The Lumbini Journal of Business and Economics

Editorial Note Vol.11(2)

Pitambar Sapkota — Sun, 31 Dec 2023 00:00:00 +0000

The Volume XI, No.2 issue of “The Lumbini Journal of Business and Economics”, is ready now for catering the need of this time from Lumbini Banijya Campus.

I would like to take this privilege today to share with you that the Research and Development Department of Lumbini Banijya Campus is rigorously dedicating for the enhancement of quality research in this region. The small step from LBC would ultimately add value to all the researchers to conduct their research works.

We the entire editorial team expresses sincere gratitude to the respective contributors who not only contributed their invaluable research paper but also provides critical appreciative comments to bring the journal lively.

The team also expresses sincere thanks to president, Campus Management Committie of LBC Mr. Motilal Pandey, Campus Chief Prof. Dr. Tara Prasad Upadhaya, all reviewers, all the falculties, staffs and students of LBC for the supportive attitude to bring this issue into final form.

The Vol. XI, No.2 issue contains altogether eight research papers of diffrent flavour to cater the needs of current business and economic environment of Nepal as well as International arena.

We the editorial team left no stone unturned to make this issue completely free from errors but you know that “TO ERROR IS HUMAN” so if you point out and suggest us then that would be our positive direction for the future.

I offer sincere thanks to all my team members of editorial board for their great support to bring the issue in the hand of readers.

Editor-in-Chief
December, 2023

Organizational Learning and Performance of Nepalese Banks

Bharat Bhusal — Sun, 31 Dec 2023 00:00:00 +0000

This study delves into the significance of organizational learning in Nepalese public and private banking institutions, with a focus on understanding its impact on operational efficiency. Employing a Structural Equation Modeling (SEM) approach, the research scrutinizes the relationship between organizational learning and bank performance, utilizing primary data gathered through a descriptive methodology. Drawing from a sample of 3 public and 11 private banks, encompassing 560 questionnaires with 40 respondents from each institution, the investigation reveals a substantial and positive correlation between organizational learning and the performance metrics of banks in Nepal. These findings underscore the importance of fostering organizational learning initiatives, suggesting profound implications for enhancing operational efficiency and effectiveness within the Nepalese banking sector. Moreover, the research underscores the pivotal role of organizational learning as a fundamental driver of capable functioning in both public and private sector banks. By elucidating the symbiotic relationship between organizational learning achievements and banking performance, the study advocates for managerial attention towards cultivating a learning-oriented atmosphere within these financial entities. Ultimately, the study emphasizes the intrinsic value of organizational learning as a strategic force for enhancing the performance dynamics of Nepalese banks, advocating for sustained managerial investment in nurturing a culture conducive to continuous learning and knowledge acquisition.

Empowering Women through Microfinance: Catalizing Societal Transformation via Entrepreneurship

Pramshu Nepal — Sun, 31 Dec 2023 00:00:00 +0000

Microfinance has emerged as a transformative tool addressing financial needs, especially for marginalized communities with a focus on empowering women. This study investigates the impact of microfinance on women’s entrepreneurship and societal transformation via entrepreneurship in Butwal sub-metropolitan city emphasizing decision-making, effectiveness, lifestyle changes, and the reduction of domestic violence and gender inequality. Surveying 100 women entrepreneurs, the study reveals significant positive effects of microfinance. It empowers women in decision-making, enhances effectiveness, uplifts living standards, promotes investments, and reduces domestic violence. Microfinance fosters entrepreneurship, challenges patriarchal norms, and contributes to economic growth and social change. Correlation analysis demonstrate strong associations between women entrepreneurship development and other variables. The findings underscore the vital role of microfinance in women’s empowerment and economic development. Policymakers need to prioritize regulatory support and targeted interventions to sustain and enhance the microfinance sector, ensuring inclusive economic growth and empowerment of women entrepreneurs.

Effects of Social Media Information on Intention to Invest in Nepalese Capital Market

Nabina Aryal — Sun, 31 Dec 2023 00:00:00 +0000

The study has aimed to utilize the Theory of Planned Behaviour (TPB) to understand the investment intentions of potential individual investors in Nepal and explore the implications of online social media on their inclinations to invest in the capital market. The data were collected from 383 respondents through scheduled questionnaires and analyzed using the Statistical Package for the Social Sciences (SPSS), the study finds subjective norms, preference for innovation, risk-propensity, and perceived risk positively influence investment intention, however, attitude towards information has no effect on investment intention. The findings provide valuable insights for investors in Nepal to consider subjective norms, innovation preferences, risk propensity, and perceived risk when making investment decisions in the capital market.

Factors Influencing Tax Compliance Behavior among the Industries of Butwal Industrial Estate

Durga Prasad Dumre, Lalit Man Shrestha — Sun, 31 Dec 2023 00:00:00 +0000

This study attempts to investigate the factors influencing tax compliance behavior in all the industries with the number 72 of Butwal Industrial Estate (BIE) to determine whether taxpayers perceived fairness, social norms, accounting practice, and government fiscal responsibility affect the tax compliance behavior of the owners of the BIE. The questionnaire was distributed to all industries of BIE. Where 46 only responded. Cross-sectional survey research design was used, and data was obtained from primary sources. The results have been drawn by using descriptive and inferential statistics. The study’s findings show that accounting practice and government fiscal responsibility have a significant relationship with tax compliance behavior in BIE and an insignificant relationship between social norms and taxpayers’ perceived fairness in tax compliance. The study recommends that BIE owners ensure that their accounting record system is correct and that the government is allowed to use tax revenue for the benefit of society.

Foreign Direct Investment and Economic Growth of South Asia

Suresh Sapkota, Dilli Raj Gautam — Sun, 31 Dec 2023 00:00:00 +0000

The study aims to investigate the effect of foreign direct investment on the economic growth of four countries in South Asia. The inflow of foreign direct investment, inflation, and public expenditure used as independent variables. Whereas economic growth rate used as a dependent variable. All variables are based in current price and data has been collected from the source of World Bank from the fiscal year 2000 to 2022 A.D. Considering the large amount of public expenditure in the South Asian Countries in 2022 AD, Four countries viz. India, Bangladesh, Pakistan, and Nepal were selected to collect the data. Panel regression has been used for effect analysis. Empirical study shows that there is a positive and statistically significant effect of foreign direct investment on economic growth. However, public expenditure has positive but insignificant effect as well as inflation has a negative and statistically insignificant effect on economic growth.

Internal Control System and Financial Performance of Saving and Credit Cooperatives

Tulshi Prasad Bhusal — Sun, 31 Dec 2023 00:00:00 +0000

The study aims to assess the effect of the internal control system on the perceived financial performance of saving and credit cooperatives. Internal controls were measured using four elements (i.e. control environment, risk assessment, control activities, and information and communication) as prescribed by the Tedway Committee of Sponsoring Organizations (COSO) framework. Perceived financial performance has been measured through the increase in ROA, ROE, deposit and lending, liquidity and EPS. A descriptive and casual comparative research design was adopted to describe the relationship and effect between the elements of internal control system and financial performance. Out of 86 saving and credit cooperatives registered under the legislative area of Butwal Sub-Metropolitan city, only 38 has been considered as sample. A structured questionnaire on 5 point likert scale ranging from strongly disagree to strongly agree has been adopted. The findings of the study has revealed that the SACCOs (Shaving and Credit Co-operative enjoy a sound financial performance partly because of implementing and maintaining effective internal control system.

Effect of Religious Belief, Mental Relaxation and Cultural Enjoyment on Behavioral Intention of Tourists to Visit Lumbini, Nepal

Sandhaya Kafley — Sun, 31 Dec 2023 00:00:00 +0000

The purpose of the study is to assess the effect of religious beliefs, cultural enjoyment, and mental relaxation on the behavioral intention of religious tourists in Lumbini. Data for the study were collected from three hundred and eighty-four respondents in Lumbini, comprising both domestic and international religious tourists. The Ordinary Least Squares Method (OLS) was adopted to analyze the collected data. Similarly, Karl Pearson’s coefficient of correlation technique was used to measure the correlation between religious belief, cultural enjoyment, mental relaxation, and behavioral intention. The correlation results show a moderate level of relation between the variables. The findings of the study reveal a significant effect of religious belief, cultural enjoyment, and mental relaxation on the behavioral intention of religious tourists at Lumbini. Religious beliefs have a higher influence on the behavior of the tourists than the other two variables.

Impact of Macroeconomic and Bank-Specific Variables on the Profitability of Commercial Banks in Nepal

Bhojendra Kunwar, Govind Jnawali — Sun, 31 Dec 2023 00:00:00 +0000

The study aims to investigate how macroeconomic and bank-specific factors affect Nepalese commercial banks’ profitability. The panel data were collected from 16 Nepalese commercial banks for the fiscal year 2006/07 to 2020/21. The bank’s profitability is measured by net interest margin (NIM) and return on assets (ROA). The bank-specific variables considered in this study are bank size, capitalization, credit risk, deposit-to-total-assets ratio, capital adequacy ratio, and credit-to-deposit ratio. In addition, interest rate, broad money supply, inflation rate, and growth rate of the GDP are used as macroeconomic independent variables. The results of random effect model showed that the most significant bank-specific factor influencing Nepalese commercial banks’ profitability is bank size. Furthermore, the results reveal that the bank-specific factors namely bank size, credit risk, deposit-to-total assets, capital adequacy ratio, and credit-to-deposit ratio significantly increase net interest margin (NIM). Regarding the macroeconomic factors, the findings have explored that interest rates, inflation, economic growth, and the size of the money supply all significantly affect NIM. However when it comes to ROA, the data demonstrate that, aside from interest rate, all macroeconomic factors significantly affect the bank’s profitability as determined by ROA.