the completeness of the accounting of technological operations, and bioenergy efficiency on the fulfillment of agrotechnical requirements, the composition of units, production, and fuel consumption per unit of work, organizational, soil-climatic and other factors. The experimental conditions should be approximately the same so that the results of the assessment are comparable. A complete list of technological operations and agricultural requirements (depth of tillage, frequency of operations, seed sowing rate and a dose of fertilizer for the content of nutrients and active substance, a dose of herbicides and pesticides by their types, headland distance of transportation of crops, fertilizers, etc.); the composition of the unit and the number of trailed implements, the capacity of the unit for 1 hour of working time or the unit time per 1 ha; the number of staff: tractor drivers, drivers, auxiliary workers and labor costs per 1 ha for each category of these contractors; consumption rate and actual fuel consumption per 1 ha, depending on agricultural requirements. Having this information, they begin to calculate the energy expenditure per 1 ha of agricultural cultivation area. To do this, use energy equivalents and data on the costs of material and labor resources per 1 hour and 1 ha.

3. RESULT AND DISCUSSION The economic information management system for the cultivation of field crops is informationally and organizationally connected with the agricultural enterprise management system, with other subsystems and functional tasks.

Figure 1: The model of information flows of crop management processes (authorsâ€™ work).

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

The developed automated information system is based on eight mathematical models and management optimization methods, which includes the following modules: 1) 2) 3) 4) 5)

The subsystem of crop rotation optimization Information retrieval subsystem Module for compiling and calculating technological maps Decision Support Subsystem An electronic map of the history of crop rotation fields

The organization and functional structure of the developed crop management system can be represented in the form of a functional diagram and data flow diagrams. With such a time-consuming process, such as forming a technological map and conducting an economic and bioenergy analysis of technological processes, one of the specialists (the so-called human factor) is likely to make mistakes. That is why the need arose to automate such labor-intensive processes, and this problem must be solved within the framework of creating an integrated information management system and decision support in crop production. Based on the analysis of the subject area and the bioenergy technology assessment methodology, a conceptual model of information flows of the crop management process was developed (Figure 1). Based on this model was developing an information subsystem for the economic and bioenergy assessment of technological processes of crop production of agricultural enterprises using the methods of financial mathematical modeling. Using this system was assessment bioenergy efficiency of winter wheat cultivation technologies for economically weak farms (Table 3). Table 3: Bioenergy efficiency of winter wheat cultivation technologies for economically weak farms Indicator Grain productivity, kg/ha Energy output from 1 ha, GJ, total Total energy consumption per 1 ha, GJ Energy increment, GJ The ratio of received and expended energy Net efficiency ratio Labor costs, person-hr - on 1 ha - per 1 center of grain Liquid fuel consumption, kg - on 1 ha - per 1 center of grain The output of the main products based on - 1 GJ of energy expended - 1 kg of liquid fuel - 1 person-hr

Types of technology for economically weak farms 0000 0002 0102 0122 0132 2032 22 31 44 51 55 54 66.39 96.37 137.43 159.54 170.63 169.02 12.78 14.44 27.18 27.88 28.76 17.35 53.61 81.93 110.25 131.66 141.87 151.67 5.19 6.67 5.05 5.72 5.93 9.74 4.19 5.67 4.05 4.72 4.93 8.74 6.483 0.29

8.369 0.26

11.05 0.25

10.849 0.21

13.253 0.24

11.593 0.21

15.586 0.7

26.923 0.86

39.762 0.9

43.352 0.85

47.762 0.86

38.122 0.7

1.72 1.41 3.39

2.14 1.15 3.7

1.61 1.1 3.98

1.82 1.17 4.7

1.91 1.15 4.15

3.11 1.41 4.65

The analysis shows that the most energy-intensive technology is 0132, in which the total energy consumption per 1 ha with a yield of 55 kg/ha is 28.76 GJ. In the structure of energy costs, the largest share has been spending on fertilizers 37.06%, seeds 29.9%, fuel 13.2%. The least energy-intensive technology is 0000, in which the total energy consumption per 1 ha with a yield of 22 kg/ha is only 12.78 GJ. *Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

We propose to pay special attention to technology 2032, which, at a relatively low cost of total energy 17.35 GJ, provides a yield of 54 kg/ha. In its structure of energy costs, the largest share was spending on seeds 49.57%, liquid fuel 17.47%. The economic effect, in this case, is achieved through the use of the required number of new plant protection products.

3.1 TECHNOLOGY APPLICATION TO THE PRIVATE COMPANY "FOOTHILLS OF THE CAUCASUS" Noteworthy is the experience of introducing zero energy and resource-saving anti-erosion technology in the PC "Foothills of the Caucasus" in the Seversky district of the Krasnodar Territory, where crops have been sown for 11 years using surface tillage. The essence of this technology is the complete or partial cessation of mechanical tillage, which can significantly save fuels and lubricants, spare parts, and, in general, sharply reduce the cost of cultivating field crops. Since 2017, crop rotation on the farm has been adapting by the agrochemical service to the conditions of minimizing tillage (Table 4). Table 4: Yield dynamics of the main field crops in the farm "Foothills of the Caucasus" in comparison with the average for the Seversky district of the Krasnodar Territory Crop types

Winter wheat Corn for grain Sunflower Silage Corn

2017 г Average Productivit productivit y, kg/ha by y, kg/ha in farm the district 22.3 22.6 19.3 26.6 0.4 81 147

2018г Average Productivity, productivity, kg/ha by kg/ha in the farm district 23.3 31.6 30.7 32.9 12.9 17.8 98.0 126

2019 г Average Productivity, productivity, kg/ha by kg/ha in the farm district 26.5 39.4 32.9 39.1 9.0 12.4 104.3 210

Despite the rejection of a significant part of the mechanical tillage, the productivity of the main field crops remains stable and tends to increase (Table 4). These measures made it possible to practically switch to zero technology, that is, to exclude all types of mechanical tillage except sowing. Currently, with rising prices for energy, fertilizers, spare parts for domestic and imported agricultural machinery, the economic efficiency of the zero-technology used in the economy has sharply increased. The use of resource-saving technologies in the KPS "Foothills of the Caucasus" allowed: - reduce diesel consumption by 35-40%; - 25-50% (depending on the cultivated crop) in comparison with traditional techniques to reduce costs in the production of agricultural products; - significantly reduce the number of agricultural machinery; - increase soil fertility - the content of humus increased by 30-40% at a depth of 0-15 cm.

Zero and minimal tillage methods are alternatives to conventional tillage methods. Their importance will inevitably increase in the future, due to the need to improve soil fertility and the ecological situation due to the reduction of the technogenic load on arable land. For a group of economically medium farms, it is possible to recommend technology 1132, when fulfilling which, the total energy consumption per 1 ha is 29.33 GJ, with a yield of 66 c / ha. The

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

largest share in the structure of energy costs is spent on fertilizers 36.33%, on seeds 29.32%, liquid fuel 18.48%, electricity 12.58% (Table 5). Table 5: Bioenergy efficiency of winter wheat cultivation technologies for economically medium-sized farms Indicator Grain productivity, kg/ha Energy output from 1 ha, GJ, total Total energy consumption per 1 ha, GJ Energy increment, GJ The ratio of received and expended energy Net efficiency ratio Labor costs, people - hr - on 1 ha - per 1 center of grain Liquid fuel consumption, kg - on 1 ha - per 1 center of grain The output of the main products based on - 1 GJ of energy expended - 1 kg of liquid fuel - One person â€“ hr

Types of technologies for economically medium-sized farms 1122 1132 0232 2132 58 66 67 73 181.65 192.04 206.62 229.03 28.31 29.33 38.15 33.4 153.44 177.59 123.89 195.63 6.41 7.05 4.24 6.85 5.41 6.05 3.24 5.85 12.7 0.21

13.732 0.2

14.808 0.22

17.416 0.23

40.712 0.7

46.432 0.7

47.34 0.7

67.812 0.92

2.04 1.42 4.56

2.25 1.42 4.8

1.75 1.41 4.52

2.18 1.07 4.19

The most energy-intensive technology is 0232, the total energy consumption per 1 ha is 38.15%. The implementation of this technology provides for complete chemical protection of plants with herbicides (in the structure of energy costs 5.17%), fertilizers for the main treatment N70P90K60 in top dressing in early spring, N70 is added to tillering of winter wheat, N30 added to the tillering. Using Heavy Disk Harrow (HDH) machinery, the methods of surface and shallow soil cultivation include peeling, cultivation, hilling, harrowing, rolling, trailing, malanie, and others. With HDH, the soil cultivation is of 8-10 cm depth. The largest share in the cost structure is spent on fertilizers 49.6%, seeds 22.54%, liquid fuel 9.87%, plant protection products 4.53% (Table 4). Table 4: Bioenergy efficiency of winter wheat cultivation technologies for economically stable farms Indicator Grain productivity, kg/ha Energy output from 1 ha, GJ, total Total energy consumption per 1 ha, GJ The increment of energy., GJ The ratio of received and expended energy Net efficiency ratio Labor costs, people-hr - on 1 ha - per 1 center of grain Liquid fuel consumption, kg - on 1 ha - per 1 center of grain The output of the main products based on - 1 GJ of energy expended - 1 kg of liquid fuel - One person - h

Types of technologies for financially stable farms 2132 3132 2232 1332 2222 0330 73 76 83 76 70 65 229.03 238.51 260.62 238.5 218.01 202.21 29.76 32.14 41.56 42.13 39.13 57.08 199.27 206.37 219.06 196.4 178.88 145.13 7.69 7.42 6.27 5.66 5.57 3.54 6.69 6.42 5.27 4.66 4.57 2.54 14.209 0.19

16.894 0.22

20.68 0.24

19.44 0.25

15.256 0.21

17.208 0.26

47.862 0.65

62.556 0.82

65.7 0.79

67.83 0.89

56.475 0.8

66.255 1.01

2.45 1.52 5.13

2.36 1.21 4.49

1.99 1.26 4.01

1.8 1.12 3.9

1.78 1.23 4.58

1.13 0.98 3.77

*Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

For this group of farms, based on bioenergy assessment, we can recommend technology 2132, in which the total energy consumption per 1 ha is 29.76 GJ, with a yield of 73 kg/ha. The economic efficiency of this technology has been achieving by providing an increased level of soil fertility, the humus content of 3.2-3.3% in the arable layer. The fertilizer system is presented by N35P45K30 for the primary tillage, in fertilizing in early spring N35 and N30 at heading. Crops had entirely protected from weeds with the help of herbicides. Normally, an HDH machine is run in 2-3 tracks against the background of plowing under the predecessor of winter wheat - sunflower. It is easy to notice that a decrease in the level of technology intensity accompanied by structural changes in the total energy - the proportion of mineral fertilizers decreases, but the balance of power spent on seeds, fuel, machinery, and equipment increases. Also, from the calculation data, it is seen that with an increase in the energy intensity of the technology, the energy efficiency coefficient of wheat production decreases. Along with a decrease in bioenergy efficiency, the efficiency of resource use had reduced. The software product, including the module for analysis, assessment, and selection of effective crop cultivation technology, by bioenergy and environmental indicators, will be useful to agronomists of small agricultural enterprises. It will also become indispensable for specialists in sizeable agrarian production. It is an essential tool for solving tasks on the restoration of soil fertility and the reduction of technogenic load. Therefore, the development and implementation of the crop management information system and the automated assessment of technological maps by the bioenergy method will allow agricultural enterprises to promptly, in a short time, make decisions on choosing the most energy and resource-saving technology for cultivating crops, save production costs of one or another type of agricultural product, and increase production profitability products will help the agricultural organization become more competitive in the world like agricultural products.

4. CONCLUSION The studies showed that the lack of objective and timely information at all stages of crop production, and, as a result, the suboptimal choice of crop cultivation technology, leads to the fact that the cost of labor and material resources increase significantly, the company loses profit and sometimes incurs losses. Therefore, the development of mathematical models for the analysis and evaluation of the economic efficiency of crop cultivation technologies, and the introduction of a decision support system based on these models in production management processes, has become very relevant. Also, the methodological possibility and expediency of using information technologies and mathematical models and methods for analyzing and evaluating the economic efficiency of technological processes in crop production were identified. It should be especially noted that the developed software package is based on models and techniques that take into account the specifics of the Kuban agribusiness. The software product, including the module for analysis, assessment, and selection of effective crop cultivation technology for economic, bioenergy, and environmental indicators, will be useful for small agricultural enterprises, and will also become indispensable for large agricultural enterprises.

5. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding authors

S.A.Bhutto, H.J.Soomro, S.Shaikh, H.Amar, Q.A. Mangi

6. REFERENCES Baranovskaya, T.P., Loiko, V.I., Vostroknutov, A.E., Lutsenko, Y.V., Burda, A.G. (2016). Developing a business model and a strategy map for objectives in the enterprise architecture of an agro-industrial corporation. International journal of applied business and economic research, 14(9). 6015-6037. Burda, A.G., Frantsisko, O.Y., Baranovskaya, T.P., Trubilin, A.I., Loiko, V.I. (2016). Grounding of the combination parameters of the agricultural and processing branches of the agricultural enterprises by the operations research method. Journal of applied economic sciences, 11(6), 1209-1224.

Maslov, G., Rinas, N., Yudina, E., Malashikhin, N. (2020). Technological and Technical Improvement of Crop Cultivation Processes. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(8), 11A8G, 1-13. DOI: 10.14456/ITJEMAST.2020.148. Petrik, G.F., Vasilko, V.P., Velikanova, L.O., Siso, A.V. (2016). Productivity of maize per grain in dependence to agricultural practices of cultivating in Krasnodar krai. Advances in agricultural and biological science, 2(6). 5-17. Tkachenko, V.V., Lukyanenko, T.V., & Shadrina, Z.A. (2019). A Set of Economic and Mathematical Models for Assessment of Agricultural Crop Cultivation Technologies. International Journal of Recent Technology and Engineering, 8(2), 3829-3833. Vasilko, V.P., Garkusha, S.V., Naidenov, A.S., Neshchadim, N.N. & Kravtsov, A.M. (2017), Status and optimization of arable land fertility in low-lying kettle cultivated lands of the central zone of the Krasnodar territory. Journal of Microbiology, Biotechnology and Environmental Science, 19(1), 66-72. Vasiliy Tkachenko is Associate Professor, Department of Computer Technology and Systems. He is a Candidate of Economic Sciences. His research interests are Stream and Investment-resource Models and Agricultural Management Methods

Professor Dr.Elena Popova is with Department of Information Systems, Kuban State Agrarian University, RUSSIA. She holds a Doctor of Economics. Her research interests are the Development of Economic and Mathematical Apparatus and Integrated Techniques based on the Optimization and Adaptation of Existing Methods, Models, Techniques and Software Complexes.

Natalya Tkachenko is a graduate student, Department of Computer Technology and Systems. Her research interests include Software Modules for the Analysis, Assessment, and Selection of Effective Crop Cultivation Technology for Economic, Bioenergy, and Environmental Indicators.

*Corresponding author (V.Tkachenko). Tel: +7-918-8834566. Email: segwan@rambler.ru. International Transaction Journal of

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13N

DEMAND-SIDE RENEWABLE PORTFOLIO STANDARD: A CASE OF THAILAND 1

Suntaree Chaowiang and Nopbhorn Leeprechanon

Department of Electrical and Computer Engineering, Thammasat School of Engineering, Thammasat University, Rangsit, Pathumtani, 12120, THAILAND.

ARTICLEINFO

A B S T RA C T

Article history: Received 24 March 2020 Received in revised form 19 June 2020 Accepted 10 July 2020 Available online 18 July 2020

The electricity and heat generation sector have the highest proportion of greenhouse gas emission that comes from the combustion of fossil fuels. An increase in electricity production obtained from renewable energy resources is a key factor for a decrease in carbon emission. This paper introduces a new methodology for the Demand-Side Renewable Portfolio Standard (D-RPS) that focuses directly on electric power consumers. An effective implementation process is described for building owners to follow the novel D-RPS policy, which includes three stages - (i) numerical calculations of D-RPS value, (ii) assessment of target achievement, and (iii) corrective action to achieve the target. D-RPS can be applied for all types of buildings calculated by using data from monthly electricity bill measured in Kilowatt-Hour (kWh). The results show that D-RPS values of three different residential test-buildings are 332.7kWh, 587.35 kWh, and 694.05 kWh respectively. This shows the variation of D-RPS values based on the monthly electricity usage of each household. Residential building #1 could generate electricity upon the proposed criteria on a monthly basis. Meanwhile, residential buildings #2 and #3, applying the Time of Use (TOU) meter types have high electricity consumption and could not meet the proposed criteria in some months. As a result, these households must follow the D-RPS to meet the criteria. The simulation results illustrate that after implementing the D-RPS, the CO2 emission caused by electricity consumption is reduced significantly in residential building #1 up to 164.35 kg-CO2, residential building #2 up to 290.15 kg-CO2, and residential building #3 at 342.86 kg-CO2. It is envisaged that applying D-RPS policy in different buildings could potentially eliminate the carbon dioxide emission from traditional power consumption.

Keywords: Renewable portfolio standard (RPS); Electricity consumption; Demand-side renewable portfolio standard (D-RPS); Energy policy; Solar rooftop; Building sector; D-RPS policy; Time of Use (TOU) electric metering.

Disciplinary: Renewable Energy Policy, Sustainable energy, Environmental Engineering, Sustainability, and Carbon Management. ©2020 INT TRANS J ENG MANAG SCI TECH. *Corresponding author (N.Leeprechanon). Tel: +66-25643001 Ext 3272 Email: nopbhorn@engr.tu.ac.th ©2020 International

Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13N http://TUENGR.COM/V11A/11A13N.pdf DOI: 10.14456/ITJEMAST.2020.260

1 INTRODUCTION Electricity demand around the world has been increasing continuously. This causes the global warming problem due to the greenhouse effect. Further to the report by IEA in 2018, power demand has been increased since 2017 at 4 percent with different reasons including air conditioner usage in summer and heater usage in winter, and loads of demand for electricity from the industry, households, and different buildings. Most electricity is produced from coal and natural gas that causes increased Carbon (CO2) emission at 2.5 percent in the power generation section. Since 2010, 2/3 of CO2 emissions around the world have increased and come from fossil fuel production (IEA, 2018a; 2018b). Different countries have developed a power sourcing plan for country development and power distribution by increasing numbers of renewable energy sources for power generation. In 169 countries, states and provinces have a renewable energy promotion plan with precise targets, promotional amounts, and duration. Among these countries, 65 countries have determined 100% of renewable electricity targets. Nevertheless, most electricity demand comes from different buildings. Thus, law enforcement for effective power usage in different buildings is another method applied by some countries. For example, 69 countries have applied building energy code or BEC determined criteria for effective power consumption standards by 2018 (REN21, 2019). Renewable portfolio standard or RPS is applied by many countries along with renewable energy development plan and a developmental target is applied for developing renewable energy production proportion based on fossil fuel production with a penalty for those who could not generate or provide a determined amount of energy. In Asia, this policy is applied in seven countries including Bangladesh, China, Indonesia, Republic of Korea, Lao People's Democratic Republic, the Philippines (in policy drafting process), and Vietnam, which aims to develop renewable energy at 10-30 percent in 2020-2050 (Heeter et al., 2019). Designing and development of renewable energy policy to replace fossil fuel-based on planned target and determination of renewable energy proportion are dependable variables for the increase or decrease of power consumption which would influence renewable energy replacement upon specified proportion. These could be applied to achieve the target of independent fossil fuel generation for all buildings. We, therefore, design the calculating method called Demand-Side Renewable Portfolio Standard (D-RPS) policy for different buildings or power users by using monthly electricity bills to produce, use and participate with the national renewable energy promotion.

2 LITERATURE REVIEW 2.1 RENEWABLE PORTFOLIO STANDARD (RPS) IN THAILAND RPS is the policy to determine renewable energy generation proportion applied for fossil fuel power generators, and it influences renewable energy development for power generators. Thailand started using the policy in 2003 by national competitive energy strategy as a part of alternative energy development strategy. Its target was revised for using 8 percent of alternative energy instead of 0.5 percent in 2015. According to Thailand's power development plan 2004, fossil fuel power generators established in 2010-2015 are subject to produce renewable energy at no less than 5 percent of fossil fuel production in the first year (IEA, 2016; REN21, 2005). If the power suppliers produce lower than this, they would pay a fine to the renewable energy development fund. Power suppliers who want to establish new power plants in 2010-2015 could choose to pay compensation for renewable energy generation at 1.3 times of maximum renewable energy price (EPPO, 2004). However, the policy was Suntaree Chaowiang, Nopbhorn Leeprechanon 2

terminated already. Details of RPS were classified as elements based on the national renewable energy laboratory as the guidelines for designing the RPS policy. These include determining total installed power generation targets as percentage per annum, applicable renewable energy technology, importing alternative energy, and principles and regulations to ensure renewable energy investors (Heeter et al., 2019). Details of the RPS policy applied in Thailand in the past could be classified by its principle components as shown in Table 1 (IEA, 2016; REN21, 2005; EPPO, 2004). Table 1: Key components of an RPS in Thailand. Key component Target Interim schedule Eligible resource Compliance entities Regulatory entity Penalties for noncompliance

RPS 5% of the new power plant in 2010-2015 according to PDP2004 8% of power consumption in the country in 2015 solar photovoltaic, wind, biomass, waste and hydropower alternative power purchasing contact Ministry of Energy 1) fossil fuel power plant owner could pay compensation at 1.3 times of maximum renewable energy price. 2) If the actual power generation was lower than 5% in a year, the owner was subject to pay a 5% fine to the alternative energy development fund.

To implement the RPS policy, some penalties are designated as the mandatory policy. The applied fine in Thailand is paid to the alternative energy development fund so that the fund would be paid for development upon the objective of this fund. Power generating entrepreneurs could decide to pay the fine instead of constructing a renewable power plant. Different penalties and types of renewable energy to be promoted are decided and considered by the national policymaker based on renewable energy generating potential.

2.2 ELECTRICITY CONSUMPTION IN THAILAND Figure 1(a) shows that electricity consumption in Thailand has been increasing continuously. Most demands derived from power consumption in different buildings include residential, small, medium, and large commercial buildings and some specific businesses (see Figure 1(c)). Large commercial buildings consume the most power, followed by households. The 10-year statistics data show that power consumption in buildings is higher than 90 percent of total power consumption in the country (see Figure 1(b)). Most electricity is produced from natural gas and fossil fuel which makes the Thai government improve power generating development plans and increase more renewable energy. Thus, renewable energy has been increasing constantly as shown in Figure 1(d) (EPPO, 2019a; 2019b).

3 PROPOSED METHODOLOGY FOR D-RPS We design a calculating method of D-RPS by using monthly electricity bills to apply it with renewable energy generation development. It focuses on power users with the fundamental principle to determine production proportion, power usage, and participation in promoting renewable energy production. The amount of electricity produced from renewable energy is used to substitute fossil fuel power. Dependent variables are increased or decreased based on the amount of electricity consumption in the electricity bill. *Corresponding author (N.Leeprechanon). Tel: +66-25643001 Ext 3272 Email: nopbhorn@engr.tu.ac.th ÂŠ2020 International

Figure 1: Overview of national power consumption and the proportion of fuel used to produce electricity. (a) Electricity consumption in Thailand (b) Electricity consumption in buildings compared to the total electricity consumption (c) Electricity consumption based on different sectors (d) The proportion of fuel used to produce electricity.

3.1 PROCESS OF CALCULATING METHOD All kinds of building users could calculate D-RPS from monthly electricity bills as per the following process. 1) Find the Monthly electricity amount shown as kWh in the latest electricity bill before D-RPS policy announcement, denoted by Electricity Demand (ED) 2) Calculate the Percentage of renewable energy usage targets in the building (%đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…) as announced by the government or the organization. 3) The calculation of đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… using data from steps 1) and 2) is as đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… = đ??¸đ??¸đ??¸đ??¸ Ă— % đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…

(1).

4) Building owners or users apply the đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… value to consider installing renewable power generating system in the building

3.2 TARGET ACHIEVEMENT REVIEW

Since D-RPS is a compulsory policy, there should be a target achievement assessment as 4

Suntaree Chaowiang, Nopbhorn Leeprechanon

where

đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† = đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…

(2),

đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† = D-RPS policy target achievement,

đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ = electricity produced from the solar photovoltaic rooftop in the building each month and shown in kWh unit. If đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† assessment < 0, this means â€œunachievableâ€?. If đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† assessment â‰Ľ 0, it is considered â€œachievableâ€?.

3.3 REVISION OR CORRECTION TO ACHIEVE THE TARGET

If the amount of electricity produced from renewable energy does not meet the target, the owners should consider an alternative to promote or increase additional production capacity of renewable energy or purchase additional renewable power from other buildings.

4 DATA DETERMINATION AND SIMULATION We can calculate D-RPS from the percentage using monthly electricity bills for all kinds of buildings. In this research, we determine input values from Table 2 (EPPO, 2018; REN21, 2005) and Table 3 with a 5% proportion. This method is based on the RPS policy data in Thailand (REN21, 2005) which is adjustable according to the policy and plan. We apply rooftop solar power technology to generate renewable energy in the building. We simulate generated power by using PVWattsÂŽ software by NREL (NREL, 2016) which has the function to simulate power output generated by rooftop solar power generating system (Pabasara, et al., 2019), and apply research simulation by determining system value as shown in Table 3 (Chaianong, et al., 2019). Table 2: Input data for the simulation of D-RPS Key component Target Interim schedule Eligible resource Electricity Bill

D-RPS 5% 2018-2037 Solar Photovoltaic Rooftop Electricity consumption(kWh), Residential Type 1.2 and 1.3(TOU)

Table 3: Technical input data of PV rooftop system for the simulation PV System Specifications (Residential) System Size Module Type Array Type Array Tilt Array Azimuth System Losses Inverter Efficiency DC to AC Size Ratio

Input 0.5 -10 kWp Standard (Crystalline Silicon) Fixed (roof mount) 13.7Â° 180Â° 14.08% 96% 1.1

5 RESULTS Tables 4-6 show the results when we apply D-RPS applications with three residential buildings with installed rooftop solar energy power generation system. They reveal D-RPS values that comply with the regulation criterion varied from the amount of electricity usage each month. The proportion *Corresponding author (N.Leeprechanon). Tel: +66-25643001 Ext 3272 Email: nopbhorn@engr.tu.ac.th ÂŠ2020 International

is constant at 5%, and the replacement could help reduce the CO2 emissions from electricity usage. Since electricity consumption of residential buildings increases constantly, if we apply D-RPS, it would encourage the installation of a rooftop solar energy power generation system. It is possible to reduce produced electricity in the system based on D-RPS value each month. Table 4: Result of D-RPS application with residential building #1 (meter type 1.2) Month-Year May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Total

đ??¸đ??¸đ??¸đ??¸

672 579 516 519 552 536 515 512 460 506 554 733 6,654

đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… = đ??¸đ??¸đ??¸đ??¸ Ă—

33.6 28.95 25.8 25.95 27.6 26.8 25.75 25.6 23 25.3 27.7 36.65 332.7

Unit: (kWh/month) đ??¸đ??¸đ??¸đ??¸đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ % đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (đ??¸đ??¸đ??¸đ??¸ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…) = đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (AC Output of PV systems) â‰Ľ0,(+) < 0,(-) 59.51 638.40 25.91 57.24 550.05 28.29 67.63 490.20 41.83 60.17 493.05 34.22 55.08 524.40 27.48 53.79 509.20 26.99 52.58 489.25 26.83 48.94 486.40 23.34 51.47 437.00 28.47 52.52 480.70 27.22 56.66 526.30 28.96 59.09 696.35 22.44 674.66 6,321.30 341.96

Table 5: Result of D-RPS application with residential building #2 (meter type 1.3) Month-Year May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Total

đ??¸đ??¸đ??¸đ??¸

966 1,098 1,037 1,068 1,407 812 880 863 778 822 926 1,090 11,747

Unit: (kWh/month) đ??¸đ??¸đ??¸đ??¸đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… = đ??¸đ??¸đ??¸đ??¸ Ă— % đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (đ??¸đ??¸đ??¸đ??¸ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…) = đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (AC Output of PV systems) â‰Ľ0,(+) < 0,(-) 48.3 59.51 917.70 11.21 54.9 57.24 1,043.10 2.34 51.85 67.63 985.15 15.78 53.4 60.17 1,014.60 6.77 70.35 55.08 1,336.65 âˆ’15.27 40.6 53.79 771.40 13.19 44 52.58 836.00 8.58 43.15 48.94 819.85 5.79 38.9 51.47 739.10 12.57 41.1 52.52 780.90 11.42 46.3 56.66 879.70 10.36 54.5 59.09 1,035.50 4.59 587.35 674.66 11,159.65 102.59 âˆ’15.27

Table 6: Result of D-RPS application with residential building #3 (meter type 1.3) Month-Year May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Total

đ??¸đ??¸đ??¸đ??¸

1,174 1,195 1168 1,096 1,059 1,122 1,199 1,094 1,007 1,238 1,255 1,274 13,881

Unit: (kWh/month) đ??¸đ??¸đ??¸đ??¸đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘†đ?‘† đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… = đ??¸đ??¸đ??¸đ??¸ Ă— % đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (đ??¸đ??¸đ??¸đ??¸ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…) = đ??¸đ??¸đ??¸đ??¸đ??¸đ??¸đ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒđ?‘ƒ âˆ’ đ??ˇđ??ˇ-đ?‘…đ?‘…đ?‘…đ?‘…đ?‘…đ?‘… (AC Output of PV systems) â‰Ľ0,(+) < 0,(-) 58.7 59.51 1,115.30 0.81 59.75 57.24 1,135.25 âˆ’2.51 58.4 67.63 1,109.60 9.23 54.8 60.17 1,041.20 5.37 52.95 55.08 1,006.05 2.13 56.1 53.79 1,065.90 âˆ’2.31 59.95 52.58 1,139.05 âˆ’7.37 54.7 48.94 1,039.30 âˆ’5.76 50.35 51.47 9,56.65 1.12 61.9 52.52 1,176.10 âˆ’9.38 62.75 56.66 1,192.25 âˆ’6.09 63.7 59.09 1,210.30 âˆ’4.61 694.05 674.66 13,186 18.65 âˆ’38.03

Suntaree Chaowiang, Nopbhorn Leeprechanon

Figure 2: Results of D-RPS application and assessment of target achievement each month of the three residential buildings (a and b) residential building #1 (meter type 1.2), (c and d) residential building #2 (meter type 1.3 (TOU)), and (e and f) residential building #3 (meter type 1.3 (TOU)). Figure 2 depicts the same results graphically. The D-RPS values of residential buildings #1, #2, and #3 are 332.7kWh, 587.35 kWh, and 694.05 kWh respectively. This shows the variation of D-RPS values based on the monthly electricity usage of each household. Of the overall electricity usage at 5% of power generation system in different households and assessment of status, using 500 watt-peak (Wp) power generation capacity based on PVwattsÂŽ assessment, we find that the system could generate 674.66kWh electricity per year. Residential building1 could generate electricity upon the *Corresponding author (N.Leeprechanon). Tel: +66-25643001 Ext 3272 Email: nopbhorn@engr.tu.ac.th ÂŠ2020 International

criteria every month, whereas residential buildings #2 and #3 that use Time of Use (TOU) electric metering type have high electricity usage and could not meet the criteria in some months. As a result, residential buildings #2 and #3 have to increase installed generation capacity. This data shows the importance of providing opportunities for households that follow D-RPS but could not meet the criteria. These households should increase their power generation capacity or have an alternative to promote and compensate electricity units that could not meet the target by using different methods. Due to the 10 kWp power generation capacity for different households in Thailand, the systems of these households should be evaluated and compared with the monthly electricity usages to select the proper size of the system.

5.1 RESULTS OF CO2 EMISSION REDUCTION We find a decrease in electricity usage in building #1 at 164.35 kg-CO2, building #2 at 290.15 kg-CO2, and building #3 at 342.86 kg-CO2, which represents D-RPS policy application in different buildings. This could help reduce CO2 emission (EPPO, 2019c) and provide variation based on the amount of renewable energy usage. Because more than 90% of power consumption in Thailand is from the buildings sector each year (97% in 2019), D-RPS policy application in the buildings sector would reduce CO2 emission from electricity usage significantly.

6 CONCLUSION D-RPS is designed to encourage more renewable energy usage at different buildings. This work employs DPRS using the amount of electricity usage shown on monthly electricity bills. The numbers used are therefore based on actual data of power users as kWh unit, and renewable energy sources could be applied accordingly based on the potential of renewable energy, technology, and cost in different countries. This complies with the fundamentals of the RPS design principle. Increased usages of renewable energy in buildings are advantageous in terms of environmental friendliness and target achievement of greenhouse effect reduction in different countries. D-RPS can also be used for the microgrid development system as part of an intelligent power generation system in the future.

7 AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

8 REFERENCES Chaianong, A., Tongsopit, S., Bangviwat, A., Menke, C. (2019). Bill saving analysis of rooftop PV customers and policy implications for Thailand. Renewable Energy, 131, 422-434. EPPO. (2004). Regulations for purchasing electricity from small power producers Renewable Portfolio Standard (RPS). Energy Policy and Planning Office. http://www.eppo.go.th/index.php/th/eppo-intranet/item/1707-nepc-thaksin97 Accessed January 2020. (in Thai). EPPO. (2018). Thailand Power Development Plan 2015-2037 (PDP2018). Energy Policy and Planning Office. http://www.eppo.go.th/images/POLICY/ PDF/PDP2018.pdf Accessed January 2020. EPPO. (2019a). Electricity Consumption for the Whole Country (Classified by Tariff). Energy Policy and Planning Office. http://www.eppo.go.th/index.php/en/en-energystatistics/electricity-statistic Accessed January 2020. (in Thai).

Suntaree Chaowiang, Nopbhorn Leeprechanon

EPPO. (2019b). Power Generation Classified by Fuel Type (Detail). Energy Policy and Planning Office. http://www.eppo.go.th/index.php/en/en-energystatistics/electricity-statistic Accessed January 2020. EPPO.

Emission per kWh. Energy Policy and Planning Office. (2019c). CO2 http://www.eppo.go.th/index.php/en/en-energystatistics/co2-statistic Accessed January 2020.

Heeter, J., Speer B., Glick, M. B. (2019). International Best Practices for Implementing and Designing Renewable Portfolio Standard (RPS) Policies. National Renewable Energy Laboratory (NREL). https://www.nrel.gov/docs/fy19osti/72798.pdf Accessed January 2020. IEA. (2016). Strategic Plan for Renewable Energy Development: 8% Target. International Energy Agency. http://www.iea.org/policies/4873-strategic-plan-for-renewable-energy-development-8-target?country =Thailand&qs=Thailand Accessed March 2020. IEA. (2018a). Global Energy & CO2 Status Report The latest trend in energy emissions in 2018. International Energy Agency. http://webstore.iea.org/global-energy-co2-status-report-2018 Accessed July 2019. IEA.

(2018b). Key World Energy Statistics 2018. International http://webstore.iea.org/key-world-energy-statistics-2018 Accessed July 2019.

Energy

Agency.

NREL. (2016). PVWatts Calculator®. National Renewable Energy Laboratory. http://pvwatts.nrel.gov Accessed March 2020. Pabasara, W.M., Wijeratne, U., Yang, R.J., Too, E., Wakefield, E.R. (2019). Design and development of distributed solar PV systems: Do the current tools work?. Sustainable Cities and Society, 45, 553-578. REN21. (2005). Renewables 2005 Global Status Report. Renewable Energy Policy Network. http://www.ren21.net/wp-content/uploads/2019/05/GSR2005_Full-Report_English.pdf Accessed January 2020. REN21. (2019). Renewable Global Status Report 2019. Renewable Energy Policy Network http://www.ren21.net/wp-content/uploads/2019/05/gsr_2019_full_report_en.pdf Accessed January 2020. Suntaree Chaowiang is a student at the Department of Electrical and Computer Engineering, Thammasat University, Thailand. She completed her B.S.Tech.Ed. (Electronics Engineering) from the Rajamangala Institute of Technology, Thailand, and an M.Eng.(Electrical Engineering) from Thammasat University. Her research interests are in the area of Energy Policy, Pricing, and Renewable Energy. Dr.Nopbhorn Leeprechanon is an Associate Professor at the Department of Electrical and Computer Engineering, Thammasat School of Engineering, Thammasat University, Thailand. He obtained his Bachelor’s degree (Honors) and his Master of Engineering degree (Electrical Power Engineering) from the King Mongkut's Institute of Technology Ladkrabang, Bangkok, Thailand, and received his Ph.D. in Power System Economics and Policy from the Royal Melbourne Institute of Technology (RMIT University), Victoria, Australia. He later obtained a Master of Arts degree in Politics and Government from Thammasat University, and a Bachelor of Laws (LL.B.) from Sripatum University, Bangkok, Thailand. His research interests are Renewable Energy Optimization Modeling, Smart Grid Technology, Electricity Economics, Tariffs, Restructuring, and Reforming of State Enterprise and Public Utilities.

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13O

DEVELOPING ENGINEERING STUDENT CREATIVITY IN MATHEMATICS CLASSES AT TECHNICAL UNIVERSITY Elena A. Zubova 1

Department of Business Informatics and Mathematics, Tyumen Industrial University, RUSSIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 06 March 2020 Received in revised form 08 June 2019 Accepted 25 June 2020 Available online 20 July 2020

The paper presents the teaching technique to develop university student creativity in mathematics classes. The technique lies in the resource-based classes when students gradually accumulate knowledge in several subjects, and then, in the resource-based interaction, in a group, they solve career-related assignments. We tested the approach by Keywords: comparison testing of experimental and baseline groups of students. We Engineering student had decided that assignments should meet the requirements including creativity; Group method; the following: a plot should be close to real phenomena from future Studies of mathematics; careers of students, problem statements should very well to make Resource-based classes; Student learning process; students be not only able to solve the problem, but also make up their new problem, in the process of which they develop their creativity. In Career-related assignments; Solvability the experimental group, students started feeling better familiar with of math problems. career-related assignments, desired to obtain as much useful information as possible from studies of the real process, unlike baseline group students. The introduction of resource-based classes in the learning process results in a visibly higher interest in career-related assignments and better communicability in the student community (small groups). Disciplinary: Engineering Mathematic Education, Resource-based Learning, Teaching and Instruction (Method, Technique, and Strategy). ©2020 INT TRANS J ENG MANAG SCI TECH.

1. INTRODUCTION We might explain the increasing public demand for engineers able to provide creative solutions to career challenges with the need to provide a proper response to rapidly changing conditions in modern society development. At the same time, at technical universities, professors with insufficient efficiency use the techniques, tools, and means that encourage the creativity of students, future engineers (Yudin et al., 2017; Vlasov & Demin, 2017). Gusev (1993) highlights the importance of the shared component of the activity, for instance, is an innovator and student, and concludes that they all search for “unknown connections between things.” He believes that the introduction to creativity *Corresponding author (Elena A. Zubova). Tel: +7(3452)283660. Email: zubovaea@inbox.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13O http://TUENGR.COM/V11A/11A13O.pdf DOI: 10.14456/ITJEMAST.2020.261

implies teaching the student how to search for these unknown connections between objects in question. Zagvyazinsky (1984) highlights the number of complex skills necessary for creativity. This includes the ability to analyze an initial situation, simulate the desired condition of an object, extrapolate approaches, etc. Altshuller (1979) believes that an inventive problem aims at conflict identification and solving. Therefore, the creativity promotion is associated with a choice of an approach to learning, while types of creativity manifestation depend on the aspect, in terms of which careers are considered. The creativity is inherent in innovations as it generates new ideas. Innovations arise from a conscious and focused search for opportunities for the production of innovations based on a need in acquiring new knowledge (Laužikas & Dailydaite, 2013). Toomsalu et al (2019) conclude that higher competition, investments into technologies, and optimization tend to foster innovations. Hence, innovations represent an important factor for fostering the growth and development of SMEs and are likely to contribute to their overall success and economic profits. The need for further research on specifics in the development of student creativity reasonably follows the statement of new educational targets. The growing knowledge content in production and engineer’s responsibility for decision-making consequences impose new, heightened requirements to the quality of occupational training (Maklakova et al., 2019). The development of such personality traits of a future professional, as erudition, developed thinking abilities, and flexibility to changes are coming to the fore. Therefore, the research lies on the hypothesis that the creative development of engineering students at mathematics classes when they work with career-related assignments would be efficient if: a) learning come from real-life processes and phenomena that might occur in careers, b) set of principles to build and implement the procedural guidelines for mathematics teaching is updated, and c) algorithm is being introduced for the development of the student creativity. Thus, this research aims at the elaboration of forms and means for the creative development of engineering students when they work with career-related assignments in mathematics classes.

2. LITERATURE REVIEW The development of the creativity of an individual is one of the most important problems in the learning process. The meaning of creativity is an attitude towards various assignments. Therefore, the creativity characteristics are operating with the knowledge gained in the learning process, in emotional and ethic interaction in the society, intellectual and physical activities (Galasso & Kovářıḱ , 2018). The process management is based on feedbacks: the higher the student creativity is, the more teaching experience professors need (Zubova, 2008a). Therefore, the development of student creativity depends on the methodology of discipline teaching to gain the most comprehensive knowledge of the world. Professors need ongoing targeted encouragement to ensure that students need learning (Ponomarev, 1976). Identifying attributes in an act of creativity, almost all the researchers emphasize its unconsciousness, no control by the mind and will, spontaneity, and most importantly, the changed state of mind (Litau, 2018). The creative product actively generates unconsciousness and presents it

Elena A. Zubova

to consciousness. Ponomarev (1976) believes that the creativity core comes down to the search for by-products of an author’s work. A creatively thinking person understands by-products, which are the creation of something new, while a non-creatively thinking person only understands the results in terms of goal achievement (worthwhile results), passing by the novelty. The creative product assumes the intuition included, which is an unconscious process in this case. Poincare (1909) believes that the availability of intuition is the basis of creativity. The creativity is mainly defined as “the highest form of human being’s activities and independence” (Kairov & Petrov, 1965), “the activity that generates something qualitatively new and described with uniqueness, freshness” (Prokhorov, 1989), “the process in activities of the human being in which qualitatively new material and intellectual values are created” (Frolov, 1991). Afanasyev (1996) refers the creativity to the targeted activity inherent in the human being, marked as unusual, unique, resulted from thinking, feeling, and acting outside the box, aimed at obtaining new, essential properties, attributes, and qualities in familiar procedures and processes, a final product of applied and intellectual efforts, as well as self-fulfillment in intellectual, emotional, and substantive-practical essential fields of the human being. Platonov (1984) refers the creativity to thinking in its highest form, going beyond what is required to solve a problem with already known techniques. When studying regularities in creativity, researchers by tradition distinguish the three following phases in creativity: problem statement, idea creation, and verification. In recent works on psychology and teaching (Krol, 2001), the phases have been supplemented and modified as follows: accumulating information, subconscious maturation of a solution (against the background when an individual forgets a problem), insight, and validation. Many researchers looked for the boundary between creativity and non-creativity. Shalyutin (1985) provides an opinion and proves that in material and intellectual efforts of an individual, there are two intertwined components: algorithmic (it assumes a standard situation, certain elements of which are transformed with standard techniques in accordance with a standard target) and creative (when a technique has not been set in advance by an actor but depends on a situation). Researches have various approaches to the creativity definition and transfer of these skills. Schukina (1979) refers to the manifested need for new knowledge. Shamova (1982) refers to the quality of the activity in which a student manifests his/her personality with his/her attitude towards content, nature of the activity, and desire to mobilize ethic and goal-focused efforts to achieve learning and cognitive goals. Afanasyev (1996) refers to the activity of an individual, that ensures involvement in the creation of something new, the transfer of knowledge and skills to new situations, and changed the mode of operation for learning assignments (Zubova, 2008b). Having reviewed approaches to the development of the personality creativity, we conclude that in the creative process the main thing is not only its manifestations, characteristics, factors, and criteria (which are indeed basic milestones in the development), but inner creativity attributes (unconsciousness, spontaneity, no control by will and mind, mind variability. Thus, creativity involves pro-activeness and is a characteristic of learning. The essence of *Corresponding author (Elena A. Zubova). Tel: +7(3452)283660. Email: zubovaea@inbox.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13O http://TUENGR.COM/V11A/11A13O.pdf DOI: 10.14456/ITJEMAST.2020.261

learning is the ongoing discovery of new by students. The creativity in student studies is a process, in which students generate qualitatively new values. However, the practice points out to the fact that some students sometimes are not proactive in their creative learning. So, the task arises as follows: identify conditions to make learning more active, that is, conditions, forms, means, and success factors to develop the student creativity.

3. METHOD The research hypothesized that the development of the engineering student creativity when they learn mathematics would be efficient in their work with career-related assignments if: â€“

university training is based upon updates and ongoing integration of mathematics knowledge in career-related assignments,

â€“

there are updates to the principles following which professors develop and implement the mathematics tutorial system, which includes the following: availability, visualized simulation, variability, focus on career, subject-information content, introduced algorithms for the student creativity development.

The survey covered an entire course of mathematics and other STEM. Researchers assumed knowledge accumulation and integration during the period. When students had accumulated theoretical knowledge in certain fields, there were resource-based classes provided (the learning process included 8-9 sessions in two years of study, 2 sessions, 4 hours each, per term). At a resource-based class, students worked in small groups of 5-6 people. Students were proposed to solve a career-related assignment that needs to meet certain requirements. To develop student creativity, the considered methodology assumes that the assignment had three components: objects, relationships, and properties, making the field of students' research. Thus, having changed any component or some of them, students received another assignment to explore and solve it in small groups. The resource-based classes (RCs) were built into the current schedule of mathematics classes following the pattern in Figure 1, cases of classes and assignments, n are from 1 to m. Their didactic target includes working with career-related assignments in small groups coming from reflection and communication, integration of mathematical knowledge, focused on the student creativity development.

Figure 1: Schematic of introduction diagram of resource-based classes in the learning process.

Elena A. Zubova

At resource-based classes, there were ongoing adjustments of class content and procedure to respond to emerging challenges and suggestions made by the students who were working with assignments. Therefore, the late resource-based classes were without conflicts and any complaints from professors and students. We experimented in the first and second years in two groups with the specialty of applied geology at the Tyumen Industrial University (Tyumen, Russia). The experiment covered the first and second years of study (2 nd -4th terms) and included the introduced cycle of eight resource-based classes based on expanding of a teaching field to learn basic math concepts and procedures. The entrance test of students in the experimental group (EG) and baseline group (BG) was at the end of the 1st year (the 1st term) under three directions (P3): 1) measurement of the motivation level, 2) indicators of the academic progress, 3) measurement of the level of the student creativity. The repeated exit tests in the same groups were at the end of the 2nd year (end of the 4th term) under the same three directions. The experimental verification of the research included a psychological test for experimental and baseline groups of 30 and 29 persons, respectively. The test included the following methodology (Golovey & Rybalko, 2001), “Exploring the motivation to university studies” (test by Ilyina) used to track the university learning motivation: test “Acquiring knowledge”, test “Learning of trade” (test by Rozhkov (2002)). We statistically verified the research following the test by Rozhkov for the diagnostics of the creativity using the Wilcoxon W-test on the homogeneity of two independent samples. We measured the student creativity by 4 criteria: a sense of novelty, critical thinking, ability to transform an object structure, focus on creativity. The sense of novelty refers to the psychoemotional state of the student who, having completed a certain set of routine actions, comes to a new relationship, previously unknown to him/her, between objects in his/her mental activity. This quality underlies the measures taken to encourage search, creative, and heuristic learning. Critical thinking is an integrated trait, major components of which are abilities of the analysis, synthesis, and self-reflection. The ability to transform the object structure is an ability of deductive reasoning, ability to draw parallels and analogies, as well as make patterns. The focus on creativity refers to the pursuit of finding solutions to career-related assignments. During the research, based on observations over students, we stated and analyzed the main difficulties encountered by students when they work with career-related assignments.

4. RESULT AND DISCUSSION Let us evaluate student creativity at the beginning and end of the experiment. We will use the techniques described above. See the results of the entrance tests of future engineering students in Table 1. Entrance tests of students shown that the mean gain of the student creativity in the first year at the end of the first term is within minimum values (0.92-0.94). Repeated diagnostics was at the end of the 2nd year in the 4th term, see results in Table 1. *Corresponding author (Elena A. Zubova). Tel: +7(3452)283660. Email: zubovaea@inbox.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13O http://TUENGR.COM/V11A/11A13O.pdf DOI: 10.14456/ITJEMAST.2020.261

Table 1: Student creativity levels of the experiment student group. Parameter Feeling of novelty Criticality Focus on creativity Ability to transform the object structure Mean gain

Start the 1st year 1.06 0.81 0.87 0.95 0.92

End Baseline 1.06 0.82 0.88 0.98 0.94

the 2nd year 1.24 0.94 0.90 1.09 1.04

Baseline 0.95 0.68 0.83 0.93 0.84

Exit tests showed changes in terms of the degree to which studentsâ€™ creative skills are developed. We received a mean gain of 1.04-0.84 as the creativity level in the second year at the end of the second term. Having analyzed the mean gain for the student creativity level at the beginning and end of the experiment, we saw that in the baseline group, the creativity level was distinctly lower. This suggests that in this group, students do not understand the importance of mathematics as both a single subject and a fundamental platform for future careers. In the experimental group, students shown that they were much more familiar with career-related assignments, wanted to get as much useful information as possible from the real-life process they were exploring, unlike the students in the baseline group. This confirmed one of the first definitions of the creativity given by Batyushkov (Arsen'yev & Petrushevsky, 1901), where the creativity is the catalyst that encourages a person endowed with a creative potential to act unconventionally under each all direction, including both a process and product of external activity. Resource-based classes shown that there were positive qualitative changes in terms of the mental approach, content, and structure of students' class activities: Visible interest in career-related assignments and communication that make it possible to use the realistic mathematical apparatus based on variability and research. Updated integration of the mathematical and engineering knowledge and skills contribute to the development of student creativity. Students started working much more closely together. This points out to the fact that the group method of work makes it possible for students to be under ongoing self-control. However, each student, working in the group, wants to prove himself/herself and be the first to find solutions to the assignment. In real-life professional engagement, any future professional should have these traits. The set of career-related assignments is close to real-life business problems. As a result, students become aware of the integration of all the subjects they learn. When they were solving problems, students had intensive discussions, they were independently trying to find real processes and phenomena from their future career. This points out that they have accumulated creativity. To solve an assignment, one need to move to another level, a creative one, otherwise a solution will fail. This observation was the next confirmation of the available effect of collaboration in interaction with other students and knowledge integration (Aldieri et al., 2017). Zubova (2011) refers to Afanasyev (1996) who believes that creativity is a process when somebody is making something new and it also refers to the combination of the personality traits that ensure its involvement in this process. The true student creativity starts where there is an independent search for new solutions,

Elena A. Zubova

where there are outlines of new, advanced, and unique search directions, where there are more rational solutions to theoretical and practical problems. In the learning process, the academic progress manifests itself with the dynamics of the academic mobility that makes it possible to get advanced learning and practical experience. Having compared two-parent entities using the Wilcoxon W-test for small independent samples, we analyzed the results of statistical calculations for the creativity dynamics. See the findings in Table 3. Table 2: Verification of sample groups by Wilcoxon criterion. Experimental group ( X 1i ), the 1st term Group name Baseline group ( Y1i ) 1st term

Wobserv = 985.4 ; nЭХ 1 = 30 ; nЭY 1 = 29 790 < 985.4 < 1010 ; Wmin < Wobserv < W max differences by Wilcoxon criterion have not been found

Group name

Experimental group ( X 2i ) the 4th term

Baseline group ( Y2i ) The 4th term

Wobserv = 919 ; nЭХ 2 = 28 ; nЭY 2 = 24 919 > 768.4 ; Wobserv > W max statistically clear differences have been found

Thus, we have a confirmed hypothesis that it is feasible to introduce the methodology of student creativity development based on the selection and study of career-related assignments at classes of further mathematics when students solve a wide range of engineering problems. During the experiment, we have also identified higher motivation for the discipline. It is not only advisable to use this integrative approach to teaching at mathematics classes but also for other subjects. When students were solving the set of problems, the professors, whose disciplines were beyond the presented methodology, also noticed the students’ interest in the learning process. In the learning process in the resource-based interaction, students were persuaded that the actual practice is a basis for solutions to career-related assignments. They try to expand this belief to further education at university.

5. CONCLUSION From this study result, it confirms our hypothesis that teaching mathematics using career-related assignments contributes to the development of students' motivation and creativity. The introduction of resource-based classes in the learning process results in a clearly higher interest in career-oriented assignments and better communicability in university student communities (small groups). The students who had been skeptical of the choice of their future careers, at resource-based classes became more confident in the correctness of their choice and shown heightened interests in their future specialty. The proposed methodological approach has produced positive results. Improved education quality in society is an indirect effect.

6. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author. *Corresponding author (Elena A. Zubova). Tel: +7(3452)283660. Email: zubovaea@inbox.ru ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13O http://TUENGR.COM/V11A/11A13O.pdf DOI: 10.14456/ITJEMAST.2020.261

7. REFERENCES Afanasyev, V.V. (1996). Development of Students' Creativity when They Solve Mathematical Problems. Yaroslavl: Publishing House of YSPU named after K.D. Ushinsky. Altshuller, G.S. (1979). Creativity as a STEM Discipline (Theory of Inventive Problem Solving). Moscow: Sovetskoye Radio. Arsen'yev, K.K., & Petrushevsky, F.F. (Eds.). (1901). Encyclopedic Dictionary by Brokgauz and Efron. Vol. 32. Saint Petersburg: Akts. Obshch. "Izd. delo", Brokgauz–Efron. Frolov, I.D. (Ed.). (1991). Dictionary of Philosophy. Moscow: Politizdat. Golovey, L.A., & Rybalko, E.F. (Eds.). (2001). Tutorial on Developmental Psychology. Saint Petersburg: Rech'. Gusev, V.A. (1993). Teaching mathematics and holistic development of student’s personality (pp. 38-47). Proceedings of MSPU. Series: Natural Sciences. Moscow: Prometey. Kairov, I.A., & Petrov, F.N. (Eds.). (1965). Encyclopedia of Pedagogy. Moscow: Sovetskaya Entsiklopediya. Krol, M.V. (2001). Psychology and Pedagogy. Moscow: Vyssh. Shk. Litau, E.Y. (2018). Cognitive science as a pivot of teaching financial disciplines. In Proceedings of the 31st International Business Information Management Association Conference, IBIMA 2018: Innovation Management and Education Excellence through Vision 2020, 72–80. Maklakova, N.V., Khovanskaya, E.S., Senchenkova, E.A. (2019). Role and Place of Life-Long Learning in the University Education System. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 10(16), 10A16D, 1-8. Platonov, K.K. (1984). Brief Dictionary of Concept System. Moscow: Vyssh. Shk. Poincare, J. H. (1909). Mathematical Creativity. Moscow: Tip. E. Bergmana. Ponomarev, Ya.A. (1976). Psychology of Creativity. Moscow: Nauka. Prokhorov, A.M. (Ed.). (1989). Soviet Encyclopaedic Dictionary. Moscow: Sovetskaya Entsiklopediya. Rozhkov, M.I. (2002). Concept of existential pedagogy. Yaroslavl Pedagogical Bulletin, 4, 32-40. Schukina, G.I. (1979). The Problem of Cognitive Interest in Pedagogy. Moscow: Prosveshcheniye. Shalyutin, S.M. (1985). Artificial Intelligence: Epistemological Aspect. Moscow: Mysl'. Shamova, T.I. (1982). Promotion of School Students’ Learning. Moscow: Pedagogika. Toomsalu, L., Tolmacheva, S., Vlasov, A., & Chernova, V. (2019). Determinants of innovations in small and medium enterprises: a European and international experience. Terra Economicus, 17(2), 112–123. DOI: 10.23683/2073-6606-2019-17-2-112-123 Vlasov, A.I., & Demin, A.A. (2017). Visual Methods of Formalization of Knowledge in the Conditions of the Synchronous Technologies of System Engineering. CEE-SECR’17: Proceedings of the 13th Central & Eastern European Software Engineering Conference in Russia, 1-7. DOI: 10.1145/3166094.3166098 Yudin, A., Kolesnikov, M., Vlasov, A., & Salmina, M. (2017). Project-oriented approach in educational robotics: from robotic competition to the practical appliance. In: M. Merdan, W. Lepuschitz, G. Koppensteiner, & R. Balogh (Eds.), Robotics in Education. Advances in Intelligent Systems and Computing, Vol 457. Cham: Springer. DOI: 10.1007/978-3-319-42975-5_8 Zagvyazinsky, V.I. (1984). Development of students' creativity based on an independent problem analysis of learning materials. In Problem of Abilities in Soviet Psychology (129-134). Moscow: APN SSR. Zubova, E.A. (2008a). Criteria for selection of career-oriented research problems. Yaroslavl Pedagogical Bulletin, 4(57), 16-22.

Elena A. Zubova

Zubova, E.A. (2008b). Formation of creativity in future engineers. Management of Education Quality: Proceedings of the Regional Research and Methodology Conference, 101-108. Tyumen: Izd-vo TyumGNGU. Zubova, E.A. (2011). Visual simulation in mathematics teaching to future engineers. Yaroslavl Pedagogical Bulletin, 4(2), 195-204. Elena A. Zubova is an Assistant Professor in the Department of Business Informatics and Mathematics at Tyumen Industrial University, Russian Federation. She got her degree from the Yaroslavl State Pedagogical University named after K.D. Ushinsky. She is a Cand. Sci. of Pedagogic. Zubovaâ€™s research interests include Teaching Methods in Higher Education; Information Systems in Economics; Business Analytics; Engineering Training.

*Corresponding author (Elena A. Zubova). Tel: +7(3452)283660. Email: zubovaea@inbox.ru ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13O http://TUENGR.COM/V11A/11A13O.pdf DOI: 10.14456/ITJEMAST.2020.261

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13P

ASSESSMENT OF INNOVATIVE DEVELOPMENT DIFFERENTIATION OF RUSSIAN REGIONS 1*

Ol'ga P. Smirnova , Alena O. Ponomareva

Laboratory of Modeling the Spatial Development of Territories, Institute of Economics of the Ural Branch of the Russian Academy of Sciences, RUSSIA.

ARTICLEINFO

A B S T RA C T

Article history: Received 06 April 2020 Received in revised form 01 July 2020 Accepted 15 July 2020 Available online 21 July 2020

The introduction of advanced technologies in the real sector of the economy is becoming a determining factor in advanced development. Under these conditions, the role of innovation is steadily increasing in identifying the level of investment attractiveness of regions and their competitiveness. With a case study of Russian regions, the growth rates of the development and use of advanced production technologies have been analyzed. The purpose of this study was to assess the unevenness level of the innovative development of the Russian regions. For this, the methods of economic-statistical and correlation analysis, the methods of standardization and aggregation of indicators were used, an integral indicator of changes in the innovative potential of the region was proposed. The calculated values of innovative potential were identified for 84 regions of Russia. From the result, it was found that the distribution of science and innovation resources in Russia is extremely uneven, and a trend has been revealed of a growing increase in imbalances in the innovative development of regions. The presence of industry’s dependence on technology imports was noted.

Keywords:

Innovative activity; territorial potential; Imbalances in regional development; Technology imports; Scientific and industrial cooperation.

1. INTRODUCTION Advanced development of the society of any country is currently impossible without special attention to the development of science and innovation. Innovation-based modernization of all sectors of a national economy is becoming a determining factor in competitiveness (Goncharenko et al., 2019). The boom in the innovation industry and services began in the 1990s and is still gaining momentum. Today, industries producing high-tech goods and services account for about 27% of global Gross Domestic Product (Hill, 2020). This process has positive effects – the development and realization of new ideas, their commercialization and implementation in the form of technologies are *Corresponding author (Ol'ga P. Smirnova). Tel: +7 343 3714536. Email: olygsmirnova95@gmail.com ©2020 International

Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13P http://TUENGR.COM/V11A/11A13P.pdf DOI: 10.14456/ITJEMAST.2020.262

becoming the main source of increasing employment, increasing real investment in the economy, improving the quality of products. In this regard, issues in evaluating the effectiveness of innovative development are becoming relevant. Differentiation of the socio-economic situation of countries and regions creates the complexity of their comparative analysis in terms of the value of innovative potential, requiring consideration in a methodological aspect. A good example of an assessment of the innovative potential of polydifferentiated regions is the case of Russia. The complex federal structure of Russia, the scale of its territory, the localization of many types of resources, and other features make it necessary to use special approaches to assess various indicators of socio-economic development. These circumstances allow outlining the goal of this study, which is to identify the imbalance in the development of regions in terms of comparing the level of innovative potential and the level of a territory’s activity. This involves solving the following tasks: to consider indicators of innovative development characterizing the potential and activity of a territory; to assess the level of the unevenness of the innovative development of regions; to conduct a review of the forms and methods of the most efficient use of resources in the field of science and innovation.

2. LITERATURE REVIEW The concept of “a territory’s potential” is a complex, dynamic, and capacious category, which does not have a constant structure of indicators. The main characteristics of the innovative potential are seen in the systematic unification and connection within the framework of a territorial formation of all entities with the specification of innovatively active entities, engaged in innovative activities, and generating innovative ideas and solutions (Tatarkin, & Novikova, 2015). When considering the problem of increasing the innovative activity of Russia, it is necessary to take into account the heterogeneous development of its regions by most socio-economic indicators. According to the World Bank, Russia is a leader in regional inequality and is ahead of countries such as India, Brazil, and China in development inequality (In Russia, the Situation with Regional Inequality is Worse Than This in India and China, 2018). The imbalances in socio-economic development between regions can be caused by many factors. From the neoclassical point of view, the reasons for the differentiation of regions are explained by the insufficient mobility of the production factors. To smooth out interregional imbalances, complete mobility of labor and capital is required, which will ensure free competition. The opposite point of view on the interregional mobility of the production factors is given in the theory of “cumulative causation” (Myrdal, Hirschman, Krugman) (Myrdal, 1957; Vasilieva, 2013). According to this theory, interregional imbalances in the development of regions are explained by the movement of resources and capital from underdeveloped regions to those more attractive for development. As a result, the leading regions are becoming even stronger while interregional development imbalances are becoming increasingly stronger. A similar point of view is confirmed by the model of “total cumulative causation” (Richardson, 1973). The model shows that the regions initially being in a favorable position receive new benefits, and any inflow of investments into the regions to stimulate their economic growth will not smooth out, but further increase imbalances. From regional specialization, the causes of development imbalances are considered in the

Ol'ga P. Smirnova, Alena O. Ponomareva

resource base theory (Ciriacy-Wantrap, Perloff, Wingo) (Filippov et al., 2013). The closer a region’s specialization to export-oriented products, the faster a region develops, but this development is short-term and cannot ensure the stability of a territory’s development (Kleiner, 2011). Some modern theories connect the development of a region with its ability to restructure the economy and respond to scientific and technological progress (Gurieva, 2005). The considered theoretical approaches confirm the decisive role of innovative activity. A comparison of the level of innovative development of both individual countries and regions seems possible based on generally accepted indicators. This assessment uses indicators such as the number of registered patents, the number of publications, the share of high-tech products in the structure of Gross Domestic Product or export of territory, etc. (Kovalev, 2016; Romanova et al., 2017). The quantitative characteristics of the innovative activity of territories, according to modern researchers, include such indicators as the amount of Research & Development funding, the number of staff engaged in research, the number of scientific and educational institutions of the territory, the availability of infrastructure (Gokhberg et al., 2019). A feature of assessing the effectiveness of innovative activity of territories is the nonlinear dependence of the resources spent on the development of innovations and the results obtained in this area. In addition to the direct costs of innovation, such as Research & Development financing, costs of technological innovation, financial support for the creation and development of high-tech industries, factors such as the culture of the population, mentality, ability of the population to accept innovations and people’s attitude toward science affect the level of innovative activity (Kovalev, 2016). Undoubtedly, such factors as the level of freedom and democracy, corruption, and other indirect factors, the effect of which is difficult to evaluate objectively, do have an impact. The issue of comparability of the indicators used is of great importance. Here, researchers propose various approaches. For example, Pogodina (2004) offers to evaluate the level of innovative activity and competitiveness of regions using a system of statistical indicators. There are also many other methods based on the aggregation of various statistical indicators from the standpoint of assessing the scientific, human resources, technical, and financial potential of a territory (Zausaev et al., 2005; Orekhovsky, 2007). These methods allow assessing the level of innovative development relative to other territories and make a certain rating. The review led to the conclusion that it is necessary to use the indicators of innovative development in this study, which would allow comparing the level of potential of a territory and the level of its innovative activity.

3. METHOD For a comprehensive assessment of the innovative potential, it is proposed to use several indicators characterizing its various components. Figure 1 shows the structure of the integrated indicators for assessing the level of innovative activity and the innovative potential of a territory. The choice of components for integrated indicators is based on the experience of modern researchers in this field and is adjusted from the perspective of replacing certain indicators, for example, the share of fixed assets of scientific organizations to their number in a region, etc. *Corresponding author (Ol'ga P. Smirnova). Tel: +7 343 3714536. Email: olygsmirnova95@gmail.com ©2020 International

Innovation activity of the region

Innovative potential of the region

Production of innovative goods

R&D organizations

Granting patents for inventions and utility models

R&D staff

Number of advanced technologies developed in the region

Costs of technological innovation

Number of technologies used in the region

Internal R&D costs

Figure 1: Structure of indicators of innovative activity and innovative potential of a region

The indicators are considered in dynamics and comparison between regions. To assess the heterogeneity of innovative development in Russia as a whole, the authors propose to evaluate the degree of variation in different periods (as of 2007, 2012, 2017). The coefficient of variation (CV) allows estimating the degree of relative spread of the random variable:

ĐĄV =

Ďƒ x

(1)

where Ďƒ â€“ SD for ungrouped data; x â€“ the average value of the indicator; (x i âˆ’ x ) â€“ absolute values of deviations of individual variants of xi from the arithmetic mean; n â€“ sample volume. The indicators are normalized and combined into a single integral indicator:

ď€Š X âˆ’ xmin X= xmax âˆ’ xmin ,

(2)

I = âˆ‘xi a1 i =1

(3)

ď€Š where X â€“ normalized value of the indicator; x â€“ actual value of the indicator; xmax, xmin â€“ maximum and minimum values of the indicator; đ??źđ??ź â€“ integral indicator of innovative potential/activity; a1 â€“ weight of the i-th parameter; n â€“ number of parameters.

The weights of the parameters are usually set by experts. In the authorsâ€™ opinion, such an assessment is quite subjective in nature, and at this stage of the study, the authors have taken all the components of the integral indicator as equivalent. The calculated integral values can be graphically visualized on a map, which will reveal the

Ol'ga P. Smirnova, Alena O. Ponomareva

regions that can use the innovative potential of territory with the greatest effect.

4. RESULT AND DISCUSSION In earlier studies (Smirnova, & Ponomareva, 2019), the authors modeled the innovative activity of regions in terms of comparing the costs of technological innovation and the output of innovative products. The heterogeneous development of regions with atypical economies was taken into account (the so-called leaders and outsiders of innovative development were not included in the sample). If one evaluates the impact of costs of technological innovation and innovation output in all regions of Russia, a rather low correlation of these indicators is noted (R2=0.44) (Figure 2). It was previously revealed that the greatest correlation between the costs of technical innovation was achieved with a time lag of 3 years. The innovative potential broadly understood, namely, as a set of factors that form the institutions of innovative development, in the authors’ opinion, has a higher time lag for efficiency, and in this study, the authors have taken the time lag more than 10 years. The authors assess how the innovative infrastructure formed in 2007 affects the level of innovative activity in 2018. As one can see, the correlation of these indicators is quite close (R2=0.79) (Figure 3).

180,000 160,000

R² = 0.4438

Innovative activity of a territory

Production of innovative goods/works/ services

200,000

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

200,000

400,000

600,000

800,000

R² = 0.7936

-1

Innovative potential of a territory

Costs of technological innovation

Figure 2: The dependence of the production of innovative goods on the level of costs of technological innovation, a time lag of 5 years (2013/2018)

Figure 3: Dependence of the level of innovative activity on the innovative potential of a region, a time lag of 10 years (2018/2007)

At the first stage, the authors evaluated the indicators of innovative development from their heterogeneity. For this purpose, the authors calculated the variations for some indicators of innovative development by regions at different periods (as of 2007, 2012, 2017). For calculations, the data from Rosstat (the Federal State Statistic Service) were used (Rosstat, n.d.). The results are presented in Table 1.

Table 1: Analysis of variation of innovative activity indicators by the regions of Russia Indicator R&D organizations, number (P1)

R&D staff, people (P2)

Internal costs of R&D, million rubles (P4) Granting patents for inventions and utility models, number (F1) Costs of technological innovation, million rubles (F2) Volume of innovative goods/works/services, million rubles (F3) The portion of organizations engaged in technological, marketing innovation (F4)

Year 2007 2012 2017 2007 2012 2017 2007 2012 2017 2007 2012 2017 2007 2012 2017 2007 2012 2017 2007 2012 2017

Difference by regions 837 times 710 times 374 times 6,973 times 12,334 times 1,969 times 16,120 times 7,039 times 5,768 times 7,501 times 10,557 times 3,908 times 4,294 times 23,259 times 31,323 times 76,456 times 1,236,331 times 19,103 times 15 times 21 times 14 times

Variation factor

Average value

884% 912% 920% 309% 324% 317% 362% 349% 348% 250% 295% 257% 146% 209% 191% 214% 226% 175% 40% 45% 57%

50 43 47 10,102 8,857 8,832 4,625.99 8,540.18 12,475.27 347 405 359 3,039.71 11,307.02 16,927.53 12,138.34 35,839.57 49,607.13 9.5 10.1 7.8

Table 1 shows that no single indicator of the innovative activity represents a homogeneous population across regions. The normal value of the variation factor for a homogeneous population is 33%; in this case, it varies from 40-920%. It should be noted that the regions are more heterogeneous in terms of such an indicator as “R&D organizations”. The variation factor of this indicator in 2017 shows that the deviation from the average value will be 900%. To analyze the innovative activity of the Russian regions, the authors examined the indicators of the availability of innovative infrastructures in a region, such as the number of researchers in the region, the number of R&D organizations, the internal R&D costs, and the technological innovation costs. Also, the indicators characterizing innovative activity are as follows: the volume of output of innovative products and services; the number of registered patents; the portion of organizations using innovation in their business activities, etc. Considering the shares of these indicators by the federal districts of Russia (Table 2). Table 2: Structure of indicators of innovative potential by the federal districts of Russia P1, % P2, % P3, % P4, % 2007 2017 2007 2017 2007 2017 2007 2017 Central FD 38.8 36.6 51.9 51.2 19.7 32.6 55.6 52.0 Northwestern FD 15.3 12.1 13.0 13.4 12.3 10.2 13.0 13.7 Southern FD 6.5 7.7 3.8 3.8 5.4 5.9 3.0 6.8 North Caucasian FD 2.5 4.1 0.8 1.0 0.8 0.6 0.4 0.5 Volga FD 14.8 16.8 15.8 14.8 30.4 24.0 13.8 15.8 Urals FD 5.9 6.3 5.9 6.4 21.3 13.3 5.7 7.0 Siberian FD 10.3 11.9 6.9 7.6 8.5 9.2 4.8 6.5 Far Eastern FD 5.4 4.6 0.9 1.8 1.6 4.4 5.0 2.0 Note: P1 – R&D organizations; P2 – R&D staff; P3 – Costs of technological innovation; P4 – Internal costs of R&D; FD – federal district. Federal district

Ol'ga P. Smirnova, Alena O. Ponomareva

Note the high centralization of innovative resources in their spatial distribution. More than 50% of all scientific organizations are located in the Central and Volga Federal Districts. The leader in this indicator is Moscow and the Moscow Region – in total, more than 25% of all scientific organizations in the country are located there. The same situation is observed in terms of the number of R&D staff – more than 51.2% of researchers are concentrated in the Central Federal District, of which almost 44% are in Moscow and the Moscow Region. The authors also analyze the costs of technological innovation. If in 2007 the Volga and Urals Federal Districts were the first in terms of costs, then in 2017 the largest share of all costs of technological innovation was accounted for by the Central Federal District alone. In particular, this indicator in 2007 in Moscow amounted to 5% of all Russian costs of technical innovation, and by 2017 it increased to 13.8%. At the same time, the share of the Urals Federal District, on the contrary, decreased from 21.3 to 13.3%. The indicator of internal R&D costs in the spatial aspect has the largest concentration. The share of the Central Federal District is 52%, of which 46.8% are costs in Moscow and the Moscow Region. Consider the structure of indicators characterizing innovative activity (Table 3).

Table 3: The structure of indicators of innovative activity of territories by federal districts of Russia F1, % F2, % F3, % F4, % 2007 2018 2007 2018 2007 2018 2007 2018 Central FD 44.7 45.7 23.4 26.9 36.4 34 35.6 30.0 Northwestern FD 9.9 11.4 8.3 11.0 15.0 12 6.5 9.5 Southern FD 6.2 6.8 1.9 7.3 5.0 7 5.2 5.5 North Caucasian FD 2.0 0.8 2 1.2 Volga FD 19.1 17.6 46.8 34.7 23.5 17 33.2 29.9 Urals FD 7.1 5.4 12.4 12.2 11.3 17 10.5 11.7 Siberian FD 9.3 8.8 5.0 4.8 7.8 8 6.6 8.6 Far Eastern FD 1.9 2.3 0.9 2.3 1.0 3 2.4 3.6 Note: F1 – Granting patents for inventions and utility models; F2 – Volume of innovative goods/works/services; F3 – Number of advanced manufacturing technologies created; F4 – Number of advanced manufacturing technologies used. Federal district

Based on the methods of rationing and aggregation, the integral values of innovative potential and innovative activity for 84 regions of Russia were calculated. Note that in this study, the time lag of more than 10 years was used (an indicator of the innovative potential of territory according to the 2007 data, an indicator of innovative activity according to the 2018 data). Integral indicators are conventionally divided into three groups (low, medium, and high level), which allows comparing their values by the regions (Figure 4).

Level of innovative activity

Medium High

Level of innovative potential

Low

High

Medium

Krasnodar Territory, Ulyanovsk Region

Belgorod Region, Bryansk Region, Vladimir Region, Ivanovo Region, Kaluga Region, Lipetsk Region, Novgorod Region, Omsk Region, Penza Region, Republic of Mordovia, Ryazan Region, Smolensk Region, Tver Region, Tula Region, Tyumen Region (without autonomous districts), Udmurtian Republic, Khabarovsk Territory, Chuvash Republic, Yamal-Nenets Autonomous Area

Perm Territory, Republic of Bashkortostan

Volgograd Region, Vologda Region, Voronezh Region, Irkutsk Region, Kemerovo Region, Krasnoyarsk Territory, Leningrad Region, Novosibirsk Region, Rostov Region, Saratov Region, Tomsk Region, Yaroslavl Region

Moscow, Saint Petersburg, Moscow Region, Nizhny Novgorod Region, Republic of Tatarstan, Samara Region, Sverdlovsk Region, Chelyabinsk Region

Khanty-Mansi Autonomous Area – Yugra

Low Republic of Altai, Amur Region, Archangelsk Region, Astrakhan Region, Sevastopol, Jewish Autonomous Republic, Trans-Baikal Territory, Kabardino-Balkarian Republic, Kaliningrad Region, Kamchatka Territory, Karachayevo-Circassian Republic, Republic of Adygeya, Kirov Region, Kostroma Region, Kurgan Region, Kursk Region, Magadan Region, Orenburg Region, Orel Region, Primorye Territory, Pskov Region, Republic of Buryatia, Republic of Daghestan, Republic of Ingushetia, Republic of Kalmykia, Republic of Karelia, Komi Republic, Republic of Crimea, Republic of Mari El, Republic of North Ossetia – Alania, Republic of Tuva, Republic of Khakassia, Sakhalin Region, Stavropol Territory, Tambov Region, Chechen Republic, Chukotka Autonomous Area

Murmansk Region, Republic of Sakha (Yakutia)

Figure 4: Comparison of Russian regions by integrated indicators of innovative potential and innovative activity. As can be seen from Figure 5, the majority, namely 58 of 84 regions correspond to the general trend – the higher the level of innovative potential of the territory, the higher the level of its innovative activity. The leaders in both innovative activity and innovative potential are industrially developed regions of Russia e.g. Moscow, Saint Petersburg, the Moscow Region, Nizhny Novgorod Region, Republic of Tatarstan, Samara Region, Sverdlovsk Region, Chelyabinsk Region. Regions with a low level of the considered indicators relate mainly to the North Caucasian and Far Eastern Federal Districts (Figure 1A). Among the regions that use innovation potential inefficiently (the level of potential is lower than innovation activity) are the Khanty-Mansi Autonomous Area – Yugra, Republic of Sakha, and Murmansk Region. Note the regions with an effective ratio of potential and activity – these are the Krasnodar Territory and Ulyanovsk Region, Perm Territory, and the Republic of Bashkortostan. Compare the values of the obtained integral indicators on the map (Figure 5).

Ol'ga P. Smirnova, Alena O. Ponomareva

Figure 5: Spatial modeling of uneven innovative development of Russian regions.

USD thousand

A graphical interpretation of the data allows concluding about the extremely uneven innovative development of the regions of Russia. Most of the regions have low innovation potential and low activity. The analysis shows a high centralization of these indicators. There is a tendency towards a greater increase in imbalances in the innovative development of regions, which hinders economic development. 4000 3000 2000 1000 0

2010

2011

2012

2013

2014

2015

2016

2017

-1000 -2000 -3000 Payments for exports of technology

Payments for imports of technology

Balance of payments for technology

Figure 6: Balance of payments for international technological exchange (Russia), thousand USD (Source: Gokhberg et al., 2019) To smooth out imbalances in the innovative activity of regions, importance of such a form of interaction as scientific and industrial interaction between industrial enterprises, scientific and educational increasingly relevant. According to studies conducted by the Higher

it is important to note the cooperation. The need for organizations is becoming School of Economics, the

*Corresponding author (Ol'ga P. Smirnova). Tel: +7 343 3714536. Email: olygsmirnova95@gmail.com ÂŠ2020 International

number of organizations performing research and development in 2017 decreased by 2.8%. In the general structure of these organizations, industrial enterprises occupy only about 9%. About 11% of all organizations carrying out specialized research are engaged in the development of technologies for the Russian industry (Gokhberg et al., 2019). The growth rate of the development of production technologies lags behind the growth rate of their use, and the existing technological demand for production technologies is currently not met either qualitatively or quantitatively. The balance of payments for international technological exchange is negative (Figure 6). The dependence of the Russian industry on technology imports becomes apparent. In this regard, the importance of increasing innovative activity is growing. The current problems in the field of development, update, and use of innovative developments cannot be resolved in a natural market way, which means that the state should play a special role in this process (Kuznetsov, 2020; Smirnov, 2017). The innovative policy of the state, as part of the industrial policy, should flexibly respond to the needs of the real sector of the economy and form instruments that promote interregional scientific and industrial cooperation between science and business (Batkovskiy et al., 2017).

5. CONCLUSION From this study result, it shows the problem of increasing innovative activity in Russia is complicated by the barrier of heterogeneity in the development of its regions by most socio-economic indicators. An important issue in this context is the correctness of evaluating the effectiveness of innovation. This is confirmed by the growing dependence of the Russian industry on technology imports. The results of this study indicate a high degree of centralization of resources that stimulate local innovation growth. The data allows concluding about the uneven innovative development of Russian regions. Most of them correspond to the general trend – the higher the level of innovative potential of the territory, the higher the level of its innovative activity. Moreover, most of the regions have low innovation potential and low activity. The extremely uneven distribution of innovative potential, its increasing centralization in some territories, can further contribute to growing imbalances in the socio-economic development of the Russian regions.

6. AVAILABILITY OF DATA AND MATERIAL Information can be made available by contacting the corresponding author.

7. ANNOTATION The paper was prepared in accordance with the Research Plan for the Laboratory for Spatial Development of the Territory of the Institute of Economics of the Urals Branch of the Russian Academy of Sciences for 2019-2021.

8. REFERENCES Filippov, Yu.V., Avdeeva, T.T., & Lavrova, T.G. (2013). Theories of Local Economic Development. Moscow: Ekonomika, 130p. DOI: 10.15216/9785406010389 Gokhberg, L.M., Ditkovsky, K.A., Dyachenko, E.L. et al. (2019). Indicators of Science: 2019: Statistical Bulletin. Moscow: National Research University “Higher School of Economics”, 328p. Gokhberg, L.M., Ditkovsky, K.A., Kuznetsova, I.A. et al. (2019). Indicators of Innovative Activity:

Ol'ga P. Smirnova, Alena O. Ponomareva

2019: Statistical Bulletin. Moscow: National Research University “Higher School of Economics”, 376p. Goncharenko, O., Tohochynskyi, O., Sirenko, K., Chebonenko, S., & Tretiak, H. (2019). Innovative Performance as Precondition of Sustainable and Secure Development. Journal of Security and Sustainability Issue, 8(3), 531-544. DOI: 10.9770/jssi.2019.8.3(19) Gurieva, L.K. (2005). The Theory of Diffusion of Innovations. Innovation, 4, 22-26. Hill, D. (2020). Production and Trade of Knowledge- and Technology-Intensive Industries. Retrieved January 2020, http://ncses.nsf.gov/pubs/nsb20205 Kleiner, G.B. (2011). Resource Theory of the Organization of Economy. Russian Journal of Management, 3, 3-28. Kovalev, Yu.Yu. (2016). Innovation Sector of the World Economy: Notions, Concepts, Development Indicators: Textbook. Yekaterinburg: Publishing House of the Urals University, 180p. Kuznetsov, D.A. (2020). Formation of the Industrial Policy of Russia on the Basis of Innovation Priorities. Petersburg Economic Journal, 1, 6-14. Myrdal, G. (1957). Economic Theory and Underdeveloped Regions. In Rich Lands and Poor. London: Duckworth. Orekhovsky, P. (2007). Evaluation of the Effectiveness of Innovation in the Regions: A Comparative Analysis. Society and Economics, 5-6, 203-215. Pogodina, T.V. (2004). Economic Analysis and Assessment of Innovative Activity and Competitiveness of the Regions of the Volga Federal District. Economic Analysis: Theory and Practice, 5, 16-22. Richardson,

H.W.

(1973).

Regional

Growth

Theory.

London:

Macmillan.

DOI:

10.1007/978-1-349-01748-5

Romanova, O.A., Korovin, G.B., & Kuzmin, E.A. (2017). Analysis of the Development Prospects for the High-Tech Sector of the Economy in the Context of New Industrialization. Espacios, 38(59), 25. Rosstat. (n.d.). Science, Innovation, and Advanced Manufacturing Technology. Retrieved March 2020, http://www.gks.ru/folder/11189 Smirnov, R.O. (2017). Issues of Commercialization of Innovative Technologies in the Russian Federation in the Field of Entrepreneurial Activities. Radio Industry (Russia), 3, 110-112. DOI: 10.21778/2413-9599-2017-3-110-112

Smirnova, O.P., & Ponomareva, A.O. (2019). Modeling the Innovative Activity of the Constituent Entities of the Russian Federation in the Conditions of a New Technological Reality. Economic Analysis: Theory and Practice, 18(8), 1523-1542. DOI: 10.24891/ea.18.8.1523 Tatarkin, A.I., & Novikova, K.A. (2015). The Innovative Potential of a Territory in the Behavioral Assessments of the Population. Economy of the Region, 3, 279-294. DOI: 10.17059/2015-3-23 Vasilieva, M.V. (Ed.). (2013). The New Paradigm of Management of Socio-Economic Development of Russian Regions, 33-34. Moscow: Nauchnoye Obozrenie. Zausaev, V.K., Bystritsky, S.P., & Krivoruchko, I.Yu. (2005). Innovation Potential of the Eastern Regions of Russia. EKO, 10, 40-52.

9. APPENDIX 4 Total rating of a territoryâ€™s innovative potential, 2007 3

Total rating of a territoryâ€™s innovative activity, 2018

Chukotka Autonomous Area

Chechen Republic

Republic of Crimea

Magadan Region

Republic of Altai

Republic of Mari El

Amur Region

Republic of Tuva

Kamchatka Territory

Kabardino-Balkarian Republic

Kaliningrad Region

Trans-Baikal Territory

Belgorod Region

Smolensk Region

Kirov Region

Altai Territory

Komi Republic

Kurgan Region

Ryazan Region

Lipetsk Region

Archangelsk Region

Penza Region

Stavropol Territory

Ulyanovsk Region

Republic of Adygeya

Orenburg Region

Republic of Buryatia

Kaluga Region

Vladimir Region

Irkutsk Region

Novosibirsk Region

Leningrad Region

Kemerovo Region

Tomsk Region

Yaroslavl Region

Rostov Region

Volgograd Region

Samara Region

Sverdlovsk Region

Chelyabinsk Region

Moscow

Moscow Region

Figure 1A: Integral indicators of innovative potential and activity of Russian regions Dr.Ol'ga P. Smirnova is a Researcher of the Institute of Economics of the Ural Branch of the Russian Academy of Sciences, Ekaterinburg, Russia. She received a PhD in Economics and National Economic Management from the Institute of Economics of the Ural Branch of the Russian Academy of Sciences, Russia. She is a Cand.Sci. (Economic). Her works are devoted to the issues of Balanced Development of Industry and Economic Security. Alena O. Ponomareva is a Junior researcher, Institute of Economics of the Ural Branch of the Russian Academy of Sciences, Ekaterinburg, Russia. She received a Master's degree in Economics and Management of Metallurgical and Machine-Building Enterprises from Ural Federal University, Russia. Her research focuses on Regional Economic Development, Industrial Policy, and Innovative Activity of Industrial Enterprises.

Ol'ga P. Smirnova, Alena O. Ponomareva

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13Q

RUSSIAN FOOD INDUSTRY INNOVATIVE DEVELOPMENT NEEDS 1*

Irina Bogomolova , Elena Krivenko , Irina Vasilenko , 2 1 Victoria Malitskaya , Natalia Shatokhina 1

Department of Management, Faculty of Production and Branch Economics, Voronezh State University of Engineering Technologies, 19, Revolution Ave., Voronezh, 394036, RUSSIA. 2 Accounting and Taxation Department, Plekhanov Russian University of Economics, Moscow, RUSSIA. ARTICLEINFO

A B S T RA C T

Article history: Received 20 January 2020 Received in revised form 01 July 2020 Accepted 10 July 2020 Available online 18 July 2020

The process of introducing innovations must go through several interrelated stages. Determination value of weight coefficient the reasons under consideration and establishment-level indicators that affect enterprise development carried out by the method of expert assessments. This method is based on five essential elements. The first element is the Keywords: preparation of a plan and forecasts. The second stage carries out a Innovative development; feasibility study. The third stage includes consideration of the proposed Food industry; options by the enterprise management. The fourth stage focuses on the Enterprise management; Modernization programs; achievement of the goals and objectives of the structural and functional units. At the final stage, the enterprise management carries out control, Expert assessment; assessment, monitoring, adjustment, and addition of measures of an Technology enhancement; Diary firm; innovative type. For the case of food industry enterprises, after analyzing Innovation management. the obtained level, we revealed its rather low value. This low value confirms the negative influence of factors on developing food industry enterprises. Collected data indicates about the necessity to introduce organizational innovations into the enterprise's work. Using the presented methodology to identify the reasons affecting enterprise and assessing obtained options quality allows determining a crisis point. These points are identified at various stages of the enterprise's life cycle and require the introduction of innovations in production, management, and organizational processes. Based on the presented methodology can develop factorial methods to improve enterprise efficiency. Introducing this system to the JSC Diary Firm Moloko can increase its productivity by over 300%. Disciplinary: Technology Development and Innovation Management. ©2020 INT TRANS J ENG MANAG SCI TECH.

Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13Q http://TUENGR.COM/V11A/11A13Q.pdf DOI: 10.14456/ITJEMAST.2020.263

1. INTRODUCTION Innovation is the key to the success and profitability of the business. Innovations give leaders advantages reinforced with highly competitive strategies. Innovative methods and approaches to modern management allow not only to increase and diversify productions, increase labor productivities and economic efficiency but also to maximize the identification of all available potential and reserves that were not previously available. All this proves the prospective necessity and relevance of the formation of a stable trend of the innovative development path for the entire national economy, including for food industry enterprises. Today, domestic economic entities lag behind representatives of leading countries in terms of innovation activity, the number of innovative developments, their testing, and implementation in real production. This situation is inherent in many sectors and spheres of action of the national economy of the Russian Federation, including the food industry. Particularly acute problems are in the areas of technical and technological support, resource-saving, environmental safety, the use in real production of qualitatively new methods of planning, organization, and management of complex production systems and labor resources (informatization, programming, digitalization, automation). To date, foreign and domestic scientists of the past and present have formed a fairly good base of works devoted to the study of innovative processes and the development of food industry enterprises (development of a scientific base, testing of innovations and their implementation in practice, infrastructure development, state support system, financial support and organizational -management support, the promotion of innovative products to markets, etc.). Moreover, there are significant results not only in theoretical and methodological terms but also in the practical sphere of management. Currently, innovations and innovative development of various kinds of homo- and heterogeneous socio-economic systems have acquired an extraordinary and polysemantic character of a permanent type. Today, this development factor is the most effective tool for qualitative and quantitative changes in the national economy and society as a whole. It is worth noting that this economic category "innovation" was first identified and defined by Schumpeter [14] and defined only at the beginning of the 20th century. Similar manifestations were earlier, and this applies to the theoretical level of scientific research, and methodological, as well as utilitarian. Qualitative changes existed before, and their description was valid and justified. Still, the issues of innovation, in the context of their multi-aspect report, were first framed in the scientific work "Theory of Economic Development" (1911) [14]. In this work of authorship, the essence of not only innovations but also the content and structure of the innovation process, development, and transformation, were clearly defined and substantiated quite clearly. Schumpeter [14] defined innovation as a critical source of profit: "... profit is the result and the final result of the desired (new combination), which in itself is the embodiment of the formula: there is no development, there is no profit and vice versa" [14]. Currently, there are many definitions and interpretations of this category, but for the most part, they are identical and united by a single conceptual understanding. In the state document [7], innovation or innovation is the final result of the innovation activity of an economic entity, in the form of a new and/or improved product, new and/or improved technology that has been tested and used in practice." This definition is an official term concerning innovation and the development of socio-economic systems of the national economy of Russia. In this aspect, it is worth noting that the new and improved implies qualitative

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

transformations and changes of a new order, which have an explicit format for the implementation of scientific and technological progress and world scientific thought in all its manifestations. Thus, our author's position entirely coincides with the stated concept of understanding the essence of this subject area of scientific research. The study identifies the features of the Russian organization of innovative activity in food enterprises and identifies implementation criteria and problems of managing the innovation process.

2. MATERIALS AND METHODS In the course of basic scientific research in the field of economics and management, this study applies the systemic, situational, logical, dialectic, functional, and process. Based on the implementation, the used methods involve the empirical group (description, comparison, expert assessment), the theoretical group (idealization, analysis, analogy, synthesis, formalization, axiomatization, reflection, generalization, abstraction), and the general scientific group (abstract-logical, retrospective, economic -statistical, graphic). In particular, in the process of developing a comprehensive system for managing the innovation process at the enterprise used systemic, logical, and functional approaches, and the following scientific methods: description, expert assessment, idealization, analysis, formalization. This study used "JSC firm Moloko" as a case study for the construction of the production and economic model of the functioning.

3. RESULTS AND DISCUSSION Currently, more than 1/2 of the gross domestic product of developed countries (E.U., USA, Canada, Australia) is formed through innovative solutions and achievements of the production and organizational-managerial type, implemented based on specific innovative projects [2]. At the moment, Russia has a very significant lag behind the world leaders in the field of innovative development in many positions (resource conservation, environmental safety, technical and technological support for the agrarian sector and industrial production, I.T. technology in the context of software and information support and management control various socio-economic systems). During the past 5-10 years, much more attention has been paid to the issues of innovative development of the national economy from government agencies [2, 3]. Today, there are specific results based on a hugely expanded and reasonable regulatory framework for public administration [1, 5, 5, 8, 9, 10, 11, 12, 13]. Following the critical provisions of the latter in our country in the next 3-5 years, an innovative economic system based on scientific knowledge and high technology should be formed. In particular, the application of innovative solutions with the introduction of specific developments and inventions should become a critical factor in increasing the functioning efficiency of all sectors of Russia's economy, in particular, ensuring labor productivity growth in the real area by 3-5 times and contributing to 1.5-2 times reduction in resource consumption. These target settings are very relevant and promising for the domestic food industry. The effective functioning of this sector of the national economy is an integral element of ensuring the food, economic, and national security of our state. It also takes place that it is the food industry that determines the level and quality of life in any country in the world and Russia, including. *Corresponding author (Irina Bogomolova). Tel: +78612215845. Email: Bogomolova@vstuet.ru ÂŠ2020 International Transaction

The format of the innovation process and all innovation activity at food industry enterprises should be permanent and comprehensive. It should include the whole range of measures for the implementation, development, and analysis of the effectiveness of innovative solutions and progress. All spheres and functional, structural units of industry entities should be grouped and integrated based on the implementation of targets and tasks related to increasing the level of manufacturability, progressiveness, and innovativeness of the latter. The following types of innovations are most often found and have more than others development at food industry enterprises: technological, organizational, marketing, environmental [2, 14].

Percent

For a general fact of innovation activity, Figure 1 shows the dynamics of changes in the innovation activity of organizations in our country (the proportion of organizations involved in technological, organizational, marketing innovations), in particular, enterprises engaged in food production [8].

16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

11.6 9.5

11.8 10.4

2010

2011

11.9 10.3

2012

12.5 11.0 10.1

2013

9.9

2014

12.2 9.3

2015

Year

12.2

13.0

13.4

13.6

8.4

8.5

8.7

8.9

2016

2017

2018

2019

Total

13.9 9.3

2020 (forecast)

Food production

Figure 1: Innovative activity of organizations in Russia (the proportion of organizations engaged in technological, organizational, marketing innovations) Figure 1 shows that the indicator of innovative activity in food production is higher than the average index for the economy, but in absolute terms, it (sign) has rather low values. It is also worth noting that the average index of innovative activity in the economy has a steady decline trend, and this is against the background of expansion, updating, and development of regulatory documents [4, 10, 12]. These contradictions determined not by the legislative criterion, but by a whole series of other approaches that have a direct impact on the innovative activity of business entities of the modern economy (financial security, profitability, technical equipment, staffing, highly specialized specialists capable of carrying out research and case studies). Thus, the main barrier and constraining factor for innovative activity of modern enterprises have a multidimensional structure based on the above criteria. Therefore, a regulatory study of this issue is not a guarantee of the level growth of domestic economy innovativeness and help to resolve this controversial situation. There is a more comprehensive approach is required on the part of state and industry management structures with an emphasis on the identified deterrence criteria and risk situations. The proportion of organizations implementing innovations of surveyed the total number given in Table 1. The data show that technological innovations take the highest priority among the rest, and this type of innovation is more attention by industry management. All this is determined by the fact that management structures assigned technological and technological changes (modernization) plays

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

a crucial role in creating a productive innovation environment in the relevant sector of the national economy. Table 1: Percentage of organizations implementing innovations. Indicators/Year

2010

2011

2012

Total economy in food production

7.9 9.5

8.9 9.6

9.1 9.3

Total economy in food production

3.2 2.6

3.3 3.1

3 2.9

Total economy in food production

2.2 4.5

2.3 4.8

1.9 4.3

Total economy in food production

4.7 6.2

5.7 7.4

2.7 3.3

2013

2014

2015

2016

Technological innovation 8.9 8.8 8.3 7.3 9 10.3 10.2 10 Organizational Innovation 2.9 2.8 2.7 2.4 2.5 2.4 2.2 2.0 Marketing innovation 1.9 1.7 1.8 1.4 4.4 4.3 4.1 4.0 Environmental innovation 1.5 1.6 1.6 1.1 1.4 1.7 2.2 1.9

2017

2018

2019

2020 (forecast)

7.5 10.8

7.2 11.6

7.3 11.9

7.5 12.0

2.3 2.2

2.1 2.3

2.3 2.5

1.4 4.2

1.3 3.5

1.3 3.6

1.6 3.8

1.1 1.5

1.0 1.2

1.1 1.3

1.2 1.3

These trends also exist in other sectors and spheres of the national economy, which are confirmed by statistical observations and applied research. Another essential feature of the identified pattern is that for all types of innovations, including food production, and the economy as a whole, there is a decrease in the innovative activity of economic entities of the business environment, except for only 2018, when technological and organizational innovations implemented in food production, had a positive trend. It is worth emphasizing that most of the technological innovations introduced are the result of their borrowing from the leading countries in this industry segment, and the share of domestic developments introduced in real production is less than 10%. All this is a consequence of the large gap and lag in local applied science from the world level of innovative transformations. The noted trends confirmed by the indicators of investments (costs) that local food industry enterprises have recently directed to technological innovations (Figure 2).

180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

Food production 43.9

25.9

20.1

26.1

120.4

128.5

40.8

41.6

147.3

154.6

44.7

30.0 16.9 8.8

12.6

40.1

73.4

90.5

111.2

121.2

140.5

158.5

50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0

Thousands million rubles

x 10000

million rubles

Total

Year

Figure 2: Costs of technological innovation in food production and the economy as a whole In particular, in 2017, in the food industry, the number of costs for technological innovations *Corresponding author (Irina Bogomolova). Tel: +78612215845. Email: Bogomolova@vstuet.ru ÂŠ2020 International Transaction

amounted to 43.9 billion rubles, which is 68.2% more than the previous period. Over the same period in the economy as a whole, the costs of technological innovation amounted to almost 1.41 trillion rubles. In 2018, these indicators amounted to 40.8 billion p. and 1.47 trillion p. respectively. As you can see, large amounts of money are being sent to these types of innovations today. All this became possible due to the implementation of several state program initiatives [2, 6, 7, 10, 11, 12, 13, 14]. These initiatives have a very effective mechanism to support new business entities that implement various kinds of innovative projects in the plan for co-financing, regulatory, organizational, managerial, and information and consulting support. As the practice of research at most food industry enterprises shows, innovative initiatives (solutions) are discrete and point-like. At that time, an integrated approach should apply in the system of innovation transformation management. To implement this approach, it is wholly necessary to develop and justify holistic program activities in the form of business plans and strategic maps. The organization the innovation process will be considered on the example of the milk processing enterprise of the Voronezh region "JSC firm Moloko". The effectiveness of the implementation of innovative activities at this enterprise is primarily determined by several factors, the accounting and high-quality use of which will allow achieving the desired goals in this area of functioning. The latter, first of all, includes research work in the field of marketing, organizational, and managerial and technical and technological measures. A well-organized innovation process shortly will ensure the achievement of the planned result in the form of an increase in intellectual potential, production of products with improved consumer properties, as well as profit growth and increased levels of capitalization. The fundamental component of any innovation process is scientific and technological progress. It ensures the interconnected development of science and production, which makes it possible to achieve in practice a positive synergistic effect in the form of technical and technological modernization, creation of a new product, and improvement of the quality of scientific research conducted directly at the enterprise. The main areas of scientific and technological progress inherent in the ÂŤJSC firm Moloko" are illustrated in Figure 1.

Improving the level of information and automation of the production process management, as well as the system of planning, accounting, control and forecasting

Introduction of advanced technologies for controlling the production process

Mastering fundamentally new technologies and diversification of existing production

Implementation of quality control and permanent monitoring of products through the use of modern technologies

Figure 1: The main directions of scientific and technological progress inherent in "JSC firm Moloko" For competitive development in an unstable and highly intermittent market environment, industry enterprises need to continually carry out modernization changes in the fundamental areas of operation (material and raw materials supply, the primary production process, marketing of finished products, bringing it to the consumer). Per this, we developed the integrated innovation process

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

management system for JSC firm Moloko (Figure 2). Planning and forecasting

Control, evaluation, monitoring, adjustments and additions

Implementation in practice by structural and functional units

Feasibility study (efficiency)

Organizational and management decisions and support

Figure 2: The integrated innovation process management system for "JSC firm Moloko" This system is capable of activating innovative transformations at this enterprise. First of all, this system implies the involvement of a significant number of employees in the development and implementation of innovations in production. The system is based on five essential elements. In particular, the first element is the preparation of a plan and forecasts. At this stage, the process of planning the implementation of the selected strategy (goals, objectives, timelines, tools, mechanisms, responsible, control numbers). It also on this stage makes forecasts (scenarios, indicators, risks, uncertainties, positive effect, determination). In the second stage, a feasibility study is carried out (calculation of the effect and performance indicators), here evaluated the necessary resources for the implementation innovation cycle. The third stage composes of planing the specific set of goals and tasks for the staff and enterprise. At the fourth stage, it carried out the achievement goals and objectives of the structural and functional units. At the final stage, the management of enterprise carries out control, evaluation, monitoring, adjustment, and addition of measures of an innovative type, if appropriate. Based on the implementation of this system, the enterprise management will be able to determine the goals and the corresponding type of strategy, which will achieve high results in the production and sale of finished products. This system has high adaptive properties and can be considered a universal tool. This system makes it possible to single out individual components in innovation, thereby providing the possibility of a phased implementation of end-to-end planning of innovative development from the stage of receipt of raw materials to the manufacture of finished products (Figure 3).

*Corresponding author (Irina Bogomolova). Tel: +78612215845. Email: Bogomolova@vstuet.ru ÂŠ2020 International Transaction

Figure 3: Adapted production and economic model for "JSC firm Moloko". Here, using the method of expert assessments, we determine the value of the weighting factor of the reasons under consideration and establish the level of this indicator that can influence the development of the enterprise. For each goal, we will set the value of the weight coefficient - which measures the degree of influence a factor in enterprise development. Let's set the value in the range from 0 to 1, and the closer the parameter is to 1, the more critical it is from the expert's point of view. For each factor of the cause, we will establish a score on a 10-point scale. The higher the probability of a positive rating, the closer the evaluation is to 1, the lower the likelihood of a positive assessment, the closer the score is to 10. Calculating the value of each parameter allows us to find their sum. Next, we calculate the level of positive or negative cumulative influence of these factors on the development of the enterprise (Table 2). Table 2: Expert Assessment Factor Financial condition Technical potential Scientific potential Profitability Implementation Investment potential Sales connections Regional innovation activity The population purchasing power State regulation of innovation TOTAL

Thus, the level of influence is

2.80 100

Influence degree (x) 1 0.9 0.9 1 1 0.9 0.9 0.8 0.95 0.65 x

Factor assessment (y) 7 3 3.5 5 6 1.5 6 1.7 5 2 x

Value (x/y) 0.14 0.30 0.26 0.20 0.17 0.60 0.15 0.47 0.19 0.33 2.80

= 0.028. Note that the maximum possible level of influence

is positive at a value close to 1, respectively. The lower this value, the more the importance of factors is negative, and at the 0.5 borders, it will be zero. As a result of the obtained level of the indicator, we have a rather low value, which thereby confirms the negative impact of these reasons on the development of food industry enterprises. It suggests the need to introduce organizational innovations into the work of the enterprise. Determining the quality of the obtained options using the presented

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

organization allows us to establish crisis points. These points are identified at various stages of the life cycle of an enterprise and require an immediate decision on the implementation of innovations in production, management, and organizational processes. Based on the presented organization, was developed factorial methods to increase efficiency. Next, we consider a modernization program in the production and management for "JSC diary firm Moloko" (Table 3). Table 3: Modernization program in the field of production and management at "JSC firm Moloko" Process name

Time Scope of The name of the indicator implementation structural unit where

#1. Measures to improve the quality of system entry

Year

96%

#2. Measures to improve the quality of the process in the system

Year

94%

#3. Activities to improve the quality of finished products

Year

100%

Year

100%

Year

100%

#4. Measures for the sale of goods #5. Consumer Activities

Expected Result

For the manufacturer: For the consumer: Point of reception of enhancing the quality of improving the quality raw materials the process by reducing and reliability of the rejects finished product These measures will allow the manufacturer to Department of chief effectively use the advantages of high-quality engineer and system entry, maximizing the competitiveness of mechanic their products Production and Production Increase in labor productivity, reliability of Department execution. (Production Manager) Marketing and sales The release of high-quality goods and maximum department possible acquisition by consumers. Customer Relations The study of taste preferences, analysis of quality Department indicators, identifying consumer needs

In Table 3 proposed for "JSC firm Moloko", five types of measures to implement in different structural divisions are determined by the multidimensional nature of the steps taken to maximize the economic effect of both the enterprise and the end-user. The first measure is the installation of a metering station for receiving milk of increased productivity at the stage of receiving raw materials, that will allow accurately taking into account the amount of milk received and filtering. The second event is improving professional staff skills, conduct training, seminars with participation highly qualified and narrow-profile experts. The third stage is modernizing the production process (upgrading equipment and technologies), in particular, the sterilization-cooling plant and the apparatus for ultra-pasteurization). The fourth stage was a consequence of the third stage because the installation of the ultra-pasteurization apparatus allowed JSC firm Moloko to carry out deep whey processing. This event made it possible to expand the products range through the production of the protein concentrates of whey, attract additional profit, and reduce the impact on the environment. In the fifth stage was a detailed study of the preferences of the modern consumer, for this, carried out surveys, collection of personal data, visits to exhibitions, and fairs. Such measures had been allowing us to find out the taste preferences and wishes of consumers and identified the next ways for innovation. One of the ways for the further development of JSC firm Moloko is the production of "organic" dairy products, but this requires innovation in the whole agro-industrial complex. This system allowed singled out individual components for innovation, and we developed five methods to increase efficiency: 1 - installation a metering station for receiving milk of increased productivity at the stage of receiving raw materials; *Corresponding author (Irina Bogomolova). Tel: +78612215845. Email: Bogomolova@vstuet.ru ÂŠ2020 International Transaction

2 - improving professional staff skills, conduct training, seminars with participation highly qualified and narrow-profile experts; 3 - modernizing the production process by installation sterilization-cooling plant and the apparatus for ultra-pasteurizationĐś 4 - carry out deep whey processing; 5 - setting goals for further innovation. The implementation of these measures allowed an increase in the company's profit by more than 300%, which is confirmed by the company's tax return for 2019 (Table 4). Table 4: Statement of financial results (profit and loss) "JSC diary firm Moloko" (Rubles). Indicator name Revenue Cost of sales Gross profit (loss) Business expenses Administrative expenses Profit (loss) from sales Interest receivable Percentage to be paid Other income Other expenses Profit (loss) before tax Income tax Current income tax (until 2020 this is p. 2410) Change in deferred tax liabilities Change in deferred tax assets Other Net income (loss)

Code 2110 2120 2100 2210 2220 2200 2320 2330 2340 2350 2300 2410 2411 2430 2450 2460 2400

2018 3794844 3037717 757127 652824 208711 43279 13223 -65 111016 157077 54875 17361 17361 4164 6496 2349 29884

2019 4526973 2228896 1014862 505137 209610 152428 15688 -395 160276 124272 267126 59573 59573 1000 0 -134 212874

4. CONCLUSION The retrospective analysis showed that Russia is on the third stage of scientific and technological progress. The key driver is an innovative transformation. At present, more than 1/2 of the GDP of developed countries formed through innovative technologies and innovative products. Russia today is significantly behind the world leaders in the field of creative development in many positions. Nevertheless, in the past 5-10 years, much more attention has been paid to issues of innovative development. So today, there are specific results based on a developed regulatory framework for management. Significant for the food, economic, and national security of our country is the innovative development of the food industry. Statistics department data indicates that creative activity in food production is higher than the average index for the Russian economy. Still, in absolute terms, it has rather low values. We also note that technological innovations take the highest priority among the rest, and this type of change is given more attention by industry management. Still, it is worth emphasizing that most of the technological innovations introduced are the result of export, and the share of domestic developments being introduced into real production today is less than 10%. All this is a consequence of the large gap and lag in local applied science from the world level of innovative transformations. Further, this research was applied to a regional enterprise of the dairy industry "JSC firm Moloko". For JSC firm Moloko enhancing competitive advantages, we developed the integrated

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

innovation process management system. The system based on five essential elements (preparation of a plan and forecasts; carrying out a feasibility study; composes of planing the specific set of goals and tasks for the staff and enterprise; achievement goals and objectives of the structural and functional units; control, evaluation, monitoring, adjustment, and addition of measures of an innovative type, if appropriate). The implementation of these measures allowed an increase in the company's profit by more than 300%.

5. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

6. REFERENCES [1] Russia Government. (1998). The concept of innovation policy of the Russian Federation for 1998-2000. Decree of the Government of the Russian Federation, No.832, http://base.garant.ru/179112. [2] E.I. Krivenko, G.N. Strukov. (2018). Directions of innovation-oriented development of enterprises. 2018 Scientific Conference of Teachers and Researchers of VGUIT, Part 3. Ed. S.T. Antipova; Voronezh. State University of Engineering Technol., 201. [3] E.I. Krivenko, E.S. Stryapchikh, A.V. Mikhailova (2016). Directions of innovative development of enterprises based on managerial tools. Economics and Entrepreneurship, 10-3(75), 327-331. [4] Russian Presidential Council. (2019). The national program "Digital Economy of the Russian Federation". Minutes of the meeting of the Presidium of the Presidential Council on Strategic Development and National Projects, No. 7. http://digital.gov.ru/uploaded/files/natsionalnaya-programma-tsifrovaya-ekonomika-rossijskoj-feder atsii_NcN2nOO.pdf. [5] Russian Federation Government. (2010). Information Society (2011-2020). The Government of the Russian Federation, No. 1815-r. http://static.government.ru/media/files/41d47c465b2b53f82bb1.pdf . [6] Russia Government. (1998). On the Concept of Innovation Policy of the Russian Federation for 1998-2000. Decree of the Government of the Russian Federation No. 832 http://base.garant.ru/179. [7] Russia Government. (2017). The program "Digital Economy of the Russian Federation". The Government of the Russian Federation, No. 1632-r. http://static.government.ru/media/files/9gFM4FHj4PsB79I5v7yLVuPgu4bvR7M0.pdf. [8] Russia Government. (2017). Strategies for the development of the information society in the Russian Federation for 2017-2030. Decree of the President of the Russian Federation, No. 203, http://static.kremlin.ru/media/acts/files/0001201705100002.pdf. [9] Russia Government. (2012). Development strategies of the food and processing industry of the Russian Federation for the period until 2020. Order of the Government of the Russian Federation, No. 559-r. http://www.consultant.ru/document/cons_doc_LAW_128940. [10] Russia Government. (2017). Economic security strategies of the Russian Federation for the period until 2030. Decree of the President of the Russian Federation, No. 208. http://www.consultant.ru/document/cons_doc_LAW_216629. [11] Russia Government. (2014). Strategy for innovative development of the Russian Federation for the period until 2020. http://ac.gov.ru/files/attachment/4843.pdf. [12] Russia Government. (2013). The development strategy of the information technology industry in the Russian Federation for 2014-2020 and the future until 2025. Decree of the Government of the *Corresponding author (Irina Bogomolova). Tel: +78612215845. Email: Bogomolova@vstuet.ru ÂŠ2020 International Transaction

Russian Federation, No. 2036-r. http://digital.gov.ru/common/upload/Strategiya_razvitiya_otrasli_IT_2014-2020_2025.pdf. [13] S.A. Khalin. (2011). Formation of a holistic system of innovative management at the enterprise of the food industry. Scientific notes of Oryol State University. Series: Humanities and Social Sciences, 6, 23-27. [14] J.A. Schumpeter. (2005). Theory of Economic Development. http://financepro.com/economy/10158-sh-umpeter-jj.a.-teorijajekonomicheskogo-razvi-tija.html Professor Dr.Irina Bogomolova is Head of the Department of Management, Organization of Production, and Branch Economics. She holds a Doctor of Economics. Her research interests include Managing the Sustainable Development of Agricultural and Processing Enterprises of the Agro-Industrial Complex, ensuring Food Security, current Trends in the Clustering of the Grain Product Complex, Innovative Development of Enterprises based on Resource Conservation, the use of Resource-efficient Technologies Elena Krivenko is an Associate Professor of the Department of Management, Organization of Production and Branch Economics. She is a Candidate of Economic Sciences. Her research interests are Innovative Development of Domestic Enterprises in the Food Industry, Integration of Agricultural and Processing Enterprises in the Agro-Industrial Complex, Management of the Assortment of Products of Food Enterprises based on Innovative Mechanisms, Resource Conservation as an Element of Development Management of Industry Enterprises Irina Vasilenko is an Associate Professor of the Department of Management, Organization of Production and Branch Economics, She is a Candidate of Economic Sciences. Her research interests are Management of Innovation and Investment Activities of Industrial Enterprises, Food Security of the Russian Federation: problems and prospects, Increasing the Competitiveness of Agricultural Enterprises, Diversification Directions of Development of Industrial Enterprises in the Context of Import Substitution Professor Dr.Victoria Malitskaya teaches at the Department of Economic Activity Analysis, the Russian Economic University named after G.V. Plekhanov. She holds a Doctor of Economics. Her research interests are research in the field of Accounting, Analysis, and Audit of Financial Assets in Russian and International Practice.

Natalia Shatokhina is an Associate Professor of the Department of Management, Organization of Production and Branch Economics. She is a Candidate of Economic Sciences. Her research involves Product Quality Management of Industrial Enterprises, Food Security of the Russian Federation: Problems and Prospects, improving the Competitiveness of Agricultural Enterprises, Diversification Directions of Development of Industrial Enterprises in the Context of Import Substitution

Irina Bogomolova, Elena Krivenko, Irina Vasilenko, Victoria Malitskaya, Natalia Shatokhina

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13R

ESTIMATION OF PROVINCIAL MULTIDIMENSIONAL POVERTY INDEX (MPI) OF PAKISTAN Rifat Mahmood 1

, Ijaz Hussain

Department of Economics, Gomal University, Dera Islami Khan, Khyber Pakhtunkhwa, PAKISTAN.

ARTICLEINFO

A B S T RA C T

Article history: Received 02 April 2020 Received in revised form 15 June 2020 Accepted 28 June 2020 Available online 20 July 2020

Poverty has multidimensional aspects. That is, it does not only capture the lack of consumption expenditure in terms of food poverty, but it also considers education, sanitation, housing, health, and other aspects as well. Thus, the assessment of poverty also considers the incorporation of all aspects during its assessment phase. Therefore, the new methodology of poverty assessment captures these deficiencies/deprivations that people face. The paper estimates the multidimensional poverty index (MPI), by considering five dimensions i.e. the quality of housing, health facility, education, basic needs, and living standards with 11 indicators. The theme of this paper is to consider all dimensions right at the time of poverty assessment, not to consider after the poverty assessment (as effects of poverty). This will clearly explain the multidimensional aspects of poverty assessment. This study will adopt a methodology used by Alkire and Foster (2007). This study used PSLM (Pakistan Social and Living Standard Measurement Survey, Round VII, 2013-14), which is micro-level data at the provincial level covered eighteen thousand households collected by the Pakistan Bureau of Statistics. This study finds that the nationwise headcount ratio is 87% and MPI is 35%. The provinces with the highest MPI are seen in Sindh and Balochistan by 40% and minimum MPI are noticed in the provinces Punjab by 31% followed by Kyber Pakhtunwa by 34%.

Keywords: Poverty indices; MPI; Multidimensional poor; Pakistan’s provinces; Poverty dimension; Poverty indicators; Khyber Pakhtunkhwa; Punjab; Sindh; Baluchistan; PSLM; Poverty measurement; Household poverty; Poverty assessment; Headcount ratio; Average poverty.

1. INTRODUCTION More than 1129 million humans worldwide suffer from acute income poverty with a certain disparity. Poverty has become a major challenge in history for the developing world, due to its *Corresponding author (Rifat Mahmood). Email: riffat_saddozai@yahoo.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13R http://TUENGR.COM/V11A/11A13R.pdf DOI: 10.14456/ITJEMAST.2020.264

widespread impact on the developmental process (UNDP, 2013). Income for the poverty measurement is a conventional measurement. Their justification of using the income as determine to poverty is based on the philosophy that income offers money by which one can fulfill the basic needs (Christiaensen et al. 2002). Absolute poverty means a situation that indicates an acute deficiency of basic needs like housing, provision of sanitation, water, food, health, information, safe drinking, and education therefore Poverty not only depends upon income but also on basic needs as well as access to services. (von Maltzahn et al. 2008). According to most economists, poverty is a multidimensional phenomenon, yet in practice for poverty assessment, the majority of the researchers use a unidimensional index to analyze an individualâ€™s wellbeing by per capita income or usually expenditures (Duclos et al. 2006). But poverty has a variety of signs, like shortage of income and lack of productive resources which should be sufficient for ill health, livelihoods, hunger, malnutrition, and lack to access of educational facilities and mortality from illnesses, insufficient shelters, social discrimination, and insecure environment (seminal work of Sen, 1976). One researcher has characterized it by the lack of contribution of decision-making in social, civil, and artistic life which have presented the capabilities concept like good education and health (Laderchi 1997). Poverty is a link between income and wellbeing that includes such as school enrolment, mortality, and malnutrition. For a complete picture of poverty, only income does not give all the essential information. Thus, for the image of absolute poverty additional dimensions should also be added (Dercon 2005). Similarly, the World Bank (1990; 2000) reports on poverty, focus on 3D of poverty in combination with income poverty i.e. education, health, voicelessness, and vulnerability. To estimate the Multidimensional Poverty Index (MPI) by taking the following dimensions, 1. Quality of housing a. b. c. d.

To see Occupancy Status (Own Occupied (Not Self hired) Dwelling Type (if the household have no independent house / Compound / Apartment / Flat) To see the room density (three or more than three persons per room) To see the sanitation facilities (if they have no sanitation facility)

2. To see health facility a.

If any child has died in a family in the age of 0-5

3. To examine the education dimension a. b.

Years of schooling (If no family member has completed 05 schooling years) School attendance (If any child of school-going age 4 to 8 is out of school)

4. To observe the basic needs a. b.

Nutrition Drinking water (availability of drinking water)

5. To find the living standard of the masses a. Cooking fuel, b. Electricity, c. Assets (Freezer / Refrigerator / Air cooler / Air conditioner / Geyser / Washing machine / Dish antenna / Pc)

Rifat Mahmood and Ijaz Hussain

2. LITERATURE REVIEW This chapter highlights the earlier studies and discussion and their summaries which are as under: Although the literature on this topic is not sufficient, yet the following are the earlier studies that were carried out in this field. This paper explains the self-evident basis of multidimensional poverty indices avoiding the income poverty approach which measures poverty by predetermined poverty income line and took the basic need approach into account. The researcher also depicts the fact that area restrictions may have a crucial role in the design of “multidimensional poverty” indices (Tsui, 2002). Abraham et al. (2008) has suggested that an individual’s poverty can be seen in her/his deficiency that consists of not “only income but also many other dimensions such as sanitation, health, and nutrition” not only in his income. Hereafter, a complete poverty measure should be taken into account by taking multiple dimensions of an individual. Poverty vulnerability confines the probability of an individual falling into poverty. Unlike poverty, that indicates the status of an individual, whereas nature vulnerability is predictive. Sabina et al. (2014) implemented the first “direct method to measure the poverty” for more than 100 countries in developing context. After offering the MPI, she analyzed robustness and its scope, by considering the data constraints and issues of methodological which were involved in estimating and constructing. A variety of robustness tests shows that MPI is a dependable framework that can harmonize global poverty income estimation. Ramya et al. (2014) explored that multidimensional poverty measurement on the individual level shows the important weaknesses in the discussion of poverty. The researcher found that the majority of poor individuals belong to nonpoor families. In the household level, poverty analysis these poor people would be misclassiﬁed as non-poor. The particular female is completely ignored in such a conventional approach. Currently, gender analysis is with female heads as the representative for all the females while disregarding those women who are living in such a family which are headed by males. He further said that several studies including his study found that “female household heads are not worse than” those whose household head is male; therefore, it is concluded that in poverty gender differences do not exist. Still, the study reveals that when poverty is measured on an individual basis, the mainstream of the women is found poor. He further added that about 25% of the households are suffering from multidimensional poverty. On assigning the value of multidimensional poverty to individual members of the household, approximately 22% of all people of households are recognized as multidimensional poor with the ratio (21%) of men and (22%) women. Similarly, results indicate that there is a slightly higher poverty rate in male-headed families with the ratio (25%) more than (23%) female-headed ones. The analysis at the individual level, however, shows a different picture of poverty of gender differences i.e. among the women poverty rate 64% is more than double than the poverty rate 30% among men which indicates that the majority of the women are (71%). Thomas et al. (2009) compared and distinctions of poverty of lay individuals, who are suffered by policies. He took “Livelihood insecurity” as the key determinant of poverty for identification of poor households where families were classified into four different groups based on very poor livelihood (Hungry *Corresponding author (Rifat Mahmood). Email: riffat_saddozai@yahoo.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13R http://TUENGR.COM/V11A/11A13R.pdf DOI: 10.14456/ITJEMAST.2020.264

households), Poor (agricultural laborers /Other casual laborers / Fish workers / Construction workers), non-poor (Government service, Gulf migrants (semi-skilled or unskilled), farmers /Traditionally well off families, skilled migrants. While the methodology indicates basic needs (clothing, food, sanitation, and housing), assets (consumer goods, debt, and land), capabilities (school attendance and literacy) and livelihood (means of livelihood, labor status, and migration) and the Kerala method took basic needs (water, food, sanitation, and housing) and capabilities (education), stress on socio and cultural factors. Whereas local method highlights only one aspect of poverty which is livelihood insecurity and also gave relative standing to diverse livelihood. Conchita et al. (2011) used three approaches giving identical result, that 80% of the families are poor. They also find a U-shaped relationship amid the size of the family size and poverty as well as between the age of the individual and poverty. Also, marital status and work have the largest marginal effect over poverty, this impact is seen truly in all the five. Franc et al. (2013) evaluated not only the nature of the multidimensional poverty of children but also to classify the children group which is most vulnerable in Darfur. It showed the child deprivation which may attract the interventions on a humanitarian basis to improve child welfare by improving nutrition, access to clean water and shelter, sanitation, health, and education. For humanitarian agencies and policymakers, this paper shows four important issues that declare an emergency. First, in Darfur, poverty is noticeably high; almost all children, boys, and girls, are disabled and nondisabled, Secondly, poor-children do not consist of the undeviating group. More, he has found disabled children, especially disabled girls, which shows the poverty at the highest level. This gap of “multidimensional poverty” between nondisabled and disabled, children with disabilities are signiﬁcantly worse than non-disabled children. Thirdly, disable children are signiﬁcantly worse off. Mahmood and Hussain (2020) report the multidimensional Poverty Index (MPI) for urban and rural regions of Pakistan and find that rural region contributes a 76% share of MPI. This work analyzes the estimation of the multidimensional poverty index at the provincial level of Pakistan, therefore it is important to explore its different aspects.

3. METHODOLOGY AND DATA For the estimation of MPI researcher has used the methodology of Alkire and Faster (2007). The estimation section is broken into two parts one is the identification of poor and non-poor by using a dual-cutoff point approach. The first cutoff is used to identify the non-deprived and deprived while under the second cutoff, non-poor and poor is separated, and the second section consists of aggregation which is used to find information regarding the MPI at the provincial level.

3.1 DATA SOURCE For research PSLM data (Pakistan Social and Living Standards Measurement Survey), Round VII (2013-2014) is used which consists of 17989 families. It is micro-level (a unit record) data collected by the Pakistan Bureau of Statistics (PBS), Statistics Division, Islamabad.

Rifat Mahmood and Ijaz Hussain

4. ANALYSIS AND DISCUSSION This chapter describes the basic features of the analysis of the study, which provides simple summaries about the sample and the measurements. Result of first cut off of poverty which splits the deprived and not deprived families separately. If a family receives a “0” score then the family will be declared as not deprived otherwise if the family obtains 1 then it will be considered as deprived. In Pakistan, there are four provinces which are Khyber Pakhtunkhwa, Punjab, Sindh, and Baluchistan. After the discussion of three-dimensional frequencies, the multidimensional poverty index has been estimated according to provinces and country wise.

4.1 FIRST CUT OFF OF POVERTY DIMENSION WISE In this section, five dimensions along with eleven identifications are taken into account, where deprived and non-deprived (not deprived) are identified. 4.1.1 QUALITY OF HOUSING DIMENSION Under this dimension four indicators are selected which are occupancy status, dwelling type, room density, and sanitation are included. Table 1 Quality of Housing. (authors’ calculation) Provinces

Occupancy Status

Dwelling Type

Room density

Sanitation

Non-Deprived Deprived Non-Deprived Deprived Non-Deprived Deprived Non-Deprived Deprived

Khyber Pakhtunkhwa % within indicator Punjab % within indicator Sindh % within indicator Baluchistan % within indicator

2884 81.9 6355 83.7 4639 89.0 1383 83.4

638 18.1 1242 16.3 572 11.0 276 16.6

3002 85.2 6388 84.1 3866 74.2 1451 87.5

520 14.8 1209 15.9 1345 25.8 208 12.5

2582 73.3 5482 72.2 3083 59.2 1174 70.8

940 26.7 2115 27.8 2128 40.8 485 29.2

126 3.6 2267 29.8 1128 21.6 141 8.5

3396 96.4 5330 70.2 4083 78.4 1518 91.5

According to Table 1 in occupancy status, 89% of Sindh families are “non deprived” followed by Punjab and Baluchistan where they have equal percentage i.e. 83. In the dwelling type maximum percentage is seen in “non-deprivation” in the families of Baluchistan by 87.5%traced by Kp 85% while the least percentage i.e. 74% in “non-deprivation” is depicted in Sindh province. The case of room density exposes the same situation as the dwelling type here “non-deprivation” are also in majority here majority families with fractional fluctuation in ascending order belongs to provinces Kp, Punjab, and Baluchistan by 73%, 72%, and 71% respectively. On the other hand in the indicator sanitation, the condition is shocking, here majority houses of entire provinces are not connected with the sanitation system. Maximum “deprivation” is shown in Kp chased by Baluchistan with 96% and 92% and the minimum percentage is depicted in Punjab province where this percentage is 70. 4.1.2 CHILD MORTALITY Under this dimension, only one indicator is included i.e. child mortality. Our total sample size is 17989 while here in child mortality our sample is 14100 and 3889 number of families have either no children or their children’ age is more than our required age. *Corresponding author (Rifat Mahmood). Email: riffat_saddozai@yahoo.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13R http://TUENGR.COM/V11A/11A13R.pdf DOI: 10.14456/ITJEMAST.2020.264

Table 2: Child Mortality (author’s calculation) Provinces Khyber Pakhtunkhwa % within indicator Punjab % within indicator Sindh % within indicator Balochistan % within indicator

Non-Deprived 2332 81.5 4301 74.8 2942 72.6 1191 82.9

Deprived 531 18.5 1449 25.2 1108 27.4 246 17.1

Table 2 depicts that overall “non-deprivation” is larger than “deprivation”. The situation of Baluchistan exposes that this percentage of “non-deprivation” is 82.9% which is maximum across the provinces chased by Kp with almost the same percentage i.e. 81.5. While this percentage in Sindh is 73 concerning “non-deprivation” is minimum among the provinces. 4.1.3 EDUCATION DIMENSION This education dimension consists of drop out and school attendance. Table 3 indicates that in drop out the greater part of families of Sindh and Punjab are in “deprivation” having the same percentage by 53% while in the same indicator 56% of families of Kp province pursued by Baluchistan with 53% are in “non-deprived”. On the other hand, in school attendance according to Table maximum families of entire provinces are in “deprivation” here maximum percentage i.e. 95 which is observed in Baluchistan and 88% in Kp and 85% in Sindh.

Table 3: Education dimension. Provinces Khyber Pakhtunkhwa % within indicator Punjab % within indicator Sindh % within indicator Balochistan % within indicator

Drop Out Ratio Non-Deprived Deprived 1459 1133 56 44 2908 3351 47.0 53.0 1647 1888 47.0 53.0 561 489 53.0 47.0

School attendance Non-Deprived Deprived 427 3095 12.0 88.0 1977 5620 26.0 74.0 789 4422 15.0 85.0 89 1570 5.0 95.0

Similarly condition of the Punjab province although is worse yet a little bit better than the rest of provinces here the “deprivation is depicted by 74%. 4.1.4 BASIC NEED DIMENSION This includes nutrition and access to clean drinking water. According to Table 4 in the nutrition indicator majority families of provinces, Kp and Punjab are fine as compared rest of the provinces about 61% of Kp families and 59% of Punjab provinces are in not deprivation, while 58% of Baluchistan and 52% of Sindh’s families are suffering from malnutrition i.e., not deprivation.

Rifat Mahmood and Ijaz Hussain

Table 4 Basic Need Dimension Provinces Khyber Pakhtunkhwa % within indicator Punjab % within indicator Sindh % within indicator Balochistan % within indicator

Nutrition Non-Deprived Deprived 2130 1392 60.5 39.5 4489 3108 59.1 40.9 2478 2733 47.6 52.4 684 975 41.2 58.8

Access to clean drinking water Non-Deprived Deprived 2571 951 73.0 27.0 7451 146 98.1 1.9 4683 528 89.9 10.1 1098 561 66.2 33.8

The indicator access to clean drinking water indicates that the majority families of entire provinces have the access to drinking water while among the provinces, 98% of Punjab’s families are receiving clean drinking water track by Sindh where this percentage is about 89 while Kp and Baluchistan having 73% and 66% respectively. Living Standard dimension; this dimension includes Gas availability, electricity facility, and assets. Table 5 illustrates a very awful situation that the majority of the families of the entire provinces have no access to the gas facility, “deprivation” about 74% is ceiling percentage which is observed in Baluchistan and then approximately 70% and 68% by KP and Sindh respectively. Table 5: Living Standard Dimension Provinces Khyber Pakhtunkhwa % age Punjab % age Sindh % age Balochistan % age

Gas Availability Non-deprived Deprived 1071 2451 30.4 69.6 2770 4827 36.5 63.5 1660 3551 31.9 68.1 439 1220 26.5 73.5

Electricity Availability Non-deprived Deprived 3070 452 87.2 12.8 6612 985 87.0 13 2539 2672 48.7 51.3 1172 487 70.6 29.4

Assets Non-deprived Deprived 558 2964 15.8 84.2 1013 6584 13.3 86.7 273 4938 5.2 94.8 160 1499 9.6 90.4

The situation of the electricity availability is good where the majority of families in entire provinces have access to the electricity facility except Sindh province where 51% of the houses have no access to electricity facility. In not deprivation, Kp and Punjab provinces have an equal percentage, while 71% of Baluchistan’s houses have an electricity facility. The situation of assets is very horrific as the majority of families do not qualify the condition of assets, here maxim “deprivation” is seen in the provinces Sindh i.e. 95% and then in the Baluchistan which is 90%. Similarly, 87% of “deprivation” is in the Punjab and 84% “deprivation” in Kp is depicted.

4.2 WEIGHTED DEPRIVATION IN GROUPING INTENSITIES (2ND CUT OFF) Weighted deprivation in grouping describes the second cut off ranging from 00 to greater than or equal to 0.51, while “non-poor” having the score less than 0.20 and the poor have the score greater than or equal to 0.20 while the rest of the column shows the severity of Poverty. The analysis of Table 6 specifies that that within the province in Kp majority families lie in the *Corresponding author (Rifat Mahmood). Email: riffat_saddozai@yahoo.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13R http://TUENGR.COM/V11A/11A13R.pdf DOI: 10.14456/ITJEMAST.2020.264

slab of greater or equal to 0.51 which is severed poverty intensity, oppositely minimum families are associated with near to poor or “non-poor” by about 9%. Similarly, 18% of families are living between two extremes i.e. 0.36-0.4. In the case of Punjab, the situation is different majority chunk (18%) belongs to “non-poor” and families which belong to the succeeding percentage i.e.16% are living in poverty (>= 0.51). Likewise, 8% of families are near the acute poverty living in 0.46-0.50. Table 6: Weighted deprivation intensity (author's calculation). Provinces Khyber Pakhtunkhwa %age within province Punjab %age within province Sindh %age within province Baluchistan %age within province

Non-Poor 332 9.4 1357 17.9 580 11.1 81 4.9

.20-.26 299 8.5 738 9.7 290 5.6 94 5.7

.26-0.3 412 11.7 1119 14.7 409 7.8 150 9.0

0.31-0.35 359 10.2 900 11.8 488 9.4 161 9.7

0.36-0.4 625 17.7 962 12.7 615 11.8 261 15.7

0.41-0.45 450 12.8 693 9.1 579 11.1 244 14.7

0.46-0.50 363 10.3 584 7.7 587 11.3 204 12.3

>=.51 682 19.4 1244 16.4 1663 31.9 464 28.0

Analysis of Sindh province (within the province) indicates that under the “non-poor” intensity only 11% families lie, while 32% families are breathing in the severe poverty block which is greater than or equal to 0.51. The lowest portion of the sample size of families of Sindh is existing near the “non-poor”. The case of Baluchistan depicts that 28% of the households are living in the brutal poverty slab, the smallest number of families are breathing in “non-poverty”. Between the two extremes i.e. 0.36-0.4, about 16% of the families of Baluchistan are surviving. 4.2.1 AVERAGE DEPRIVATION (POVERTY INTENSITY), HEADCOUNT (POVERTY INCIDENCE), AND MPI ACCORDING TO PROVINCIAL AND COUNTRY-WISE Average deprivation (A) is planned by summing up to the total proportion of deprived families of all dimensions and “divided it by the total number of poor” families. The Headcount ratio (H) is calculated by dividing the poor people number by the total number of people i.e. the Total number of poor/total number of population, and multidimensional poverty index or depth of poverty or adjusted headcount “MPI” is calculated by multiplying the average poverty (A) to headcount ratio (H) whereas MPI should be between 0 and 1 if the family’s MPI is 0, which indicates that the family is not poor whereas 1 shows perfect poverty.

Table 7 Provincial wise MPI (authors’ calculation). Provinces Khyber Pakhtunkhwa Punjab Sindh Baluchistan

A 0.39 0.38 0.44 0.43

q (total number of poor) 3049 6302 4728 1550

H= q/n 0.87 0.83 0.91 0.93

MPI 0.34 0.31 0.40 0.40

The outcome of Table 7 portrays “A” (average poverty), “q” (total number of poverty), “H” (headcount), and MPI at the provincial level. Analysis of “A” depicts that maximum average poverty is seen in the families of Sindh followed by the Baluchistan where it is 0.44 and 0.43 while this poverty in the families of Punjab is 0.38 which is the lowest. The investigation of the “q”

Rifat Mahmood and Ijaz Hussain

indicates that the majority of poor families are living in Punjab province then in Sindh and minimum poor families are perceived in Baluchistan. Similarly, the situation of “H” illustrates the highest score is seen in Baluchistan and then Sindh. On the other hand, the analysis of MPI indicates that families of Sindh and Baluchistan provinces have equal and are highest multidimensionally poor. While lowest multidimensional poverty is seen in the provinces of Punjab and then Kp with 0.31 and 0.34. Multidimensional Poverty Index (MPI) or depth of poverty or adjusted headcount at the country level. The “adjusted headcount ratio combines information on the number of multidimensionally poor” families and the extent of deprivation ratio; it is calculated by multiplying the headcount ratio (H) with average poverty (A) or poverty intensity (at the country level). Thus, MPI = A x H = 0.41 x 0.87 = 0.35. The result shows that in Pakistan 35% of people are multidimensionally poor.

5. CONCLUSION MPI multidimensional poverty index is an important and interesting effort to find the poverty extent in-depth and coverage with the extensively used poverty indicators. MPI is broadly accepted by the researcher as the substance of multiple deprived magnitudes. Now a day’s “non-income indicators and multidimensionality of poverty” index have got much attention with the expansion of knowledge. Explicitly, the effective components of poverty i.e. education, living standards, nutrition, housing, basic needs, etc. etc. are now measured in terms of deprivations along with “establishing cut-off points according to Millennium Development Goals” (MDGs). The research analyzed the issues of deprived dimensions across provinces of Pakistan with the identification of poor and non-poor. An estimation of deprived dimensions for incidence, depth & severity poverty has been made. According to the results of the multidimensional poverty index, the nation-wise headcount ratio (H) is 87% (0.87) and MPI is 35%. Whereas among the provinces highest MPI is seen in Sindh and Balochistan by 40% and minimum MPI is noticed in the provinces Punjab by 31% followed by Kyber Pakhtunwa by 34%.

6. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding authors

7. REFERENCES Abraham, R.A., Kumar, K.S.K. (2008). Multidimensional Poverty and Vulnerability. Economic and Political Weekly, 43(20), 77-79. Alkire, S. & Foster, J. (2007). Counting and multidimensional poverty measurement. OPHI Working Paper 7, Oxford Poverty & Human Development Initiative, University of Oxford. https://ophi.org.uk/working-paper-number-07 Accessed: July 2019. Christiaensen, L., Scott, C., & Wodon, Q. (2002). Poverty measurement and analysis. World Bank. http://mpra.ub.uni-muenchen.de/45362/1/MPRA_paper_45362.pdf Accessed October 2019. Duclos, J.Y., Sahn, D., & Younger, S.D. (2006). Robust multidimensional spatial poverty comparisons in Ghana, Madagascar, and Uganda. The World Bank Economic Review, 20(1), 91-113. Laderchi, R.C. (1997). Poverty and its many dimensions: The role of income as an indicator. Oxford *Corresponding author (Rifat Mahmood). Email: riffat_saddozai@yahoo.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13R http://TUENGR.COM/V11A/11A13R.pdf DOI: 10.14456/ITJEMAST.2020.264

Development Studies, 25(3), 345-360. Mahmood, R., Hussain, I. (2020). Multidimensional Poverty Index (MPI) for Urban and Rural Regions of Pakistan. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(12), 11A12G, 1-13. DOI: 10.14456/ITJEMAST.2020.232 Sen, A. (1976). Poverty: An ordinal approach to measurement. Econometrica: Journal of the Econometric Society, 219-231. Thomas, B.K., Muradian, R., De Groot, G., & De Ruijter, A. (2009). Multidimensional poverty and identification of poor households: A case from Kerala, India. Journal of Human Development and Capabilities, 10(2), 237-257. Tsui, K.Y. (2002). Multidimensional poverty indices. Social choice and welfare, 19(1), 69-93. UNDP. (2013). The Rise of the South Human Development Report. United Nations Development Program. http://hdr.undp.org/en/2013-report Accessed November 2019. von Maltzahn, R., & Durrheim, K. (2008). Is poverty multidimensional? A comparison of income and asset-based measures in five Southern African countries. Social Indicators Research, 86(1), 149-162. World Bank. (1990). Poverty in Pakistan in the 1990: An interim assessment report. http://web.worldbank.org/archive/website00827/WEB/PDF/PAKIST-3.PDF Accessed November 2019. World Bank. (2000). The World Development Report 2000. Oxford University Press. http://siteresources.worldbank.org/INTPOVERTY/Resources/WDR/approutl.pdf Accessed October 2019. Rifat Mahmood is a PhD Scholar at Department of Economics, Gomal University, Dera Ismail Khan. He holds an M.Phil. He is a Lecturer at Department of Economics, Gomal University, Dera Ismail Khan, KP, Pakistan. He is interested in Alleviating Poverty with Experimental Research.

Dr. Ijaz Hussain is an Associate Professor at Department of Economics, Gomal University Dera Ismail Khan. He got a PhD degree in Economics. He can be reached ijazecoqau @ gmail.com

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International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13S

EFFECTS OF MOTIVATORS & BARRIERS ON GREEN BUILDING INTENTION: ARCHITECTS’ PERSPECTIVES Ziliya K.P 1

, U. Faisal

Department of Management Studies, Kannur University, Kerala, INDIA.

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Article history: Received 23 March 2020 Received in revised form 24 June 2020 Accepted 10 June 2020 Available online 22 July 2020

Buildings are an integral part of human existence. We spend most of our time in buildings either residing or working. Buildings have a huge impact on the economy, environment, and human health. This realization has paved the way for creating sustainable buildings. Hence Green Buildings is a promise for the future to solve various problems like Keywords: environmental pollution, global warming, and common man’s problems Sustainable architectures; Green building adoption; like water shortage, waste disposal, high electricity price, and health concerns. The diffusion of green buildings in the built environment is Sustainable building; Green building practices; crucial and the role of Architects as sustainability prophets is paramount. Green incentives; Indian This study focuses on the Indian architect's intention to engage in green architect; Green barriers; building activities and the influence of motivating factors and hindering Green motivators; Green factors associated with green building adoption. Intention.

Disciplinary: Green Architectures (Green Sustainability Development, Green Management.

Building

Design)

1. INTRODUCTION Over the past few years, sustainable construction practices have become a global phenomenon because buildings cause a lot of environmental degradation and pollution. Wang et al. (2011) revealed that development activities in the construction industry consisting of high-end buildings aimed at improving human living standards have resulted in high resource consumption and pollution of the environment. ‘Green Buildings’ are sustainable buildings that outperform classical buildings in terms of design, utility, comfort, durability. A green building is constructed in a way that is environmentally friendly, giving prime importance to resource efficiency, water conservation, innovation, and indoor environmental quality. Bohari et al. (2015) highlighted that future of green building success is dependent on a proper vision of co-operation and collaboration among all the stakeholders involved in the construction industry. Hankinson & Breytenbach (2013) emphasised that Designers' and Architects' understanding of the concept and sustainable building values influence *Corresponding author (Ziliya.K.P). E-mail: ziliya.zeal@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 10 No.11 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13S http://TUENGR.COM/V11A/11A13S.pdf DOI: 10.14456/ITJEMAST.2020.265

their overall attitude, probability of application, and behaviour in submission to the Building rules, policies, and mandates. Stakeholders of the Construction Industry, especially in a rapidly developing economy like India can make a significant impact by adopting green buildings. Hence, this study revolves around the impact of barriers and motivators of green building adoption on Architects' intention to adopt green buildings.

2. LITERATURE REVIEW Many researchers have studied the barriers and motivators associated with green building adoption in various contexts. Landman (1999) reported that lack of clients' interest or request for sustainable building, illiterateness in sustainable design education and training, and the higher costs (both real and perceived) of sustainable building options are the primary barriers to more widespread sustainable building practice. Williams & Dair (2006) reported that Lack of consideration of sustainability measures, higher costs and Inadequate green awareness and policies, and insufficient green techniques as a major barrier towards green building adoption. Pitt et al. (2009) stated Affordability, planning policy building regulations, lack of client awareness and demand, defect of business case understanding, scarcity of proven alternative technologies, deficiency of one labelling criteria, or measurement standard as barriers. Client awareness and demand, Investment, financial incentives, Building regulations, Planning policy, and Taxes or levies, Labeling, or measurement as motivators. Ambec & Lanoie (2008) Motivators as picked out from the study are- Better access to specific markets, product differentiating strategy, Sale of pollution-control technologies, efficient risk management process, good external stakeholder relations, lower raw material and energy expenditure, reduced financial capital cost, budding and qualified employee attraction. Zhang et al. (2011) stated that developers assumed that the execution of green technologies will lead to increasing their credibility, obtaining favourable prices, gaining new financial sources, and cutting back construction and operation charges. The major barriers are poor policy implementation attempts, overprice in relation to clientâ€™s demand, and high cost involved in designing green and energy-saving appliances. Lertpocasombut et al. (2016) studied green building technology for the conceptual design of public restroom via SketchupÂŽ platform by taking the criteria of the green label standard, green building for sanitary ware, and public toilet standards into account. Construction materials and sanitary wares have been chosen with certified environmental standards. With the green design, water consumption can save up to 80 % and monthly electric expenses go down by 60 %. The green restroom investment project will be rewarding after five years of usage. Despite the fact, the restroom cost with green building technology design is more costly compared to a conventional type, but it is important for environmental and sustainable concerns. Darko & Chan (2017) found that cost, unavailability of information, the inadequacy of Green

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Building mandates, the absence of incentives, and lack of interest and demand are the most reported barriers. All the studies reviewed emphasised that green building adoption is hugely impacted by the various barriers and motivators identified for specific regions and contexts.

3. RESEARCH METHODOLOGY A descriptive and quantitative approach was followed by the researcher in conducting the study. Data were collected from 50 practicing architects from the state of Kerala, India. The purposive sampling method was used to select architects using the Architects Directory. For data collection, a questionnaire was devised consisting of the variables- barriers, motivators, and intention and obtained Cronbach’s alpha value of .778, .789, and .805 respectively along with general information of the respondents. Cronbach’s alpha obtained is greater than 0.7 and hence the questionnaire enjoyed reasonable reliability and will obtain the reliable output. The collected data were analysed using SPSS® Amos 21.0. Statistical tests like one sample t-test and Structural Equation Modelling (SEM) was done. This study’s objectives are to explore the major barriers and motivators associated with green building adoption and architects intention to adopt green building and to understand the relationship between barriers and intention to adopt green building and motivators and intention to adopt green building. Based on the objectives, researchers fixed two hypotheses for the study (Figure 1). •

H1: There is a significant relationship between Barriers associated with green building adoption and Intention to adopt green building.

•

H2: There is a significant relationship between Motivators associated with green building adoption and Intention to adopt green building.

Figure 1: A proposed model for this study.

4. RESULT AND DISCUSSION This study analyses the motivators and obstacles related to green buildings in the construction sector as perceived by Architects to understand its effect on intention. The demographic profile of Architects includes 31 males and 19 females. Among them, 29 architects fell in the experience group of 1-10 years, 15 architects in the experience category of 11-20 years, and 6 architects in more than 20 years of experience group. The results of the data analysis are discussed below. *Corresponding author (Ziliya.K.P). E-mail: ziliya.zeal@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 10 No.11 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13S http://TUENGR.COM/V11A/11A13S.pdf DOI: 10.14456/ITJEMAST.2020.265

4.1 BARRIERS The variable ‘Barriers’ in this study refers to any technical, financial, managerial, and behavioural hindrance or obstacle which makes the green building design and adoption difficult. Eighteen variables are used to assess the barriers. All variables were measured on a three points Likert scale where 1 indicates ‘not at all barrier’, 2 indicates ‘minor barrier’ and 3 indicates ‘major barrier’. Table 1 shows the mean scores of respondents regarding barriers and significant differences from test value (2) by conducting a one-sample t-test. Table 1: Barriers Associated with Green Building Adoption Barriers Lack of Expressed Interest from clients Inadequacy of sustainable design and construction education and training The high cost of constructing Green Building Lack of technical know-how from sub-contractors part Non-availability of Green Building materials locally Lack of information on sustainable building methods Lack of Government regulations and incentives Green certification is an elaborate and tedious process and has upfront costs Creativity stifling Building Byelaws Corrupt Building Permit System and Regulatory framework Risks associated with the implementation of new practices Lack of communication and collaboration between different stakeholders Difficulty in quantifying immediate benefits Personal Resistance Extra time commitment required for green buildings Resistance within my firm Resistance from client Lack of motivation on my part to incorporate sustainable green building practices

Mean 2.56 2.40 2.16 2.36 1.68 2.12 2.40 1.86 1.98 2.00 1.92 2.00 1.90 1.54 1.68 1.22 2.24 1.48

SD .64 .72 .79 .72 .71 .79 .75 1.01 .89 1.03 .77 .69 .90 .81 .71 .64 .68 .81

t-value 6.14 3.88 1.42 3.52 -3.17 1.06 3.74 -.98 -.15 .00 -.72 .00 -.77 -3.99 -3.17 -8.51 2.47 -4.51

Sig. Barrier type <.01 Major <.01 Major .15 Minor <.01 Major <.01 Not .29 Minor <.01 Major .33 Minor .87 Minor 1.00 Minor .47 Minor 1.00 Minor .44 Minor <.01 Not <.01 Not <.01 Not .01 Major <.01 Not

Table 1, the mean scores of five variables belongs to barriers are significantly higher than the test value (2). Table 1 also reveals that the difference between the mean score and the test value of all the variables are significant at a 5 percent level in five cases. Among the variables, ‘Lack of expressed interest from clients ‘scored the highest mean score followed by ‘Inadequacy of sustainable design and construction education and training’ and ‘Lack of Government regulations and incentives’. Eight variables are minor barriers and five variables are not at all barriers of green building.

4.2 MOTIVATORS ‘Motivators’ refer to the stimulus that persuades Architects to design and adopt green buildings. Seventeen variables are used to assess motivators. All were measured on a five-point Likert scale where 1 specifies ‘strongly disagree’ and 5 specifies ‘strongly agree’. Table 2 provides one sample t-test result showing the mean scores of respondents regarding motivators taking test value as 3. From Table 2, it is found that the mean scores of the majority of the variables are higher than the test value (3). Table 2 also pointed out the significant difference between the mean score and the test value of the majority of the variables since the p-value of all the components is less than 0.05. Among the variables, ‘Enhance occupant comfort, health and productivity’ had the highest mean score followed by ‘Reduced water consumption’, ‘Reduced energy bills’, ‘Conserve natural resources’ and ‘Improve air and water quality’. While the variable ‘Fashion’ had the least mean score.

Ziliya.K.P and U.Faisal

Table 2: Motivators Associated with Green Building Adoption. Motivators

Mean Social Obligation 3.98 Government Imposition 2.84 Conserve natural resources 4.46 Economic Motives 3.32 Professional Duty 4.16 Fashion 2.66 Business Interest/ Product Marketing strategy 2.76 Financial Incentives and/or subsidies 2.74 Image 2.90 Corporate Social Responsibility 3.90 Personal beliefs 3.84 Improve air and water quality 4.44 Reduced energy bills 4.46 Reduced water consumption 4.48 Waste reduction 4.38 Enhanced marketability 3.34 Enhance occupant comfort, health, and productivity 4.50

SD .95 .84 .70 .86 .97 1.09 1.06 .98 1.12 .90 1.14 .78 .78 .76 .87 .87 .73

t-value 7.23 -1.34 14.62 2.60 8.40 -2.18 -1.60 -1.86 -.62 7.00 5.16 12.94 13.10 13.72 11.11 2.75 14.42

Sig. Motivator type <.01 High .18 Not <.01 High .01 High <.01 High .03 Low .11 Not .06 Not .53 Not <.01 High <.01 High <.01 High <.01 High <.01 High <.01 High <.01 High <.01 High

4.3 INTENTIONS Intention towards green building relates to the likelihood of adopting green building utilizing designing and taking up green projects. For this, five variables were identified. Intentions were measured using a five-item scale. Table 3 discloses the result of one sample t-test regarding intentions taking test value 3. Table 3: Intentions towards Green Building Adoption Intention Mean I would favour to build a green building over an ordinary building. 4.26 I plan to include green practices in my building projects. 4.16 I would motivate colleagues to use green building practices 4.30 I would motivate clients to use green building practices 4.30 I would motivate clients to seek green certifications for their building projects 3.62

SD .72 .81 .67 .76 1.17

t-value 12.32 10.03 13.56 12.05 3.72

Sig. <.01 <.01 <.01 <.01 .001

It is clear from Table 3 that, the mean scores of all the variables belong to intentions are higher than the test value (3). The table also reveals that the difference between the mean score and the test value of all the variables are significant at a 5 percent level. Among the variables, ‘I would motivate clients to use green building practices’ and ‘I would motivate colleagues to use green building practices’ had the highest mean score followed by ‘I would favour to build a green building over an ordinary building’ and ‘I plan to include green practices in my building projects’. Whereas the variable ‘I would encourage clients to seek green certifications for their building projects’ scored the lowest mean score.

5. STRUCTURAL EQUATION MODELLING 5.1 ASSESSING STRUCTURAL MODEL FITNESS The model fit indices obtained shows a reasonable fit for the tested structural model, Table 4 and Figure 2. *Corresponding author (Ziliya.K.P). E-mail: ziliya.zeal@gmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 10 No.11 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13S http://TUENGR.COM/V11A/11A13S.pdf DOI: 10.14456/ITJEMAST.2020.265

Table 4: Model Fit Indices Indices Obtained Recommended

GFI .94 >.9

AGFI .93 >.9

NFI .92 >.9

RFI .94 >.9

CFI .91 >.9

TLI .92 >.9

RMSEA .042 <.08

The model fit indices also provide a reasonable model fit for the structural model. The goodness of fit index (GFI) obtained is 0.94. The Adjusted Goodness of Fit Index (AGFI) is 0.93. The Normed fit Index (NFI), Relative Fit index (RFI), Comparative Fit Index (CFI), Tucker Lewis Index (TLI) are 0.92, 0.94, 0.91, 0.92 respectively. RMSEA is 0.042. Hence it is concluded that the proposed research model fits the data reasonably.

Figure 2: Structural equation model for the study. From the tested structural equation model (Figure 2), the path value from barrier to intention is -0.10 that is significant at a 5 percent level. The nature of the relationship between the variables is negative indicating that every 1-unit increase in barriers would result in a 10 percent decline in

Ziliya.K.P and U.Faisal

intentions. In the case of motivators, the path beta value is 0.66 which is significant at a 5 percent level. The nature of the relationship is positive indicating that every 1-unit increase in motivators would result in a 66 percent increase in intentions. Table 5: Testing of Hypotheses Hypothesis H1 H2

Path Coefficients (Î˛ Value) -0.10 0.66

p-value <0.05 <0.05

Positive/ Negative Negative Positive

Accept/ Reject Accepted Accepted

6. CONCLUSION This study examined the various motivators and barriers associated with green buildings and how these affected architects' intention to engage in green construction. The results showed that lack of interest exhibited and resistance from clients, the inadequacy of education and training in sustainable methods in construction, and lack of proper Government regulations and incentives were the major barriers as perceived by Architects. The major motivators were occupant comfort, health and productivity enhancement, reduction in energy bills, natural resource conservation, and air and water quality improvement along with Architects' social obligation and their sense of professional duty. From the study results, it was confirmed that there is a significant relationship between barriers associated with green building adoption and intentions to adopt green buildings and between motivators associated with green building adoption and intentions to adopt green buildings. These findings throw light on the need for Government intervention to lower the barriers by imparting sustainable construction knowledge to various stakeholders and devising a good incentive plan and strict rules and regulations.

7. AVAILABILITY OF DATA AND MATERIAL Data can be made available by contacting the corresponding author.

8. REFERENCES Ambec, S., & Lanoie, P. (2008). Does it pay to be green? A systematic overview. The Academy of Management Perspectives, 45-62. Bohari, A.A.M., Skitmore, M., Xia, B., Teo, M., Zhang, X., & Adham, K.N. (2015). The path towards greening the Malaysian construction industry. Renewable and sustainable energy reviews, 52, 1742-1748. Darko, A., & Chan, A.P. (2017). Review of barriers to green building adoption. Sustainable Development, 25(3), 167-179. Hankinson, M., & Breytenbach, A. (2013). Barriers that impact on the implementation of sustainable design. Cumulus Conference: Northern World Mandate. Landman, M. (1999). Breaking through the barriers to sustainable building: Insights from building professionals on government initiatives to promote environmentally sound practices. Doctoral dissertation, Tufts University. Lertpocasombut, K., Sirimontree, S., & Witchayangkoon, B. (2016). Green Building Technology for *Corresponding author (Ziliya.K.P). E-mail: ziliya.zeal@gmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 10 No.11 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13S http://TUENGR.COM/V11A/11A13S.pdf DOI: 10.14456/ITJEMAST.2020.265

Public Restroom Conceptual Design via Sketchup. International Transaction Journal of Engineering Management & Applied Sciences & Technologies, 7(2), 119-126.

Nunnally, J.C. (2010). Psychometric theory 3E. Tata McGraw-Hill Education. Pitt, M., Tucker, M., Riley, M., & Longden, J. (2009). Towards sustainable construction: promotion and best practices. Construction Innovation, 9(2), 201-224. Wang, X., Chen, Y., Lin, Q., & Zhang, W. (2011, August). The thinking of promotion and using green building materials. In Proceedings of 2011 International Conference on Electronic & Mechanical Engineering and Information Technology, 8, 4262-4265. IEEE. Williams, K., & Dair, C. (2007). What is stopping sustainable building in England? Barriers experienced by stakeholders in delivering sustainable developments. Sustainable development, 15(3), 135-147. Zhang, X., Shen, L., & Wu, Y. (2011). Green strategy for gaining competitive advantage in housing development: a China study. Journal of Cleaner Production, 19(2-3), 157-167. Ziliya. K.P is a Senior Research Fellow at Department of Management Studies, Kannur University, Kerala, India. She got her Masterâ€™s degree in Business Administration from Kannur University. Her research focuses on Green Marketing and Sustainable Consumption.

Dr. U. Faisal is an Associate Professor and Head of the Department of Management Studies, Kannur University, Kerala, India. He earned his PhD degree from Aligarh Muslim University, India. His research encompasses Quantitative Methods, Operation Research, Computational Science, Management Information System, Management Optimization, Entrepreneurship and Project Management.

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International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13T

ROLES OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE IN DIVIDEND SMOOTHING BEHAVIOR OF ASIAN FIRMS Shakeel Ahmed 1 2

, Zulfiqar Ali Shah , Arshad Ali Bhatti

Department of Management Sciences, International Islamic University, PAKISTAN. School of Economics, IIIE, International Islamic University, Islamabad, PAKISTAN.

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Article history: Received 25 April 2020 Received in revised form 01 July 2020 Accepted 15 July 2020 Available online 24 July 2020

The study explores the determinants of dividend smoothing behavior of Asian firms for 2009-2018. The study used a firm’s specific characteristics, corporate governance, and ownership structure variables as determinants of dividend smoothing in some Asian markets (Pakistan, India, Sri Lanka, Malaysia, and Singapore). Based on gender critical mass theory, the study finds the presence of gender-critical mass is positive and significantly associated with firm dividend smoothing behavior; whereas, the presence of fewer women depicts a negative or insignificant association with dividend smoothing behavior. The moderating role of gender diversity between family ownership and dividend smoothing is also examined. Further, contrary to the agency theory-based explanations of dividend smoothing, we find that family firms follow a smooth dividend policy. These findings suggest that gender-critical mass, family ownership, and higher market to book value contribute positively to dividend smoothing behavior in the Asian market.

Keywords: Dividend smoothing; Corporate governance; Ownership structure; Fixed effects method; Random effects method; Family-owned business; Board gender diversity; Board independence.

1 INTRODUCTION In the area of corporate finance, dividend behavior is considered an important topic of research, but we still do not have sufficient explanation for the dividend behavior of firms (Hussainey et al., (2011). It is one of the ten unresolved puzzles in corporate finance literature as we obtain different views of its determinants. Miller and Modigliani (1961) believe that dividend is irrelevant while Lintner (1956), Fama and Babiak (1968), and Brav et al., (2005) strongly favor the relevancy hypothesis. It is not the dividend that has remained controversial but the assumptions about markets make dividend policy more complicated since we have not been able to have conclusive evidence in *Corresponding author (Shakeel Ahmed), Tel: + 92-3445250550, Email: shakeelpccrwp@gmail.com ©2020 International

Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13T http://TUENGR.COM/V11A/11A13T.pdf DOI: 10.14456/ITJEMAST.2020.266

respect of dividend policy. Studies explored that firms prefer to distribute smoothly divided. The signaling hypothesis suggests that management smooth dividends relative to earnings. They increase dividend payout ratio only when they are self-assured for a sustainable increase in firm’s earnings and are reluctant to cut dividends except adverse conditions are likely to persevere, as dividend cuts may be perceived as a bad signal about firm’s performances and result in lower share price due to market negative response. The study confers with the theory of dividend payout. For smoothing behaviors of firms (Brav et al., 2005), the literature is unable to resolve the controversies among dividend smoothing determinants due to differences in investors horizon, market behavior, and economic condition in which the firm is operating or the overall governance mechanism of the economy (Leary and Michaely, 2011). Also, most studies focused on US and western markets where the conditions are significantly different from Asian markets. Among other theories of finance, agency theory is used to explain and resolve issues in the relationship between stakeholders and their agents. Corporate governance represents a system of principles, policies, and clear accountabilities and responsibilities used by shareholders to overawe the conflicts of interest inherent. The classical principal-agent conflicts between managers and stockholders may be an outcome of separation of ownership. Agency costs may be larger than the cost of any other conflict of interest. The ownership structure has a significant role in dividend smoothing in Asian due to family dominance, group affiliations, and growing subsidiary pattern in Asian. At the same time, dispersed structures are less typical, though there are noteworthy differences between jurisdictions among Asian countries. While China and Vietnam, for instance, are categorized by sizable state ownership, while India and Korea preserve substantial family ownership structures. Accepting ownership structures in Asian is precarious to confirming the advance of operational corporate governance standards. So, it is very important to test the ownership role in dividend smoothing for Asian. The study has several significant contributions. It highlights the roles of governance and ownership structure in dividend smoothing. More importantly, it provides new evidence relating to the significant role of gender diversity on firms’ smoothing behavior in Asian. Also, the moderating effect of board diversity between family ownership and dividend smoothing is explored by the current research.

2 THEORETICAL FRAMEWORK Three different schools regarding dividend policy prevail (Damodaran, 2010). First, the dividend irrelevance theory proposes that dividends do not influence the market price of a firm’s stock; henceforth the firm’s value in a perfect capital market remains unaffected (Miller and Modigliani, 1961; Black and Scholes, 1974). The second school of thought takes into consideration the tax disadvantage and claims that dividends are not useful for stockholders who fall in higher tax brackets; thus resulting in lower stock prices (Berger and Ramaswamy, 1979). Finally, dividends are encouraging as an increase in stockholders’ wealth through their influence on stock price (Woolridge, 1983). Also, how any change in dividend payout conveys bad/good signals to the stock markets associated with the company’s prospects (Miller and Rock, 1985) which ultimately explain into upward/downward movements of the stock value. Accordingly, dividend payments curtail agency costs between the management and shareholders (Moh’d et al., 1995).

S.Ahmed, Z. Ali Shah, A. Ali Bhatti

3 LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT 3.1 FIRM’S DIVIDEND SMOOTHING Lintner (1956) extensively studied the phenomenon of dividend smoothing. As dividend changes may respond slowly to change in earnings, the management is reluctant to a dividend cut and they are often ready to bear the cost to avoid dividend cut even if the cost is significant. The evidence suggests that managers peruse dividend smoothing only because they are in the belief that investors prefer smooth dividends. In this vein, Brav and Michaely (2005) exhibited that executives are aware of a significant asymmetry between dividend cut and increases: hence, they perceive a nominal return for increasing dividends but a heavy penalty for a dividend cut. So far, there is little (if any) empirical evidence in the Asian context that describes the mechanism through which stockholders control management dividend smoothing behavior. Berk and De Marzo (2013) stated that even more than fifty years after Lintner’s seminal work, we did not find any conclusiveness evidence explain the dividend smoothing behavior of firms. 3.1.1 CORPORATE GOVERNANCE AND DIVIDEND SMOOTHING Corporate governance is a mechanism by which corporations are governed. Corporate governance primarily attempts to guard stockholders and then other stakeholders’ interests by making certain transparency and enforcing accountability. In the meantime, the dividend-paying behavior in Asian firms is different from that of the western because of the difference in tax, information asymmetry, and market volatility (AlKuwari, 2009; Wardhana et al., 2014). There is a probability that dividend payout is more vulnerable in playing the monitoring role which ultimately enables minority stockholders to control managers' discretionary action to avoid any manipulation in the firm’s resources. As the literature depicts that higher and stable dividends are the most appropriate mechanism to control agency conflicts (Easterbrook, 1984; Jensen, 1986); firms with higher agency conflicts have higher degrees of dividend smoothing and firms with weak governance mechanism tend to opt for a higher degree of dividend smoothing (Leary and Michaely, 2011; Javakhadze et al., 2014). Hence, dividend and agency conflicts can serve as a substitute for each other. Conversely, it is also believed that stockholders can influence firms’ dividend policy by their strong shareholdings and influential role on the corporate board (Mirza & Malik, 2019); they can force the management to pay stable dividend resulting dividend smoothing as an outcome of a strong corporate governance mechanism. 3.1.2 BOARD SIZE AND FIRM’S DIVIDEND SMOOTHING According to the resource dependency theory, board size provides different resources to them and enables them to make timely and useful decisions. Similarly, as per agency theory, a larger board is more likely to reduce agency conflicts between management and stakeholders by better monitoring and reducing information asymmetry. Board size has positive and significant effects on dividend smoothing and firm performance according to resource dependency theory and reducing agency conflicts as per agency theory, empirically proved by various studies. The Board of directors and its size makes significant efforts to reduce agency problems and make better relations between management and stockholders. In contrast, some views that small typically produces better returns in comparison to larger-firms. A small board spends less time in discussions and is more likely to make *Corresponding author (Shakeel Ahmed), Tel: + 92-3445250550, Email: shakeelpccrwp@gmail.com ©2020 International

timely decisions (Bopin, 2011). The current study is mainly concerned with the agency conflicts model; therefore, we confer positive associations between board size and dividend smoothing behavior of the firms in Asian. This is in line with earlier findings (Batool & Javid 2014). Thus, we hypnotized as H#1: The board size has a significant positive influence on the dividend smoothing behavior of Asian firms.

3.1.3 ROLE OF GENDER DIVERSITY IN DIVIDEND SMOOTHING In modern business, gender equality is one of the most important factors that promote ethics in the corporate board. Board with gender diversity is more likely to have fewer agency conflicts. Good governance mechanism does not call for dissent in the corporate board, but it often calls for gender diversity. A female presence on the corporate board is good, as it is beneficial for internal and external stakeholders. Its presence is more pronounced and useful in firms and markets where shareholders' protection rights are on the lower side or/and agency conflicts prevail due to information asymmetry. Moreover, it is also observed that female directors are more helpful for smoothing dividends and reducing agency conflicts (Ararat et al., 2015). The stakeholders can reduce agency costs by increasing the proportion of female directors on the board. Similarly, it is evidenced that boards with female directors have more effective monitoring mechanisms as compare to the boards with male directors and more female directors in the board strengthen the corporate governance and dividend smoothing practices (Rozeff, 1982). Contrary, the literature also evidenced that due to the presence of more female directors decision making is difficult because female directors are difficult to reach a single decision, thus H#2: Board diversity has a significant positive influence on the dividend smoothing behavior of Asian firms.

3.1.4 ROLE OF BOARD INDEPENDENCE IN DIVIDEND SMOOTHING Sometimes, a board itself creates agency conflicts. There are many shareholders in large companies, and the structure of the ownership frequently changes even by minute on the stock market. In such a situation, it becomes almost impossible for stockholders to directly manage the company. Thus, shareholders hire independent directors, to minimize such agency conflicts between shareholders and management (Armstrong et al., 2014). The literature evidenced a positive relationship between board independence and dividend policy (Yarram and Dollery, 2015). Board independency is very supportive to minority shareholders for paying stable and consistent dividends and performs as a bridge between managers and shareholders to mitigate agency conflict (Shrader et al., 2003). In the Asian context, the importance of board independence is more important because legal protection is on the weaker side and information asymmetry has been a problem for decades due to market imperfections. Thus, the hypothesis is H#3: The board's independence has a significant positive influence on the dividend smoothing behavior of Asian firms.

3.1.5 OWNERSHIP STRUCTURE AND DIVIDEND SMOOTHING A concentrated ownership structure can help to reduce the agency conflicts since greater monitoring efforts by large shareholders is a key feature of concentrated ownership (Jensen &

S.Ahmed, Z. Ali Shah, A. Ali Bhatti

Meckling 1976). In contrast, ownership concentration also has costs, not least that it can lead to the expropriation of minority rights (La Porta et al., 1999), with perhaps negative outcomes on firm performance. Ownership structure emerges as an important factor that could influence various financial decisions taken by the firms including dividend payments. The ownership pattern whether it is institutional, family, or blockholders determines the control and influence of shareholders in the firm (Mehboob et al. 2015). 3.1.6 FAMILY OWNERSHIP AND DIVIDEND SMOOTHING Family ownership is characterized as the control and management of family members (Kraiczy, 2013). The first school of thought declares family ownership as a mechanism to reduce agency conflicts resulting from information asymmetry; hence, resulting in better performance and alignment of resources. In such firms, the board of director remains under the scrutiny of family ownership, and the interest of both groups are better aligned. Another school states that in family-owned firms, the rights of minority shareholders are less protected and management is reluctant to distribute dividends. Thus, we find two controversial findings. Some view presence of family ownership as positive determinants of dividend smoothing (Masset et al., 2019). On the other hand, family-owned firms pay lower dividends to the minority shareholders and retain more amount of free cash flow for their benefits (De Cesari, 2012). With a positive view, the hypothesis H#4: There is a significant and positive association between family ownership and dividend smoothing behavior of Asian firms.

3.1.7 ROLE OF INSTITUTIONAL OWNERSHIP IN DIVIDEND SMOOTHING Since institutions (e.g. mutual funds, pension funds, hedge funds, and private equity firms) often occupy a significant portion of money at their disposal, they are always welcomed by the equity market and their role is more pronounced than any other type of investor. They are considered as a mechanism to reduce the agency conflict because their vocally stated benefits are aligned with those of smaller stockholders (Celik and Isaksson, 2014). Institutional ownership plays an influential role in the financial decision-making process, firms having large institutional participation provide higher dividends to shareholders due to the dominant role of institutional shareholders, in light of institutional theory (Thanatawee, 2013). In most Asian countries, institutional investors directly influence policies made by the board of directors, thus H#5: Institutional ownership has a significant positive influence on the dividend smoothing behavior of Asian firms.

3.1.8 BLOCK-HOLDER OWNERSHIP AND DIVIDEND SMOOTHING A block-holder is an influential shareholder because of the significant block of the company's stock that they own. Generally, there is not a specific number of shares owned by the blockholders. These blockholders play a crucial role in the financial decision-making process of firms. In most firms, blockholders may influence corporate decisions such as capital structure, dividend distribution, etc. (Franks et al., 1997). Dividend smoothing is important in firms controlled by institutional investors because it mitigates agency problems (Gugler, 2003). Similarly, Edmans, (2014) evaluate that firms pay stable and consistent dividends to the shareholders due to the dominant role of *Corresponding author (Shakeel Ahmed), Tel: + 92-3445250550, Email: shakeelpccrwp@gmail.com ÂŠ2020 International

institutional block holders in the board, strong influence of institutional block holders on some of the financial decisions including dividend payments (Amihud and Murgia, 1997). Moreover, the negative impact of blockholders within family-owned firms on the dividend smoothing behavior of firms is empirically proved by different studies which show that firms pay fewer dividends to minority shareholders due to the dominant role of blockholders in boards (Godard and Schatt, 2005; Maury and Pajuste, 2002). Thus, the relationship in the Asian context, H#6: Blockholders have a significant negative influence on the dividend smoothing behavior of Asian firms.

3.2 CONTROL FACTORS The study used firms’ characteristics such as market-to-book value, cash-to-total assets, firms’ age, and firms’ size as control variables. The market-to-book ratio represents the market performance of the firms. Cash flow to total asset ratio is used as a proxy of a financial metric that quantify such benefits. Different proxies can be used to measure the size of the firm such as total assets, total sales, number of employees, market capitalization. We also used the natural log of the firm’s age that is measured as a difference in date of incorporation and year of observation.

4 RESEARCH METHODOLOGY 4.1 SAMPLING AND DATA COLLECTION This study determines the role corporate governance and ownership structure in a firm’s dividend smoothing behavior in Pakistan, India, Sri Lanka, Malaysia, and Singapore, selected based on some common economic characteristics and their recognition as important developing countries in Asian. We include only listed non-financial firms from the mentioned economies for the sample period. Fama and French (1992) suggest excluding financial firms from samples because they are normally high leveraged. We collected corporate governance and ownership data from the financial report of each firm, for 2009-2018. We used panel data analysis methodology as it assists to investigate the time-series as well as cross-sectional data concurrently (Torre et al., 2012).

4.2 MEASUREMENT OF VARIABLES We used the speed of adjustment (SOA) as a measure of dividend smoothing and it is used as a dependent variable in this study. Corporate governance (board-size, independent-directors, and board-diversity) and ownership structure (family-ownership, institutional-ownership, and blockholders-ownership) are used as independent variables. Similarly, we also used firm-level control variables (market-to-book ratio, cash-reserves available to the firm, size, and age of the firms) as control variables.

4.3 MODEL SPECIFICATION we used panel data methodology, due to data characteristics, the formation of the panel, and observation of country effects. According to Baltagi (2005), fixed effect and random effect models are the most famous techniques used for panel data analysis. Hausman test (1978) test is used to select the most appropriate model. We used the regression model SOAi,t= β0+ β1 Corporate Governance + β2 Ownership Structure + ε i,t

(1),

where the subscript i and t represent the firm and year effect, The ε is an error term, β1 and β0 are the

S.Ahmed, Z. Ali Shah, A. Ali Bhatti

regression coefficients and β0 is the model constant.

5 EMPIRICAL RESULTS 5.1 DESCRIPTIVE STATISTICS Descriptive statistics are provided in Table 1, the results show that the average dividend per share (DPS) is 8.459 and ranges from 3.510-17.153, shows large differences in dividend per share paid by the firms. The average value of the market to book value (MTB) is 0.643 and ranges from 0.010-18.980. Cash available to total assets (CTA) has an average value of 0.847. The average value of firm age (AGE) is 30.429 and ranges from 7.000-124.00. The average size of the firm (SIZE) is 27.480 and ranges from 6.112-123.469 that shows a large variation in the size of firms. Table 1 also shows the different characteristics of corporate governance. The average value of the board size (BS) is 12.653 while it ranges from 3.061-22.445. The average value of board independence (BI) is 0.612. The average value of board diversity (BD) is 0.602 with the range 0.00-3.00. Among ownership structure variables, the average value of blockholders (BH) is 82.235 with the range from 21.429-1504.082. The average value of family ownership (FO) is 64.296. Institutional ownership (IS) has an average value of 12.837 while it ranges from 1.000-1441.837. Table 1: Descriptive Statistics Mean Maximum Minimum SD

DPS

MTB

CTA

SIZE

AGE

8.459 17.153 3.510 7.673

0.643 18.980 0.010 1.020

0.847 23.051 0.000 0.592

27.408 123.469 6.112 21.602

30.429 124.00 7.000 23.510

0.602 3-00 0.000 0.500

82.235 1504.082 21.429 18.092

12.653 22.449 3.061 1.041

64.296 689.796 4.082 10.592

2.459 4.000 1.00 0.520

12.837 1441.837 1.000 14.633

5.2 CORRELATION ANALYSIS Table 2 represents the correlation matrix. The correlation analysis is used to identify the presence of multicollinearity among firms’ specific characteristics, corporate governance, ownership structure, and dividends paid by firms. The results show that all correlation coefficients are small and most of them are below 0.80. Hence, we are sure that there is no issue of multicollinearity in our main model. Table 2: Correlation Matrix DPS MTB CTA SIZE AGE BD BH DPS MTB CTA SIZE AGE BD BH BS FO ID IS

1.000

-0.006 1.000

-0.009

0.007

0.018

0.013

0.012

-0.011

0.048

0.093

-0.068

0.118 1.000

0.032

-0.032

0.042

0.034

0.023

0.033

0.013

0.019

0.040 1.000

-0.087

-0.032

-0.016

-0.038

-0.018

0.020

-0.007

-0.607

-0.027

-0.013

0.270

-0.037

0.075

0.010

1.000

0.016

0.008

-0.229

0.029

-0.076

-0.011

1.000

0.024

-0.004

0.055

-0.133

-0.009

1.000

-0.027

0.606

0.003

0.836

1.000

-0.047

0.141

0.001

1.000

-0.015

0.002

1.000

0.014 1.000

5.3 ROLE OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE IN DIVIDEND SMOOTHING Table 3 shows the relationship between different variables. We found that board size and independence do not affect the dividend smoothing behavior of firms. Hence, we did not find any support for our H#1 and H#3. However, the findings show that board gender diversity significantly and negatively impacts a firm’s dividend smoothing behavior (β=-0.654 & p<.05). For further clarity, we include Board diversity_2 and Board diversity_3 and the findings show that board diversity has a positive association with dividend smoothing only when their presence is up to critical mass (three or more) (β=0.418& p<.01). Hence, H#2 is supported only when the female has a critical mass on the corporate board. The presence of one or two female does not support our H#2. Besides, we found a negative and significant association between board interlock and the firm’s dividend smoothing behavior (β=-0.187& p<.05). As far as the ownership structure is concerned, we found a positive and significant association between family ownership and dividend smoothing (β=-0.187& p<.10); thus supporting our H#4. In contrast, we did not find any support for our H#5 as there is an insignificant impact of blockholders ownership on dividend smoothing. Further, we include the interaction term (board diversity (board diversity×family ownership) for the association of gender diversity and family ownership with dividend smoothing. The findings show that family ownership substitutes the negative relationship between gender dummy and dividend smoothing (β=0.6082 & p<.01). We also include firm characteristics as control factors and findings show that market-to-book value has a positive association (β=0.717& p<.05); whereas the firm size is negatively associated (β=-0.452& p<.01) with dividend smoothing. In contrast, cash to total assets and firm age have no impact on the dividend smoothing behavior of firms. Table 3: Determinants of Dividend Smoothing. Variable Coefficient Std. Error t-Statistic Corporate governance Board diversity (dummy) -0.654** 0.012 -2.832 Board diversity_2 (dummy) 0.008 0.926 0.008 Board diversity_3 (dummy) 0.418*** 0.033 12.822 Board independence -0.002 0.101 -0.018 Board size -0.005 0.495 -0.010 Ownership structure Institutional ownership -0.002 0.232 -0.009 Family ownership 0.187* 0.103 1.802 Block holders -0.045 0.244 -4.231 Moderating Role Board diversity * Family ownership 0.608*** 0.059 10.326 Firm's characteristics Market to book value 0.717** 0.243 2.948 Cash to total assets 0.008 1.442 0.006 Firm-size -0.452*** 0.224 -2.016 Firm-age 0.003 0.174 0.008 *, **, *** denotes significance levels 10%, 5% and 1% respectively

Prob. 0.036 0.381 0.002 0.186 0.635 0.163 0.092 0.228 0.002 0.032 0.938 0.003 0.146

5.4 ROLE OF MALE AND FEMALE CEO AND DIVIDEND SMOOTHING We split the sample into male and female CEOs and comparative results are provided in Table 4 below. In comparison, we found that gender diversity measures (gender diversity, gender-2, and gender 3) are positively associated with dividend smoothing in panel A. On the other hand, we found

S.Ahmed, Z. Ali Shah, A. Ali Bhatti

a negative impact of gender dummy on dividend smoothing (β=-0.039& p<.10; refer to panel B). In contrast, we found a positive and significant impact of Board diversity_3 (dummy) (β=0.181& p<.05; refer to panel B). In conclusion, the role of gender diversity is more pronounced in firms with male CEOs. In firms with female CEOs, the role of only gender-critical mass is more pronounced. Further, we did not find any significant difference in the impacts of board independence and board size. Institutional ownership has a significant inverse (-0.145) effect on dividend smoothing at a 10% level of significance in firms with male CEOs and no effect on the firms with female CEOs. Family ownership has a significant positive effect (0.160) at a 5% level of significance on the dividend smoothing behavior of firms with male CEOs, it also has a significant positive effect (0.039) at a 5% level of significance on the dividend smoothing behavior of firms with female CEOs, which show that family-owned firms with male or female CEOs give smooth dividends to the minority shareholders in an Asian context. Table 4 shows the moderating role of board diversity and family ownership has a significant positive (0.009) effect at a 5% level of significance on the dividend smoothing behavior of firms with male CEOs and firms with female CEOs. Moreover, the effects of some important firm characteristics are also explained in Table 4. Market to book value has a positive effect on the dividend smoothing in both types of firms. Similarly, firm-size negatively impacts on dividend smoothing, shows that how firms with both male and female CEOs pay fewer dividends as the firms become mature in age. Table 5 summarizes the hypotheses testing. Table 4: Dividend Smoothing (Male CEO versus Female CEO) Variable

Panel=A Firms with male CEO Coefficient Std. Error

Panel=B Firms with female CEO Coefficient Std. Error

Corporate Governance Board diversity (dummy) 0.097* 0.055 -0.039* Board diversity_2 (dummy) 0.162** 0.070 0.993 Board diversity_3 (dummy) 0.108*** 0.023 0.181** Board independence -0.001 0.002 -0.313 Board size -0.002 0.022 0.098 Ownership Structure Institutional Ownership -0.145* 0.084 -0.015 Family Ownership 0.160** 0.076 0.049** Block holders -0.045 0.170 -0.263 Moderation Role Board diversity * Family ownership 0.0295** 0.015 0.128* Firm's Characteristics Market to book value 0.103* 0.061 0.099** Cash to total assets 0.001 0.033 -0.634 Firm-size -0.148** 0.061 0.051** Firm-age 0.001 0.043 -2.594 *, **, *** denotes significance levels 10%, 5% and 1% respectively

0.021 0.921 0.071 0.220 0.160 0.611 0.021 0.213 0.070 0.043 0.213 0.025 0.011

Table 5: Summary of hypotheses testing. Hypothesis H#1, H#3, H#6 H#2, H#4, H#5

Accepted/Rejected Rejected Accepted

6 CONCLUSION This study investigates the impacts of corporate governance and ownership structure on dividend smoothing behavior. Our findings depict that board gender diversity is a key determinant of dividend smoothing. Importantly, our findings show that gender diversity significantly impacts dividend smoothing when female achieves critical mass on the corporate board (female 3 or more). If their presence is below the critical mass, they serve as a token because of their insignificant role in corporate policies like dividend smoothing. The findings also support the maxim of tokenism that a female serve as a token since we found negative impacts of gender dummy on dividend smoothing. So, this study significantly contributes to the context of agency theory and gender-critical mass maxim in the Asian context. We include gender diversity as an interaction term between family-ownership and dividend smoothing, the findings show that family ownership substitutes its negative association with dividend smoothing. Hence, we can conclude family-owned firms are less likely to have agency conflicts. Importantly, our findings show that family-owned firms are more likely to have a smooth dividend policy in contrast to firms hold by blockholders. In the additional test, we also found that gender diversity has a significant role in firms with male CEO; whereas, in female CEO firms, the only gender-critical mass has a significant impact on dividend smoothing in Asian. We did not find any support for the association between board independence and board size, and dividend smoothing. The study strongly recommends the presence of gender-critical mass to reduce agency conflicts among Asian firms and the authorities are required to force a significant portion of gender on the corporate board and mere a woman will serve as a token. The findings depict that board interlock serves as a negative determinant of dividend smoothing. This may have an impact on board independence also may be the reason for the insignificant association between board independence and dividend smoothing.

7 AVAILABILITY OF DATA Data can be available by contacting the corresponding author.

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S.Ahmed, Z. Ali Shah, A. Ali Bhatti

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Maury, C.B., & Pajuste, A. (2002). Controlling shareholders, agency problems, and dividend policy in Finland. LTA, 1(2), 15-45. Mehboob, F., Tahir, S.H., & Hussain, T. (2015). Impact of family ownership on financial decisions of a firm: an analysis of pharmaceutical and chemical sectors in Pakistan. Euro-Asian Journal of Economics and Finance, 3(2), 103-112. Miller, M.H., & Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. Journal of Business, 34(4), 411-433. Miller, M.H., & Rock, K. (1985). Dividend policy under asymmetric information. Journal of Finance, 40(4), 1031-1051. Moh'd, M.A., Perry, L.G., & Rimbey, J.N. (1995). An investigation of the dynamic relationship between agency theory and dividend policy. Financial Review, 30(2), 367-385. Rozeff, M.S. (1982). Growth, beta and agency costs as determinants of dividend payout ratios. Journal of Financial Research, 5(3), 249-259. Thanatawee, Y. (2013). Ownership structure and dividend policy: Evidence from Thailand. International Journal of Economics and Finance, 5(1), 121-132. Wardhana, L., Tandelilin, E., Lantara, I., & Junarsin, E. (2014). Dividend policy in Indonesia: a life-cycle explanation. Asian Finance Association Conference. Woolridge, J. R. (1983). Stock dividends as signals. Journal of Financial Research, 6(1), 1-12. Yarram, S.R., & Dollery, B. (2015). Corporate governance and financial policies. Managerial Finance, 41(33), 267-285. Shakeel Ahmed is a PhD scholar at Department of Management Sciences, International Islamic University, Islamabad, Pakistan. He holds an MS (Finance) from Muhammad Ali Jinnah University, Islamabad. He is interested in Corporate Governance, Dividend Policy, and Earnings Management.

Dr. Syed Zulfiqar Ali Shah is an Associate Professor and Acting Chairman, Department of Higher Study & Research (HS&R), International Islamic University, Islamabad, Pakistan He earned his PhD in Finance from Muhammad Ali Jinnah University, Islamabad, Pakistan.

Dr.Arshad Ali Bhatti is an Assistant Professor, Islamic Institute of Islamic Economics, International Islamic University, Islamabad, Pakistan. He got his PhD in Economics from University of Manchester, UK. He works in the area of Financial Institutions and Markets, Growth and Development.

S.Ahmed, Z. Ali Shah, A. Ali Bhatti

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies http://TuEngr.com

PAPER ID: 11A13U

RELATIONSHIP OF WORKING CAPITAL TO CORPORATE PERFORMANCE AND STOCK PRICE: EVIDENCE FROM THE MANUFACTURING SECTOR OF PAKISTAN 1*

Noheed Khan , Muhammad Bilal , Imran Riaz Malik , 2 2 Abdul Rauf Kashif , and Abdul Rehman Sajid 1 2

College of Commerce, Government College University Faisalabad (GCUF), PAKISTAN. Department of Business Administration, Iqra University Islamabad Campus, PAKISTAN.

ARTICLEINFO

A B S T RA C T

Article history: Received 15 October 2019 Received in revised form 19 June 2020 Accepted 06 July 2020 Available online 25 July 2020.

Working capital plays a significant role in the manufacturing sector. The recent study is based on the manufacturing sector of Pakistan. Thirteen manufacturing sectors were selected for this research. For analyzing the results, a univariate test was performed under a generalized linear model. The results reveal that cash has a negative impact on operating profitability. The Construction & Materials, Automobiles & Parts, Forestry & Paper, and Food Product sectors experience negative impacts on operating profitability. The Pharma & Biotech and the Chemicals sectors see highly negative impacts on operating profitability. Working capital management in some sectors have positive and some have negative impacts on the stock price.

Keywords: Current ratio (CR); Cash; Stock Price (SP); Net operating profitability; Working capital management (WCM); Cash conversion cycle (CCC); Inventory turnover.

1. INTRODUCTION The manufacturing sector is the second-largest sector after the agricultural sector in Pakistan. According to the “2011-2012 Economic Survey of Pakistan”, the Pakistani manufacturing sector growth rate was 3.65%, a 23.31% increase compared to the previous year. The modest growth has been observed in the manufacturing sector for 2011-2012. The Quantum Index of the manufacturing sector (QIM) increased by 1.05% compared to the previous year. The base year was revised in 2011 and 2012 because new industries were added (Survey, 2012). Nevertheless, manufacturing sector firms are facing working capital management (WCM) problems. The mismanagement of working capital (WC) can increase production costs. It directly affects firm liquidity and profitability (Afza & Nazir, 2007; Nazari and Jamshidinavid, 2019). Previous studies have investigated the importance of WCM from different perspectives. For example, Haq et al. (2011) discuss the relationship WCM has with the profitability of a company. *Corresponding author (N. Khan). Tel: +923219728450. Email: noheed_khan@hotmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13U http://TUENGR.COM/V11/11A13U.pdf DOI: 10.14456/ITJEMAST.2020.267

Higher shareholder wealth depends upon current assets and short-term financing (Nwankwo & Osho, 2010). The stock price of a company indicates the shareholder wealth of the company. The stock price can change due to government policies and industry performance. Industry performance can change investor preferences (Bockman, 2011). The objective of this research is to find the association between WCM, profitability and the stock price of companies. This study provides two major contributions. First, this study describes the importance of WCM for operating profitability (OP) and stock price (SP) of companies. Second, this research extends the concept of WCM with respect to stock price. The findings of the study reveal that the current ratio has a positive impact on SP and APPD has a negative impact on SP. Some sectors see a positive and negative impact on the stock price.

2. LITERATURE REVIEW 2.1 WORKING CAPITAL MANAGEMENT The foundation of WCM is based on “current assets” and “currents liabilities”. Current liabilities consist of creditors, bills payable, notes payable, and short term debt. WCM plays a significant role in company profitability and risk. It also plays a significant role in financial planning (Enqvist et al., 2014). WCM practices change over time (Filbeck & Krueger, 2005). High levels of WC utilization of input and increase the production while the uncertain WC decreases the production level (Mahmoudzadeh et al., 2017).

2.2 WORKING CAPITAL MANAGEMENT AND PROFITABILITY Prior research examined the elements of WCM. For example, the CCC is a main element of WC. Cash holdings have always had less value for investors (Pinkowitz et al., 2003). Sayaduzzaman (2007) reveals a negative association between WCM and profitability. Raheman and Nasr (2007) argue that WC has a relationship with capital expenditures. WCM policies always enhance the profitability of companies. Appuhami (2008) finds a negative association between WC policies and firm profitability, using aggressive financing policy and investment policy for WCM. Afza and Nazir (2008) found a negative relationship between aggressive investment and financial policies, from examining seventeen industry groups on the Karachi Stock Exchange. The result suggests that CCC affects an organization’s operating cycle. Aggressive WCM policies increase corporate performance. The cash conversion cycle negatively impacts on corporate profitability (Chang, 2018). The CCC also impacts on operating profitability, cash flow, profitability and SP of the company (Zeidan & Shapir, 2017). Banomyong (2005) argues that companies can perform better with a short conversion cycle. Raheman et al. (2010) examine the association between WCM and profitability, using CCC and ACP for investigating the link with profitability. The study finds that the CCC directly affects the performance of a manufacturing firm. Manufacturing firms normally face collection and payment problems. Uyar (2009) finds a negative association between CCC and profitability of a firm and also a negative association among the CCC and firm size. Alipour (2011) found a negative association between CCC and ACP with profitability. Charitou et al. (2010) examine the association between WCM and firm performance using cash conversion and company profitability. Keown, Martin, Petty, and Scott (2003) explains the importance of the CCC. Ortín-Ángel and Prior (2004) identify problems with the CCC and suggest some assumptions for the CCC.

N. Khan, M. Bilal, I.R.Malik, A.R.Kashif, A.R.Sajid

Gill et al. (2010) observe the association between WCM and profitability. The findings recommend that when companies have a long collection period, then companies do lose profit. The long collection period always decreases the profitability of the companies. Mathuva (2015) shows that the CCC, ITORD, sales outstanding, and APPD, all have links with company performance. Farris (2002) suggests that companies can enhance the collection with fast payment periods if companies allow discounts to debtors. Deloof (2003) found that profitability decreases the number of accounts receivable. ACP directly affects the CCC and this CCC affects the company profit. A large proportion of current assets creates negative impacts on profitability, while a small proportion of current assets can create liquidity problems for a firm. Eljelly (2004) argues that “current assets and current liabilities” are a major component of WCM planning. The INTORD plays a vibrant role in WCM. Chen et al. (2005) argue that inventory levels decline when companies change their inventory turnover ratio from 96 to 81 days. Randall and Ulrich (2001) examine the association between supply chain structure and a classical inventory model. Proper WCM in manufacturing companies can increase the profitability of companies. The level of cash is very important for profitability (Mun & Jang, 2015). Theodore Farris and Hutchison (2002) suggest that if companies use electronic payment methods, then they can decrease the time of the payment period. Gill et al. (2010) argue that profitability has a negative association with a firm's APPD and a positive relationship with the CCC. Charitou et al. (2010) indicate that the CCC and its major components, for example, ITORD, day’s sales outstanding, and APPD, are connected with firm profitability. The changes in bank credit also effect on WCM (Chen & Kieschnick, 2017). Nazir and Afza (2009) find a negative association between firm profitability and aggressive WCM policy. According to Afza and Nazir (2011), WCM affects the cement industry of Pakistan. Haq et al. (2011) discuss the association between WCM and profitability. We thus propose the hypothesis H1. Working capital management has a negative relationship with profitability.

2.3 WORKING CAPITAL MANAGEMENT AND STOCK PRICE Literature has provided evidence about WCM and stock prices. Mohamad and Saad (2010) examine the association between WCM policies and stock returns in Swedish firms. They suggest that WC correlates with the stock returns of companies. Moreover, WC does not correlate with stock performance in the manufacturing sector. Karchani and Givaki (2014) describe the association between WCM and SP, using a sample of 179 manufacturing companies listed on the Tehran stock exchange. The findings show that moderating and aggressive policies do not associate with SP but conservative WCM policies have a strong relationship with SP. The low-level investment in WC increases firm market performance (He et al., 2017). We thus propose the hypothesis H2: Working capital management has a positive relationship with the stock price.

3. METHODOLOGY 3.1 DATA This research is based on data from thirteen manufacturing sectors in Pakistan. Data were collected from companies' websites from 2006 to 2011. Forty-three manufacturing companies’ data were used for recent empirical investigation. Every company is included in the KSE100Index. The *Corresponding author (N. Khan). Tel: +923219728450. Email: noheed_khan@hotmail.com ©2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13U http://TUENGR.COM/V11/11A13U.pdf DOI: 10.14456/ITJEMAST.2020.267

sector-wise detail of the companies is as follows. Construction & Materials sector has seven companies; three companies are included in Automobile & Parts sector, General Industries has two companies, one company belongs to Forestry & Paper, Food Products sector consists of the four companies, one company belong to Households Goods, Personal Goods consists of the three companies, two companies related to Pharma & Biotech sector, four companies have associated with Chemicals, Oil & Gas sector consists of the ten companies, two companies link with the Tobacco sector, Industrial Engineering has three companies, and one company belongs to Beverages sector.

3.2 VARIABLE This research uses WCM as an independent variable. We select the proxies for WCM in the context of previous literature. Deloof (2003) and Eljelly (2004) used CR, cash, ACP, ITORD, and APPD. We use OP and stock price as dependent variables. We use thirteen manufacturing sectors as control variables. If the company belongs to the Construction & Materials, Automobiles & Parts, General Industries, Forestry & Paper, Food Products, Households Goods, Personal Goods, Pharma & Biotech, Chemicals, Oil & Gas, Tobacco, Industrial Engineering, or Beverages Sectors then the dummy variable is 1, otherwise 0. Table 1 represents the variable measurements. Table 1: Variable measurement and abbreviations Variables Operating profitability Average stock price Current ratio Cash Inventory turnover in days. Average collection period in days. Average payment period Cash conversion cycle

Measurement Gross profit â€“ Operating expenses The total daily Closing stock price of the company in year t / Total number of working days in year t. Current assets /current liabilities Total cash in year t Inventory/Cost of goods sold *365. Accounts receivable/Credit sales*365 Accounts payable/Credit purchases*365 ACP + ITORD - APPD

Abbreviations OP SP CR Cash ITORD ACP APPD CCC

3.3 PEARSON CORRELATION ANALYSIS Before the analysis, the data were checked for normal distribution. Data were not properly distributed. The log transformation is applied for OP and SP. To check for multicollinearity, the Pearson Correlation was applied to Models #1 and #2. The Pearson Correlation results are reported in Tables 2 and 3. The Pearson results for Model #1 show that CR, S1, S2, and S4 are negatively correlated with operating profitability providing preliminary support for Hypothesis 1. Cash, APP, CC, S5 and S13 are positively correlated with operating profitability. The Pearson results for model 2 reveal that CR, INTOR, ACP, S5, S6 and S9 have a positive correlation with the stock price which initially supports Hypothesis 2. APP and S13 has a positive correlation with the stock price. Models #1 and #2 (Tables 2 and 3) indicate that there is no serious multicollinearity problem. After the Pearson Correlation, we then ran a univariate regression for Model #1 and #2. Correlation does not show the proper multicollinearity issue. The variance inflation factor confirms the multicollinearity problem. VIF is applied for checking the robustness of the results.

N. Khan, M. Bilal, I.R.Malik, A.R.Kashif, A.R.Sajid

Table 2: Model #1 Pearson Correlation Variable Op CR Cash INTOR ACP APP CCC S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13 Op 1.00 CR -.10 1.00 Cash .03 .08 1.00 INTOR .10 .01 .02 1.00 ACP -.06 .33 .07 -.06 1.00 APP .08 .05 .19 .42 .19 1.00 CCC .09 .36 .08 .48 .35 .04 1.00 S1 -.02 .43 .07 .03 -.33 .01 -.38 1.00 S2 -.04 .01 .05 .04 -.21 -.06 -.04 -.09 1.00 S3 -.26 .10 .12 .14 .06 .05 .11 .12 .05 1.00 S4 -.04 .17 -.08 .05 .13 -.01 .12 -.08 -.03 -.04 1.00 S5 .07 -.12 -.19 -.11 -.16 -.11 -.02 -.16 -.07 -.08 -.06 1.00 S6 -.16 .17 .18 .06 .05 .03 -.01 .07 .03 .04 .02 .05 1.00 S7 -.26 .09 .01 -.04 .11 -.13 .04 -.11 -.05 -.06 -.04 -.08 -.03 1.00 S8 -.15 .21 .05 .11 -.02 -.08 .16 .09 .04 .05 .03 .07 .03 -.05 1.00 S9 -.04 -.06 .20 .09 .05 -.08 .17 -.10 -.04 -.05 -.04 -.07 -.03 -.05 -.05 1.00 S10 .34 .28 .19 -.21 .39 -.03 .18 -.19 -.08 -.11 -.07 -.14 -.06 -.09 -.08 -.09 1.00 S11 .16 .03 .19 .25 -.29 .22 .07 -.08 -.03 -.04 -.03 -.07 -.03 -.04 -.03 -.04 -.08 1.00 S12 .23 .01 .13 -.06 -.19 -.08 -.06 -.09 -.03 -.05 .04 -.06 -.03 -.05 -.04 -.04 -.08 -.4 1.00 S13 .09 .08 .17 .21 .19 .59 .17 -.05 -.02 -.03 -.02 -.03 -.01 -.02 -.02 -.02 0.04 -.02 -.02 1.00 Notes. Dependent variable, OP indicates operating profitability of the company in year t. CR, cash, INTOR, ACP, APP, CCC represent, respectively, current ratio, cash in year t, inventory turnover ratio, average collection period, average payment period, cash conversion cycle. S1 to S13 represent, respectively, Construction & Materials, Automobiles & Parts, General Industries, Forestry & Paper, Food Products, Household Goods, Personal Goods, Pharma & Bio-tech, Chemicals, Oil & Gas, Tobacco, Industrial Engineering, Beverages sectors.

Table 3: Model #2 Pearson Correlation Variable SP CR Cash INTOR ACP APP CCC S1 S2 S3 S4 S5 S6 S7 S8 S9 S10 S11 S12 S13

SP CR 1.00 .06 1.00 .17 .07 .06 -.01 .02 .31 -.06 .03 -.03 .33 -.02 -.43 -.12 .05 -.16 .11 -.26 .18 .05 -.12 .06 -.17 .05 .09 -.08 .20 .07 -.06 -.15 .28 -.09 .01 -.26 .03 -.04 .09

Cash INTOR ACP

APP CCC

1.00 .03 .02 .20 -.09 .08 .06 -.11 -.09 -.22 -.18 .01 .05 .20 .19 .20 .13 .17

1.00 .041 .01 -.06 .05 -.01 -.11 .04 -.13 -.09 -.08 -.02 .25 -.07 .58

1.00 -.09 .40 .44 -.01 .05 .14 .06 -.11 .06 -.04 .05 .09 -.21 .26 -.06 .21

1.00 .10 .40 -.31 -.21 .05 .12 -.13 .05 .11 .08 .05 .36 -.39 -.19 .18

1.00 -.33 -.03 .11 .12 -.02 -.01 .04 .17 .16 .17 -.04 -.06 .17

S10

S11

S12

S13

1.00 -.09 1.00 -.12 .05 1.00 -.08 -.04 -.04 1.00 -.16 -.07 -.08 -.06 1.00 -.07 .03 -.04 -.03 -.05 1.00 -.11 -.05 -.06 -.04 -.08 -.03 1.00 -.12 -.05 -.06 -.04 -.08 -.04 -.06 1.00 -.11 -.04 -.05 -.04 -.07 -.03 .05 -.05 1.00 -.19 -.08 -.11 -.07 -.14 -.06 -.09 -.11 -.09 1.00 -.08 -.04 -.05 -.03 -.06 -.03 -.04 -.04 -.04 -.08 1.00 -.09 -.04 -.05 .03 -.06 -.03 -.05 -.04 -.04 -.08 -.04 1.00 -.05 -.02 -.03 -.02 -.03 -.01 -.01 -.02 -.02 0.04 -.02 -.02 1.00

Notes. The dependent variable, SP indicates the average stock price of the company in year t.

4. RESULT AND FINDINGS 4.1 MODEL #1: WORKING PROFITABILITY

CAPITAL

IMPACT

NET

OPERATING

Figure 1 describes that the Beverages sector indicates the maximum mean and highest standard deviation, but Pharma & Biotech sector shows the lowest mean and highest standard deviation. Forestry & Paper has the lowest SD. Next, we analyze the WCM and profitability by following the regression Equation (1). For detail of variables (see Table 1). The regression results are presented in Table 4. đ?‘Śđ?‘Ś = đ?›źđ?›ź + đ?‘?đ?‘?1(đ??śđ??śđ??śđ??ś) + đ?‘?đ?‘?2(đ??śđ??śđ??śđ??śđ??śđ??śâ„Ž) + đ?‘?đ?‘?3(đ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??ź) + đ?‘?đ?‘?4(đ??´đ??´đ??´đ??´đ??´đ??´) + đ?‘?đ?‘?5(đ??´đ??´đ??´đ??´đ??´đ??´) + đ?‘?đ?‘?6(đ??śđ??śđ??śđ??śđ??śđ??ś) + đ?œ€đ?œ€

(1),

symbols đ?›źđ?›ź , đ?‘?đ?‘?1, đ?‘?đ?‘?2, đ?‘?đ?‘?3, đ?‘?đ?‘?4, đ?‘?đ?‘?5, đ?‘?đ?‘?6 are to be determined from the regression and đ?œ€đ?œ€ represents the error term. *Corresponding author (N. Khan). Tel: +923219728450. Email: noheed_khan@hotmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13U http://TUENGR.COM/V11/11A13U.pdf DOI: 10.14456/ITJEMAST.2020.267

Mean Std. Deviation 20 18.077 17.808 16.72 18 16.194 15.479 15.006 14.757 14.475 16 14.437 12.924 12.715 14 12.266 11.421 12 10 8 6 3.86 3.145 3.604 3.064 4 2.282 2.299 1.828 2.078 1.674 1.405 1.386 2 0.336 0.299 0

Figure 1: Mean and Standard Deviation of Model #1. Table 4 shows that cash is positively significant at the 1% level. It means that cash has a positive impact on OP. If cash increases, then OP in the manufacturing sector also increases. The CR is negatively significant and the APPD is positively significant at the 10% level. It means that the current ratio has a negative relationship and the APPD has a positive relationship with OP. Construction & Materials, Automobiles & Parts, Forestry & Paper, Pharma & Biotech, Chemicals & Food Products are all negatively significant at the 1% level. WCM decreases the OP in these sectors. If the WC components increase in these sectors, then the OP of the firm will decrease. If WC components decrease in these sectors, then the OP of the firm will increase. The findings related to the current ratio, Construction & Materials, Automobiles & Parts, Forestry & Paper, Food Products, Personal Goods, Pharma & Biotech and Chemicals sectors support the first hypothesis. Table 4: Working capital and profitability. Variables B S.E. t p Intercept 17.25 1.24 13.88 0.00 #CR –0.18 0.11 –1.67 0.09* Cash 0.00 0.00 2.43 0.01** ITORD –0.02 0.01 –1.54 0.12 ACP –0.02 0.01 –1.15 0.25 APPD 0.02 0.01 1.77 0.07* CCCD 0.02 0.01 1.63 0.10 Construction & Materials –2.24 1.44 –2.76 0.00*** Automobiles & Parts –4.32 1.23 –3.49 0.00*** General Industries –0.73 1.22 –059 0.55 Forestry & Paper –4.13 1.47 –2.80 0.01** Food Products –2.52 1.23 –2.05 0.04** Household Goods 0.24 1.48 0.163 0.87 Personal Goods –2.10 1.23 –1.70 0.09* Pharma & Bio-tech –5.48 1.31 –4.18 0.00*** Chemicals –4.83 1.24 –3.90 0.00*** Oil & Gas –1.31 1.14 –1.14 0.25 Tobacco –1.99 1.29 –1.54 0.12 Industrial Engineering –2.25 1.59 –1.40 0.16 Beverages 0b . . Notes. “*, **, *** “represent significance at the 10%, 5 % and 1% levels, respectively” a. “Dependent variable” –Net operating profitability b. “R Squared” = 0.348 (“Adjusted R Squared” =0.310)

4.2 MODEL #2: WORKING CAPITAL AND STOCK PRICE Figure 2 shows that Food Products indicates the highest mean and SD. Tobacco has the

N. Khan, M. Bilal, I.R.Malik, A.R.Kashif, A.R.Sajid

minimum mean and a maximum SD. Next, we analyze the WCM and stock price by following the regression Equation (2). The regression results are presented in Table 5. Mean Std. Deviation 6.52 7 5.407 5.205 6 4.925 4.822 4.66 4.602 4.566 4.508 4.387 5 3.667 3.565 4 2.994 2.012 3 1.633 1.417 2 0.982 1.118 0.908 0.856 0.76 0.422 0.289 0.276 0.155 0.278 1 0

Figure 2: Mean and Standard Deviation of Model #2 đ?‘Śđ?‘Ś = đ?›źđ?›ź + đ?‘?đ?‘?1(đ??śđ??śđ??śđ??ś) + đ?‘?đ?‘?2(đ??śđ??śđ??śđ??śđ??śđ??śâ„Ž) + đ?‘?đ?‘?3(đ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??źđ??ź) + đ?‘?đ?‘?4(đ??´đ??´đ??´đ??´đ??´đ??´) + đ?‘?đ?‘?5(đ??´đ??´đ??´đ??´đ??´đ??´) + đ?‘?đ?‘?6(đ??śđ??śđ??śđ??śđ??śđ??ś) + đ?œ€đ?œ€

(2)

Table 5: WC and SP

Variables B S. E t p CONST 4.85 0.54 8.95 0.00 CR 0.09 0.04 1.98 0.04** Cash 0.35 0.10 1.33 0.18 ITORD 0.01 0.01 1.72 0.08* ACP 0.01 0.01 1.84 0.06* APPD â€“0.01 0.01 â€“2.06 0.04** CCCD â€“0.01 0.01 â€“1.87 0.06* Construction & Materials â€“1.20 0.53 â€“2.27 0.02** Automobiles & Parts â€“0.40 0.54 â€“0.75 0.45 General Industries â€“0.35 0.53 â€“0.65 0.51 Forestry & Paper â€“0.68 0.64 â€“1.05 0.29 Food Producer 1.66 0.54 3.09 0.00*** Households Goods 0.32 0.63 0.50 0.61 Personal Goods â€“0.38 0.54 â€“0.70 0.48 Pharma & Bio-tech â€“0.17 0.57 â€“0.28 0.77 Chemicals â€“1.42 0.54 â€“2.63 0.00*** Oil & Gas â€“0.17 0.50 â€“0.33 0.73 Tobacco â€“1.70 0.56 â€“3.05 0.02** Industrial Engineering 0.30 0.70 0.43 0.66 Beverages 0b . . . Notes.*, **, *** â€œrepresent significance at the 10%, 5 % and 1% levels, respectivelyâ€? â€œDependent variableâ€?: Stock price â€œR Squaredâ€? = 0.454 (â€œAdjusted R Squaredâ€? =0.424)

Table 5 shows that the CR is positively significant with the stock price at the 5% level. A high CR shows the financial strength of the firm. Investors collect financial information for investing in companies. If companies are financially strong, then more investors invest in these companies and the SP of the companies increases. The average payment period is negatively significant, with the stock price at the 5% level. If the APPD increases then the SP of the firm decreases and if the APPD decreases then the SP increases. The ITORD and ACP have a positive effect at the 10% significance level. If inventory turnover in days and ACP in days increases then the SP of the company increases. The CCC is negatively significant at the 10% level. If the CCC in days increases then stock price decreases; if the CCC in days decreases then the SP of the company increases. The Construction & Materials and Tobacco sectors show negatively significant *Corresponding author (N. Khan). Tel: +923219728450. Email: noheed_khan@hotmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13U http://TUENGR.COM/V11/11A13U.pdf DOI: 10.14456/ITJEMAST.2020.267

relationships with SP at a 5% level. The Food Products sector is positive and the Chemicals sector is negatively significant at the 1% level. It means that WC components have a positive relationship with OP in the Food Products sector and a negative relationship in the Chemicals sector. The findings of the CR, INTORD, ACP, APPD, and CCC in the Construction & Materials, Food Products, Chemicals and Tobacco sectors support the second hypothesis.

4.3 ROBUSTNESS TESTS To check the robustness of the results, we use the variance inflation factor (VIF). It is used when there is a strong linear relationship with predictor variables. If the value of VIF exceeds 4, it warrants investigation for multicollinearity. If the value of VIF is more than 10, it indicates that there is a serious problem of multicollinearity. The results listed in Table 6 highlight that all the values lie below four, so there is no concern with multicollinearity for Models 1 and 2. Table 6: Variance inflation factor. Variables Model1 (VIF) 1/VIF Model2 (VIF) 1/VIF CR 1.63 0.61 1.60 0.63 Cash 1.63 0.62 1.63 0.61 ITORD 1.80 0.56 2.36 0.42 ACP 2.32 0.43 2.74 0.37 APPD 2.33 0.43 2.62 0.38 CCC 2.28 0.44 2.70 0.37 Construction & Materials 2.21 0.45 2.20 0.45 Automobiles & Parts 1.38 0.73 1.41 0.71 General Industries 1.29 0.77 1.29 0.77 Forestry & Paper 1.16 0.86 1.19 0.84 Food Products 1.55 0.65 1.55 0.64 Household Goods 1.14 0.87 1.14 0.88 Personal Goods 1.24 0.81 1.27 0.79 Pharma & Bio-tech 1.38 0.73 1.42 0.70 Chemicals 1.48 0.67 1.48 0.68 Oil & Gas 1.94 0.52 1.91 0.52 Tobacco 1.71 0.58 1.40 0.71 Industrial Engineering 1.42 0.70 2.02 0.50 Beverages 1.23 0.81 1.84 0.54 Mean VIF 1.64 1.78 Notes. Model 1 Dependent variable Op represents Operating profitability. Model 2 “Dependent variable “SP represents a stock price. “CR, cash, INTOR, ACP, APP, CCC represent the respectively current ratio, cash in year t, inventory turnover ratio, average collection period, average payment period, cash conversion cycle”.

5. DISCUSSION The recent study develops the association among WCM, profitability and the stock price of companies. The findings of the study suggest that cash has a positive impact on OP. Prior studies discussed the relationship in different manners. For example, Afza and Nazir (2007) investigate the negative association among WC components such as CR and profitability. Mathuva (2015) finds that cash has a positive association with the profitability of companies. It means if cash increases, then OP in the manufacturing sector also increases. In the sector-wise analysis, findings suggest that the Construction & Materials, Automobiles & Parts, Forestry & Paper, Pharma & Biotech, Chemicals and Food Products sectors all see negative impacts on OP. These results are in line with prior literature. For example, Afza and Nazir (2007) and “Rahman” find a negative association between WC and profitability. It means WC decreases the OP in these sectors. If WC components increase in these sectors, then the operating profitability of the firm will decrease. If WC decreases in these sectors, then the OP of the firm will increase.

N. Khan, M. Bilal, I.R.Malik, A.R.Kashif, A.R.Sajid

In the Food Products and Beverages sectors, WC has a positive effect on the SP. If the CR rises, then the SP of the company will also increase. Financial managers in these sectors should maintain maximum CR to increase the stock price of their companies. A high CR shows the financial strength of the companies. The Construction & Materials, Automobiles & Parts, Forestry & Paper and Food Products sectors all experience the negative impact of WC on OP. Financial managers should maintain a minimum CR to increase the OP of their companies. They should avail themselves of short-term loans for manufacturing to enhance the operating profitability of their companies. The Construction & Materials, Chemicals and Tobacco sectors all experience the negative impact of WC on SP. Financial managers should maintain a maximum CR to increase the SP of their companies. A high CR shows the financial strength of the companies. When investors collect a company’s financial information, if a company has strong financial information, then more investors will be interested in investing in this company. An APPD has a negative impact on the SP of the company. If companies have less than APPD, then their stock price will increase, showing the financial strength of the company. Financial managers should maintain less than APPD to increase stock prices for their companies.

6. CONCLUSION WCM plays a significant role in every manufacturing organization. This research objective is to analyze the impact of WC on profitability and SP. The findings of this study reveal that the CR has a positive impact on SP and the APPD has a negative impact on the stock price. The findings of this study suggest that WCM in some sectors has a positive impact and some sectors have a negative impact on SP. Financial managers should maintain minimum current ratios for increasing the OP of their companies. They should avail themselves of short term loans for manufacturing; then they can enhance the operating profitability of their companies. Financial managers should maintain lower than average payment periods for increasing the SP of their companies.

7. AVAILABILITY OF DATA AND MATERIAL Data can be provided upon contacting the corresponding author.

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N. Khan, M. Bilal, I.R.Malik, A.R.Kashif, A.R.Sajid

Pinkowitz, L., Stulz, R. M., & Williamson, R. (2003). Do firms in countries with poor protection of investor rights hold more cash? National Bureau of Economic Research. Raheman, A., & Nasr, M. (2007). Working capital management and profitabilityâ€“case of Pakistani firms. International review of business research papers, 3(1), 279-300. Raheman, A., Afza, T., Qayyum, A., & Bodla, M. A. (2010). Working capital management and corporate performance of manufacturing sector in Pakistan. International Research Journal of Finance and Economics, 47(1), 156-169. Randall, T., & Ulrich, K. (2001). Product variety, supply chain structure, and firm performance: Analysis of the US bicycle industry. Management Science, 47(12), 1588-1604. Sayaduzzaman, M. (2007). Working Capital Management: A Study on British American Tobacco Bangladesh Company Ltd. Journal of Nepalese Business Studies, 3(1), 78-84. Singh, J., & Pandey, S. (2008). Impact of Working Capital Management in the Profitability of Hindalco Industries Limited. ICFAI journal of financial Economics, 6(4). Survey, P. E. (2012). A Pakistani survey 2011-2012. Finance Division, Government of Pakistan. Theodore Farris, M., & Hutchison, P. D. (2002). Cash-to-cash: the new supply chain management metric. International Journal of Physical Distribution & Logistics Management, 32(4), 288-298. Uyar, A. (2009). The relationship of cash conversion cycle with firm size and profitability: an empirical investigation in Turkey. International Research Journal of Finance and Economics, 24(2), 186-193. Zeidan, R., & Shapir, O. M. (2017). Cash conversion cycle and value-enhancing operations: Theory and evidence for a free lunch. Journal of Corporate Finance, 45, 203-219. Dr. Noheed Khan is an Assistant Professor in Government College University Faisalabad (GCUF), Pakistan. He has completed his PhD in Business Administration from Beijing Institute of Technology, Beijing, China in 2018. His research is related to Corporate Governance, FDI, and others.

Dr. Muhammad Bilal is a Researcher/Trainer in the field of Qualitative and Quantitative data analysis. He received his BS (CS) degree from PMAS-UAAR, Pakistan. He continued his MS/PhD study at Iqra University Islamabad Campus Pakistan where he obtained his PhD in Business Administration (Finance). Dr. Bilal's interests involve Risk Management and Capital Budgeting in Financial Institutions.

Dr. Imran Riaz Malik is an Associate Professor of Finance at Iqra University Islamabad Campus. He earned his PhD (Finance) degree from Institute of Management Sciences, Peshawar, Pakistan. His interests involve Financial Risk Management and Financial Econometrics.

Abdul Rauf Kashif is a PhD Scholar at Iqra University Islamabad Campus. He got an MS (Finance) degree from Iqra University Islamabad Campus Pakistan. His current interests involve Risk Management and Portfolio Management.

Abdul Rehman Sajid is a PhD Scholar at Iqra University Islamabad Campus. He holds an MS (Finance) degree from Iqra University Islamabad Campus Pakistan. His current interests involve Islamic Finance and Credit Management.

*Corresponding author (N. Khan). Tel: +923219728450. Email: noheed_khan@hotmail.com ÂŠ2020 International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies. Volume 11 No.13 ISSN 2228-9860 eISSN 1906-9642 CODEN: ITJEA8 Paper ID:11A13U http://TUENGR.COM/V11/11A13U.pdf DOI: 10.14456/ITJEMAST.2020.267

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