Wednesday, July 31, 2019

Debates on Advertising Essay

In the text , introduction to mass communication media literacy and culture, Stanley Baran states specific complaints about advertising. He states that advertising is intrusive , deceptive, exploits children, and demean and corrupts culture. Ads can be intrusive because they are everywhere and interfere with and alters our experience. It can be deceptive because the ads implicitly and sometimes explicitly says that it came improve someone’s lives through a purchase of a product. Ads also exploit children because they are targeted. There are ads that are specifically mind blowing go them. Finally, ads demanding and corrupts culture by appealing to human values and needs. Advertisers accomplish this goal by using the AIDA approach and consumer culture. The AIDA approach is used to persuade consumers and the consumer culture is used to impose new definitions that serve the advertiser and not the cultures important aspects of our lives. The disagreements that are shown by Baran in Chapter 12 are legitimate. The arguments that are provided supports the complaints given. I believe the accusations that support advertising are tolerable. Advertising is everywhere and interferes with and alters our experience. Advertising is all over the world. Ads does not have to be actual billboards or commercials on television. The clothes that we wear and the products that we use are also advertisements. This is also called 360-marketing. Advertising can also be deceptive. There are many products in our society where it is supposed to change out lives. For example, â€Å"AXE† , a male shampoo, is supposed to attract more women if you wear it. These products can be deceiving to our culture because of this. The advertisers know that people in society want an excitement in their lives , so to improve that they create products that excite the consumers. I also think that advertisements do exploit children. Ads specially create ads for children because they are the influence on their parents. This means that the advertisers will use the children to their advantage to get their products brought. For example , when children see a product that’s eye catching to them , they will beg their parents to buy that product which will eventually happen because the parents would not want to keep hearing their children beg. Lastly , advertisements does demean and corrupt our culture. I believe this is true because advertisements come about to seek products that we need. They attract us by producing products that we use everyday. For an example , we use soap everyday to wash our bodies. The advertisers will produce many soap ads to intrigue us to buy a particular soap. Also, producers create many soaps , with different scents to give us the idea that it will make you smell better which leads back to the idea of advertisements being deceptive. This shows that advertisers do demean and corrupt our culture.The article â€Å"Boosting Smoking Among Children† supports the complaint of advertising exploiting children. In the article RJR Nabisco created a new campaign for its camel brand cigarettes. Anti smoking groups accused the company of attacking young smokers as they saw Joe Camel repeating the same path as to smoke go an† untapped market†. It was stated by Dr. Joseph DiFranza that,† children as young as 3 years old could recognize Joe, and more kids could identify him than could identify Mickey Mouse†(page 335). DiFranza researched that Joe camel was the single most recognizable logo in the country. This shows that advertisements connect to children because they can realize a character at the age of 3. The children do not understand what is going on , but the advertisers know that the parents will buy their cigarettes because of the children. Also , when the children get older , the camel on the cigarette box will be more common and if decided to smoke they would buy only that product because they are used to seeing it. The Ad Council and Media Foundation does challenge common practices of the advertising industry by creating â€Å"uncommercials†. Uncommercials are commercials ,at no cost if used, challenge known actual commercials. In the article ,†Challenging Advertising: Ad Busters and Uncommercials† it is stated that ,†those who wish to use them to , as the Media Foundation likes to call it, â€Å"culture jam,† or challenge the prevailing commercial culture†(page 336). This shows that the uncommercials are used to show that the advertisements demean and corrupt out culture. This is done by showing and telling us that we need to buy a certain product to live. It also connects to the complaint that advertisements are deceptive. This is because seeing that we supposedly need a certain product in our life makes us want to buy the product not knowing that it is just for money.In the documentaries â€Å"Consuming Kids† and â€Å"Killing Us Softly 4† shows us the specific complaints against advertising. In â€Å"consuming kids† it was showed that children are targeted in many wa ys. This connects to the idea that advertisements exploit children because in the documentary it is shown that the children do influence parents. For example, a new car was brought because the children were attracted and begged their parents to buy it because of what was inside. The parents do not realize that the children are why their money is spent on unnecessary things. In â€Å"Killing Us Softly 4† it was shown that advertisements demean and corrupts our culture because women are portrayed and used as an object to sell products. Also in the documentaries they tell the society how to prevent the unbalanced advertising. In â€Å"Consuming kids â€Å"†¦Ã¢â‚¬ ¦. In â€Å"Killing Us Softly 4 † lady name stated that the society should , † become aware and pay attention , teach media literacy in school, protest and speak out about the problem , deface ads, and get involved and change the attitudes that are presented for us†. This shows that there are ways that we can maneuver around the pile up of advertisements. In conclusion , the advertising industries received many complaints on the ways they attack consumers. The reasons stated were because of advertisements being intrusive , deceptive, exploiting children and demeaning and corrupting our culture. AIDA approach and consumer culture helped these complaints conquer their goal. This created a controversy between industries and social groups. The social groups were the ones who complain about these problems.

Marriage in a Man’s World

Marie de France’s epic poem â€Å"Lanval† is an outstanding work of satire that pokes fun at the societal norms of the author’s time, including government and the institution of marriage.   Though she never directly states it, de France paints marriage at the court level as a farce, a facade, and an arrangement of convenience rather than passion, love, or commitment. Marie de France wastes no time in laying the groundwork for the subtext of this poem.   Within the first few stanzas, as she paints a picture of the great and noble King Arthur, she manages to slide in a reference to King Arthur providing his Round Table members with wives as â€Å"gifts.†Ã‚   She mentions these gifts in the same breath as â€Å"lands,† which suggests the King views women as property and the institution of marriage as a kind of purchase agreement.   The art here is in the subtlety with which de France inserts this subversive idea into what seems like a simple description of a man’s virtues. The author reinforces her statement on marriage – specifically the sexist nature of marriage and relationships at the time – with the introduction of the mysterious, wealthy and beautiful maiden.   The maiden acts as a caricature of a male fantasy, approaching him out of nowhere with the offer of free love and devotion.   Only her physical and financial features are praised, and when Lanval agrees to her terms, she immediately allows him to sleep with her.   Lanval has found himself in the perfect situation – sex and wealth from a beautiful woman, and all he has to do is not acknowledge their relationship. It is not long before Lanval’s loyalty is put to the test and de France puts another nail in the coffin of marriage.   King Arthur’s wife, the Queen, apparently unconcerned with the fact that that she is married, offers herself to Lanval.   The author treats this as though a Queen coming on to a knight was common practice, even expected.   When Lanval denies her wish, the Queen is incensed; one gets the idea that she is no stranger to such an arrangement and not used to being turned down.   When Lanval professes his love for his fantasy maiden, he does so to disprove the Queen’s suggestion that he is homosexual. As one would expect, King Arthur is extremely angry when he finds out what has happened between Lanval and the Queen, though the version he hears is not the whole truth.   Arthur vows to bring the knight to justice in court, which is heavily swayed in the King’s favor.   However, when he brings the charges against Lanval he fails to mention that Lanval attempted to sleep with his wife.   Instead, he focuses on Lanval’s statement that his lover’s maidens were fairer than the Queen.   As it seems logical that King Arthur would be far more upset with the idea of Lanval sleeping with his wife than speaking these words, readers get the idea that perhaps King Arthur does not believe the Queen’s accusations.   Perhaps he knows and ignores the Queen’s unfaithful ways, and perhaps he is guilty of the same behavior. After a series of ridiculous happenings in which the male members of the court are nearly put into trances by a series of half naked maidens on horseback, Lanval’s beautiful maiden comes to his aid.   Upon witnessing her beauty, all side with Lanval immediately, King Arthur included.   By pardoning this man who has supposedly wronged the Queen, King Arthur gives insight into his priorities.   Since the mystery maiden is far more physically attractive and wealthy than the Queen had ever been, there was no way Lanval could have made such an advance on the Queen.   And even if he said the things he said, he spoke the truth.   In this comical twist by de France, the King is more than willing to put aside his honor and the honor of his wife for an attractive stranger. Marie de France makes her final comment on the male-female, love-marriage tradition with the image of Lanval leaping onto the back of the maiden’s horse and riding into the distance.   Clearly, de France is turning the typical boy-rescues-girl scenario upside down, and perhaps is suggesting that things in her time are out of hand and need some strong women to turn things around.

Tuesday, July 30, 2019

The Determinant of Economics Growth in the Emerging Markets

MSc BUSINESS ECONOMIC AND FINANCE Title of Project The determinant of economic growth in emerging markets: A case study of China. Tarik TOUAT Student ID: 10034757 August 2011 Project Supervisor: Dr. Helen Solomon. Abstract China has enjoyed a very rapid economic growth over the past decades. The impressive growth was driven by several factors. This study aims to determine those factors which contributed to unprecedented economic growth of China and show the relationship with the economic growth by an empirically investigation.The Ordinary Least Squares (OLS) method is applied in order to estimate a growth model using a time series data from 1984 to 2009. The results shows that trade openness, government size and inflation have a significant effect on economic growth. On the other hand, foreign direct investments, the level of human capital and return on investment have minor impact on economic growth in China. The relationship is established though the vector error correction model ( VECM), the finding is that trade openness, government size and inflation had a positive impact on gross domestic product of China in the long-run. Similar essay: Why Nations Fail Summary Chapter 5Word account: 13. 112 words. Acknowledgements Allow me to pay tribute to my supervisor, Dr. Solomon for kindly supervising this study and giving her time and her knowledge to the success of this project. I take this opportunity to thanks my elder brother Arezki TOUAT who was a model of success and constant source of motivation; I’m here to express my sincere gratitude and I wish him all the best for his wedding day. Dedication I dedicated this work to my parents Mouloud and Saliha TOUAT, who have contributed in an extraordinary way to my studies.To my younger sister Louiza TOUAT who is very special for me. Table of Contents 1INTRODUCTION6 1. 1Main objective7 1. 2Organization of the study7 2OVERVIEW OF THE CHINESE ECONOMY8 2. 1Geopolitical characteristics of China9 2. 1. 1Population9 2. 2Economic reforms in China10 3REVIEW OF LITERATURE12 3. 1Growth models12 3. 1. 1Basic Economic Growth Model12 3. 1. 2The Harrod-Domar model13 3. 1. 3Exogenous growth Solow model14 3. 1. 4The augmented Solow-MRW15 3. 1. 5The growth accounting model16 3. 2The determinants of growth17 3. 2. 1Foreign direct investment17 3. 2. Trade Openness19 3. 2. 3Human capital20 3. 2. 4Government size21 3. 2. 5Inflation22 3. 2. 6Infrastructure23 3. 2. 7Return on investment (Portfolio investment)24 4DATA AND METHODOLOGY25 4. 1Presentation of the data and statistical analysis25 4. 2Description of the variable26 4. 2. 1GDP per Capita26 4. 2. 2Foreign Direct Investment Net Inflows (% of GDP)27 4. 2. 3Trade openness28 4. 2. 4School enrolment, tertiary29 4. 2. 5General government final consumption expenditure30 4. 2. 6Inflation31 4. 2. 7Portfolio investment, bonds32 4. 2. 8Electric power consumption33 4. Descriptive Statistics34 4. 4Methodology35 4. 4. 1Estimation of the general model35 4. 4. 2The hypothesized relationships between GDP and its determinant36 5MODEL ESTIMATION AND FINDING37 5. 1Testing For Stationary using the Augmented Dickey Fuller Test37 5. 1. 1Results of the stationarity test. 39 5. 2Estimation of a Short-Run Growth Model for China41 5. 3Results of Robustness Tests44 5. 3. 1Testing for autocorrelation:44 5. 3. 2Testing for hetereoskedasticity:45 5. 3. 3Testing for non-linear functional form46 5. 4Estimating a long-run growth model for China47 5. 4. Testing for Co-integration: Engle-Granger Approach47 5. 4. 2Results using Engle and Granger Approach49 5. 4. 3Result of Johansen co-integration test. 52 5. 4. 4Vector correction model:55 6CONCLUSION59 LIST OF TABLES AND FIGURES TABLES Table 1: Literature review on foreign direct investment. 18 Table 2: Literature review on inflation. 22 Table 3: Literature review on return on investment24 Table 4: Descriptive statistic. 34 Table 5: ADF Test Statistics in levels39 Table 6: ADF Test Statistics in 1st difference40 Table 7: Estimation of the general growth model by OLS41Table 8: Estimation of the parsimonious model43 Table 9: Summary of the results from test for auto correlation44 Table 10: Summary of the results from test for hetereoskedasticity45 Table 11: Summary of the results from test for non-linear functional form46 Table 12: Testing the residuals from stationarity. 49 Table 13: Estimation of the Error Correction model 549 Table 14: Selecting the Appropriate Lag Length52 Table 15: Determining the number of co-integration vector with the Trace test53 Table 16: Determining the number of co-integration vector with the Maximum Eigenvalue test53Table 17: Unrestricted Johansen54 Table 18: Vector Error Correction Estimates56 FIGURES Figure 1: China nominal GDP per capita26 Figure 2: China- Foreign direct investment27 Figure 3: China -Trade openness. 28 Figure 4:China- School enrolment, tertiary29 Figure 5: China government final consumption expenditure. 30 Figure 6: Inflation in China31 Figure 7: Portfolio investment32 Figure 8: Infrastructure33 Figure 9: Graphs for stationarity in level. 62 Figure 10: Graphs for stationarity in first difference . 63 LIST OF ACCRONYMS GDP: Gross Domestic Product.GNP: Gross National Product. FDI: Foreign Direct Investment. ROI: Return On Investment. BRIC: Brazil, Russia, India and China. WTO: World trade Organization. OECD: Organisation for Economic Co-operation and Development US$: United State Dollar CIA : Central Intelligence Agency ADF: Augmented Dickey-Fuller. OLS: Ordinary Least Square. VAR: Vector Autoregression Model VECM: Vector Error Correction Model. NLLS: Non-linear least squares AR: Auto Regressive Models H0: Null hypothesis H1: The alternative hypothesis I (0): Integrated of order 0 (stationary).I (1): Integrated of order 1 (stationary). TFP: Total Factor Productivity. CHAPTER 1 INTRODUCTION In last decades, we have seen new economic power emerge from low level economic development to relatively high level of economic growth. Among these emerging economies are Brazil, Russia, India and China (the BRIC). Over the past two decades, developing countries have posted high rates of e conomic growth. This has transformed them into emerging economies. There are many factors that acted as determinants of this high GDP growth rate of the erstwhile slow growing developing countries.Chinese economy is the largest of the emerging economies. Actually, China passed Japan and become the second largest economy in the world after United States of America. Subhash Chandra Jain (2006) defines emerging economy as nations with social or business activity in the process of rapid growth and industrialization. Based on data from Dow Jones classification (2010) there are around 35 emerging markets in the world with the economies of China and India considered to be the largest. China is leading the pack of emerging economies. Their economic growth has been propelled by many factors.The economic importance of China and its continued success in posting high economic growth rates makes it an ideal case for studying the determinants of economic growth in emerging economies. China has al l the characteristics of an emerging economy. It faces the many challenges that all the emerging economies continuously face and which act as the biggest barriers to their economic growth. It is in this spirit we have undertaken this study to determine whether there is evidence of relationship between some factors and economic growth in china.This dissertation presents the knowledge gap to be filled, research questions and objectives alongside the hypotheses of the study. Furthermore, it also shows to what extend the study is relevant for China, highlights the scope and the organization of the study. More specifically, the study aims to: – Review the literature on the theoretical foundation of growth: examining the different model of economic growth. – Review and describing some previous studies on some determinants and the relationship with economic growth. Main objectiveThe key objective of the research is to assess the impact of different factors that contributed to the unprecedented economic growth of China over the past few decades and determine whether those factors can be viewed as a determinant of economic growth. Organization of the study This study is organized as follows: Chapter two will give an overview of the Chinese economic and list of the major waves of reforms. The third chapter will be in two sections, the first section deals with the definition of growth and provides a review of the growth theories by illustrating patterns of some leading economists on the issue of growth.Among the models studied, we have those Harrod-Domar, Solow, and Mankin. The second section of chapter tree deals with selected reviews on some indicators that have likely slowed or promoted growth. In chapter four presents the data and describes the method of analysis adopted to estimate the determinants of growth in China. The presentation and interpretation of the results are presented in Chapter five. This is followed by Chapter six, the conclusion. CHAPT ER 2 OVERVIEW OF THE CHINESE ECONOMY According to central Intelligence agency (CIA), China is the second largest economy after the United States.The country has experienced a particularly strong economic growth since the 1980s. However, the population remains relatively poor: in purchasing power parity, an estimated per capita GDP IN 2010 TO 7,400 $ per capita. Led by the Communist Party since 1949, China has led since the late 1970s the power to call a â€Å"socialist market economy†. The public sector continues to hold an important place in economic life but private companies are playing an increasing role and the country is highly integrated into the global economic system. Since 2001, China is a member of the World Trade Organization.While agriculture still occupies much of the labor force (in 2010, 39. 5% of Chinese labor), it contributed only 9. 6% of GDP in 2010. Industry, however, takes a prominent place, employing about 27% of the working population and is the area's most prolific in China with a production of almost half of national GDP, According to the state administration of foreign exchanges, nearly 47% of GDP come from a huge surplus caused by industrial exports. This has allowed the country to build up foreign exchange reserves that reached approximately 2,450 officially billion in June 2010.According to some analysts, China will by 2020 be the second largest industrial and commercial in the world, just behind the United States, ahead of Japan and the richest states in Europe. Geopolitical characteristics of China China is located in eastern Asia, west of the East China Sea, Korea Bay, Yellow Sea, and South China Sea. The country is bordered by fourteen other nations. With a total area of about 9,596,960 square kilometers (3,705,407 square miles), the country is slightly smaller than the United States. China is administratively divided into twenty-three provinces, five autonomous (self-governing) regions, and four municipalities.Populati on Since the proclamation of the People's Republic, the country experienced three censuses of population and there were 582. 6 million people in 1953, 1 billion in 1982 and 1. 14 billion in 1990. According to China demographics web site (2001), in 2005, estimated population is 1. 31 billion people (about 21 % of the world population). Since the early 1970s, the Chinese authorities launched a policy of birth control, with the aim of stabilizing the population at 1. 2 billion people in 2000. Since the 1982 census, the rate of population growth has decreased dramatically.The Chinese population reached in July 2011, 1. 4 Billion. According to China's official statistics, the rate of growth increase of about 2 to 3% per year during the first phase of demographic transition (2. 6% in 1969), fell to 1. 1% per year between 1990 and 1995. It is estimated at 1. 02% for 1995-2000 and 0. 7% for the period 2002-2020. The birth rate fell from 45% o in 1953 to 21% o in 1990, reaching 13. 10% o in 2005. At the same time, the mortality rate was reduced from 22. 5% to 6. 90%. This low mortality is due to the current youth population. In 2005, 25. % of China's populations were under 15 years, 67. 6% between 15 and 65 and 7. 6% (2005), alone, more than 65 years. The male population is 51. 50%. Economic reforms in China The economic reform called â€Å"Socialism with Chinese characteristics† started in 1978 by reformists within the Communist Party of China led by Deng Xiaoping. 1978-1984 The reform has started with the improvement of the micro-economic management (agriculture and urban industry), these reforms were implanted by Deng Xiaoping. The main objective was to encourage farmers, business leaders and employees to increase economic productivity.Effective action has been taken, by allowing farmers to keep the land's output after paying a share to the state. This move increased agricultural production, increased the living standards of hundreds of millions of farmers (B randt 2008). In rural areas, the system of collective ownership has been replaced by the household responsibility. In cities, the main objective of the reform was to increase the autonomy of enterprises. To this end, a number of experiments to improve the management system were conducted. Some of them, after the initial demonstration of their success, have extended to the whole country.The creation of joint enterprises with foreign capital is now possible. Deng Xiaoping launched the reform of the so-called â€Å"open door†, opening China to the outside. Foreign investment is now desired, and their home is concentrated to a set of areas open to foreign trade. Five special economic zones are for foreign companies from 1979 (including the cities of Guangzhou and Shanghai as well as the zone of Shenzhen, near Hong Kong), and free zones. These special economic zones were experimental laboratories for China, allowing it to gradually open up to foreign trade techniques. 1984-1991The key point of the second period was the decentralization of state control also impended by Deng Xiaoping, leaving local provincial leaders to experiment with ways to increase economic growth and privatize the state sector (Brandt 2008). The reform has created favorable conditions for enterprise with a partial autonomy of management, which had the effect of creating a supply and demand of resources of goods and services. That have achieved positive results such as foreign trade and the financing system were introduced to create favorable conditions for enterprise reform. 1993- 2005After the death of Deng Xiaoping in 1997, the radical reforms were continued by the Prime Minister Zhu Ronji who came to power in 1998. He had a goal to integrate his country in the World trade Organization (WTO), hence the importance that preceded the entry into WTO. Zhu Ronji has introduced a new program, including the reform of state enterprises, privatization of public housing, the legitimation and expa nsion of the private sector, reform of relations with foreign investors, reducing by half the bureaucracy, the acceleration of the fight against corruption and the creation of a viable unemployment insurance scheme and pension.The reform of state enterprises is central to these policies whose characteristic is to be highly interdependent. Indeed, the Chinese government has helped them to escape their social welfare function, to observe the principles of the market, to increase the competitiveness by upgrading their management system After accession to the WTO, China has continued this wave of reforms to modernize its economy and metamorphosed with the rules of the WTO. CHAPTER 3 REVIEW OF LITERATURE Growth models Explanatory theories of growth are relatively recent in the history of economic thought.These theories have led to highlight the role of technical progress in growth. In the long run, only the technical progress leads to a more productive economy. However, each of these gro wth theories have weaknesses because they are able to fully explain the determinants of growth in any given economy. With this in mind that many economists have given their vision of growth. Basic Economic Growth Model The main factors of production under a basic economic growth model are the stock of capital and labor force. The output is a function of capital and labor. At national level, an aggregate production function can be represented by the formula:Y=F(K,L)†¦. (1) Where Y is output, K is capital and L is labor. Increased production (Y) depends on the increase in capital stock (K) through investment and depreciation, and increased labor supply (L) by the population growth. The amount of capital investment depends on savings and is calculated by multiplying the average savings rate in a country by domestic production. Labor supply is based on demographics. The Harrod-Domar model The Harrod-Domar model is the first formal economic model of growth. This model has opened the way for modern models of growth, particularly in the Solow model.The Harrod-Domar model is intended to extend over a long period of Keynes' General Theory, which covered only the short term. As the General Theory, the Harrod-Domar model aims to highlight the unstable nature of economic growth and the need for state intervention. In the Harrod-Domar model, there is no guarantee that an economy is on a stable growth path. This model was presented by Roy Forbes Harrod (1939) in the book â€Å"Toward a dynamic economics† and Evsey Domar in 1947 in an article entitled â€Å"Expansion and Employment† published in American Economic Review.The model focuses on two critical aspects of the growth process: saving and the efficiency with which capital is used in investment. This model can provide accurate short term predictions of growth and has been used extensively in developing countries to determine the â€Å"required† investment rate or â€Å"financing gap† to be covered in order to achieve a target growth rate. The Harrod-Domar model is simple with relatively small data requirements and the equation is easy to use. However, the model only remains in equilibrium with full employment of both labor force and capital tock causing inaccurate longer term economic predictions and fails to account for technological change and productivity gains considered essential for long-term growth and development. The equation in the Harrod-Domar model is: Y = K/v (2) Where v is a constant found by dividing capital (K) by investment (Y), v is the capital-output ratio. This ratio is primarily a measure of the productivity of capital or investment. Exogenous growth Solow model The Solow model is one of the main models of the theory of economic growth.Developed by Robert Solow (1956), it is a model of neoclassical economics. The model is based on a production function with two factors: labor and capital. Production thus results solely from the combination of s etting a certain amount of capital (means of production) and work (labor). The Solow model is based on the assumption that production function with the property of diminishing returns where each additional increment in capital per worker results in less output. It is also assumed that the factors of production are used effectively by all countries.By assuming that the population has a growth rate that Solow called â€Å"natural† (not influenced by the economy), the model derived three predictions: 1. Increase the amount of capital (i. e. investing) increases growth: with more capital, labor productivity increases (Called apparent). 2. Poor countries have a growth rate higher than rich countries. Indeed, they have accumulated less capital, and therefore they knew of diminishing returns lower. 3. Due to diminishing returns of inputs, economies will reach a point where any increase in factors of production no longer results in increased production. This corresponds to the steady state.Solow noted, however, that this third prediction is unrealistic: in fact, the savings never reach this stage because of technical progress which increases the productivity of factors. In other words, long-term growth comes from technological progress. However, this technological progress is exogenous to the model. The model implies â€Å"that the growth of income per capita cannot be sustained without continued technological progress. Whereas, Harrod-Domar model have identified capital accumulation as major source of development. Clearly the difference stems from different assumptions of the production function.In the Solow model, over time poor and rich countries incomes should converge. The Solow growth model takes the rate of saving; population growth and technological e. g, improved machinery, computers etc progresses are exogenous. There are two inputs capital and labor, which are paid their marginal products. By assuming a Cobb-Douglas production functional which is ge nerally used to represent the relationship of an output to inputs, the model is as follow: Y (t) = K (t) ? [A(t)L(t)] 1- ? (3) 0 < ? < 1 Y is output, K is capital, L is labor, and A is a parameter which might influence growth.The augmented Solow-MRW This model was introduced by Mankiw et al (1992), in their article â€Å"A Contribution to the Empiric of Economic Growth†, Mankiw, Romer, and Weil (1992), have augmented the standard Solow model by adding Human capital to the production function. Therefore, the inputs of the model would include a function of stocks of capital, labour, human capital and productivity. According to Cobb-Douglas production function in (4), production at time t in country i is given by Yi (t) = Ki (t) ? Hi (t) ? [Ai (t)Li (t)] 1- ? – ? (4) Where ? , ? ? [O,1] ? + ? ? [O,1],and t denotes time.This implies that the production function exhibits constant returns to scale in its three factors: physical capital (K), human capital (H), and productivit y-augmented labor (AL). Specifically, it is a Cobb-Douglas production function. All markets (both input and output markets) are assumed to be perfectly competitive. All firms are assumed to be identical. The economy can then be described by a representative agent. The growth accounting model The theoretical framework of the Solow growth model describes the sources of economic growth, and the consequences for long-run growth of changes in the economic environment and in economic policy.However, some economists have built up an alternative framework which examines economic growth in freer framework without necessarily being bound to adopt in advance the conclusions of our economic theories. This framework is called growth accounting which gives us a different perspective on the sources of economic growth. The model starts wilt a production function which shows that output Y is as a some particular time t as a function of the economy’s stock of capital Kt, its labour force Lt, a nd the economy’s total factor productivity At. The Cobb-Douglas form of the production function is: Y = F (A, K, L) (5)Since A captures not only efficiency gains but also the net effect of errors and omissions from economic data, the residual A is sometimes referred to as a measure of our ignorance about the growth process. The determinants of growth To study the impact of determinants on economic growth in China, it is necessary to present the theoretical foundations underlying the role of each determinant is expected to play in an economy, especially in the early stages of growth. We can distinguish several types of determinants for growth: natural resources, external environment, population, innovation, investment, knowledge, consistency of development.In this section, we will see a wide range of studies done to investigate the relationship between the different determinant and growth. Foreign direct investment According to the IMF and OECD definitions, direct investment r eflects the aim of obtaining a lasting interest by a resident entity of one economy (direct investor) in an enterprise that is resident in another economy (the direct investment enterprise). The â€Å"lasting interest† implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the latter.Direct investment involves both the initial transaction establishing the relationship between the investor and the enterprise and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated. It should be noted that capital transactions which do not give rise to any settlement, e. g. an interchange of shares. FDI is expected to increase employment, enhancing labor productivity, exports, lowers rental rate of capital and thus be a source of growth and productivity gains.It is also a vehicle for technology transfer, which i s crucial for take-off and recovery pathways to production to more high-tech. In contrast, it can also discourage competition and even corrupt the development path of a country. Numerous empirical studies have analyzed the impact of FDI on economic growth with divergent results. While some studies argue that FDI has a positive effects on economic growth in host countries, others against thinking that FDI is not a necessary condition or sufficient for growth. The following table provides some empirical studies on the impact of FDI on economic growth.Attention will be drawn to the latest studies. Table 1: Literature review on foreign direct investment Author| Sample Size andTime Period| EconometricMethod and Tests| Empirical Evidences| Basu & Guariglia(2007). | 119 developingcountries1970 – 1999. | GeneralizedMethods ofMoments (GMM)| FDI enhances both educational inequalities and economic growth in developing countries. However, itreduces the share of agriculture sector in GDP. | Johnson(2006). | 90 developed anddevelopingcountries1980 – 2002. | OLS regression| FDI inflows accelerate economic growth in developing countries. But it is not valid for developed countries. Hyun(2006). | 59 developingcountries1984 – 1995. | OLS regression| FDI has positive effect on economic growth but lagged FDI values have no positive effects on current economic growth. | Durham(2004). | 80 countries1979 – 1998. | Extreme BoundAnalysis(SensitivityAnalysis)| There is no direct positive effect of current and lagged values of FDI and portfolio investment on economicgrowth. | Carkovic & Levine(2002). | 72 developed anddevelopingcountries1960 – 1995. | OLS regression and GMM| FDI alone has no statistically significant affect on economic growth. | Obwona(2001)| Uganda1975 – 1991. 2 Stage LeastSquares| FDI has a positive effect on economic growth in Uganda. | Berthelemy & Demurger(2000). | 24 Chineseprovinces1985 – 1996. | GMM| FDI plays an important role in the economic growth of Chinese provinces. | Source: Endogenous Determination of FDI Growth and Economic Growth: The OECD Case (2008). The latest empirical literature has provided more-or-less consistent findings affirming a significant positive link between FDI and GDP. Trade Openness Another major determinant of growth is trades openness; it has been used in the empirical literature to investigate the relationship between openness and growth.First, the most basic measure of openness is the simple trade shares, which is exports plus imports divided by GDP. A large number of studies used trade shares in GDP and have provided that open economies increased their GDP faster than closed economies. This has led to the conclusion that trade openness has a positive relationship with Growth as reviewed in Dollar (1992), Sachs and Warner (1995), Edwards, (1998), Dollar and Kraay (2000). On the other hand, Levine and Renelt (1992); Rodriguez and Rodrik (1999); Vamvakidis (200 2) have criticized the robustness of these findings especially on methodological and measurement grounds.Openness affects economic growth through several channels such as exploitation of comparative advantage, technology transfer and diffusion of knowledge, increasing scale economies and exposure to competition. However, a recent study from Halit Yanikkaya (2002) in his paper â€Å"Trade openness and economic growth a cross-country empirical investigation†, have investigates the relationship between a wide variety of trade openness measures and growth. He used two types of openness measures. The first group was various measures of trade volumes (except population densities).Trade shares, export shares, and import shares in GDP were found to be significantly and positively correlated with growth. Another key finding in his study was that the growth effects of trade with developed countries are not considerably different from trade with developing countries. Furthermore, popula tion densities also positively affect growth through increasing trade volumes. Hence, the regression results for trade volumes provide substantial support for the hypothesis that trade promotes growth through channels such as technology transfers, scale economies. Human capitalThe role of Human capital for economic growth has been well documented in the economic literature which has long recognized that the quality of labor factor plays an essential role in the growth process. Indeed, the classical economist Adam Smith has highlighted the importance of the quality of the workforce in the competitiveness and economic growth in the long term. Adam Smith (1776) also showed that the wealth of individuals and nations depends on the skills levels of workers. The specialization of labor implies that there are different types of tasks that each individual does what he is alcified. The notion of â€Å"division of labor† also highlights the growth potential of the product linked to the improvement of the organization or production method. This improvement is made possible by dynamic entrepreneurs and skilled workers and the ability or qualification to perform specific tasks. The major recent contributions to the empirical, show that the growth of human capital was an important component of economic growth, therefore, it had a legitimate place in the aggregate production function Solow (1956) et Swan (1956), Mankiw, Romer & Weil(1 992).Furthermore, a large number of other studies have found evidence suggesting that educated population is key determinant of economic growth (see Barro, 1991; Mankiw et al, 1992; Barro and Sala-i-Marin, 1995; Brunetti et al, 1998, Hanushek and Kimko, 2000). Government size The size of the government can affect the economic growth through many channels, such as expenditure, the efficiency of resource allocation, taxation and the budget balance on several economic issues.The recent economic literature seems to point a negative relation ship between government size (General government final consumption expenditure) and economic growth (Guseh, 1997; Dalagamas, 2000). In the empirical study of Yesim (2005), relatively small sizes of government are detrimental to economic growth, while medium sized government affects it positively. According to Barro (1991), government size may have a negative impact on economic growth due to government inefficiencies, excess burden of taxation and distortion of the incentives systems.However, according to Ghali (1998), it may also have positive effects on growth due to beneficial externalities such as the development of a legal, administrative and economic infrastructure and interventions to offset market failures. Inflation Mankiw (2002) defined inflation as â€Å"a rise in the general level of prices of goods and services in an economy over a period of time†. Inflation reflects an erosion in the purchasing power of money. A chief measure of price inflation is the inflation r ate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.A number of empirical studies have been devoted to the link between economic growth and inflation. These studies have objective to determine the empirical relationship between growth and inflation, the following table provide some empirical studies on the impact of Inflation on economic growth. Attention will be drawn to the latest studies. Table 2: Literature review on inflation Author| Sample Size andTime Period| EconometricMethod and Tests| Empirical Evidences| Khan & Senhadji (2001). | 140 developed anddeveloping countriesduring the period 1960-98. Non-linear least squares (NLLS). | Inflation has a negative effect on growth. The threshold is lower for industrialized countries than it is for developing countries. | Atish & Phillips (1998). | 145 countries during the period 1960-96. | Multivariate regression analysis. | Negative relationshipbetween inflation and growth that is statistically significant. | Michael Sarel (1995)| 87 countries, during the period 1970 – 90. | OLS regression| A specific numerical target for policy: keep inflation below the structural break. | Joao Ricardo Faria and Francisco Galrao Carneiro (2001). Monthly inflation rateof Brazil and real output for the period 1980 -95. | The Blanchard and Quay (1989) decomposition. | The results indicated that in the short-run, there is a negative impact of inflation on output. | Robert J. Barro (1995). | 100 countries from 1960 to 1990| Based on an extended view of the neoclassical growth model. | The impact effects from an increase in average inflation by 10 percentage pointsper year are a reduction of the growth rate of real per capita GDP by 0. 2-0. 3% points per year. | Ghosh and phillips(1998). | 145 countries, over the 1960-96 period. Panel regression. | At very low ratesof inflation (around 2 -3 percent a year or lower), inflation and growth arepositively correlated. | From the table 2, we can conclude that most of the findings of the empirical studies have provided an evidence of a negative relationship between inflation and growth. However, Tobin (1972) suggests that inflation can have a positive relationship to economic growth. This is because inflation can cause individuals to substitute out of money and into interest earning assets, which leads to greater capital intensity and promotes economic growth.In other words, an increase in inflation can result in higher output; this effect is known as the Tobin effect. Infrastructure In a broad sense, the concept of infrastructure services closely associated with roads, highways, railways, ports and airports, telecommunications networks, the national distribution networks of gas, electricity and water, i. e. all investments that develop and facilitate the movement of people, goods and production (Barro, 1990). A large empirical literature to examine the effects of public infrastructure on the growth of na tions but also on local growth, especially scale of American States.Beyond the pioneering work of Ratner (1983) on the productive infrastructure, has been the work of Ashauer (1989) which showed a positive effect of public capital on output or productivity companies. Although recently confirmed by Munnell (1990), this proposal continues to generate various methodological criticisms mainly because many economists believe that the marginal productivity of infrastructure implied by the estimates is excessively high. Return on investment (Portfolio investment)The definition of portfolio investment is the acquisition of financial assets (which includes stock, bonds, deposits, and currencies) from one country in another country. In contrast to foreign direct investment, which is the acquisition of controlling interest in foreign firms and businesses, portfolio investment is foreign investment into the stock markets. Most economists consider foreign direct investment more useful than portf olio investment since this last one is generally regarded as temporal and can leave the foreign country at the first sign of troubleThe table below shows some empirical studies on the impact of portfolio investment on Economic Growth in Developing and Developed Economies and their findings. Table 3: Literature review on return on investment Author| Sample Size andTime Period| Empirical Evidences| Butkiewicz and Yanikkaya (2008). | 114 developed and developing countries over the period going from 1970 to 1997. | The study reveals that the countries which receive important volumes of direct investment flowing and portfolio investment will carry out a rapid growth. | Rodrik (1998) and Klein and Olivei (2008). 100 developed and developing countries 1975-89 and 1986-95. | The study reveals that country which does not impose a restriction on capital flows is lucky more to carry out a rapid growth than that closed. | Chambet and Gibson (2008). | 25 emerging markets from 1995 to 2004. | Por tfolio equity flows have positive effects on output growth. | The literature contains a large number of variables, other than the variables we have listed in this chapter, which might have a significant impact on economic growth. CHAPTER 4 DATA AND METHODOLOGYPresentation of the data and statistical analysis Measuring the impact of several aggregates on economic growth in China will be done using an econometric model estimated in the section methodology. It will also test the veracity of the assumptions made in the literature review. The general idea is that from the data on the various activities in China over a short and a long period, it is highlighted, through statistical and econometric techniques the relationship between economic performances achieved in the last decades and performance the overall economy in China.Before evaluating the regression results, the the variables will be used in the econometric model to determine the sources of economic growth in China will be expla ined. The variable used to measure economic performance is Gross Domestic Product (GDP) per capita. GDP per capita it represents all the wealth created in an economy during a year. It gives the best measure of activity level. Therefore, the dependent variables used in the model is GDP per capita (current US $). There are seven independent variables used in the model: * Foreign direct investment, net inflows (% of GDP). * Trade openness (% of GDP). School enrollment, tertiary (% gross). * General government final consumption expenditure (% of GDP). * Inflation, GDP deflator (annual %). * Portfolio investment, bonds (PPG + PNG) (NFL, current US$). The data used for this study is annual data from 1984 to 2009 and was obtained from the World Bank. This relatively long period has the advantage of lending itself to a range of econometric tests yielding robust results. It also allows us to show the effects of new reforms to the Chinese economy that have introduced a new management system t o help increase the productivity in the 80’s.The raw data table is presented in Annex 1 and the Log form in Annex 2, more detailed description of these data will be done in the next section 4. 2. Description of the variable The explanatory variables were selected from theory outlined in literature review. We grouped the variables that are likely to have a material effect on the endogenous variable. GDP per Capita: The World Bank national accounts data (2011)† define the gross domestic product as the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products†.GDP per capita is gross domestic product divided by midyear population. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 1: China nominal GDP per capita Since the introduction of the economic reforms, the GDP has experienced significant growth since the 1980s, it has hit a record almost USD 4000 Trillion in the year 2009, providing further evidence of the growth potential of the Chinese market. This growth continued despite the many attempts by the central government to cool down the economy after pressure from the international community.Foreign Direct Investment Net Inflows (% of GDP) According to the World Bank, â€Å"foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments† Figure 2: China- Foreign direct investment The Foreign direct investment; net inflows (% of GDP) in China was reported at 3. 42 in 2008.This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors, and is divided by GDP. China's economy is the second largest in the world after that of the United States. Trade openness 20 30 40 50 60 70 80 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 3: China -Trade openness. As can be seen in the graph, the trade openness in China is more open than it was 20 years ago, and that was due to the economic openness which increases in trade (as part of the reforms). The trade openness (% of GDP) in China was reported at 59. 0 in 2008, according to the World Bank† Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U. S. dollars. China's economy is the second largest in the world after that of the United States†. School enrolment, tertiary 0 5 10 15 20 25 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 4: China- School enrolment, tertiary The school enrolment, tertiary, have known an import increase since the reform, Between 1996 and 2009, enrollment in higher education increased from approximate 5% to almost 25% of GDP per capita.Chinese universities form more and more engineers and scientists each year. This shows that China is on the road to a knowledge-based economy. The Gross enrolment ratio is the ratio of total enrolment, regardless of age, to the population of the age group that officially corresponds to the level of education shown. Tertiary education, whether or not to an advanced research qualification, normally requires, as a minimum condition of admission, the successful completion of education at the secondary level. General government final consumption expenditure 13. 0 13. 5 14. 0 14. 5 15. 0 15. 5 16. 0 84 86 88 90 92 94 96 8 00 02 04 06 08 Figure 5: China government final consumption expenditure. The General government final consumption expenditure (% of GDP) in China was reported at 13. 5 % in 2007, it has hit almost 16% in the year 2001. According to the World Bank. General government final consumption expenditure (formerly general government consumption) includes all government current expenditures for purchases of goods and services (including compensation of employees). It also includes most expenditure on national defense and security, but excludes government military expenditures that are part of government capital formation.Inflation Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. -4 0 4 8 12 16 20 24 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 6: Inflation in China China’s average inflation rate of 2% over the past ten years has been unusually low for a developing country   The inflation rate in China was last reported at 5. 5 % in 2011 and its highest historical rate of 22% in 1994 and a low record of -2. 0 % in 1999. Portfolio investment, bonds -3,000,000,000 -2,000,000,000 -1 ,000,000,000 0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 7: Portfolio investment The Portfolio investment; bonds (PPG + PNG) (NFL; US dollar) in China was reported at approximate -2 billion in 2008, its highest hit was reported almost 5 billion in the years 2005 According to the World Bank, bonds are securities issued with a fixed rate of interest for a period of more than one year.They include net flows through cross-border public and publicly guaranteed and private nonguaranteed bond issues. Data are in current U. S. dollars. Electric power consumption 0 400 800 1,200 1,600 2,000 2,400 2,800 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 8: Infrastructure China has been spending heavily in physical Infrastructure since the 90’s and that due to economic policy to improve the economic growth owing to its economic expansion. Figure 8 shows that the consumption of electricity has increased during the last 20 years. In 2009, it has hit a record of electric power consumption of 2400 kWh per capita.We measure infrastructure by looking at the Electric power consumption (kWh per capita) which measures the production of power plants and combined heat and power plants less transmission, distribution, and transformation losses and own use by heat and power plants. Descriptive Statistics The table below shows a summary statistic for the dataset used, the means differ significantly across the variable. The skewness coefficient is close to 0 for most values. The null hypothesis of the Jarque Bera normality test is that the residuals are normally distributed.The decision rule is to accept this hypothesis if the statistic of Jarque Bera (JB) is less than 5. 99. Here, the JB statistic is less than 5. 99 for all the series which means we cannot reject the null; there is no evidence of non-normally distributed residuals, except for Foreign direct investment which shows JB higher that 5. 99. Table 4: Descriptive statistic | ForeignDirectInvestmentNet inflows| GrowthDomesticProduct| Government Final Consumption | The level of human capital| Inflation| Infrastructure| Trade openness| Return on investment| Mean| 0. 020258| 0. 047137| -0. 0028| 0. 04396| -0. 01937| 0. 03529| 0. 1491| -0. 62059| Median| -0. 0042| 0. 041494| -0. 00224| 0. 037303| -0. 0022| 0. 033887| 0. 01207| 0. 108995| Maximum| 0. 374106| 0. 109831| 0. 037975| 0. 108951| 0. 650219| 0. 065986| 0. 108611| 18. 08911| Minimum| -0. 31887| -0. 04897| -0. 04678| -0. 01321| -0. 68278| 0. 00866| -0. 10326| -18. 5564| Std. Dev. | 0. 138935| 0. 038244| 0. 019386| 0. 038065| 0. 338516| 0. 014811| 0. 045317| 10. 35226| Skewness| 0. 67502| -0. 30828| -0. 19908| 0. 194607| -0. 13538| 0. 431179| -0. 24933| -0. 07282| Kurtosis| 5. 047| 3. 28519| 2. 723548| 1. 917252| 2. 50906| 2. 477846| 3. 399615| 2. 832023| Jarque-Bera| 6. 63353| 0. 480719| 0. 244745| 1. 378992| 0. 327435| 1. 058651| 0. 425367| 0. 051484| Probability| 0. 043645| 0. 786345| 0. 884819| 0. 501829| 0. 848982| 0. 589002| 0. 808412| 0. 974587| Sum| 0. 506443| 1. 17842| -0. 06988| 1. 098993| -0. 4842| 0. 882238| 0. 372743| -15. 5147| Sum Sq. Dev. | 0. 463268| 0. 035102| 0. 00902| 0. 034775| 2. 750233| 0. 005265| 0. 049286| 2572. 062| Observations| 25| 25| 25| 25| 25| 25| 25| 25| Methodology The objective of this study is to determine the impact of different factors that contributed to the unprecedented economic growth of China over the past few decades.In order to control for the problems of misspecification caused by the application of classical linear regression methods, recent developments in time series econometrics will be used such as the Error Correction Models and Johansen co-integration test. In this section, we explain the methodology that is the basis for estimating the appropriate model for the Chinese economy. The impact of different factors that contributed to the unprecedented economic growth of China over the past few decades and d etermine whether those factors can be viewed as a determinant of economic growth.Estimation of the general model The literature review has identified some models and we chose a variant of the model presented by Robert Solow (1957). Indeed, the standard growth accounting approach seems appropriate which is decomposed into stocks of capital, labor, human capital and productivity. The model that we suggest to use is based on a functional form of Cobb Douglas: GDP=F( FDI, OPEN, HUMCAP , GOVSIZE, INFL, ROI) †¦(5) The dependent variable is the growth rate of real gross domestic product per capita.All the independents variables are derived from the neoclassical theory of growth mentioned in the literature reviews in chapter tree. The empirical model used to examine the determinants of growth in China is shown in equation (6) below: ? LGDP=? + ? 1 ? LFDI + ? 2 ? LOPEN + ? 3 ? LHUMCAP + ? 5 ? LGOVSIZE + ? 7 ? LINFL + ? 4 ? LROI +?. †¦ (6) Where: The ? is the intercept and ? the err or term. The variables used for the construction of the models are: LGDP = Log of real gross domestic product per capita. LFDI = Log of foreign direct investment, net inflows (% of GDP). LOPEN = Log of trade openness (% of GDP).LHUMCAP = Log of the level of human capital (School enrolment, tertiary (% gross). LGOVSIZE = Log of general government final consumption expenditure (% of GDP). LINFL = Log of inflation, GDP deflator (annual %). LROI = Log of return on investment (long-term US interest rate): Portfolio investment, bonds). We have taken the logs of the variables in order to linearise the model. Furthermore the variables are tested for unit roots and are differenced accordingly to achieve stationarity. The results showed that most of the variables were I (1). The hypothesized relationships between GDP and its determinant:In the following table, we present the relationship between GDP and some of its determinant according to the literature reviews. Determinant of growth | Relat ion with Growth Domestic Product| Foreign direct investment| +| Trade openness| +| The level of human capital| +| General government final consumption| +/-| Inflation| -| Return on investment| +| CHAPTER 5 MODEL ESTIMATION AND FINDING This chapter presents the methods and estimation techniques used to determine the long-run and short-run growth for China. The empirical testing of this estimation will be done by following these tests: Determine whether the series are stationary or not by using the ADF test. * Estimating the OLS model with general equation. * Testing for Co integration using Engle and Granger technique and the Johansen cointegration test to see if the determinants of growth apply in the long run. * Estimating a VECM to examine the dynamics in the short-run and the adjustment of co-integration error term. 1. 1 Testing For Stationary using the Augmented Dickey Fuller Test: To avoid spurious regressions, it is necessary to study the characteristics of the series to see i f they are stationary or not.Equation tests for unit roots using the Simple Dickey-Fuller test. Yt=pYt-1 + ut (7) Yt will be stationary of the estimated value of p is less than 1. Yt will not be stationary of the estimated value of p is more or equal to 1. Therefore, we check for H0: p= 1 (Yt is not stationary) H1: p < 1 (Yt is stationary) A more convenient version of this test is to transform the model (by subtracting Yt-1 on both sides) and obtain the following: Yt=pYt-1 + ut (7) Where ? = p- 1. We can hence estimate equation (7) and test for ? as follows: H0: ? = 0 (Yt is not stationary) H1: ? lt; 0 (Yt is stationary) In equation (7) which is derived from equation (6), we are assuming that there are no constant and time trend (deterministic trend). There are 2 more versions of the Dickey-Fuller tests for unit roots shown in equations (8) and (9): In testing for unit roots, equation (8) includes a constant and equation (9) includes both a constant and a time trend. ?Yt=? 1 + ? Yt- 1 + ut †¦ (8) ?Yt=? 1 + ? 2t+ ? Yt-1 + ut †¦ (9) In equations (8) and (9), the DF test is still testing whether ? = 0. Generally, we look at the plot of the variable and decide which of equations to use.However, equations (7), (8) and (9) may suffer from autocorrelation and the test-statistics may be invalid. To solve the autocorrelation problem, we keep adding lags of the dependent variables (? Yt) until the problem disappears. The optimal number of lags are given by the SIC or AIC, but EViews will determine that automatically. This is called the Augmented Dickey Fuller (ADF) test. Using model (4), for example, the ADF model: ?Yt=? 1 + ? 2t+ ? Yt-1 + ? Yt-1 + ? Yt-2 + †¦ + ut†¦ (10) If the variables are found to be non-stationary, we transform them by differencing the variables to make them stationaryFor instance, let denote ? Yt = Dt . If Yt is not stationary, we take the first difference of Yt (? Yt ), and if we find that ? Yt is stationary, we say that Yt is integrated of order 1. However, if it’s not the case, we take the first difference of Dt (? Dt ), , If ? Dt is stationary, we say that Yt is integrated or order 2 or I(2). First all, before we undertake the test for stationary it’s useful to visualize the variables on a graph to see whether we need a constant or time trend or both in the ADF test. (See groupe figures 9. ). We have found that all the variables need a constant.Results of the stationarity test. The decision is made by comparing â€Å"ADF† to â€Å"critical value: If ADF> CV, then we accept the null hypothesis of non-stationarity of the variable and whether ADF [? 2(p)] one rejects the null hypothesis of no autocorrelation of order p. If LMA(p) < [? 2(p)] one cannot reject the null hypothesis of no autocorrelation of order p. Or equivalently, H0 = 0 there is no autocorrelation. H1 = different from 0, then the autocorrelation The statistic is distributed chi-squared, with p degrees of freedom. Acce pt H0 if the p-value of the Breusch-Godfrey statistic is greater than 0. 05.Table 9: Summary of the results from test for autocorrelation Models| Obs. * R-squared| Prob. Chi-Squared| Observation| Model 2| 0. 189117| | 0. 9098| | Autocorrelation is insignificant at the 5% level. | Model 3| 0. 267317| | 0. 8749| | Autocorrelation is insignificant at the 5% level. | Model 4| 0. 308434| | 0. 8571| | Autocorrelation is insignificant at the 5% level. | Model 5| 2. 285405| | 0. 3190| | Autocorrelation is insignifican

Monday, July 29, 2019

No title Case Study Example | Topics and Well Written Essays - 500 words

No title - Case Study Example Capital investment are money used to buy long-term assets like switches that direct telephone calls making it easier to spread the cost for several years hence hiding the expenses incurred for a given period. During 2001 and the first quarter of 2002, the company counted as capital investments $3.8 billion that it spent on everyday expenses. This makes a difference because capital investments are treated differently from other expenses for accounting purposes. Capital spending is money used to buy long-lasting assets, like fiber-optic cables or switches that direct telephone calls, so the cost is spread out over several years. For example, if WorldCom spent $10 million on switches it expected to last 10 years, it would book a $1 million expense for 10 years. In contrast, if it spent $10 million on office space, it has to count all of that expense in the period in which it occurred. The company says the expenses that were counted as capital expenditures involve "line costs," which are fees WorldCom pays to other telecom players for the right to access their networks. Shifting Revue into Future - This accounting principle implies that the revenues that were to be earned in the current account period are deferred to a future date. Although not common in practice, it is often undertaken by some corporations and accounting companies. It is argued that future shifting of revenue gives the company future revenue stability. Shifting Expenses into the Present – under this accounting approach, a company may opt to defer some of its future expenses. The company, therefore, can shift its current revenue to the coming accounting period in case of financial challenges during the current accounting period. Shifts to operating cash increases – this principle is based on the idea that under certain circumstances, it would be important to shift the company’s operating cash flows. The increases in the cash flows would therefore impact on the future operations. Misuse of

Sunday, July 28, 2019

Volunteering with Hancock Christian Clearing House (HCCH) Essay

Volunteering with Hancock Christian Clearing House (HCCH) - Essay Example HCCH is a cooperative effort involving 42 Churches in Hancock County with a mission to help those who, under ordinary circumstances, may not qualify for the assistance from regular charitable and other social organizations. HCCH is mostly run by the volunteers like me who interact with the clients in order to determine their needs and assist them in finding proper solution for their needs. HCCH also provides training to its volunteers who need it. The main sources of funding for HCCH come in the shape of donations and contributions made by the members of the Churches and other individuals. According to one estimate, approximately $13000 is disbursed monthly to those in need. These funds are disbursed in terms of fulfilling the needs of needy for their housing rentals, medical aid, food support, transportation as well as fulfilling other needs. HCCH is a small organization but its efforts and endeavors are much bigger in their scope and impact on those who are rejected or refused help . My volunteer work with HCCH was based on different assignments which were given to me, or which I believed I could do to the best of my abilities and with highest efficiency. I participated in preparing a dinner at HCCH as a part of its efforts to provide food to its clients. I almost participated in every activity. First of all, I started with arranging the tables for dinner so that food when ready can be readily served to the people coming for dinner. After that I helped prepared the cakes which were going to be served besides helping other volunteers to label the cakes made by me and others. After the dinner was finished, I helped other volunteers to clean the tables as well as throwing the garbage also. Further, I helped the senile people, who came to dinner, to carry their dinner dishes so that a positive and healthy attitude can be developed in them. I also helped other staff members by

Saturday, July 27, 2019

Eating Disorders and the Media Essay Example | Topics and Well Written Essays - 1500 words

Eating Disorders and the Media - Essay Example not comprehend the fact that eating more and that too at odd times can literally break down the metabolism rate in their bodies and force them to lie on the bed every now and then. Being sick also comes under the heading of one of the aftereffects of eating and eating more. Fortunately enough, there are now some particular ways and means which look to tell children and grown ups about their proper intake of food during different periods of the day with specification of calorie levels, which in more ways than one is a step in the right direction. In the world of present times, human beings are experiencing a change within their lives. They have become busy and time for them passes in a whisker. The modern society has changed and so has the way in which people eat. The fast food culture has taken up their lives. There are a number of good restaurants to choose from - so people can go out and have good meals as and when they wish to. (Peterson, 2005) However all of this requires a clear thinking approach as to whether fast food is indeed good for the human body or not? There are a lot of franchise restaurants for getting fast foods when one does not have the time to eat enough and more than that cook for his own self. Everybody knows that foods are very important for getting energy to activate the human body, but one should know that how food culture influences the family linkages, friendships, emotions as well as the pertinent personalities. The media in the form of television, newspapers and magazines provides role models that teach women to value beauty and thinness over strength of character. While men are influenced by their role models to succeed academically and excel in all areas, we are expected to maintain a beautiful appearance, i.e. a thin, sexy body. Many of these role models are not only weak and thin, essentially, they lose their personalities and become objects and images for the pleasure of others. Used to be, you could turn on the television and

Friday, July 26, 2019

Managing Finance Research Paper Example | Topics and Well Written Essays - 3500 words

Managing Finance - Research Paper Example Ratio analysis is the significant tool for investigating the financial performance of the company. It helps in analyzing the financial statements and the accounting ratios assist in knowing the company’s financial position. The ratios are also essential for evaluating the efficiency of the company in relation to its management and operations. On the basis of the ratio analysis, companies formulate their future plans. By doing the analysis of different ratios, companies come to know how well they are performing as compared to previous years as well as to its competitors (Khan and Jain, 2007). The profitability ratios signify whether the business assets are being utilized effectively in order to generate reasonable revenue. The liquidity ratios assist in determining whether the organization is capable of fulfilling the financial requirements in short term. The efficiency ratios signify the level to which the assets have been capable of creating sales. Financial leverage ratios s crutinize the financial construction of the company. Investment ratios assist the investors to make their critical decisions. A numerical investigation is carried out by calculating different ratios such as profitability, liquidity, efficiency, investment, financial, and cash flow ratios as well as on the Z-Score to recognize the performance of both the companies for the year 2012 and 2013. The numerical investigation shows that Ooredoo Telecom is considered as the more liquid company while the profitability ratios of Zain Telecom are higher.

Thursday, July 25, 2019

Governments at all levels are increasingly becoming involved in Essay

Governments at all levels are increasingly becoming involved in festivals and events - Essay Example This paper analyses the reasoning and salient pros and cons associated with the involvement of governments in encouraging events. Government is a set of institutions which Edward Sildow and Beth Henschen (2008, p.4) defined as â€Å"the individuals and institutions that make society’s rules and that also possess the power and authority to enforce those rules." Thus, it can be established that government possesses the ultimate power to influence public, and to impose such rules that are in the best interest of society. Today, governments are increasingly becoming interested in promoting events because these act as a catalyst that has an enormous â€Å"social, economic and cultural impact† (Smith, 2003). This explains that governments are now trying to garner international attraction through hosting local and mega events and basically eyeing on the aspect of economic and monetary profits. For instance, the UK government realised the impact of facilitating events on the c ountry’s economy and has supported the private sector on the reconstruction of new and bigger venues since 70s. The outcome has been in the form of some international standard sites such as the National Exhibition Centre (Birmingham) and Wembley Centre (Bowdin et al, 2012). This was also the main reason behind Prime Minister Tony Blair's strong support to the organisation responsible for holding Olympics 2012, â€Å"London Organising Committee of the Olympic Games and Paralympic Games," (LOCOG), during the bidding ceremony in 2005. Through ramping up the investments from private sector, governments seek long-term benefits for the whole country and in a variety of spheres. However, it must be acknowledged that it is not the government only that enjoys the benefits involved, but the private sector has another set of interests that is sought through events. The diversity in festivals such as Hallmark and mega-events is an outcome of the government’s involvement. Today, e vents are of various categories with varying prospects. These include business events like meetings, incentives, conventions, and exhibitions, in short MICE. Regional events are cultural or sports related and are organised every year. Every calendar event is a nation’s local festival such as Football or Rugby League matches, or religious/traditional celebrations such as Holi or Diwali in India. Hallmark events represent the customary festivals of a nation and mark an important historical event or anniversary. For instance, the event celebrated in South Africa of â€Å"10 Years of Democracy† in 2004 (Damster & Tassiopoulos, 2006). Mega-events such as Olympics, FIFA world cup or ICC Cricket World Cup; Tennis tournaments like Wimbledon and Common Wealth games, are not annual events and are held in a different part of the world by a particular organisation. Every government has its own specific motive behind pursuing and promoting events, and it can be entitled as an intel ligent strategy. For example, the motive of China's government has been different in comparison to UK because their main focus was on improving economic conditions through promoting travelling and locally prepared Chinese products. Chinese government did not just focus on mega events, but created newer holidays and altered the scale of traditional ones for achieving their goal. The transformation of three

The Parliamentary Contribution to Democracy Essay

The Parliamentary Contribution to Democracy - Essay Example Parliament is the essential and definitive link between the citizen and the government and should therefore be the cardinal institution of any nation's democratic system. Genuine representative democracy is possible only in a country with a strong Parliament. A strong Parliament ensures a good and accountable government endowed with a robust and sensitive law making mechanism. The citizens of a country have a say in the decisions that affect their lives only when a strong Parliament is in existence in that country. Over a period of time, Parliament's power to hold the Executive to account has been on the decline irrespective of the political character of the Government involved. Important legislation becomes law after being subjected to cursory investigation and this allows the entry of laws which have been poorly drafted and ill thought through. This has been the experience in the United Kingdom. The domination of the Legislature by the Executive has assumed great importance and it has been generally conceded that, the Executive dominates the Legislature and that any discussion in this regard concerns itself mainly with the level of this dominance. Such studies have in the main concentrated on the parliament's performance in the legislative process and there is a discernible neglect of other key functions of parliament such as scrutiny for example. The diminishing role of Parliament and the increasing power of the Executive in the British political system has been the subject of many discussions and a number of concrete remedies have been suggested by various authorities. Inter Alia, these authorities have frequently referred to a so called golden age when the balance between legislature and executive was more equitable. "The argument appears to start from a misinterpretation of what the role of Parliament has been in the past which is a question of description or what the role ought to be is a question of prescription. This lacks the evidence of past commentators, like Mill or Bagehot which always correctly interpreted. Indeed, the lessons of history itself are not infrequently misapplied"2 The Liaison Committee had submitted two reports, in order to clarify its views on the discussion taking place in respect of the relationship between Parliament and the Executive3, these reports are Shifting the balance: select committees and the executive, or the 1st report of 1999-2000, HC 300, March 20004 and Independence or control or the 2nd report of 1999-2000, HC 748, July 20005. Although the primary focus of the Committee's attention is the select committee system6, it addresses this in the overall context of the executive-parliamentary relations, as can be seen from its conclusions in the first report. These conclusions state that twenty years have elapsed since the setting up of the departmental select committees and that their establishment was a major step in making the Executive accountable to Parliament, and ultimately to the citizen and the taxpayer. Although, these committees had done a lot of important work their full capability had been neither realized nor

Wednesday, July 24, 2019

To Explore Feminist Counselling taking into critical consideration Essay

To Explore Feminist Counselling taking into critical consideration both the overarching theoretical ideas and practice skills - Essay Example As per (Chaplin,1999,pg.5 ) â€Å"Feminist counselling is profoundly social and polite as well as personal and individual†. Feminist counselling is about bringing in a social change where woman to could act, think and move freely. Feminist counselling has a different approach unlike traditional approach which move away from a notion that females are responsible for sexual assault. As commonly represented among feminist theorists, the first wave is often originated from liberal feminists† (Ross ,2010,pg .4 ) On the other hand , in this counselling there is an acknowledgement of power relation in society, acknowledgment of inappropriately oppressed clients and their strengths, healing women through their journey and encourage more equitable relationship with opposite sect in the society. In feminist counselling, women counsellors from various backgrounds, races, sexual orientation, abilities are involved to handle all kind of woman problems. In feminist counselling ,different kind of theories, techniques and approaches are used to attain best results. The feminist counselling has been a movement progressed with the support and ideas of many prominent figures. Some of the main contributors to feminist counselling are Judith Worell, Pam Remen, Sandra Bem , Laura Brown, Jean Baker Miller and many others. However, there was much criticism from other women regarding its concept and intention. In this movement there is no one particular founder but many women figures like Judith Worell, Pam Remen , Sandar Bem. Carol Gilligan, Carolyn Enns,Laura Brown,Lillian Comas-Diaz and Olivia Espin had a major role to play. So, the feminist counselling has been an invention of many women who were fighters and they wanted equality and freedom for women. The major focus of feminist counselling is to empower woman and make their life potential and contributing to the society. It focuses on cultural, political, social

Tuesday, July 23, 2019

Social intelligence class the name of the bock social intelligence the Essay

Social intelligence class the name of the bock social intelligence the new science of success for Karl Albrecht - Essay Example thus grouping people accordingly as well as understanding how the groups and societies map the environment in terms of ecological, social and personal thereby, establish a structure to aid in group decision making as well as revealing the views of participants. c) Performance prediction. Basing on the social intelligence test concept, people with low social intelligence are more suited to low customer contact roles because they may not necessarily posses the social competencies required for the success of frontline office duties. On the other hand, those with high social intelligence are considerately skilled socially and thus can communicate or contract directly with other people. d) Creating interaction strategies. By understanding social intelligence, it helps on to understand the dynamics of dealing with others for exampling assessing the impact of one person’s behavior on other people thus strengthening the ability to get along with others. One becomes socially successful by learning how to deal with others and interact with new behaviors. e) Helps leaders to enhance their leadership competencies. Some of the competencies that can be learnt in improving leadership include self confidence, the drive to improve performance, staying calm under pressure and having a generally positive outlook. In dealing with a family member with a toxic personality so as to affect the impact of their negative personality on your own personality, the following approaches can be undertaken.You need to acknowledge that their pain, upset and unhappiness is their own and not yours. This will help you not to believe in what they do or say.second is getting positive about yourself. When things are not better it is good to remain positive. This will make those around feel better and as well can influence the negative personality to feel positive. In addition, be firm and declare your stand about not being well with negativity. For example one can make use of comments such as

Monday, July 22, 2019

The Effect of Minimum Wage Policy on Poverty Reduction Essay Example for Free

The Effect of Minimum Wage Policy on Poverty Reduction Essay 1 Introduction Minimum wage policies are widespread throughout the world. More than 90% of all countries have a minimum wage policy (International Labour Office, 2009, p. 34). Although the goals of mandating and maintaining a minimum wage, such as the reduction of poverty and the creation of income equality, are widely accepted around the world, there is a disagreement about the policy’s efficacy regarding these goals. Opponents of setting a minimum wage argue that it leads to unemployment, and it does not result in the reduction of poverty (Burkhauser Sabia, 2007, p. 263). Meanwhile, employment plays an important role in poverty alleviation, because it secures income and empowerment for the poor (United Nations, 2005). However, proponents of the minimum wage policy appoint that the policy leads to decrease in poverty rates and the unemployment effect is not significant (Lustig and McLeod, 1997). That means, there is controversy over the use of minimum wage as an anti-poverty tool, and this makes the topic interesting to study. This paper will evaluate the extent to which the minimum wage policy is an effective anti-poverty tool. The evaluation will be based on literary reviews of scientific articles and theoretical materials regarding the influence of minimum wage on employment and poverty. Such a focus is selected because studying the effect of minimum wage only on employment does not lead to a conclusion about the influence of minimum wage on poverty. Even if the unemployment effect is moderate, an increase in the minimum wage leads to net income losses for poor families (Neumark Wascher, 1997, p. 1). In addition, criteria such as the effect of minimum wage on employment and poverty level will be used for evaluation of efficacy of minimum wage policy as anti-poverty tool. The paper will be structured in the following way: section two will provide a summary of works related to the topic; in section three, the selected assessment criteria will be described; evaluation and the conclusion will be presented in section four and five respectively. 2 Theoretical framework A few empirical investigations were made to find evidence in favour or against the minimum wage as an anti-poverty tool. There are several research studies that demonstrate that the minimum wage policy is an ineffective means of achieving poverty reduction in many cases because of the unemployment effect . Neumark and Wascher (1997) conducted one such investigation. They studied the effect of minimum wage on poverty on the basis of changes in net income of poor families. The researchers discovered that raising minimum wages increases the probability that some poor families escape poverty and the probability that, initially, non-poor families fall into poverty. The discovered result supposes that the unemployment effect combined with minimum wage increases causes reductions in the income of previously non-poor families (Neumark Wascher,1997, p. 3). The conclusion of Neumark and Wascher (1997, p. 31) is that there is no strong evidence to support the idea that minimum wage policy helps in poverty alleviation because of the concomitant unemployment effect of minimum wage. Another research study was conducted on the basis of Brazilian microdata by Paes de Baros, Carlos, and Samir (as cited in Gindling Terrell, 2010). The result of the research showed that there was no effect of the minimum wage on poverty because the unemployment effects of the minimum wage increase. Pauw and Leibbrandt (2012) also decided to check the efficacy of minimum wage as an anti-poverty tool. To investigate the influence of the minimum wage policy on poverty in South Africa, they used an advanced micro-simulation model, which assesses the distribution of employment gains and losses and the implications for household income. The results showed that minimum wages led to a marginal decline of poverty. Moreover, job losses, price increase and income decline are more likely to affect the poorest. The investigators found that the minimum wage policy targets a small fraction of the poor. As such, they concluded that the policy was not an effective tool in South Africa because it was not well targeted (Pauw Leibbrandt, 2012, p. 780). However, there are few empirical research studies that prove that the minimum wage policy reaches the poor. The first estimates on the effect of minimum wages on poverty were made in the United States by Card and Krueger (as cited by Gindling Terrell, 2010). They used regression analysis to examine the change in the poverty rate of states from 1989 to 1991 and took into consideration only a small fraction of workers who were influenced by the minimum wage increase. The researchers found weak evidence of a modest poverty reduction effect because of the minimum wage increase. Lustig and McLeod (1997) also investigated the effect of the minimum wage on poverty but in Latin America and Asia. They concluded that an increase or fall in minimum wage leads respectively to a decline or increase in the poverty rates in developing countries (Lustig McLeod, 1997, p. 81). However, it was also noticed by the investigators that an increase in the minimum wage could increase slightly unemployment. (Lustig McLeod, 1997, p. 77). In addition, they mentioned that even if the minimum wage is shown to reduce poverty in the short run, employment opportunities could decrease in the long run. The result of research by Saget (2001, p. 22) shows that an increase in minimum wage reduces poverty; however, for a set of Latin American countries, where regression analyses were made on the basis of a one- or two-dollar poverty line, there was no effect on the poverty level. Moreover, they remark that the result confirms their intuition that minimum wages in developing countries do not influence the poorest population but the low-income population of the upper level instead. The empirical research of Gindling and Terrell (2010) regarding the influence of minimum wage on poverty in Honduras provided evidence that a raise in the minimum wage had a modest poverty-reducing effect. The results are true for the formal sector and could be higher, if there was no the unemployment effect in the formal sector. Moreover, the researchers suggested that those who lost jobs probably found jobs in the informal sector, where the minimum wage regulation does not hold power (Gindling Terrell, p. 915). Although in the majority of studies above, the unemployment effect of the minimum wage policy is mentioned, Card and Kruger (1994, In: Ropponen, 2011) discovered that a minimum wage increase can lead to an increase in employment. Such evidence they received by investigating fast food restaurants in New Jersey in 1992. Thus, there are several studies that provide evidence both in favour and against the minimum wage policy as anti-poverty tool. 3 Criteria Two criteria were selected for the evaluation of the extent to which the minimum wage is an effective tool for poverty alleviation: They are the influence of the minimum wage on the poverty level and its effect on the employment of the poor. The measuring of the effect of the minimum wage on the poverty level supposes focusing on the transition into poverty and out of poverty and the changes in poverty rates. Such a focus follows from the analysis of theoretical frameworks, where researchers used poverty rates (Gindling Terrell, 2010) or transitions out or into poverty for the evaluation of the influence of the minimum wage on poverty (Neumark Wascher, 1997). The employment effect of minimum wage criterion was selected because in the theoretical framework, the employment effect seems to be a critical factor that identifies the effectiveness of the minimum wage as an anti-poverty tool. For example, Samir, (as cited in Gindling Terrell, 2010) mentions that there is no effect of the minimum wage policy if the employment effect increases. These criteria will be applied by finding in the empirical investigations the evidence of the negative or positive changes in the poverty level and employment or the evidence of the absence of corresponding minimum wage influences. After that, evidence will be weighed, and a decision about the effectiveness of maintaining a minimum wage will be made. 4 Evaluation Although economists agree that the primary goal of minimum wage policy is poverty alleviation, many disagree about its effectiveness as an anti-poverty tool, as shown in section 2 of this paper. In this section, arguments for and against the policy were compared using criteria from section 3, evaluating the extent to which minimum wage served as an effective anti-poverty tool.

Sunday, July 21, 2019

Heat of Fusion of Ice Discussion of Theory

Heat of Fusion of Ice Discussion of Theory Measuring the specific latent heat of fusion of water (ice): Introduction In our daily lives, heat can be found in everywhere. Cooking food heat is needed, it also makes people feel warm and produce more energy. Therefore to know the specific latent heat of fusion of water, both we need to know process of the heat was transferred and kinetic energy.The aim of this experiment was to find out the specific latent heat of fusion of water and steam. First of all, heat is a kind of energy, which transfers from one object to another because of their different temperatures. The SI unit of the specific latent heat is joule per kilogram (J kg-1). The specific latent heat of fusion which is the unit used to calculate the energy need to change unit mass of a substance from a solid into a liquid without in temperature. The equation Q=ItV=ML was used to calculate the energy needed from solid to liquid. Where Q is the heat supplied; m is the mass of the solid, L stands for the specific latent heat of fusion. However, in this process, first to be calculated the energy sup plied to the heater and divided it by the mass of ice melted by the heater to find the specific latent heat of fusion of ice. Next is the specific latent heat of vaporization, which was used to calculate how much heat energy for a substance need to change units of mass from liquid into vapour without in temperature. It also defined as the equation is Q=m lv +h â€Å"where lv represents the specific latent heat of vaporization of the liquid and h is the heat lost from the ‘jacket in time t†. Duncan (2000: 69). Finally, calorimeter is just a kind of equipment which uses to measure heat. There are some equations were use in the result calculation. The basic theory of the simple experiment is as above.MethodsPart.1 the specific latent heat of fusion of iceThe equipment of this experiment was two funnels and two barrels, an ammeter and a voltmeter supplied. Firstly, two funnels were filled with crushed ice, and then the heater was put in one of the funnels and left them both for five minutes. During these, the heater reached the temperature of the ice in order to change the ice to water quickly. Next, while turned on the heater, the value of voltage and current were recorded. After recording the values, the mass of water was measured that caught from each funnel in five minutes. Finally, after getting the values of masses, voltage and current, the calculation was done.Figure 1, more ice melts in the side with the beaterPart.2 the specific latent heat of vaporization of waterFinding lv can be done using the equipment below in figure 2. First of all, put a measuring cylinder on a top pan balance and surround the cylinder with lagging. The inside aluminium metal container was measured by electronic balance and the lid keep open. After the measuring cylinder was filled with water, the power was turned on to supply. Then wait the moments until the water came back to the boil. After the water was boiling, the mass of water was recorded and the clock was started. Thirdly, the p ower supply was connected and the power was set to 1100w. Finally, a little of the water in cylinder was emptied to become steam and the mass of water also was recorded. The apparatus in this experiment as in figure 2.Figure 2, the boiling water in measuring cylinderResultsPart 1. The specific latent heat of fusion of ice.Table.1 The measurement of latent heat of fusion of ice.The ice with heaterFunnel without heaterMass of cup (g)7373Mass of cup with water (g)9383Mass of water (g)2010Table.1 shows the measurement of latent heat of fusion of ice. The masses are measured by electronic balance; the current of the circuit is 1.5A and the voltage of the circuit is 6V.The error of mass:  ± 1gThe error of heat:  ± 10JPart.2 the specific latent heat of vaporization of water.M1 ( the boiling water)M2 ( after 3 minutes)100049Table.2 The data of the specific latent heat of vaporization of water.Table.2 shows the data of the specific latent heat of vaporization of water which is the difference of the masses of water. In the experiment, the mass of the balance is 79g; the temperature of the water is 100â„Æ';the power of cylinder is 1100W; the time is 3 minutes. And the error of the mass is  ± 1g.DiscussionThe specific latent heat of fusion of ice and the specifi c latent heat of vaporization of water are calculated by the measurement in the tables of result section. The calculation of the specific latent heat of fusion of ice is as follows. Heat lost by water is equal to the mass times the specific latent heat of fusion and the equation is VtI=ML, M is mass of water in difference, t stands for the time taken for heat the ice and L is the latent heat of fusion of ice. ThereforeL ==∠µ=2700J ∠´L=2.7Ãâ€"105Jkg-1 and it is not very similar to the exact value of the latent heat of fusion of ice, which is 3.3Ãâ€"105 Jkg-1. Next part is the specific latent heat of vaporization of water. The heat gained to the water and the cylinder is equal to the work down by the circuit which is 1100W, E=W Ãâ€" t=M lv, which E is the energy gained to the water and the cylinder, M is mass of balance, lv represents the specific latent heat of vaporization of water. From the equation just above, therefore Lv= => and then Lv =2.5Ãâ€"106 Jkg-1. It is also not very similar to the exact value of the specific latent heat of vaporization of water, which is 2.3Ãâ€"106 Jkg-1.According to Duncan (2000:68) â€Å"the kinetic theory sees the supply of latent heat to a melting solid as enabling the molecules to overcome sufficiently the force between them for the regular crystalline structure of the solid to be broken down. And when vaporization of a liquid occurs a large amount of energy is needed to separate the molecules and allow them to move around independently as gas molecules†.

Effect of Motivation on Employee Performance

Effect of Motivation on Employee Performance Chapter 1 INTRODUCTION 1.1 Background of the Study In todays competitive world, employee is an important asset to every organisation. An organisation cannot progress without employees. However, the success of an organisation depends on how the management utilise their workers capabilities in achieving organisation goals and objectives. Employees need to be inspired as well as motivated to perform well and perform efficiently. According to Smith (n.d.), employees who like where they work will help the company make more money. Sears conducted an 800-store survey that showed the impact of employee attitudes on the bottom line. When employee attitudes improved by 5%, customer satisfactionjumped 1.3%, consequently increasing revenue by one-half a percentage point. Seeking ways to motivate and build worker morale pays dividends to any business or organization. The motivated worker is more committed to the job and to the customer. This shows that happy employees performed well which increases the quality and quantity of their work. Long time ago, employees were considered as merely an input to the production of good and services. However as time goes by, this way of thinking has changed as many studies has been done on the employees behaviour and job performance. An employees performance may affect the production of the company, from the quality to the quantity of the products and services. This is why the management must identify the factors affecting their workers performance. A high performance workforce is the most important foundation for organisations success no matter how big or how small the organisation is. Job performance is the ability and skill that an employee possesses in performing the job required by the employer. The level of performance by the employee is going to affect the organisations goal and productivity. Besides, employees performance may also be affected by the management of the company, the job itself or even the employees own behaviour. Good job performance provides great achievement to the organisation, harmony in the workplace and also employees self-accomplishment. Thus, to have a good workforce and good employee performance, organisation must firstly identify and understand the factors which affect the employees job performance in achieving companys goal. 1.2 Research Problem For centuries, individuals have questioned and performed research on the factors affecting employees job performance and yet the answers may vary from one another. Some researcher said that employees performance is influenced by their pay and some said they are not. Employees are an organisations important asset which is why good performance by the employees is essential in producing good job quality and productivity. Employees are the ones who are running the organisation on behalf of the company. They have the responsibilities to perform well for the company in order to achieve organisation goal and compete with other organisations in the same industry. Employees are the one who plan, manage, organise and run the business activities of an organisation. This means that poor employees job performance may reduce the quality of services and productivity which will eventually slow down the operation of the organisation and lead to wastage of resources such as money and time. Organisations may find ways to solve the problem by terminating poorly performed employees or even choose to ignore it which may lead to unsuccessful business or bankruptcy. By choosing to terminate underperformed employee could not solve the problem as time is needed to hire new employee and extra cost will be incurred for training new employee. Management should find ways that inspires their workers to perform well in order to achieve organisations goal and in order to fully utilise their resources. Management believes that by paying employees more (increase of wages), employees will tend to perform better. Perhaps it might be true according to some researcher. However, there are also recent studies that have shown that employees motivations are not solely affected by pay. Thus, this research is carried out to investigate the factors that affect employees performance. This research will attempt to evaluate the effect of four variables which are motivation, job commitment, job design and work environment. 1.3 Research Objectives The reason for this research is: To investigate if motivation has the significant affect on employees job performance. To investigate if job commitment has the significant affect on employees job performance. To investigate if job design has the significant affect on employees job performance. To investigate if work environment has the significant affect on employees job performance. Job design is techniques that are use in the job design exercise are such as job enlargement, job enrichment, job rotation and job simplification. The work environment or working place which an employee performs in, can affect his or her performance. Work environment can be divided into two categories which are physical environment and social environment. The physical environment includes safe working place with ample resources and equipment such as comfortable chair, lighting and etc whereas the social environment includes people that the employees are working with in the organisation such as working colleagues or subordinates, supervisors and etc. 1.4 Scope of the Study This empirical study consists of dependent and independent variables. The dependent variable is employees job performance whereas the independent variables consist of factors that affect employees job performance such as motivation (pay, benefits, rewards, etc), job commitment, job design and work environment. The population for this study take into account the employees working in the manufacturing companies in Penang and is randomly selected by using convenience sampling method. Questionnaires will be distributed to 150 employees. Questionnaires will then be collected back and data will be analysed using the regression testing that is use to test the effects of the independent variables onto the dependent variables. 1.5 Significance of Study It is definite that every organisation no matter how big or small in size the company is in the whole wide world needs people or employees to operate and manage their company. The significance of this study is to investigate the four factors relationship with employees job performance, as employees job performance is important in producing good job quality and maximum productivity. This study is also essential to find out the influences of the four factors to the organisations. An organisation is considered dead and cannot operate without workers. Well performed employees may lead the organisation to success and earn competitive advantage over competitors while poor performed employees may lead company to failure and even bankruptcy. Besides poorly performed workers causes insufficiency in productivity which indirectly waste company resources. It might also cause company to be defeated by its rival. Therefore this study will help managers and employees to understand better the problem affecting their performance and reduce the negative effects to the company. Chapter 2 LITERATURE RREVIEW 2.1 Introduction These days, the business world is becoming more challenging than ever. This increases the managements awareness that good job performance is the key success to the organisation. To have well-performed employees, various ways or techniques should be conducted to manipulate humans nature and needs to produce desired behaviours and well performance. For that reason, the first thing the management should do is to understand human (employees) needs and wants. Employee job performance is the ability of employees to perform effectively in their job required and they need to have understanding of complete and up-to-date job description for their position. Besides that, they also need to be aware of the job performance requirements and standard that they are expected to meet. Supervisors or the management of the organisation should then review their employees job description and performance requirements. Job performance can be reviewed in terms of overall efficiency in the job or in terms of specific components that the job compromises. The purpose of performance standards is to communicate expectations. Some supervisors prefer to make them as specific as possible, and some prefer to use them as talking points with the specificity defined in the discussion (University Human Resource Services, 2005). In general employees and supervisors use the performance assessment annually to sum up an overall review of how the job has been done over the previous 12 months, to identify whether organisational goals have been met, to identify areas which require additional efforts, and lastly to identify the achievement and development goals for the forthcoming year. Performance reviews typically take place annually, but can be scheduled more frequently. Performance review processes vary depending on whether your appointment is as classified or professional staff. For classified staff covered by a labour contract, the contract establishes the performance review process requirements (University of Washington, 2007). People who are joining the workplace today are not only looking for jobs that earn money, but are also looking for more opportunities such as self-development. They are willing to put more effort on their job when their own needs, goals, expectation and desires are met. For that reason, the management of the organisation have to find out the factors affecting the employees performance and come up with techniques to improve employees job performance. Management must also make sure that employees goals are in line with organisations objectives. As the world become more competitive, organisations around the world are also alerted by the need to compete effectively against each other. In order to do so, organisations need to prepare themselves by making sure the people in their organisation are able to perform well and compete competently. Job performance will be the key success for organisation as it enables employees to work at their best and maximize their contribution to the organisa tion. 2.2 History of Research on Job Performance According to Hersen (2004), â€Å"job performance is a complex, multidimensional construct that can be defined and assessed in varying ways. Job performance can be defined (and assessed) in terms of quantifiable outcomes of work behaviours (e.g., amount of sales measured in dollars, productivity level, number of academic journal publications, number of lines of computer code written) and in terms of behavioural dimensions (work-related communication, decision making, attention to detail) that are less quantifiable†. Employees job performance also stands for the level ability of every employee to work efficiently (in terms of quantity and quality) in their job as required or expected by their employers. The employees job performance is then evaluated by the employer, supervisors or the people in charge. The job performance can be evaluated in terms of effectiveness all together in the job and in terms of particular components that the job compromises. The employees performances will show the personalities, knowledge and experiences of themselves. Each employees performance level is different as each individual has different capability and behaviour. Employees poor level of performance may be affected by many factors which include motivation, job commitment, job design and the work environment of the organisation. Historically, many researchers have attempted to study the factors affecting job performance but it is not as simple as one may think and the answer may vary from one another. Buchanan (n.d.), who has done a study on the relation of job satisfaction and performance, pointed out in her study that â€Å"the relationship between job satisfaction and performance is an issue of continuing debate and controversy. One view, associated with the early human relations approach, is that satisfaction leads to performance. An alternative view is that performance leads to satisfaction†. She also mentioned that many researchers tend to relate job satisfaction and job performance in a specific fashion, which is a happy worker, is a good worker. Job satisfaction is defined as the extent to which people like (satisfaction) or dislike (dissatisfaction) their jobs (Spector, 1997). This definition suggests job satisfaction is a general or global affective reaction that individuals hold about their job (Williams, 2004). Job satisfaction is usually linked with motivation, but the nature of this relationship is not clear. Satisfaction is not the same as motivation. Several numbers of studies has found that there is only a limited amount of relationship between employees satisfaction and their job performance. For example, it was found by Brayfield and Crockett (1955) that there is only a minimal relationship between job performance and job satisfaction (Judge et al., 2001). The increased of job satisfaction does not necessarily mean increased of employees job performance. If the goals of the organisation are not aligned with the goals of employees, then employees are not effectively working towards the mission of the organisation. Therefore, Buchanan concluded in her study that each employees performance is normally determined by motivation, ability, and the work environment. The motivation factor is the desire of the employee to do the job; ability is the capability of the employee to do the job and lastly the work environment which is the tools, materials and information that is needed by the employee to do the job required. 2.3 Past Research on Motivation Affecting Job Performance In the past, employees job performance are traditionally been looked at in terms of ‘motivation. Many researchers have come out with a conclusion that employees levels of performance are influenced by the motivation factor. Examples of researchers are like Maslow (1954), who developed ‘the hierarchy of needs or Hezberg (1966), who developed the idea of ‘hygiene factors, such as pay and conditions which, if not ‘right in the eyes of the employee, act as de-motivators. There is also the work of McClelland who argued that people struggled to fulfil needs of power or influence and social interaction, amongst others. All these ideas have uses in the management of the poor performer. Sometimes, however; they seem to be too complex to use on a day-to-day basis and are more suited to giving the manager a theoretical understanding rather than a useful tool (Proud, n.d.). From the theory of motivation such as Maslows hierarchy of needs,modern leaders, executive managers or supervisors findmeans of motivation for the purposesof employees performance and workforce management. Motivation is always view as an important issue in the business world. This is because motivation is vital in every organisation as it will affect the productivity of the organisation. When the employees in an organisation are unmotivated, the productivity of that organisation will be decreased whereas compared to an organisation which have motivated employees the labour turnover will be lower and production will be higher. According to Dev (n.d.), â€Å"A Gallup organisation study indicated that companies with positive employee attitudes are 50 percent more likely to achieve customer loyalty, and 44 percent more likely to achieve above-average profits. Additionally, the study finds firms that measure in the top quartile with regard to employee engagement averaged 24 percent higher profitability, 29 percent greater revenue and 10 percent less employee turnover than businesses in the bottom quartile. The evidence is clear. Better people management practices produce better business results.† According to Bartol Martin (1998), â€Å"motivation is defined as the force that energises behaviour, gives direction to behaviour, and underlies the tendency to persist. This definition recognises that in order to achieve goals, individual must be sufficiently stimulated and energetic , must have a clear focus on what is to be achieved, and must be willing to commit their energy for a long enough period of time to realise their aim†. Thus, motivated behaviours are performed and controlled voluntarily by the employees themselves whereas supervisors or managers only act as the motivator to encourage employees to increase their level of job performance. Many people who are not motivated keep their performance to an acceptable level by expending only 20% to 30% of their ability whereas managers who know how to motivate their employees can achieve 80% to 90% ability levels and consequently higher levels of performance (Geoff, n.d.). Motivation comes in many different forms. It can be in a simple form like praise by the supervisors or managers, in the form of monetary (increase in pay), rewards, promotion, job security and etc. These factors are important because it will affect the employees level of job performance. Hence it is truly essential that managers and supervisors of an organisation knows how to motivate its employees in performing well and achieving organisation goals. According to Wagner (n.d.), â€Å"Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper, ‘A Theory of Human Motivation. This hierarchy suggests that people are motivated to fulfil basic needs before moving on to other needs†. Maslows hierarchy of needs is most often displayed as a pyramid, with lowest levels of the pyramid made up of the most basic needs and more complex needs are at the top of the pyramid. The basis of Maslows theory is that human beings are motivated by unsatisfied needs, and that certain lower needs need to be satisfied before higher needs can be satisfied. A satisfied need is not a motivator as the most influential employee need is the one that has not been satisfied. From the Maslows hierarchy of needs, management should understand and identify what their employees need and then satisfy them from the lowest to the highest level. Physiological needs are needs which are at the bottom of the pyramid, are the most essential needs to human living. In the workforce, organisation helps employees to satisfy their needs by giving them basic salary. Safety needs are security needs that include the needs for shelter from the environment and health insurance. In the organization context, employees express their security needs as a desire for job security with fringe benefits. The management should provide employees with safe working environment with ample tools and resources. These will be the factor that helps employees to perform well. Social needs are needs related to the need for friendship, love and sense of belonging. At the workplace, these needs include having good relationship with colleagues, superiors or etc. When employees enjoy working closely with each other, it may result in positive behaviour at work which will also result in better employee performances. The management can also help to satisfy employees social needs by showing direct concern for them. Esteem needs are the needs of self-respect, respect or recognition from others and a sense of personal achievement. When these needs are satisfied, the person feels self-confident and valuable as a person in the world (Simons et al., 1987). In the organisation, the management can fulfil employees esteem needs by showing their appreciation through promotion, rewards, recognition and etc. Self-actualisation needs are place at the highest level of the pyramid. These needs are associated to personal growth, self-fulfilment and the realisation of ones full potential. In this stage, the management can help the employees by giving them tasks that challenges their own intelligence. All the elements in the Maslows hierarchy of needs are the motivator for employees to perform well in their job. A motivated employee is usually someone with clearly defined goals who takes action which he or she expects to achieve. Besides that, motivated employees will be likely to put in more effort towards the organisation objectives and goals. A leader that recognises employee efforts and helps employees achieve and grow can help improve motivation which therefore increases job performance. According to Hong et al. (1995), Vroom maintained in his expectation theory that everyone works in expectation of some rewards (both spiritual and material), and welfare is one of them. In other words, the degree of reward influences the quality and quantity of work, and in turn productivity. So it is important for management to explore how to give the stimulus (welfare) in order to promote work motivation and performance. Image. Relationship between the type of employee benefit and impact on job performance However, there are some researchers that found out that motivation has limited relationship with employees job performance. They do not believe that money (salary and bonuses) is a good motivator. McNamara (n.d.), who did a research on employee motivation, said that â€Å"certain things like money, a nice office and job security can help people from becoming less motivated, but they usually dont help people to become more motivated. A key goal for the company is to understand the motivations of each of their employees†. Another researcher, Urichuck (n.d.), stated that â€Å"organisations could provide employee motivation through a bonus in the form of money at the end of a period. For sure they will be glad and grateful. They may even perform better, but what are their expectations at the end of the next period will be more money. External employee motivation is temporary and it is never lasting. Money is an external employee motivator. Its an incentive that once acquired, leads to expectations for more, bigger or better. Nevertheless the employees will not even realise that the company is facing a crisis. They will want a bonus at least equal to what they got last year, but preferably more, not less†. According to him, there is a survey on thousands of workers around the world that uses compared rankings by supervisors and employees on employee motivating factors. The typical supervisory group ranked the factors in the following order; high wages, job security, promotion in the organisation, good working conditions, interesting work, personal loyalty of supervisor, tactful discipline, full appreciation of work done, help on personal problems, and feeling of being in on things. However, when employees were given the same exercise and asked what affects their morale and employee motivation the most, their answers followed this pattern; full appreciation of work done, feeling of being in on things, help on personal problems, job security, high wages, interesting work, promotion in the organization, personal loyalty of supervisor, good working conditions, and tactful discipline. Note that the top three employee motivating factors marked by the employees are the last three felt to be important for them by their supervisors (Urichuck, n.d.). As a result, this research shows that motivation through the form of money, has limited amount of relationship with employees job performance while recognition is the most influential motivator that affects employees job performance. 2.4 Past Research on Job Commitment Affecting Job Performance Job commitment is the willingness of the employees to be devoted in completing the job assigned to them at minimum level of commitment or exceeding the amount that is required. The level of employee commitment to their job is often the key determinant of whether the employee performs as expected or exceeding the expectations. The level of employee commitment may affect employees job performance. Committed employees often performed well and results in companys success and increase of productivity level. Besides job commitment includes the level of employee involvement and employee loyalty to the organisation. Simpson (n.d.), who did a research on building employee commitment for business success, stated that â€Å"the indication of lack of employee commitment could be an indication of a company on the way to becoming another business failure. The workplace is changing dramatically and demands for the highest quality of product and service is increasing. To remain competitive in the face of these pressures, employee commitment is crucial. The two keys to success in todays environment of increasing competition and rapid change are an absolute passion for, and dedication to, excellence in customer service and the effective and enlightened management of our workforce. The employees commitment will lead to achieving desired standards in customer service and high job performance. Without employee commitment, there can be no improvement in any area of business activity. In the absence of good management, employees will simply treat their work as a job; a 9am to 5pm routine without any desire to accomplish any more than is necessary to remain employed. It does not take many uncommitted employees to prevent a business from prospering and thereby ceding a big advantage to its competitors†. Another researcher, Fink (1992), asserted that although there are many factors that affect employees performance, the key factor of employees performance is affected by employees job commitment. He defines commitment as an attitude that develops from a process called identification, which occurs when one experiences something, someone, or some idea as an extension of oneself. While all research on commitment treats it only in terms of identification with organisation, that is, its goals, values, and mission, on the other hand, he focuses on three-dimensional concept including identification with the work itself and with co-workers. He is sure that these are equally important because they can have powerful effects upon employee performance. As basis of his research he makes an interactive model that proposes: good management practices result in an effective reward system and employee commitment, an effective reward system results in enhanced employee commitment and employee performanc e, and employee commitment results in enhanced employee performance. As a result of his research in two companies, who has 418 and 430 employees, respectively, he found that there was significant correlation between employee performance ratings and commitment score in all categories, and also the correlation between performance and commitment for managers and operational employees grouped separately were significant in all categories. The higher the level of employee commitment to work; co-worker, and organisation, the higher the level of the performance will be. Based on Sutanto‘s (1999) findings, instead of concluding that job commitment only has significant affect on job performance, he has found that â€Å"there is also a positive and significant relationship between commitment to supervisors and performance. He also stated that employees commitment to supervisors have become a good predictor to performance rather than commitment to organisations†. After conducting a larger project to all 1,803 members of May 1993 graduating class of large north-western university, Becker (1992), has found that commitment to supervisors was positively related to performance. â€Å"Further, internalization of supervisors and organizations values was associated with performance but identification with these foci (targets) was not. A number of theorists and researchers have begun to view employee commitment as having multiple foci and bases. Foci commitments are the individuals and group to whom an employee is attached†. Thus, in order to increase employees performance, the study suggest that managers should focus on creating employees commitment to supervisors rather than creating employees commitment to the organisation. On the other hand, Cohens (1999) research supported the important status of job involvement as an antecedent to organisational commitment. Specifically, Cohen argued that those individuals with high levels of job involvement, which stem from positive experiences on-the-job (Witt, 1993), make attributions for these experiences to the organisation. Thus, having previously received benefits from the organisation and being obligated by the norm of reciprocity (Gouldner, 1960) to repay them, high job involvement employees feel compelled to reciprocate in some form. This increased affective commitment (i.e. where employees adopt the companys goals as their own and, therefore, desire to remain with the organisation to help it achieve its goals; Meyer and Allen, 1984; Mowday et al., 1979) and later was found to reduce turnover intentions, absence behaviour, and/or turnover, as well as increased job performance. Tough many researchers have confirmed that employees commitment result in high job performance, nevertheless some past researchers have also found that job commitment or involvement has limited affect on employees job performance. According to Rotenberry and Moberg (2007), â€Å"research finding a significant impact of job involvement on employee performance has met limited success (e.g. Brown, 1996; Brown and Leigh, 1996; Diefendorff et al., 2006 and Vroom, 1962)†. Diefendorff et al. (2002) stated that â€Å"research has been limited for two reasons. Specifically, they asserted that past studies had predominantly used inferior measures of job involvement, which led to their insignificant findings. In addition, Diefendorff et al. (2002) argued that the performance domain assessed in those previous studies needed to be expanded in order to ascertain job involvements true impact on performance at work. The researchers tested the validity of these propositions, but called for additional research in the area paying particular attention to theory development regarding the job involvement-performance relationship†. 2.5 Past Research on Job Design Affecting Job Performance Job design is the method of arranging various work elements in forming a job that suit the employees. Job design identifies what work must be performed to be precise, the content of the job, how it will be performed, where it is to be performed and the competencies required by the person who will perform it. Job design also facilitates the achievement of organizational goals and performance of the work the job was established to accomplish (Sharon, 1998). Job design is also important to avoid employees dissatisfaction. The design of the job must follow the organisations and employees requirement including the health and safety requirement. Besides, job design implementation includes methods such as job enlargement, job rotation, job enrichment and job simplification. The first, job enlargement, can be used to increase motivation by giving employees more and varied tasks. Tasks that reduce the amount of specialization required by the employee, as well as, extending the length of time he or she has to complete them. The second, job rotation, allows an employee to work in different departments or jobs in an organization to gain better insight into operations. This, in itself, does not modify or redesigns the employees job, but allows the opportunity to increase his/her skills and knowledge about other jobs. Job enrichment, the third method, allows the employee to take on some responsibilities normally delegated to management. The risk here is that the employee would be transferred too much responsibility and autonomy in the planning and control aspects of the job. Done right, however, the newfound control would invigorate the employee to work more effectively and thus increased it Effect of Motivation on Employee Performance Effect of Motivation on Employee Performance Chapter 1 INTRODUCTION 1.1 Background of the Study In todays competitive world, employee is an important asset to every organisation. An organisation cannot progress without employees. However, the success of an organisation depends on how the management utilise their workers capabilities in achieving organisation goals and objectives. Employees need to be inspired as well as motivated to perform well and perform efficiently. According to Smith (n.d.), employees who like where they work will help the company make more money. Sears conducted an 800-store survey that showed the impact of employee attitudes on the bottom line. When employee attitudes improved by 5%, customer satisfactionjumped 1.3%, consequently increasing revenue by one-half a percentage point. Seeking ways to motivate and build worker morale pays dividends to any business or organization. The motivated worker is more committed to the job and to the customer. This shows that happy employees performed well which increases the quality and quantity of their work. Long time ago, employees were considered as merely an input to the production of good and services. However as time goes by, this way of thinking has changed as many studies has been done on the employees behaviour and job performance. An employees performance may affect the production of the company, from the quality to the quantity of the products and services. This is why the management must identify the factors affecting their workers performance. A high performance workforce is the most important foundation for organisations success no matter how big or how small the organisation is. Job performance is the ability and skill that an employee possesses in performing the job required by the employer. The level of performance by the employee is going to affect the organisations goal and productivity. Besides, employees performance may also be affected by the management of the company, the job itself or even the employees own behaviour. Good job performance provides great achievement to the organisation, harmony in the workplace and also employees self-accomplishment. Thus, to have a good workforce and good employee performance, organisation must firstly identify and understand the factors which affect the employees job performance in achieving companys goal. 1.2 Research Problem For centuries, individuals have questioned and performed research on the factors affecting employees job performance and yet the answers may vary from one another. Some researcher said that employees performance is influenced by their pay and some said they are not. Employees are an organisations important asset which is why good performance by the employees is essential in producing good job quality and productivity. Employees are the ones who are running the organisation on behalf of the company. They have the responsibilities to perform well for the company in order to achieve organisation goal and compete with other organisations in the same industry. Employees are the one who plan, manage, organise and run the business activities of an organisation. This means that poor employees job performance may reduce the quality of services and productivity which will eventually slow down the operation of the organisation and lead to wastage of resources such as money and time. Organisations may find ways to solve the problem by terminating poorly performed employees or even choose to ignore it which may lead to unsuccessful business or bankruptcy. By choosing to terminate underperformed employee could not solve the problem as time is needed to hire new employee and extra cost will be incurred for training new employee. Management should find ways that inspires their workers to perform well in order to achieve organisations goal and in order to fully utilise their resources. Management believes that by paying employees more (increase of wages), employees will tend to perform better. Perhaps it might be true according to some researcher. However, there are also recent studies that have shown that employees motivations are not solely affected by pay. Thus, this research is carried out to investigate the factors that affect employees performance. This research will attempt to evaluate the effect of four variables which are motivation, job commitment, job design and work environment. 1.3 Research Objectives The reason for this research is: To investigate if motivation has the significant affect on employees job performance. To investigate if job commitment has the significant affect on employees job performance. To investigate if job design has the significant affect on employees job performance. To investigate if work environment has the significant affect on employees job performance. Job design is techniques that are use in the job design exercise are such as job enlargement, job enrichment, job rotation and job simplification. The work environment or working place which an employee performs in, can affect his or her performance. Work environment can be divided into two categories which are physical environment and social environment. The physical environment includes safe working place with ample resources and equipment such as comfortable chair, lighting and etc whereas the social environment includes people that the employees are working with in the organisation such as working colleagues or subordinates, supervisors and etc. 1.4 Scope of the Study This empirical study consists of dependent and independent variables. The dependent variable is employees job performance whereas the independent variables consist of factors that affect employees job performance such as motivation (pay, benefits, rewards, etc), job commitment, job design and work environment. The population for this study take into account the employees working in the manufacturing companies in Penang and is randomly selected by using convenience sampling method. Questionnaires will be distributed to 150 employees. Questionnaires will then be collected back and data will be analysed using the regression testing that is use to test the effects of the independent variables onto the dependent variables. 1.5 Significance of Study It is definite that every organisation no matter how big or small in size the company is in the whole wide world needs people or employees to operate and manage their company. The significance of this study is to investigate the four factors relationship with employees job performance, as employees job performance is important in producing good job quality and maximum productivity. This study is also essential to find out the influences of the four factors to the organisations. An organisation is considered dead and cannot operate without workers. Well performed employees may lead the organisation to success and earn competitive advantage over competitors while poor performed employees may lead company to failure and even bankruptcy. Besides poorly performed workers causes insufficiency in productivity which indirectly waste company resources. It might also cause company to be defeated by its rival. Therefore this study will help managers and employees to understand better the problem affecting their performance and reduce the negative effects to the company. Chapter 2 LITERATURE RREVIEW 2.1 Introduction These days, the business world is becoming more challenging than ever. This increases the managements awareness that good job performance is the key success to the organisation. To have well-performed employees, various ways or techniques should be conducted to manipulate humans nature and needs to produce desired behaviours and well performance. For that reason, the first thing the management should do is to understand human (employees) needs and wants. Employee job performance is the ability of employees to perform effectively in their job required and they need to have understanding of complete and up-to-date job description for their position. Besides that, they also need to be aware of the job performance requirements and standard that they are expected to meet. Supervisors or the management of the organisation should then review their employees job description and performance requirements. Job performance can be reviewed in terms of overall efficiency in the job or in terms of specific components that the job compromises. The purpose of performance standards is to communicate expectations. Some supervisors prefer to make them as specific as possible, and some prefer to use them as talking points with the specificity defined in the discussion (University Human Resource Services, 2005). In general employees and supervisors use the performance assessment annually to sum up an overall review of how the job has been done over the previous 12 months, to identify whether organisational goals have been met, to identify areas which require additional efforts, and lastly to identify the achievement and development goals for the forthcoming year. Performance reviews typically take place annually, but can be scheduled more frequently. Performance review processes vary depending on whether your appointment is as classified or professional staff. For classified staff covered by a labour contract, the contract establishes the performance review process requirements (University of Washington, 2007). People who are joining the workplace today are not only looking for jobs that earn money, but are also looking for more opportunities such as self-development. They are willing to put more effort on their job when their own needs, goals, expectation and desires are met. For that reason, the management of the organisation have to find out the factors affecting the employees performance and come up with techniques to improve employees job performance. Management must also make sure that employees goals are in line with organisations objectives. As the world become more competitive, organisations around the world are also alerted by the need to compete effectively against each other. In order to do so, organisations need to prepare themselves by making sure the people in their organisation are able to perform well and compete competently. Job performance will be the key success for organisation as it enables employees to work at their best and maximize their contribution to the organisa tion. 2.2 History of Research on Job Performance According to Hersen (2004), â€Å"job performance is a complex, multidimensional construct that can be defined and assessed in varying ways. Job performance can be defined (and assessed) in terms of quantifiable outcomes of work behaviours (e.g., amount of sales measured in dollars, productivity level, number of academic journal publications, number of lines of computer code written) and in terms of behavioural dimensions (work-related communication, decision making, attention to detail) that are less quantifiable†. Employees job performance also stands for the level ability of every employee to work efficiently (in terms of quantity and quality) in their job as required or expected by their employers. The employees job performance is then evaluated by the employer, supervisors or the people in charge. The job performance can be evaluated in terms of effectiveness all together in the job and in terms of particular components that the job compromises. The employees performances will show the personalities, knowledge and experiences of themselves. Each employees performance level is different as each individual has different capability and behaviour. Employees poor level of performance may be affected by many factors which include motivation, job commitment, job design and the work environment of the organisation. Historically, many researchers have attempted to study the factors affecting job performance but it is not as simple as one may think and the answer may vary from one another. Buchanan (n.d.), who has done a study on the relation of job satisfaction and performance, pointed out in her study that â€Å"the relationship between job satisfaction and performance is an issue of continuing debate and controversy. One view, associated with the early human relations approach, is that satisfaction leads to performance. An alternative view is that performance leads to satisfaction†. She also mentioned that many researchers tend to relate job satisfaction and job performance in a specific fashion, which is a happy worker, is a good worker. Job satisfaction is defined as the extent to which people like (satisfaction) or dislike (dissatisfaction) their jobs (Spector, 1997). This definition suggests job satisfaction is a general or global affective reaction that individuals hold about their job (Williams, 2004). Job satisfaction is usually linked with motivation, but the nature of this relationship is not clear. Satisfaction is not the same as motivation. Several numbers of studies has found that there is only a limited amount of relationship between employees satisfaction and their job performance. For example, it was found by Brayfield and Crockett (1955) that there is only a minimal relationship between job performance and job satisfaction (Judge et al., 2001). The increased of job satisfaction does not necessarily mean increased of employees job performance. If the goals of the organisation are not aligned with the goals of employees, then employees are not effectively working towards the mission of the organisation. Therefore, Buchanan concluded in her study that each employees performance is normally determined by motivation, ability, and the work environment. The motivation factor is the desire of the employee to do the job; ability is the capability of the employee to do the job and lastly the work environment which is the tools, materials and information that is needed by the employee to do the job required. 2.3 Past Research on Motivation Affecting Job Performance In the past, employees job performance are traditionally been looked at in terms of ‘motivation. Many researchers have come out with a conclusion that employees levels of performance are influenced by the motivation factor. Examples of researchers are like Maslow (1954), who developed ‘the hierarchy of needs or Hezberg (1966), who developed the idea of ‘hygiene factors, such as pay and conditions which, if not ‘right in the eyes of the employee, act as de-motivators. There is also the work of McClelland who argued that people struggled to fulfil needs of power or influence and social interaction, amongst others. All these ideas have uses in the management of the poor performer. Sometimes, however; they seem to be too complex to use on a day-to-day basis and are more suited to giving the manager a theoretical understanding rather than a useful tool (Proud, n.d.). From the theory of motivation such as Maslows hierarchy of needs,modern leaders, executive managers or supervisors findmeans of motivation for the purposesof employees performance and workforce management. Motivation is always view as an important issue in the business world. This is because motivation is vital in every organisation as it will affect the productivity of the organisation. When the employees in an organisation are unmotivated, the productivity of that organisation will be decreased whereas compared to an organisation which have motivated employees the labour turnover will be lower and production will be higher. According to Dev (n.d.), â€Å"A Gallup organisation study indicated that companies with positive employee attitudes are 50 percent more likely to achieve customer loyalty, and 44 percent more likely to achieve above-average profits. Additionally, the study finds firms that measure in the top quartile with regard to employee engagement averaged 24 percent higher profitability, 29 percent greater revenue and 10 percent less employee turnover than businesses in the bottom quartile. The evidence is clear. Better people management practices produce better business results.† According to Bartol Martin (1998), â€Å"motivation is defined as the force that energises behaviour, gives direction to behaviour, and underlies the tendency to persist. This definition recognises that in order to achieve goals, individual must be sufficiently stimulated and energetic , must have a clear focus on what is to be achieved, and must be willing to commit their energy for a long enough period of time to realise their aim†. Thus, motivated behaviours are performed and controlled voluntarily by the employees themselves whereas supervisors or managers only act as the motivator to encourage employees to increase their level of job performance. Many people who are not motivated keep their performance to an acceptable level by expending only 20% to 30% of their ability whereas managers who know how to motivate their employees can achieve 80% to 90% ability levels and consequently higher levels of performance (Geoff, n.d.). Motivation comes in many different forms. It can be in a simple form like praise by the supervisors or managers, in the form of monetary (increase in pay), rewards, promotion, job security and etc. These factors are important because it will affect the employees level of job performance. Hence it is truly essential that managers and supervisors of an organisation knows how to motivate its employees in performing well and achieving organisation goals. According to Wagner (n.d.), â€Å"Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper, ‘A Theory of Human Motivation. This hierarchy suggests that people are motivated to fulfil basic needs before moving on to other needs†. Maslows hierarchy of needs is most often displayed as a pyramid, with lowest levels of the pyramid made up of the most basic needs and more complex needs are at the top of the pyramid. The basis of Maslows theory is that human beings are motivated by unsatisfied needs, and that certain lower needs need to be satisfied before higher needs can be satisfied. A satisfied need is not a motivator as the most influential employee need is the one that has not been satisfied. From the Maslows hierarchy of needs, management should understand and identify what their employees need and then satisfy them from the lowest to the highest level. Physiological needs are needs which are at the bottom of the pyramid, are the most essential needs to human living. In the workforce, organisation helps employees to satisfy their needs by giving them basic salary. Safety needs are security needs that include the needs for shelter from the environment and health insurance. In the organization context, employees express their security needs as a desire for job security with fringe benefits. The management should provide employees with safe working environment with ample tools and resources. These will be the factor that helps employees to perform well. Social needs are needs related to the need for friendship, love and sense of belonging. At the workplace, these needs include having good relationship with colleagues, superiors or etc. When employees enjoy working closely with each other, it may result in positive behaviour at work which will also result in better employee performances. The management can also help to satisfy employees social needs by showing direct concern for them. Esteem needs are the needs of self-respect, respect or recognition from others and a sense of personal achievement. When these needs are satisfied, the person feels self-confident and valuable as a person in the world (Simons et al., 1987). In the organisation, the management can fulfil employees esteem needs by showing their appreciation through promotion, rewards, recognition and etc. Self-actualisation needs are place at the highest level of the pyramid. These needs are associated to personal growth, self-fulfilment and the realisation of ones full potential. In this stage, the management can help the employees by giving them tasks that challenges their own intelligence. All the elements in the Maslows hierarchy of needs are the motivator for employees to perform well in their job. A motivated employee is usually someone with clearly defined goals who takes action which he or she expects to achieve. Besides that, motivated employees will be likely to put in more effort towards the organisation objectives and goals. A leader that recognises employee efforts and helps employees achieve and grow can help improve motivation which therefore increases job performance. According to Hong et al. (1995), Vroom maintained in his expectation theory that everyone works in expectation of some rewards (both spiritual and material), and welfare is one of them. In other words, the degree of reward influences the quality and quantity of work, and in turn productivity. So it is important for management to explore how to give the stimulus (welfare) in order to promote work motivation and performance. Image. Relationship between the type of employee benefit and impact on job performance However, there are some researchers that found out that motivation has limited relationship with employees job performance. They do not believe that money (salary and bonuses) is a good motivator. McNamara (n.d.), who did a research on employee motivation, said that â€Å"certain things like money, a nice office and job security can help people from becoming less motivated, but they usually dont help people to become more motivated. A key goal for the company is to understand the motivations of each of their employees†. Another researcher, Urichuck (n.d.), stated that â€Å"organisations could provide employee motivation through a bonus in the form of money at the end of a period. For sure they will be glad and grateful. They may even perform better, but what are their expectations at the end of the next period will be more money. External employee motivation is temporary and it is never lasting. Money is an external employee motivator. Its an incentive that once acquired, leads to expectations for more, bigger or better. Nevertheless the employees will not even realise that the company is facing a crisis. They will want a bonus at least equal to what they got last year, but preferably more, not less†. According to him, there is a survey on thousands of workers around the world that uses compared rankings by supervisors and employees on employee motivating factors. The typical supervisory group ranked the factors in the following order; high wages, job security, promotion in the organisation, good working conditions, interesting work, personal loyalty of supervisor, tactful discipline, full appreciation of work done, help on personal problems, and feeling of being in on things. However, when employees were given the same exercise and asked what affects their morale and employee motivation the most, their answers followed this pattern; full appreciation of work done, feeling of being in on things, help on personal problems, job security, high wages, interesting work, promotion in the organization, personal loyalty of supervisor, good working conditions, and tactful discipline. Note that the top three employee motivating factors marked by the employees are the last three felt to be important for them by their supervisors (Urichuck, n.d.). As a result, this research shows that motivation through the form of money, has limited amount of relationship with employees job performance while recognition is the most influential motivator that affects employees job performance. 2.4 Past Research on Job Commitment Affecting Job Performance Job commitment is the willingness of the employees to be devoted in completing the job assigned to them at minimum level of commitment or exceeding the amount that is required. The level of employee commitment to their job is often the key determinant of whether the employee performs as expected or exceeding the expectations. The level of employee commitment may affect employees job performance. Committed employees often performed well and results in companys success and increase of productivity level. Besides job commitment includes the level of employee involvement and employee loyalty to the organisation. Simpson (n.d.), who did a research on building employee commitment for business success, stated that â€Å"the indication of lack of employee commitment could be an indication of a company on the way to becoming another business failure. The workplace is changing dramatically and demands for the highest quality of product and service is increasing. To remain competitive in the face of these pressures, employee commitment is crucial. The two keys to success in todays environment of increasing competition and rapid change are an absolute passion for, and dedication to, excellence in customer service and the effective and enlightened management of our workforce. The employees commitment will lead to achieving desired standards in customer service and high job performance. Without employee commitment, there can be no improvement in any area of business activity. In the absence of good management, employees will simply treat their work as a job; a 9am to 5pm routine without any desire to accomplish any more than is necessary to remain employed. It does not take many uncommitted employees to prevent a business from prospering and thereby ceding a big advantage to its competitors†. Another researcher, Fink (1992), asserted that although there are many factors that affect employees performance, the key factor of employees performance is affected by employees job commitment. He defines commitment as an attitude that develops from a process called identification, which occurs when one experiences something, someone, or some idea as an extension of oneself. While all research on commitment treats it only in terms of identification with organisation, that is, its goals, values, and mission, on the other hand, he focuses on three-dimensional concept including identification with the work itself and with co-workers. He is sure that these are equally important because they can have powerful effects upon employee performance. As basis of his research he makes an interactive model that proposes: good management practices result in an effective reward system and employee commitment, an effective reward system results in enhanced employee commitment and employee performanc e, and employee commitment results in enhanced employee performance. As a result of his research in two companies, who has 418 and 430 employees, respectively, he found that there was significant correlation between employee performance ratings and commitment score in all categories, and also the correlation between performance and commitment for managers and operational employees grouped separately were significant in all categories. The higher the level of employee commitment to work; co-worker, and organisation, the higher the level of the performance will be. Based on Sutanto‘s (1999) findings, instead of concluding that job commitment only has significant affect on job performance, he has found that â€Å"there is also a positive and significant relationship between commitment to supervisors and performance. He also stated that employees commitment to supervisors have become a good predictor to performance rather than commitment to organisations†. After conducting a larger project to all 1,803 members of May 1993 graduating class of large north-western university, Becker (1992), has found that commitment to supervisors was positively related to performance. â€Å"Further, internalization of supervisors and organizations values was associated with performance but identification with these foci (targets) was not. A number of theorists and researchers have begun to view employee commitment as having multiple foci and bases. Foci commitments are the individuals and group to whom an employee is attached†. Thus, in order to increase employees performance, the study suggest that managers should focus on creating employees commitment to supervisors rather than creating employees commitment to the organisation. On the other hand, Cohens (1999) research supported the important status of job involvement as an antecedent to organisational commitment. Specifically, Cohen argued that those individuals with high levels of job involvement, which stem from positive experiences on-the-job (Witt, 1993), make attributions for these experiences to the organisation. Thus, having previously received benefits from the organisation and being obligated by the norm of reciprocity (Gouldner, 1960) to repay them, high job involvement employees feel compelled to reciprocate in some form. This increased affective commitment (i.e. where employees adopt the companys goals as their own and, therefore, desire to remain with the organisation to help it achieve its goals; Meyer and Allen, 1984; Mowday et al., 1979) and later was found to reduce turnover intentions, absence behaviour, and/or turnover, as well as increased job performance. Tough many researchers have confirmed that employees commitment result in high job performance, nevertheless some past researchers have also found that job commitment or involvement has limited affect on employees job performance. According to Rotenberry and Moberg (2007), â€Å"research finding a significant impact of job involvement on employee performance has met limited success (e.g. Brown, 1996; Brown and Leigh, 1996; Diefendorff et al., 2006 and Vroom, 1962)†. Diefendorff et al. (2002) stated that â€Å"research has been limited for two reasons. Specifically, they asserted that past studies had predominantly used inferior measures of job involvement, which led to their insignificant findings. In addition, Diefendorff et al. (2002) argued that the performance domain assessed in those previous studies needed to be expanded in order to ascertain job involvements true impact on performance at work. The researchers tested the validity of these propositions, but called for additional research in the area paying particular attention to theory development regarding the job involvement-performance relationship†. 2.5 Past Research on Job Design Affecting Job Performance Job design is the method of arranging various work elements in forming a job that suit the employees. Job design identifies what work must be performed to be precise, the content of the job, how it will be performed, where it is to be performed and the competencies required by the person who will perform it. Job design also facilitates the achievement of organizational goals and performance of the work the job was established to accomplish (Sharon, 1998). Job design is also important to avoid employees dissatisfaction. The design of the job must follow the organisations and employees requirement including the health and safety requirement. Besides, job design implementation includes methods such as job enlargement, job rotation, job enrichment and job simplification. The first, job enlargement, can be used to increase motivation by giving employees more and varied tasks. Tasks that reduce the amount of specialization required by the employee, as well as, extending the length of time he or she has to complete them. The second, job rotation, allows an employee to work in different departments or jobs in an organization to gain better insight into operations. This, in itself, does not modify or redesigns the employees job, but allows the opportunity to increase his/her skills and knowledge about other jobs. Job enrichment, the third method, allows the employee to take on some responsibilities normally delegated to management. The risk here is that the employee would be transferred too much responsibility and autonomy in the planning and control aspects of the job. Done right, however, the newfound control would invigorate the employee to work more effectively and thus increased it