Type 2 Diabetes Symptoms, Treatment, And Cure - 1798 Words

Type 2 diabetes is known as mature onset diabetes. It is a chronic disease that develops when the pancreas cannot produce enough insulin. Therefore, the amount of glucose in the blood stream is high. This research paper explains type 2 diabetes. It focuses on what it is, the prevalence in the United States, causes, symptoms, treatment, and cure. However, it will start by introducing diabetes in general. Diabetes Review When food reaches the digestive track, it transforms into glucose. That is a simple sugar. It is absorbed by the stomach and intestine and then it enters to the blood stream. When it is in the blood stream, the sugar level of our body rises. This gives signals to the pancreas, resulting in the liberation of the hormone called insulin. This hormone is very important because it helps glucose to reach important parts of the human body, such as the liver, muscles and adipose tissue or fat. It is also necessary because it helps to maintain sugar levels of our body. When the Pancreas does not produce insulin, the blood sugar level rises and glucose cannot reach the liver, muscle, and adipose tissue. This defect is called diabetes. The international Expert Committee in their article â€Å"International Expert Committee Report On The A1c Assay In The Diagnosis Of Diabetes† states that â€Å"Diabetes is a disease characterized by abnormal metabolism, most notably hyperglycemia, and a n associated heightened risk for relatively speciï ¬ c long-term complicationsShow MoreRelatedDiabetes Mellitus : A Disease1369 Words   |  6 PagesDiabetes Mellitus Diabetes is a disease that afflicts approximately 29.1 million American people and is ranked as the 7th leading cause of death in America (â€Å"Statistics About Diabetes†). Thus, understanding and studying this disease has the potential to help better many lives. A patient living with diabetes, or a parent of a child with diabetes all benefit from understanding and learning how to live with this disease, what risk factors to look for and how to adjust life style choices to help preventRead More Types I and II Diabetes1085 Words   |  5 PagesThere are some diseases people can overcome with the right treatment; however, there are some diseases that are a life long battle even with a treatment. An excellent example is diabetes. There are two types of diabetes. Type 1 diabetes is diagnosed during childhood or adolescence. Type 2 diabetes is diagnosed in adulthood. Type 1 diabetes is important but it only affects a small amount of the population mainly adolescence while Type 2 diabetes affects a large portion of the population making it moreRead MoreDiabetes Mellitus ( Dm )1258 Words   |  6 PagesDIABETES Diabetes mellitus (DM), referred to as diabetes is a group of metabolic diseases in which there are high blood sugar levels over a prolonged period. Symptoms of high blood sugar include frequent urination, increased thirst, and increased hunger. If left untreated, diabetes can cause many complications. Diabetes is due to either the pancreas not producing enough insulin or the cells of the body not responding properly to the insulin produced. There are three main types of diabetes mellitusRead MoreSymptoms And Treatment Of A Fever878 Words   |  4 PagesA fever is also a symptom of Influenza as the body attempts to fight the illness off it has to raise its temperature to higher than that of the normal body temperature, 37.5 degrees Celsius. The body does this in order to kill off any bacteria or virus, as it struggles to survive in any temperature above 37.5 degrees Celsius. With the bodies temperature being higher, the liver and spleen stop the production of iron levels, leading t he body to be able to fight off bacteria as it cannot survive inRead MoreDiscussion on Otitis Externa1050 Words   |  5 Pagesproblems or serious complications, the infection is responsible for significant pain and acute morbidity. Prompt diagnosis and appropriate therapy cure the majority of cases without complications, however, patients who are diabetic, immunocompromised, or untreated may develop necrotizing OE, a potentially life-threatening. (Medscape 2014). Primary treatment of otitis externa involves management of pain, removal of debris from the external auditory canal, administration of topical medications to controlRead MoreDiabetes Mellitus And Type 2 Diabetes Essay1301 Words   |  6 PagesDiabetes mellitus, known as â€Å"diabetes† is a grouping of metabolic diseases that present, over a long period of time, levels of high blood sugar. There are two main forms of diabetes: Type 1 Diabetes Mellitus and Type 2 Diabetes Mellitus. In addition to these two, there is also what is called Gestational Diabetes. In all cases, insulin is somehow not doing its job: Insulin is a hormone produced by beta cells of the pancreas, and is needed to allow glucose to enter the cells and produce energy. IfRead MoreDiabetes : An Endocrine System Disorder1210 Words   |  5 PagesDiabetes mellitus, or better known as Diabetes, is an endocrine system disorder. In this case, your body is unable to produce enough or any insulin at all. Insulin, produced by the pancreas, has a very important role. When sugar is ingested from food, it is turned into energy for the cells in our body. Without insulin, the transfer of sugar into the cells would be compromised. Insulin is also vital to keep the right balance of sugar in the bloodstream (Hess-Fischl, 2015). If too much insulinRead MoreType 1 Diabetes On Children Essay1011 Words   |  5 Pag es Type 1 Diabetes In Children Kathy Miron Beckfield Mrs. Rebecca Barner December 2, 2016 Type 1 Diabetes In Children Helen Keller once said, â€Å"All the world is full of suffering. It is also full of overcoming.† Throughout life each person will face obstacles, but will only be defined by how they overcome or fail. In today’s society health and wellness has become such a challenge. Many things in our environment, social status, financial position, and culture can affect what we eat and ourRead MoreDiabetes Leading Cause of Chronic Death1738 Words   |  7 Pagesâ€Å"Diabetes is one of the leading chronic causes of deaths in children and adolescent’s in the United States. Diabetes mellitus is a group of diseases that is characterized by high levels of glucose in the bloodstream, resulting from defects in insulin production, insulin action or even both† (Overview, 1). â€Å"Diabetes is a serious health issue and can be associated with premature death or serious complications. Timely diagnosed treatment of diabetes can delay or prevent any onset of long-term complic ationsRead MoreDiabetes : Symptoms, Causes, And Treatments1528 Words   |  7 PagesWhat is diabetes? Diabetes, also referred by doctors as diabetes mellitus, in simple words meaning people have too much sugar in their blood stream, or in medical terms, high blood glucose (blood sugar). The reason why people have diabetes because people’s insulin production is not enough, or because their body s cells do not respond properly to insulin, or in some cases, both could be the case. Patients with high blood sugar will most likely experience polyuria (frequent urination), they will

The Digestive System and Digestive Process Essay

Essays on The Digestive System and Digestive Process Essay The paper "The Digestive System and Digestive Process" is a wonderful example of an essay on biology. Different types of foods come along with different nutrients such as vitamins, carbohydrates, fats, minerals, and proteins. These nutrients are often a source of energy and material to the body cells. The problem is that most of these nutrients cannot be used by the body for energy in the form in which they are eaten. Hence, before these nutrients are absorbed and carried to the body cells, they need to be broken out and changed into smaller, usable pieces. This is the work of the digestive system with the help of the digestive organs. The digestive process is a rigorous task carried out by the digestive organs working together in the digestive system (Hoffman, 53). Of concern is whether it is possible to live without one or more of the digestive organs.   Each and every digestive organ has its own distinctive role. For this reason, it is impossible to live without one or more digestive organisms. However, the small intestine does the most work of any digestive organ. This is the point where food is broken down by physical grinding as well as special proteins known as enzymes that work on food at the molecular level. In addition, the small intestine is where almost all of the useful nutrients are absorbed into the body. By this time, all that is left for the large intestines is waste in the form of undigested food. Other digestive organs such as the pancreas, liver, and gallbladder are not part of the twisted tube through which food travels but play important roles in the digestive system (Scott Fong, 16). Regardless of how minor a role a digestive organ contributes to the digestive system, failure to have one of the digestive organizations can lead to a digestive breakdown. Therefore, every digestive organ plays a detrimental role in digestion, and however minor it may appear, its pathology may lead to incomplete digestion.

Discuss How Shakespeare Uses Language and Dramatic Techniques Free Essays

Discuss how Shakespeare uses language and dramatic techniques for character development in Act 2 Scene 2 of Measure for Measure. Shakespeare uses a variety of linguistic devices and dramatic techniques for character development from Act 2 Scene 2 to Scene 4. We see Angelo’s precise, business-like persona transform to temptation, and final cruelty whilst we see the true, confident side of Isabella as as she attempts to convince Angelo to reverse his judgement, but eventually loses her ignorant hope on the realisation of his true ‘purpose’. We will write a custom essay sample on Discuss How Shakespeare Uses Language and Dramatic Techniques or any similar topic only for you Order Now In Act 2 Scene 2 Shakespeare portrays Angelo as precise, intelligently dealing with the pleas of Isabella to save the life of her brother by reversing the death sentence that has been handed down to him. The scene begins with the Provost and Angelo discussing Claudio’s punishment. The Provost dares to ask Angelo if he really wants Claudio murdered, ‘All sects, all ages smack of this vice, and he to die for’t! , and Angelo states that he does, ‘Did not I tell yea? Hast thou no order? Why dost thou ask again? ’. Shakespeare instantly uses dramatic technique of foreshadowing the conflict that is to follow through the sharp words exchanged between the two. Provost then asks what’s to be done with the woman he got pregnant, Juliet. Angelo still refuses to relent, and says that Juliet, who is in labour, should go to a more fitting place, away from everything that is going on ‘Dispose of her To some more fitter place’ Shakespeare’s lexical choice conveys his ruthless nature to the audience, in this context would mean ‘send her away’, but of course reading the text using more modern language; ‘dispose’ is an unpleasant word, especially when referring to a human being, where it seems incongruous, especially in reference to a pregnant woman, thus subtly foreshadowing the revealing of Angelo’s animalistic nature later in the scene. Angelo also calls Juliet a ‘fornicatress’, the harsh constanents of the name once again conjuring the theme that is constantly present through the play, that of appearance versus reality. Although Juliet appears from Angelo’s quick appraisal to be just a sinful person, her reality is far more complex; she is much better than most women of the time, she is not a prostitute or adulterer, rather her only fault was not securing a marriage contract before she slept with her fiancee. She is actually a woman of strength and principle, not the simple sinner that Angelo’s developing harsh, cruel character reduces her to. Isabella comes to see Angelo innocently, as shy as she appeared in her first scene at the nunnery, and begins to plead with him for Claudio’s life, ‘I have a brother is condemned to die. I do beseech you, let it be his fault, And not my brother’. Angelo is portrayed to be business-like and unrelenting, ‘Condemn the fault, and not the actor of it? Why, every fault’s condemned ere it be done’ but Lucio urges her to persist, encouraging her ‘Ay, touch him, there’s the vein’ acting as a kind of Greek chorus for the audience. She does, and calls upon Angelo’s pity, mercy, and moderation; she recognises that Angelo has the power to enforce the law in full, but impresses upon him that one must use power with moderation. Isabella’s strategy is a keen one, trying to persuade Angelo to have the same mercy for her brother that she has. Once again, the issue of mercy is urged upon Angelo, as is the theme of human weakness, which all, Isabella stresses, fall victim to. Her character is portrayed as increasingly canny, when she has to be; her argument is strong and persuasive, although it is not her argument that causes Angelo to relent, but his attraction to her. Isabella also touches upon the theme of use of power; ‘it is excellent to have a giant’s strength,’ she tells Angelo, ‘but it is tyrannous to use it as a giant’, making an allusion to ‘Jove’ to demonstrate her point – even the gods, with tremendous power, know how best to use their awesome abilities. This is another lesson that Angelo’s character must learn; for although he can use the law to its full extent if he wishes, he has to learn how to temper his power with mercy and heed moderation. Comparing the characters of Angelo and Isabella, one could argue that Isabella is ‘the symbol of goodness and mercy set against a background of moral decay’. Alternatively, one could see her character as self-righteous and hypocritical, as we later discover when she values her chastity higher than her brother’s life. Isabella continues arguing with Angelo until he finally relents and tells her to come back the next day to hear his judgement. Everyone leaves, and Angelo speaks a rather striking soliloquy, apparently talking to himself ‘†¦what art thou Angelo? Dost thou desire her foully for those things that make her good? ’. Thus, through Shakespeare’s staging, we learn that Angelo admits to himself that he is in love with Isabella because of her virtue and purity. Often characters in Shakespeare’s plays have soliloquies but they do not often refer to themselves in third person and when they do, it is often a sign of madness. Perhaps Shakespeare is suggesting this as a sign for Angelo. What is certain is that he is struggling with an inward battle between what he knows he should do and what he desires to do, as his develops and starts questioning the morality of his own character. It is with great irony that Isabella’s call to Angelo to mark the weaknesses in his own heart is answered by Angelo’s acknowledgement that he is tempted by Isabella. It is this temptation that brings from Angelo his first statement of mercy toward Claudio: ‘O, let her brother live! Thieves for their robbery have authority when judges steal themselves! Shakespeare shows how Angelo realises that with experience of one’s own weakness comes mercy for others’ failings; however, he soon ignores this lesson, and falls into hypocrisy in Act 2 Scene 4. In this scene, Isabella comes back the next day as Angelo had asked, and he begins by saying that Claudio must die. Isabella begins to leave, but Angelo begins to tempt her to save her brother, by offering herself i nstead. Isabella ignorantly misunderstands Angelo’s subtle sexual offer, and he is forced to tell her plainly that if she sleeps with him he will let Claudio live. Angelo accuses her of hypocrisy, and they discuss the frailty of women. In terms of character development in this scene, Angelo begins in a state of agitation, pondering why he cannot pray and with a new awareness of how the appearance of things might not be true to reality. Where before Angelo was unified in his intentions and actions, he has now become internally divided, ‘O place, O form, How often does thou with thy case, thy habit, Wrench awe from fools, and tie the wiser souls to thy false seeming! Blood, thou art blood. ’- questioning the power of authority, position and outward appearance to convince even wise men that false men are virtuous. Shakespeare uses language of coercion, ‘wrench’ and ‘tie’, and apostrophe – ‘O place, O form’ to perhaps illustrate the sophisticated and baffling nature of false appearances. Shakespeare also shows how Angelo is beginning to seduce Isabella with subtle and ambiguous lexis, but moving more and more towards blunt, harsh and animalistic discourse as the scene progresses. I have begun, and now I give my sensual race the rein’; Shakespeare shows how Angelo has almost been possessed by his animal side. This is perhaps emphasised by the use of horse imagery, ‘race the rein’, as well as the use of plosives and dentals ‘fit they consent to my sharp appetite’, drawing attention to his teeth and lips, reinforcing his sexual lust and passion for Isabella. When Isa bella enters, however, she meekly accepts Angelo’s judgement, but as the scene progresses she continues to find her voice. As Angelo descends into sensuality, she seems to become more pious and religously extreme, almost swapping roles with Angelo. ‘Th’ impression of keen whips I’d wear as rubies, and strip myself to death’ – Shakespeare uses images of love, death and falgellation to express her disgust at the idea of submitting to Angelo. Though the sentiment is spiritual, the language and images are highly physical, suggesting that her character would resist the carnal sexuality by yielding herself to more gruesome lovers: torture and death. Her innocence is also shattered by Angelo’s crass offer – she seems shocked to find out that justice might not be as perfect as it appears. Her naivety is gradually stripped away as Angelo easily overcomes her threat to expose him, and she sees that virtue does not necessarily triumph over iniquity. Yet, she still has ignorant faith in the honour of her brother, Claudio, and trusts that he will defend her honour even at the cost of his life. How to cite Discuss How Shakespeare Uses Language and Dramatic Techniques, Essays

Intraprenuers and Entreprenuers free essay sample

Intrapreneurship or also known as Corporate Entrepreneurship is the act or behaves like an entrepreneur but only in a large organisation rather than a market as a whole. Nowadays, intrapreneurship known as a practise of management that integrates risk taking and innovation. Intraprenuer is a person in a large organization who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation. The intraprenuer is basically an entrepreneur who works for a company. All business needs intraprenuers since they are considered as powerhouses in a company who creates new businesses, which keep a company or organisation moving forward. Intraprenuers also motivates colleagues and keep the profits up. Employees in an organisation like marketing executives or in other position who engaged in large project are encouraged to behave like an intraprenuer. These can be done by trying things until successful and also learning from failures. This will not expose those employees who behave like an intraprenuer to the risks that usually will affect entrepreneurs. We will write a custom essay sample on Intraprenuers and Entreprenuers or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Generally an intraprenuer focuses on innovation and creativity and also makes an idea profitable while working in an organisation. Hence, intraprenuers are referred as inside entrepreneur who tries to achieve the organisation goal. And also his or her main job is to turn the project into profitable venture. There are some intraprenuers in banks too. Intraprenuers is actually important for banking organisation since they do innovations and add revenues to organisation and also increase motivation among other intrapreneurial employees. As an intraprenuer they become a leader and not as a follower in their organisation and they become the first one when it come to get latest project rolling. In banking organisation, an intraprenuer will take risk to volunteer themselves in leading a new project. For example, Abdul Razak bin Mohammaad Dali Senior General Manager, Public Affairs Division who become a leader in Public Islamic Bank by running advertisement projects to increase Public Bank customer rate and banking revenue. An intraprenuer also need to accept changes for organisations sake. They do not afraid of new technologies or new method and processes and learn to adapt to new changes so, they don’t fall back and keep up updating their knowledge. Public Bank also occasionally undergoes changes mostly in terms of technology since they need to upgrade new technology for banking effectiveness and customer convenience. While the senior employees or intraprenuers in bank not might used to new technologies and still accept it as a major change for the bank and their career. For example, Mr Tan Teck Kong who currently working as General Manager, Information Technology Division joined Public Bank in 1983 and was appointed as a Director in 2000 to head the Bank’s IT Division. Since, he is the director of IT Division in Public Bank Mr Tan Teck Kong makes changes in Public Bank in terms of technology and did not refuse to accept the growth of the technology in the organisation. An intraprenuer also must always be ready to listen to other employee’s idea on how to improve the organisation and its finance. The employees rank in the company should not be considered but only the idea they are giving to improve the organisation. Because even an employee’s rank is not high but he or she might contribute a feasible idea about how the company should progress to improve the work progress. Then the idea should be supported after the idea is approved. There are also other campaigns and projects held in Public Bank. For example, Public Bank has launched Public Bank Esso Mobil Gold Credit Card around 2011. This card allows the card holders to enjoy 8% cash rebate at any Esso or Mobil Service Station and also bonus of 0. % for other retail purchases. Entrepreneurship is behaving or act of being an entrepreneur which is a person undertakes innovations and business in an effort to transform those innovations into economic goods. The efforts will result in creating a new organisation or sometimes revitalize an existing company. An entrepreneur is usually will be in top rank in an organisation or company like a manager or owner and make money through initiative and risk. They monitor and controls the business activities in their organisation and usually be the decision maker. An entrepreneur usually is a sole-proprietor or partner and owns equal or majority shares in a company. A successful entrepreneur has attributes like leadership skills, management skill and a very strong team building abilities. This is the key attributes that led them to success and creating a new business or company. There are many types of Entrepreneurs but we will only look into three basic or general types of Entrepreneurs. a) Social Entrepreneur – a social entrepreneur is an entrepreneur who is motivated by his/her desire to help or improve social, educational and economic conditions. This type of entrepreneurs will not give priority to profit but give importance social and economic conditions. Social Entrepreneurs will develop innovative solutions to global problems. b) Serial Entrepreneur – a serial entrepreneur is an entrepreneur who frequently comes up with new business and ideas. For instance, they will start new business and usually the business will is not related with the entrepreneur’s previous business. They give priority for profits than any other conditions. Serial Entrepreneurs have higher rate of risk, innovation and also achievement. c) Lifestyle Entrepreneur – the lifestyle entrepreneur also will not give priority to profit but places their passion when launching a business. They combine personal interests and talent with the ability to gain profits from their business. This kind of entrepreneurs may decide to be self-employed to get more personal freedom, family time and more time to work with business that inspire them. There are entrepreneurs in Malaysia who become Malaysia’s top richest people. One of the successful entrepreneurs in Malaysia is Tan Sri Dato Sri Dr. Teh Hong Piow is the Chairman of Public Bank. He is a respected entrepreneur with banking career experience of more than 60 years. He starts his banking career in 1950 as a Bank Clerk in Overseas-Chinese Banking Corporation Limited. He then quickly promoted to rank officer in just five years. This shows his skills in banking and how hardworking person he is. He then later joined as Manager in Malayan Banking Berhad in 1960. Tan Sri Teh later he was promoted to the position of General Manager at a young age of 34 which is on 1964. On 1966, Tan Sri Dato Sri Dr. Teh Hong Piow founded Public Bank after he left Malayan Banking. Since then he worked so hard to develop his business into a modern and financial institution. He made the Public Bank with a wide network of 251 domestic five overseas branches.

Affirmative Action Essays (1461 words) - Social Inequality, Politics

Affirmative Action Affirmative Action Treating people differently because of the color of their skin used to be called discrimination, but today it's called affirmative action (Amselle 177). Affirmative action today, is considered to be one of the most controversial dilemma facing our equal status of individual rights. As we all know, affirmative action was implemented with the idea and hope that America would finally become truly equal. So far, it has lasted for thirty years and had not solved any of our current problems concerning equal rights ? it made things worse. It was created with the intention of using reverse discrimination to solve the problem of discrimination. In that, minority groups are being chosen over the qualifications of other workers. This intention creates a mainstream of problems. Some find it very unfair in using its practices, some find it very helpful. The portion of the group that stands with affirmative action, are usually in a situation in which they actually benefited from it. They have their reasons as to why they support the action. Based on the general public as to why they acknowledge affirmative action is usually based of the fact that it establishes a situation where equal opportunity is distributed among minorities for jobs. Prior to affirmative action ? city, state, and government jobs were almost completely closed off to minorities and women. In our present day, minorities and women have gained a tremendous increase in the application of jobs in those workplaces. Unlike the days before affirmative action, where job opportunity was mostly given to the Americans, now jobs are being given to minorities and women due to the quota system. Suppose that a American male and a minority (Hispanic, Afro-American, woman, etc.) are applying for the same job, the American male is much more qualified than the minority, there! fore, logically, the American should be hired. Due to the quota system, the company, in order to meet that quota, must hire the minority. Which is for the better, because, in that sense, were are slowly but surely making some advancements in solving the problem of racial inequality in America's workplace. Affirmative action is also very influential in the educational system. Minority students who before never had a chance in being accepted into a decent college, are now being accepted. They are given the chance to prove that, with the help of affirmative action, they could, in turn, get more education and end up with a decent job after graduating. All hopes are to end racism in school campuses, to have diversity between students. The constitution says that we the people of the United States of America are all created equal. Therefore, since that we are all equal, shouldn't we all have the same opportunity as everyone else. Equal opportunity is achieved when people of lower standards in life are given chances to succeed in life. To start to achieve a better life, one must have proper education, because education is the key to our future. Therefore, though education, minorities must be given the chance to get a good start at securing their future. Critics of affirmative action argue that this quota is unfair. White males are being forced to pay a price that their ancestors have done wrong in the past. Knowingly that it was a long time ago, and that now, it is a dawn of a new era. White males should not be given this burden of something that their ancestors have done. While the minorities enjoy the benefits such as jobs and education. Especially, to give favor to males or to females, to whites, to blacks or to persons of any color because of their sex or color is morally wrong because doing so is intrinsically unfair. Color, nationality, sex are not attributes that entitle anyone to more (or less) of the good thing of life, or to any special favor (or disfavor). When in the past whites or males did receive such preference that was deeply wrong; it is no less wrong when the colors or sexes are reversed. (Cohen 183) In the workplace, critics argue that because of affirmative action, now they are being treated unequally. Jobs in which they are more likely to succeed in

germ line gene therapy essays

germ line gene therapy essays Whether it is referred to by its scientific term "syngamy" or by the general term "conception", the moment a sperm cell unites with an egg cell stirs, both in the scientist and the layperson, much awe and reverence. It is the point at which a new and unique genome is created. To some it is the instant a new person comes into existence. Such a union has been repeated for billions of years since its advent in the first, simple organisms. It is a means by which evolution can exert its influence. When the genetic material of two individuals combine in sexual reproduction, any variations between the two inherited sets of genes may result in offspring that are more or less suited to its environment. Human beings have come to a point in this process where we can now, to an extent, shape the environment to suit our needs. The evolution of intelligence in our specie is the characteristic that has had the most profound impact on our planet and on us. This intelligence, among other things, allows us to understand and combat some genetic diseases. Inventions such as spectacles to correct our vision or drugs that fight heart disease and cancer have extended and improved the lives of individuals who, in a more Darwinian world, would have otherwise been eliminated by natural selection. Cheating this process, however, has allowed a multitude of genetic diseases such as Tay Sachs and hemophilia to propagate in our gene pool. But researchers are taking the field of medicine to a new frontier that promises to eliminate genetic diseases. New technology is being developed that will allow scientists to alter or replace defective genes in germ-line cells (egg and sperm cells). In a literal sense it will allow us to control the evolution of our specie as these alterations may be passed on from generation t o generation. The implications are profound for the individual and for society. Above it all the specter of eugenics, the process of se...

Read story and answer question Case Study Example | Topics and Well Written Essays - 250 words

Read story and answer question - Case Study Example She appears to be irritated by the way some ignorant people try to trace her roots, not to the country or culture, but to the person in the family who was originally fair complexioned. The stylistic devices used in the essay are irony and conflict to deepen the meaning. â€Å"We mixed-raced people know what you really mean. You dont want to know where we were born or where we grew up. You dont want to know what kinds of regimes we lived under or what languages we speak. You want to know who in our family isnt white.†What might have been an inquisitive person’s innocuous question aimed at knowing the person better is taken as an offense by the author. â€Å"Yet because my skin isnt white, some people think its entirely acceptable to hound me about my so-called identity. People who dont know me, dont want to know me, who will never see me again. People who just need to know so that they know. And if youre one of these people, Ill tell you that Im from Vanya.† This sentence clearly reflects the conflict in the mind of the author. The author should have the necessary confidence to brush these remarks casually and go on with life, rather than allow ing such remarks or incidents to hurt

Chronic Kidney Disease Term Paper Example | Topics and Well Written Essays - 2500 words

Chronic Kidney Disease - Term Paper Example For these reasons, chronic kidney disease is considered a disease because it affects the health of an individual. Chronic kidney disease is a chief health concern problem because the prevalence of the disease grows at a yearly rate of 8%, and expends 2% of the worldwide health spending (Là ³pez-Novoa, Martà ­nez-Salgado, Rodrà ­guez-Peà ±a, & Là ³pez-Hernà ¡ndez, 2010). In the United States, about 13% of the populace suffers from this condition. As the prevalence of chronic renal disease rises, health care providers are tasked with the management of the multifaceted medical complications that patients with CKD face. This paper takes a detailed look at the pathophysiology, causes, symptoms and management of chronic kidney disease. The central role of the kidney is to sift nitrogenous wastes from ingested food and metabolic activities, as well as surplus fluids from the blood. The kidneys, therefore, play an important role in fluid and electrolyte balance. The nephron is the elementary working component of the kidney. A normal kidney has about one million nephrons. Each nephron possesses a clump of glomerular capillaries called the glomerulus where the filtration of blood takes place. The nephron also has a lengthy tubule where the filtered fluid is transformed into urine as it is transported into the pelvis (Guyton & Hall, 2006). The renal arteries branch into interlobar arteries and two other arteries and finally into afferent arterioles that supply the glomerulus in the nephron through the glomerular arterioles, which join together to form the efferent arterioles that exit the glomerulus. Urine, which carries the waste products filtered by the kidney is produced in three main phases namely ultrafiltration, reabsorption and secretion. The kidneys also excrete strange chemicals, drug substances and metabolites produced from hormones. Such substances include urea from the metabolism of amino acids and creatinine

Assignment Essay Example | Topics and Well Written Essays - 1250 words - 3

Assignment - Essay Example Still, the Police may be able to pin both of the individuals for drug trafficking and possession if they have seen marijuana in plain sight and if it is not the case then, the seizure and search took place in the given scenario is not admissible to the court of law. The couple can only be prosecuted for violating customs check. Q.2 The need to practice due diligence is applicable in this case because Tangelo was well aware of the dangers that were associated with watching a baseball game (Jennings pp.300). Additionally, she had read the statement behind the tickets which relieved the organization from any kind of liability for an incident that may take place during the games and that formed a tort. Furthermore, the featured organization had taken preventive measure in order to contain the ball and the punching of a hole in the net can be identified as a mere coincident. The whole incident can be presented as a consequence of a decision to go and watch a game while; the injured party was having knowledge of the risks and therefore, cannot claim successfully for damages in the court of law. The court might decide to apply ordinary damages in this regard. Q.3 The purchaser has already conditionalized its performance with a favorable outcome of an event and therefore, the condition of obtaining a loan from the bank was a valid part of the contract that was signed by both parties (Jennings pp.35). The claim of specific performance is invalid because the purchasing party stated a condition that has to be fulfilled before a contract can be practiced. The seller however, can claim damages and specific performance against the involved bank whose manager did not supply the seller with a loan on a personal conflict. If the bank’s incapacity to loan the seller is legally justified then the charges will be dropped. Q.4 The environmental laws are growingly applied in order to preserve natural habitat of earth and therefore, the companies are strongly being recommended to take stronger measures towards returning to the environment what they have taken from it previously. Additionally, the companies that have become sensitive in the direction of preserving natural environment over the past few years are now adding environmental costs while, performing strategic decision making (Esty pp. 25). The governments on the hand are applying environmental taxation on firms that are known to pollute the environment in abundance. Finally, the companies like Herman Miller, FedEx and McDonalds have been cited in the book with the title of â€Å"Green to Gold† for their exceptional level of strategic dedication for environmental safety. Q.5 The companies are liable for the safety of their employees under the US labor law. The excuse that Nick was operating the crane in an inappropriate way means that he is either incapable or poorly trained. In both of the cases organization is at fault because either they are making an untrained or poorly trained person to run the crane. The company should have known about Nick’s poor ability to manage crane. Based on the above argument, Nick is fully capable and eligible to receive damages and treatment expenses from his employer. Q.6 The pay structure is determined on the basis of one’

Impacts on Agency Cost Theory

Impacts on Agency Cost Theory The main purpose of this research is to investigate how the determinants of the capital structure (leverage) and the dividend payout policy impact the agency cost theory. Literature review part picked up the relevant material related to agency theory, leverage, and dividends payout policy. The literature review section goes through the agency cost literature, and explores the financial policies; the capital structure (leverage), and the dividend payout policy and that these policies would influence the agency cost theory. 2.1 Agency theory Literature The notion of the agency theory is widely used in economics, finance, marketing, legal, and social sciences; Jensen and Meckling (1976) initiated and developed it. Capital structure (leverage) for the firms is determined by agency costs, i.e., costs related to conflict of interests between various groups including managers, which have claims on the firm’s resources (Harris and Raviv, 1991). Jensen and Meckling (1976) defined the agency relationship as â€Å"a contract under which one or more persons (the principal) engage another person (the agent), to perform some service on their behalf which involves delegating some decision making authority to the agent† pp.308. Assuming that both parties utility maximizes, the agents are not possible to act in the best interest of the principal. Furthermore, Jensen and Meckling (1976) contended that the principal can limit divergences from his interest by establishing appropriate incentives for the agent, and by incurring monitoring costs (pecuniary and non pecuniary), which are designed to limit the aberrant activities of the agent. Jensen and Meckling (1976) argued that the agency costs are unavoidable, since the agency costs are borne entirely by the owner. Jensen and Meckling (1976) contended that the owner is motivated to see these costs minimized. Authors who initiated and developed the agency theory have argued that if the owner manages a wholly owned firm, then he can make operating decisions that maximise his utility. The agency costs are generated if the owner manager sells equity claims on the firms, which are identical to his.  It also generated by the divergence between his interest and those of the outside shareholders, since he then bears only a fraction of the costs of any non-pecuniary benefits he takes out maximizing his own utility (Jensen and Meckling, 1976). Jensen and Meckling (1976) suggested two types of conflicts in the firm; First of all, the conflict between shareholders and managers arises because managers hold less than a hundred percent of the residual claim. Therefore, they do not capture the entire gain from their profit enhancement activities, but they do bear the entire cost of these activities. For example, managers can invest less effort in managing firm resources and may be able to transfer firm resources to their own, personal benefit, i.e., by consuming â€Å"perquisites† such as a fringe benefits. The manager bears the entire cost of refraining from these activities but captures only a fraction of the gain. As a result, managers over indulge in these interests relative to the level that would maximize the firm value. This inefficiency reduced the large fraction of the equity owned by the manager. Holding constant the manager’s absolute investment in the firm, increases in the fraction of the firm financed by debt increases the manager’s share of the equity and mitigates the loss from conflict between the managers and shareholders. Furthermore, as pointed out by Jensen (1986), since debt commits the firm to pay out cash, it reduces the amount of free cash flow available to managers to engage in these types of interests.  As a result, this reduction of the conflict between managers and shareholders will constitute the benefit of debt financing. Second, they also suggested that the conflict between debt holders and shareholders arises because the debt contract, gives shareholders an incentive to invest sub optimally. Especially when the debt contract provides that, if an investment yields large returns, well above the face value of the debt, shareholders capture most of the gain. However, if the investment fails, debt holders bear the consequences. Therefore, shareholders may benefit from investing in very risky projects, even if they are under valued; such investments result in an adverse in the value of debt. Lasfer (1995) argued that debt exacerbates the conflict between debt holders and shareholders. Shareholders will benefit from investments in risky projects at the expense of debt holders.  If the investment yields higher return than the face value of debt, shareholders capture most of the gain, however, if the investment fails, debt holders lose, given that. Therefore, shareholders protected by the limited liability. On the other hand, if the benefits captured by debt holders reduce the returns to shareholders, then an incentive to reject positive net present projects has created. Thus, the debt contract gives shareholders incentives to invest sub optimally. In addition, Myers (1977) argued that the firms with many growth opportunities should not be financed by debt, to reduce the negative net value projects.   Furthermore, some of arguments have been debated that the magnitude of the agency costs varies among firms. It will depend on the tastes of managers, the ease with which they can exercise their own preferences as opposed to value maximization in decision making, and the costs of monitoring and bonding activities. Therefore, the agency costs depend upon the cost of measuring the manager’s performance and evaluating it (Jensen and Meckling, 1976). (Jensen, 1986) either points out that when firms make their financing decision, they evaluate the advantages that may arise from the resolution of the conflicts between managers, shareholders and from long run tax shields.   In addition, Lasfer (1995) argues that debt finance creates a motivation for managers to work harder and make better investment decisions. On the other hand, debt works as a disciplining tool, because default allows creditors the option to force the firm into liquidation. Debt also generates information that can be used by investors to evaluate major operating decisions including liquidation (Harris and Raviv, 1990). Jensen (1986) debated that when using debt without retention of the proceeds of the issue, bonds the managers to meet their promise to pay future cash flows to the debt holders. Thus, debt can be an effective substitute for dividends. By issuing debt in exchange for stock, managers are bonding their promise to pay out future cash flows in a way that cannot be accomplished by simple dividend increases. Consequently, managers give recipients of the debt the right to take the firm to the bankruptcy court if they do not maintain their commitment to make the interest and principle payments. Thus, debt reduces the agency costs of free cash flow by reducing the cash flow available for spending at the discretion of managers. Jensen (1986) claimed that these control effects of debt are a potential determinant of capital structure. In practice, it is possible to reduce the owner manager non pecuniary benefits; by using these instruments external auditing, formal control systems, budget restrictions, and the establishment of incentive compensation systems serve to identify the manager’s interests more closely with those of the outside shareholders (Jensen and Meckling, 1976). Jensen (1986) suggested that leverage and dividend may act as a substitute mechanism to reduce the agency costs. Agency cost models predict that dividend payments can reduce the problems related to information asymmetry. Dividend payments might be consider also as a mechanism to reduce cash flow under management control, and help to mitigate the agency problems (Rozeff, 1982, and Easterbrook, 1984). Therefore, paying dividends may have a positive impact on the firms value. â€Å"Agency theory posits that the dividend mechanism provides an incentive for managers to reduce the costs related to the principal agent relationship, one way to reduce agency costs is to increase dividends† Baker and Powell (1999). They also claim that firm use the dividends use as a tool to monitor the management performance. Moreover, Easterbrook (1984) and Jensen (1986) argue that agency costs exist in firms because managers may not always want to maximize shareholder’s wealth due to the separation of ownership and control. Jensen (1986) addresses the free cash flow theory, in terms of this theory the conflict of interest between managers and stockholders is rooted in the presence of informational and self interest behavior. He defines the free cash flow as â€Å"cash flow in excess of that required to fund all projects that have positive net present value when discounted at the relevant cost of capital† (Jensen,1986). Within the context of the free cash flow hypothesis, firms prefer to increase their dividends and distribute the excess free cash flow in order to reduce agency costs. Consequently, markets react positively to this type of information. This theory is attractive because it is consistent with the evidence about investment and financing decisions (Jensen, 1986, Frankfurter and Wood, 2002). 2.2 Leverage Literature This section reviews the determinants of capital structure by different relevant literatures. Titman and Wessels (1988) study is considered to be one of the leading studies in the developed markets. They tried to extend the empirical work in capital structure theory by examining a much broader set of capital structure theories, and to analyze measures of short term, long term, and convertible debt. The data covers the US industrial companies from 1974 to 1982, and they used a factor analytic approach for estimating the impact of unobservable attributes on the choice of corporate debt ratios. As a result, the study confirms these factors, collateral values of assets, non-debt tax shields, growth, and uniqueness of the business, industry classification, firm size, and firm profitability. They also found that there is a negative relationship between debt levels and the uniqueness of the business. In addition, short term debt ratios have a negative relationship to firm size. However, they do not provide support for the effect on debt ratios arising from non debt tax shields, volatility, collateral value of assets, and growth. In Jordan, Al-Khouri and Hmedat (1992) aimed to find the effect of the earnings variability on capital structure of Jordanian corporations from the period from 1980 to 1988. They included 65 firms. The study used a multivariate regression approach with financial leverage as the dependent variable measured in three ways; first, long term debt over total assets, secondly, short term debt over total assets, and finally, short term debt plus long term debt over total assets. The standard deviation of the earnings variability and the size of the firm measured as independent variables. They concluded that the firm size is considered as a significant factor in determining the capital structure of the firm, and insignificant relationship between the earning variability and financial leverage of the firm. Furthermore, they suggest that the type of industry is not considered as a significant factor in determining the capital structure of the firm. Rajan and Zingales (1995) provided international evidence about the determinants of capital structure. They examined the capital structure in other countries related to factors similar to those that influence United States firms. The database contains 2583 companies in the G7 countries. They used regression analysis with the firm’s leverage (total debt divided by total debt plus total equity) as the dependent variable. Tangible assets, market to book ratio, firm size, and firm profitability used as independent variables. They found that in market bases firms with a lot of fixed assets are not highly levered, however, they supported that a positive relationship exists between tangible assets, and firms size, and capital structure (leverage). On the contrary, they confirmed that there is a negative relationship between leverage and the market to book ratio, and profitability. From the capital structure literature, Ozkan (2001) also investigated that the determinants of the target capital structure of firms and the role of the adjustment process in the UK using a sample of 390 firms. The multiple regression approach (panel data) was used to measure the debts by total debt to total assets, on the one hand. He also used in his model, non debt tax shield, firm size, liquidity, firm profitability, and firm growth as an independent variables. He confirmed that the profit, liquidity, non debt tax shield, and growth opportunities have a negative relationship to capital structure (leverage). Finally, he supported that there is a positive effect arising from size of firms on leverage. The study provided evidence that the UK firms have long term target leverage ratios and that they adjust quickly to their target ratios. The study by Booth et al. (2001) is considered as a one of the leading studies in the developing countries. It aimed to assess whether capital structure theory is applicable across developing countries with different institutional structures. The data include balance sheets and income statements for the largest companies in each selected country from the year 1980 to 1990. It included 10 developing countries: India, Pakistan, Thailand, Malaysia, Zimbabwe, Mexico, Brazil, Turkey, Jordan, and Korea. The study used multivariate regression analysis with dependent variables; total debt ratio, long term book debt ratio, and long term market to debt ratio. The independent variables are; average tax rate, tangibility, business risk, firm size, firm profitability, and market to book ratio. Booth et al. found that the more profitable the firm the lower the debt ratio, regardless how the debt ratio is defined. In addition, the higher the tangible assets mix, the higher is the long term debt ratio but the smaller is the total debt ratio. Finally, it concluded that debt ratios in developing countries seem to be affected in the same way by the same set of variables that are significant in developed countries. Voulgaris et al. (2004) investigated the determinants of capital structure for Greek manufacturing firms. The study used panel data of two random samples one for small and medium sized enterprises (SMEs) including 143 firms and another for large sized enterprises (LSEs) including 75 firms for the period from 1988 to 1996. It used a leverage model as a dependent variable (short run debt ratio, long run debt ratio, and total debt ratio). On the other hand, It used firm size, asset structure, profitability, growth rate, stock level, and receivables as independent variables. The study suggested that there are similarities and differences in the determinants of capital structure among the two samples. The similarities include that the firm size and growth opportunities positively related to leverage. While, they confirm that the profitability has a negative relationship to leverage. Moreover, they pointed out the differences that the inventory period, and account receivables collection period have been found as determinants of debt in SMEs but not in LSEs. Liquidity doest not affect LSEs leverage, but it affects the SMEs. Finally, they also suggested that there is a positive relationship between profit margins and short term debt ratio only for SMEs. Voulgaris et al. (2004) have debated this arguments as; ‘‘the attitude of banks toward small sized firms should be changed so they provide easier access to long-term debt financing’’. In addition, â€Å"enactment of rules that will allow transparency of operations in the Greek stock market and a healthier development of the newly established capital market for SMEs will assist Greek firms into achieving a stronger capital structure’’. 2.3 Dividends payout ratio literature Dividend payout ratios vary between firms and the dividend payout policy will impact the agency cost theory. Rozeff (1982) investigated in his study that the dividends policy will be rationalize by appealing the transaction cost and agency cost associated with external finance. Moreover, Rozeff (1982) had found evidences supporting how the agency costs influence the dividends payout ratio. He found that the firms have distributed lower dividend payout ratios when they have a higher revenue growth, because this growth leads to higher investment expenditures.  This evidence supports the view of the investment policy affect on the dividend policy; the reason for that influences is that would the external finance be costly. Conversely, he found that the firms have distributed higher dividends payouts when insiders hold a lower portion of the equity and (or) a greater numbers of shareholders own the outside equity. Rozeff (1982) pointed out that this evidence supports that the dividend payments are part of the firm’s optimum monitoring and that bonding package reduces the agency costs. Moreover, if the agency cost declines when the dividend payout does and if the transaction cost of external finance increases when the dividend payout is increased as well, then minimization of these costs will lead to a unique optimum for a given firm. In addition, Hansen, Kumar, and Shome [HKS], (1994) pointed out the relevance of the monitoring theory for explaining the dividends policy of regulated electric utilities. From an agency cost perspective, they emphasized their ideas that the dividends promote monitoring of what they call the shareholders regulator conflict. Therefore, it is a monitoring role of dividends. On the contrary, Easterbrook’s (1984) has noted that the dividends monitoring of the shareholders managers conflict. They also have observed that the utilities firms have a discipline of monitoring mechanism for controlling agency cost, depending on the relative cost effectiveness of those costs (Crutchly and Hensen, 1989). The regulator process will impact the conflict between the shareholders and mangers, by mitigate the managers’ power to appropriate shareholders’ wealth and consume perquisites (Hansen et al. 1994). On the other hand, they argued this issue by the cost-plus concept, regulators may set into motion of managerial incentive structure that potentially conflicts with shareholders interests, this concept solve the shareholders-regulators concept since the sources of the conflict lies in differences in the perceptions of what constitutes fair cost plus. Therefore, the regulation can control some of the agency cost while exacerbating others. In their study, they conduct also that the managers and shareholders of unregulated firms have a several mechanisms whether, internal or external, for controlling agency cost. In addition, they observed that the dividend policy to reduce the agency theory is not limited, depending on their findings they suggested that the cost of dividend payout policy might be below the costs paid by other types of firm. In fact the utilities company maintain high debt ratio that would maintain as well as equity agency costs. Aivazian et al. (2003b) compare the dividend policy behaviour of eight emerging markets with dividend policies in the US firms in the period from 1980 to 1990. The sample included firms from; Korea, Malaysia, Zimbabwe, India, Thailand, Turkey, Pakistan, and Jordan. They found that it is difficult to predict dividend changes for such emerging markets. This is because the quality of firms with reputations for cutting dividends is somehow similar to those who increase their dividends, than for the US control sample. In addition, current dividends are less sensitive to past dividends than for the US sample of firms. They also found that the Lintner model[1] does not work well for the sample of emerging markets. These results indicate that the institutional frameworks in these emerging markets make dividend policy a weak technique for signaling future earnings and reducing agency costs than for the US sample of firms. Furthermore, Omran and Pointon (2004) investigated the role of dividend policy in determining share prices, the determinants of payout ratios, and the factors that affect the stability of dividends for a sample of 94 Egyptian firms. They found that retentions are more important than dividends in firms with actively traded shares, but that accounting book value is more important than dividends and earnings for non-actively traded firms. However, when they combined both the actively traded and non-traded firms, they found that dividends are more important than earnings. In the determinants of payout ratios, they found that there is a negative relationship between the leverage ratio and market to book ratio, tangibility, and firm size on the one hand, to the payout ratios in actively traded firms. On the contrary, they also found that there is a positive relationship between the business risk, market to book and firm size (measured by total assets) to payout ratios in non-actively traded firms. Furthermore, for the whole sample, leverage has a positive relationship with payout ratios, while firm size (measured by market capitalization) is negatively related to payout ratios. Finally, the stepwise logistic regression analysis shows that decreasing dividends is associated with lack of liquidity and overall profitability. In addition, increasing dividends is associated with higher overall profitability. 2.4 Summary In this chapter the relevant literatures addressing the reviews of the agency cost theory related to the financial policies. It also gives a theoretical background on how the conflicts of interests arise between the agents (managers) and the principal (shareholders). The second and third sections present the determinants of leverage and dividend payout policy. The following chapter will go through the description of data, and data methodology was employed for this dissertation. 3. Methodology, Research Design and Data Description The aim of the current study is to investigate firstly, the empirical evidence of the determinants of leverage and dividend policy under the agency theory concept for the period 2002-2007. The majority of the previous studies in the field of capital structure have made in the context of developed countries such as USA and UK. It is important to investigate the main determinants of leverage and dividend policy in developing countries where, capital markets, are less developed, less competitive and suffering from the lack of compatible regulations and sufficient supervision This chapter will explain the research methodology of this study. This chapter also identifies the sample of the study. Moreover, it presents an illustration of the econometric techniques that have been employed. In addition, this chapter gives a brief explanation of the specification tests used in the study to identify which technique is the best for the data set. This chapter structured as follows; Section (3.1) presents data description.  Section (3.2) presents the sample of the study. Section (3.3) discusses the econometric techniques employed in the study. Finally, Section (3.4) provides a brief summary. 3.1 Data Description The data used in the study are secondary data for companies listed at Amman Stock Exchange (ASE) for the period of 2002-2007. The data was extracted from the firm’s annual reports, and from Amman Stock Exchange’s publications (The Yearly Companies Guide, and Amman Stock Exchange Monthly Statistical Bulletins). Data is readily available in the form of CD and on the website of the Amman Stock Exchange. The reason for the study period selection was to minimize the missing observations for the sample companies. Moreover, a different reporting system has been used since 2000. The application of the new reporting system was the result of the transparency act which was launched in 1999, and forced all companies listed in Amman Stock Exchange to disclose their financial information and publish their annual reports according to the International Financial Reporting Standards. In other words, this data series for the period from 2002-2007 was chosen in terms of consistency and comparability purposes. 3.2 Sample of the study The sample of the study consists of the Jordanian Manufacturing companies listed on the Amman Stock Exchange for the period of 2002-2007. The total number of the companies listed in ASE at the end of year 2007 was 215. Officially, these companies are divided into four main economic sectors; Banks sector, Insurance sector, Services sector and finally Industrial sector. Moreover, this study is concerned only with Jordanian manufacturing companies that their stocks are traded in the organized market. It is important to note that the capital structure of financial firms has special characteristic when compared to the capital structure of non financial firms, they also have special tax treatment (Lester, 1995). On the other hand, the financial firms have a higher leverage rate, which may tend to make the analysis results biased. Moreover, financial firms their leverage is affected by investor insurance schemes (Rajan and Zingals, 1995). For these reasons, the potential sample of the study consists of non financial (Manufacturing) companies that are still listed in Amman Stock Exchange. The total number of industrial companies listed in ASE at the end of year 2007 was 88 companies, which are 40.93% of the total number of the companies listed in that market. The study conducts the following criteria in selecting the sample upon the Jordanian manufacturing companies by excluding all the firms that was incorporated after year 2002, and all the firms that have merged or acquired during this period, further, the firms have liquidated or delisted by the Amman Stock Exchange, and finally, the study have also excluded the firms that have information missing for that period. The application for those criteria has resulted in 52 samples of manufacturing companies. The data for the variables that are included in the study models is tested using three different econometric techniques which will be discuss briefly in the next sections. 3.3 Econometrics techniques Hairs et al. (1998) argued that the application of econometrics technique depends on the nature of data employed in the study, and to what extent it would be realised to the research objectives. In order to find a best and adequate data model, the current study employs pooled data technique and panel data analysis which is usually estimated by either fixed effect technique or random effects technique.  The following sections provide a brief discussion on the econometrics techniques that the current study uses to estimate the empirical models. 3.3.1 Pooled Ordinary Least Square (OLS) technique All the models used in the study have been tested by the pooled data analysis technique. The pooled data is the data that contains pooling of time series and cross-sectional observations (combination of time series and cross-section data) (Gujarati, 2003). The pooled data analysis has many advantages over the pure time series or pure cross sectional data. It generates more informative data, more variability, less collinearity among variables, more degrees of freedom, and more efficiency (Gujarati, 2003). The underlying assumption behind the pooled analysis is that, the intercept value and the coefficients of all the explanatory variables are the same for all the firms, as well as they are constant over time (no specific time or individual aspects). It also assumes that the error term captures the differences between the firms (across-sectional units) over the time. However, (Gujarati, 2003) has pointed out that these assumptions are highly restrictive. He argues that although of it is simplicity and advantages, the pooled regression may distort the true picture of the relationship between the dependent and independent variables across the firms. Pooled model will be simply estimated by Ordinary Least Square (OLS). However, OLS will be appropriate if no individual (firm) or time specific effects exist. If they exist, the unobserved effects of unobserved individual and time specific factors on dependent variable can be accommodated by using one of the panel data techniques.   According to (Gujarati, 2003) panel data is a special form of pooled data in which the same cross-sectional unit is surveyed over time. It helps researchers to substantially minimize the problems that arise when there is an omitted variables problems such as time and individual-specific variables and to provide robust parameter estimates than time series and (or) cross sectional data. All the empirical models that have been tested by using pooled data analysis and tested again on the basis of panel data analysis techniques (Fixed Effects and Random Effects).   3.3.2 The fixed effects model (FEM) Fixed effects technique allows control for unobserved heterogeneity which describes individual specific effects not captured by observed variables. According to Gujarati (2003) the fixed effect model takes into account the specific effect of each firm â€Å"the individuality† by allowing the intercept vary across individuals (firms), but each individual’s intercept does not vary over time. However, it still assumes that the slope coefficients are constant across individuals or over time. Two methods used to control for the unobserved fixed effects within the fixed effects model; the first differences and Least Square Dummy variables (LSDV) methods.  For the purposes of the current study, (LSDV) was used where; two sets of dummy variables (industry, and year dummy variables). The additional dummy variables control for variables that are constant across firms but change over time. Therefore, the combine time and individual (firm) fixed effects model eliminates the omitted variables bias arising both from unobserved factors that are constant over time and unobserved factors that are constant across firms. However, fixed effects model consumes the degrees of freedom, if estimated by the Least Square Dummy Variable (LSDV) method and, too many dummy variables are introduced (Gujarati, 2003). Furthermore, with too many variables used as regressors in the models, there is the possibility of multicollinearity. It is worth noting that OLS technique used in estimating fixed effects model. 3.3.3 The Random Effects Model (REM) By contrast, fixed effects model, the unobserved effects in random effects model is captured by the error term (ÃŽ µit) consisting of an individual specific one (ui) and an overall component (vit) which is the combined time series and cross-section error. Moreover, it treats the intercept coefficient as a random variable with a mean value (ÃŽ ±0) of all cross-sectional (firms) intercepts and the error component represents the random deviation of individual intercept from this mean value (Gujarati, 2003). Consequently, the individual differences in the intercept values of each firm are reflected in the error term (ui). On the other hand, the Generalized Least Square (GLS) used in estimating random affects model.  This is because the GLS technique takes into account the different correlation structure of the error term in the Random Effect Model (REM) (Gujarati, 2003). 3.3.4 Statistical specification tests The study uses three specification tests to identify which empirical method is the best. These tests are used for testing the fixed effect model versus the pooled model (F-statistics), the random effect model versus pooled model (Lagrange Multiplier test) (LM), and the fixed effect model versus the random effect model (Hausman test). The following sub-sections offer brief disc Impacts on Agency Cost Theory Impacts on Agency Cost Theory The main purpose of this research is to investigate how the determinants of the capital structure (leverage) and the dividend payout policy impact the agency cost theory. Literature review part picked up the relevant material related to agency theory, leverage, and dividends payout policy. The literature review section goes through the agency cost literature, and explores the financial policies; the capital structure (leverage), and the dividend payout policy and that these policies would influence the agency cost theory. 2.1 Agency theory Literature The notion of the agency theory is widely used in economics, finance, marketing, legal, and social sciences; Jensen and Meckling (1976) initiated and developed it. Capital structure (leverage) for the firms is determined by agency costs, i.e., costs related to conflict of interests between various groups including managers, which have claims on the firm’s resources (Harris and Raviv, 1991). Jensen and Meckling (1976) defined the agency relationship as â€Å"a contract under which one or more persons (the principal) engage another person (the agent), to perform some service on their behalf which involves delegating some decision making authority to the agent† pp.308. Assuming that both parties utility maximizes, the agents are not possible to act in the best interest of the principal. Furthermore, Jensen and Meckling (1976) contended that the principal can limit divergences from his interest by establishing appropriate incentives for the agent, and by incurring monitoring costs (pecuniary and non pecuniary), which are designed to limit the aberrant activities of the agent. Jensen and Meckling (1976) argued that the agency costs are unavoidable, since the agency costs are borne entirely by the owner. Jensen and Meckling (1976) contended that the owner is motivated to see these costs minimized. Authors who initiated and developed the agency theory have argued that if the owner manages a wholly owned firm, then he can make operating decisions that maximise his utility. The agency costs are generated if the owner manager sells equity claims on the firms, which are identical to his.  It also generated by the divergence between his interest and those of the outside shareholders, since he then bears only a fraction of the costs of any non-pecuniary benefits he takes out maximizing his own utility (Jensen and Meckling, 1976). Jensen and Meckling (1976) suggested two types of conflicts in the firm; First of all, the conflict between shareholders and managers arises because managers hold less than a hundred percent of the residual claim. Therefore, they do not capture the entire gain from their profit enhancement activities, but they do bear the entire cost of these activities. For example, managers can invest less effort in managing firm resources and may be able to transfer firm resources to their own, personal benefit, i.e., by consuming â€Å"perquisites† such as a fringe benefits. The manager bears the entire cost of refraining from these activities but captures only a fraction of the gain. As a result, managers over indulge in these interests relative to the level that would maximize the firm value. This inefficiency reduced the large fraction of the equity owned by the manager. Holding constant the manager’s absolute investment in the firm, increases in the fraction of the firm financed by debt increases the manager’s share of the equity and mitigates the loss from conflict between the managers and shareholders. Furthermore, as pointed out by Jensen (1986), since debt commits the firm to pay out cash, it reduces the amount of free cash flow available to managers to engage in these types of interests.  As a result, this reduction of the conflict between managers and shareholders will constitute the benefit of debt financing. Second, they also suggested that the conflict between debt holders and shareholders arises because the debt contract, gives shareholders an incentive to invest sub optimally. Especially when the debt contract provides that, if an investment yields large returns, well above the face value of the debt, shareholders capture most of the gain. However, if the investment fails, debt holders bear the consequences. Therefore, shareholders may benefit from investing in very risky projects, even if they are under valued; such investments result in an adverse in the value of debt. Lasfer (1995) argued that debt exacerbates the conflict between debt holders and shareholders. Shareholders will benefit from investments in risky projects at the expense of debt holders.  If the investment yields higher return than the face value of debt, shareholders capture most of the gain, however, if the investment fails, debt holders lose, given that. Therefore, shareholders protected by the limited liability. On the other hand, if the benefits captured by debt holders reduce the returns to shareholders, then an incentive to reject positive net present projects has created. Thus, the debt contract gives shareholders incentives to invest sub optimally. In addition, Myers (1977) argued that the firms with many growth opportunities should not be financed by debt, to reduce the negative net value projects.   Furthermore, some of arguments have been debated that the magnitude of the agency costs varies among firms. It will depend on the tastes of managers, the ease with which they can exercise their own preferences as opposed to value maximization in decision making, and the costs of monitoring and bonding activities. Therefore, the agency costs depend upon the cost of measuring the manager’s performance and evaluating it (Jensen and Meckling, 1976). (Jensen, 1986) either points out that when firms make their financing decision, they evaluate the advantages that may arise from the resolution of the conflicts between managers, shareholders and from long run tax shields.   In addition, Lasfer (1995) argues that debt finance creates a motivation for managers to work harder and make better investment decisions. On the other hand, debt works as a disciplining tool, because default allows creditors the option to force the firm into liquidation. Debt also generates information that can be used by investors to evaluate major operating decisions including liquidation (Harris and Raviv, 1990). Jensen (1986) debated that when using debt without retention of the proceeds of the issue, bonds the managers to meet their promise to pay future cash flows to the debt holders. Thus, debt can be an effective substitute for dividends. By issuing debt in exchange for stock, managers are bonding their promise to pay out future cash flows in a way that cannot be accomplished by simple dividend increases. Consequently, managers give recipients of the debt the right to take the firm to the bankruptcy court if they do not maintain their commitment to make the interest and principle payments. Thus, debt reduces the agency costs of free cash flow by reducing the cash flow available for spending at the discretion of managers. Jensen (1986) claimed that these control effects of debt are a potential determinant of capital structure. In practice, it is possible to reduce the owner manager non pecuniary benefits; by using these instruments external auditing, formal control systems, budget restrictions, and the establishment of incentive compensation systems serve to identify the manager’s interests more closely with those of the outside shareholders (Jensen and Meckling, 1976). Jensen (1986) suggested that leverage and dividend may act as a substitute mechanism to reduce the agency costs. Agency cost models predict that dividend payments can reduce the problems related to information asymmetry. Dividend payments might be consider also as a mechanism to reduce cash flow under management control, and help to mitigate the agency problems (Rozeff, 1982, and Easterbrook, 1984). Therefore, paying dividends may have a positive impact on the firms value. â€Å"Agency theory posits that the dividend mechanism provides an incentive for managers to reduce the costs related to the principal agent relationship, one way to reduce agency costs is to increase dividends† Baker and Powell (1999). They also claim that firm use the dividends use as a tool to monitor the management performance. Moreover, Easterbrook (1984) and Jensen (1986) argue that agency costs exist in firms because managers may not always want to maximize shareholder’s wealth due to the separation of ownership and control. Jensen (1986) addresses the free cash flow theory, in terms of this theory the conflict of interest between managers and stockholders is rooted in the presence of informational and self interest behavior. He defines the free cash flow as â€Å"cash flow in excess of that required to fund all projects that have positive net present value when discounted at the relevant cost of capital† (Jensen,1986). Within the context of the free cash flow hypothesis, firms prefer to increase their dividends and distribute the excess free cash flow in order to reduce agency costs. Consequently, markets react positively to this type of information. This theory is attractive because it is consistent with the evidence about investment and financing decisions (Jensen, 1986, Frankfurter and Wood, 2002). 2.2 Leverage Literature This section reviews the determinants of capital structure by different relevant literatures. Titman and Wessels (1988) study is considered to be one of the leading studies in the developed markets. They tried to extend the empirical work in capital structure theory by examining a much broader set of capital structure theories, and to analyze measures of short term, long term, and convertible debt. The data covers the US industrial companies from 1974 to 1982, and they used a factor analytic approach for estimating the impact of unobservable attributes on the choice of corporate debt ratios. As a result, the study confirms these factors, collateral values of assets, non-debt tax shields, growth, and uniqueness of the business, industry classification, firm size, and firm profitability. They also found that there is a negative relationship between debt levels and the uniqueness of the business. In addition, short term debt ratios have a negative relationship to firm size. However, they do not provide support for the effect on debt ratios arising from non debt tax shields, volatility, collateral value of assets, and growth. In Jordan, Al-Khouri and Hmedat (1992) aimed to find the effect of the earnings variability on capital structure of Jordanian corporations from the period from 1980 to 1988. They included 65 firms. The study used a multivariate regression approach with financial leverage as the dependent variable measured in three ways; first, long term debt over total assets, secondly, short term debt over total assets, and finally, short term debt plus long term debt over total assets. The standard deviation of the earnings variability and the size of the firm measured as independent variables. They concluded that the firm size is considered as a significant factor in determining the capital structure of the firm, and insignificant relationship between the earning variability and financial leverage of the firm. Furthermore, they suggest that the type of industry is not considered as a significant factor in determining the capital structure of the firm. Rajan and Zingales (1995) provided international evidence about the determinants of capital structure. They examined the capital structure in other countries related to factors similar to those that influence United States firms. The database contains 2583 companies in the G7 countries. They used regression analysis with the firm’s leverage (total debt divided by total debt plus total equity) as the dependent variable. Tangible assets, market to book ratio, firm size, and firm profitability used as independent variables. They found that in market bases firms with a lot of fixed assets are not highly levered, however, they supported that a positive relationship exists between tangible assets, and firms size, and capital structure (leverage). On the contrary, they confirmed that there is a negative relationship between leverage and the market to book ratio, and profitability. From the capital structure literature, Ozkan (2001) also investigated that the determinants of the target capital structure of firms and the role of the adjustment process in the UK using a sample of 390 firms. The multiple regression approach (panel data) was used to measure the debts by total debt to total assets, on the one hand. He also used in his model, non debt tax shield, firm size, liquidity, firm profitability, and firm growth as an independent variables. He confirmed that the profit, liquidity, non debt tax shield, and growth opportunities have a negative relationship to capital structure (leverage). Finally, he supported that there is a positive effect arising from size of firms on leverage. The study provided evidence that the UK firms have long term target leverage ratios and that they adjust quickly to their target ratios. The study by Booth et al. (2001) is considered as a one of the leading studies in the developing countries. It aimed to assess whether capital structure theory is applicable across developing countries with different institutional structures. The data include balance sheets and income statements for the largest companies in each selected country from the year 1980 to 1990. It included 10 developing countries: India, Pakistan, Thailand, Malaysia, Zimbabwe, Mexico, Brazil, Turkey, Jordan, and Korea. The study used multivariate regression analysis with dependent variables; total debt ratio, long term book debt ratio, and long term market to debt ratio. The independent variables are; average tax rate, tangibility, business risk, firm size, firm profitability, and market to book ratio. Booth et al. found that the more profitable the firm the lower the debt ratio, regardless how the debt ratio is defined. In addition, the higher the tangible assets mix, the higher is the long term debt ratio but the smaller is the total debt ratio. Finally, it concluded that debt ratios in developing countries seem to be affected in the same way by the same set of variables that are significant in developed countries. Voulgaris et al. (2004) investigated the determinants of capital structure for Greek manufacturing firms. The study used panel data of two random samples one for small and medium sized enterprises (SMEs) including 143 firms and another for large sized enterprises (LSEs) including 75 firms for the period from 1988 to 1996. It used a leverage model as a dependent variable (short run debt ratio, long run debt ratio, and total debt ratio). On the other hand, It used firm size, asset structure, profitability, growth rate, stock level, and receivables as independent variables. The study suggested that there are similarities and differences in the determinants of capital structure among the two samples. The similarities include that the firm size and growth opportunities positively related to leverage. While, they confirm that the profitability has a negative relationship to leverage. Moreover, they pointed out the differences that the inventory period, and account receivables collection period have been found as determinants of debt in SMEs but not in LSEs. Liquidity doest not affect LSEs leverage, but it affects the SMEs. Finally, they also suggested that there is a positive relationship between profit margins and short term debt ratio only for SMEs. Voulgaris et al. (2004) have debated this arguments as; ‘‘the attitude of banks toward small sized firms should be changed so they provide easier access to long-term debt financing’’. In addition, â€Å"enactment of rules that will allow transparency of operations in the Greek stock market and a healthier development of the newly established capital market for SMEs will assist Greek firms into achieving a stronger capital structure’’. 2.3 Dividends payout ratio literature Dividend payout ratios vary between firms and the dividend payout policy will impact the agency cost theory. Rozeff (1982) investigated in his study that the dividends policy will be rationalize by appealing the transaction cost and agency cost associated with external finance. Moreover, Rozeff (1982) had found evidences supporting how the agency costs influence the dividends payout ratio. He found that the firms have distributed lower dividend payout ratios when they have a higher revenue growth, because this growth leads to higher investment expenditures.  This evidence supports the view of the investment policy affect on the dividend policy; the reason for that influences is that would the external finance be costly. Conversely, he found that the firms have distributed higher dividends payouts when insiders hold a lower portion of the equity and (or) a greater numbers of shareholders own the outside equity. Rozeff (1982) pointed out that this evidence supports that the dividend payments are part of the firm’s optimum monitoring and that bonding package reduces the agency costs. Moreover, if the agency cost declines when the dividend payout does and if the transaction cost of external finance increases when the dividend payout is increased as well, then minimization of these costs will lead to a unique optimum for a given firm. In addition, Hansen, Kumar, and Shome [HKS], (1994) pointed out the relevance of the monitoring theory for explaining the dividends policy of regulated electric utilities. From an agency cost perspective, they emphasized their ideas that the dividends promote monitoring of what they call the shareholders regulator conflict. Therefore, it is a monitoring role of dividends. On the contrary, Easterbrook’s (1984) has noted that the dividends monitoring of the shareholders managers conflict. They also have observed that the utilities firms have a discipline of monitoring mechanism for controlling agency cost, depending on the relative cost effectiveness of those costs (Crutchly and Hensen, 1989). The regulator process will impact the conflict between the shareholders and mangers, by mitigate the managers’ power to appropriate shareholders’ wealth and consume perquisites (Hansen et al. 1994). On the other hand, they argued this issue by the cost-plus concept, regulators may set into motion of managerial incentive structure that potentially conflicts with shareholders interests, this concept solve the shareholders-regulators concept since the sources of the conflict lies in differences in the perceptions of what constitutes fair cost plus. Therefore, the regulation can control some of the agency cost while exacerbating others. In their study, they conduct also that the managers and shareholders of unregulated firms have a several mechanisms whether, internal or external, for controlling agency cost. In addition, they observed that the dividend policy to reduce the agency theory is not limited, depending on their findings they suggested that the cost of dividend payout policy might be below the costs paid by other types of firm. In fact the utilities company maintain high debt ratio that would maintain as well as equity agency costs. Aivazian et al. (2003b) compare the dividend policy behaviour of eight emerging markets with dividend policies in the US firms in the period from 1980 to 1990. The sample included firms from; Korea, Malaysia, Zimbabwe, India, Thailand, Turkey, Pakistan, and Jordan. They found that it is difficult to predict dividend changes for such emerging markets. This is because the quality of firms with reputations for cutting dividends is somehow similar to those who increase their dividends, than for the US control sample. In addition, current dividends are less sensitive to past dividends than for the US sample of firms. They also found that the Lintner model[1] does not work well for the sample of emerging markets. These results indicate that the institutional frameworks in these emerging markets make dividend policy a weak technique for signaling future earnings and reducing agency costs than for the US sample of firms. Furthermore, Omran and Pointon (2004) investigated the role of dividend policy in determining share prices, the determinants of payout ratios, and the factors that affect the stability of dividends for a sample of 94 Egyptian firms. They found that retentions are more important than dividends in firms with actively traded shares, but that accounting book value is more important than dividends and earnings for non-actively traded firms. However, when they combined both the actively traded and non-traded firms, they found that dividends are more important than earnings. In the determinants of payout ratios, they found that there is a negative relationship between the leverage ratio and market to book ratio, tangibility, and firm size on the one hand, to the payout ratios in actively traded firms. On the contrary, they also found that there is a positive relationship between the business risk, market to book and firm size (measured by total assets) to payout ratios in non-actively traded firms. Furthermore, for the whole sample, leverage has a positive relationship with payout ratios, while firm size (measured by market capitalization) is negatively related to payout ratios. Finally, the stepwise logistic regression analysis shows that decreasing dividends is associated with lack of liquidity and overall profitability. In addition, increasing dividends is associated with higher overall profitability. 2.4 Summary In this chapter the relevant literatures addressing the reviews of the agency cost theory related to the financial policies. It also gives a theoretical background on how the conflicts of interests arise between the agents (managers) and the principal (shareholders). The second and third sections present the determinants of leverage and dividend payout policy. The following chapter will go through the description of data, and data methodology was employed for this dissertation. 3. Methodology, Research Design and Data Description The aim of the current study is to investigate firstly, the empirical evidence of the determinants of leverage and dividend policy under the agency theory concept for the period 2002-2007. The majority of the previous studies in the field of capital structure have made in the context of developed countries such as USA and UK. It is important to investigate the main determinants of leverage and dividend policy in developing countries where, capital markets, are less developed, less competitive and suffering from the lack of compatible regulations and sufficient supervision This chapter will explain the research methodology of this study. This chapter also identifies the sample of the study. Moreover, it presents an illustration of the econometric techniques that have been employed. In addition, this chapter gives a brief explanation of the specification tests used in the study to identify which technique is the best for the data set. This chapter structured as follows; Section (3.1) presents data description.  Section (3.2) presents the sample of the study. Section (3.3) discusses the econometric techniques employed in the study. Finally, Section (3.4) provides a brief summary. 3.1 Data Description The data used in the study are secondary data for companies listed at Amman Stock Exchange (ASE) for the period of 2002-2007. The data was extracted from the firm’s annual reports, and from Amman Stock Exchange’s publications (The Yearly Companies Guide, and Amman Stock Exchange Monthly Statistical Bulletins). Data is readily available in the form of CD and on the website of the Amman Stock Exchange. The reason for the study period selection was to minimize the missing observations for the sample companies. Moreover, a different reporting system has been used since 2000. The application of the new reporting system was the result of the transparency act which was launched in 1999, and forced all companies listed in Amman Stock Exchange to disclose their financial information and publish their annual reports according to the International Financial Reporting Standards. In other words, this data series for the period from 2002-2007 was chosen in terms of consistency and comparability purposes. 3.2 Sample of the study The sample of the study consists of the Jordanian Manufacturing companies listed on the Amman Stock Exchange for the period of 2002-2007. The total number of the companies listed in ASE at the end of year 2007 was 215. Officially, these companies are divided into four main economic sectors; Banks sector, Insurance sector, Services sector and finally Industrial sector. Moreover, this study is concerned only with Jordanian manufacturing companies that their stocks are traded in the organized market. It is important to note that the capital structure of financial firms has special characteristic when compared to the capital structure of non financial firms, they also have special tax treatment (Lester, 1995). On the other hand, the financial firms have a higher leverage rate, which may tend to make the analysis results biased. Moreover, financial firms their leverage is affected by investor insurance schemes (Rajan and Zingals, 1995). For these reasons, the potential sample of the study consists of non financial (Manufacturing) companies that are still listed in Amman Stock Exchange. The total number of industrial companies listed in ASE at the end of year 2007 was 88 companies, which are 40.93% of the total number of the companies listed in that market. The study conducts the following criteria in selecting the sample upon the Jordanian manufacturing companies by excluding all the firms that was incorporated after year 2002, and all the firms that have merged or acquired during this period, further, the firms have liquidated or delisted by the Amman Stock Exchange, and finally, the study have also excluded the firms that have information missing for that period. The application for those criteria has resulted in 52 samples of manufacturing companies. The data for the variables that are included in the study models is tested using three different econometric techniques which will be discuss briefly in the next sections. 3.3 Econometrics techniques Hairs et al. (1998) argued that the application of econometrics technique depends on the nature of data employed in the study, and to what extent it would be realised to the research objectives. In order to find a best and adequate data model, the current study employs pooled data technique and panel data analysis which is usually estimated by either fixed effect technique or random effects technique.  The following sections provide a brief discussion on the econometrics techniques that the current study uses to estimate the empirical models. 3.3.1 Pooled Ordinary Least Square (OLS) technique All the models used in the study have been tested by the pooled data analysis technique. The pooled data is the data that contains pooling of time series and cross-sectional observations (combination of time series and cross-section data) (Gujarati, 2003). The pooled data analysis has many advantages over the pure time series or pure cross sectional data. It generates more informative data, more variability, less collinearity among variables, more degrees of freedom, and more efficiency (Gujarati, 2003). The underlying assumption behind the pooled analysis is that, the intercept value and the coefficients of all the explanatory variables are the same for all the firms, as well as they are constant over time (no specific time or individual aspects). It also assumes that the error term captures the differences between the firms (across-sectional units) over the time. However, (Gujarati, 2003) has pointed out that these assumptions are highly restrictive. He argues that although of it is simplicity and advantages, the pooled regression may distort the true picture of the relationship between the dependent and independent variables across the firms. Pooled model will be simply estimated by Ordinary Least Square (OLS). However, OLS will be appropriate if no individual (firm) or time specific effects exist. If they exist, the unobserved effects of unobserved individual and time specific factors on dependent variable can be accommodated by using one of the panel data techniques.   According to (Gujarati, 2003) panel data is a special form of pooled data in which the same cross-sectional unit is surveyed over time. It helps researchers to substantially minimize the problems that arise when there is an omitted variables problems such as time and individual-specific variables and to provide robust parameter estimates than time series and (or) cross sectional data. All the empirical models that have been tested by using pooled data analysis and tested again on the basis of panel data analysis techniques (Fixed Effects and Random Effects).   3.3.2 The fixed effects model (FEM) Fixed effects technique allows control for unobserved heterogeneity which describes individual specific effects not captured by observed variables. According to Gujarati (2003) the fixed effect model takes into account the specific effect of each firm â€Å"the individuality† by allowing the intercept vary across individuals (firms), but each individual’s intercept does not vary over time. However, it still assumes that the slope coefficients are constant across individuals or over time. Two methods used to control for the unobserved fixed effects within the fixed effects model; the first differences and Least Square Dummy variables (LSDV) methods.  For the purposes of the current study, (LSDV) was used where; two sets of dummy variables (industry, and year dummy variables). The additional dummy variables control for variables that are constant across firms but change over time. Therefore, the combine time and individual (firm) fixed effects model eliminates the omitted variables bias arising both from unobserved factors that are constant over time and unobserved factors that are constant across firms. However, fixed effects model consumes the degrees of freedom, if estimated by the Least Square Dummy Variable (LSDV) method and, too many dummy variables are introduced (Gujarati, 2003). Furthermore, with too many variables used as regressors in the models, there is the possibility of multicollinearity. It is worth noting that OLS technique used in estimating fixed effects model. 3.3.3 The Random Effects Model (REM) By contrast, fixed effects model, the unobserved effects in random effects model is captured by the error term (ÃŽ µit) consisting of an individual specific one (ui) and an overall component (vit) which is the combined time series and cross-section error. Moreover, it treats the intercept coefficient as a random variable with a mean value (ÃŽ ±0) of all cross-sectional (firms) intercepts and the error component represents the random deviation of individual intercept from this mean value (Gujarati, 2003). Consequently, the individual differences in the intercept values of each firm are reflected in the error term (ui). On the other hand, the Generalized Least Square (GLS) used in estimating random affects model.  This is because the GLS technique takes into account the different correlation structure of the error term in the Random Effect Model (REM) (Gujarati, 2003). 3.3.4 Statistical specification tests The study uses three specification tests to identify which empirical method is the best. These tests are used for testing the fixed effect model versus the pooled model (F-statistics), the random effect model versus pooled model (Lagrange Multiplier test) (LM), and the fixed effect model versus the random effect model (Hausman test). The following sub-sections offer brief disc