Search results for: financial studies' devolution

Authors: A. J. Regan, F. J. Lidgey, M. Betteridge, P. Georgiou, C. Toumazou, K. Hayatleh, J. R. Dibble

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Our goal is development of an algorithm capable of predicting the directional trend of the Standard and Poor’s 500 index (S&P 500). Extensive research has been published attempting to predict different financial markets using historical data testing on an in-sample and trend basis, with many authors employing excessively complex mathematical techniques. In reviewing and evaluating these in-sample methodologies, it became evident that this approach was unable to achieve sufficiently reliable prediction performance for commercial exploitation. For these reasons, we moved to an out-of-sample strategy based on linear regression analysis of an extensive set of financial data correlated with historical closing prices of the S&P 500. We are pleased to report a directional trend accuracy of greater than 55% for tomorrow (t+1) in predicting the S&P 500.

Keywords: financial algorithm, GPU, S&P 500, stock market prediction

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Authors: Pilar Gamarra Gamarra, Michele Girotto

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In the expanding field of leaders’ ethical behavior research, little attention has been paid to the association between finance leaders’ ethical traits (beyond personality) and ethical leadership, and more importantly, how these ethical characteristics can be predictors of ethical behavior at the leadership level in the financial sector. In this study, we tested a theoretical model based on uponsocial cognitive theory (Bandura, 1986) and the cognitive-developmental model (Piaget, 1932) to examine leaders’ moral identity and moral attentiveness as antecedents of ethical leadership. After the 2008 economic crisis, the marketplace has awakened to the potential dangers of unethical behavior. The unethical behavior of the leaders of the financial sector was identified as guilty of this economic catastrophe. For that reason, it seems increasingly prudent for organizations to have leaders who are cognitively inclined toward ethical behavior. This evidence suggests that moral attentiveness and moral identity is perhaps one way of identifying those kinds of leaders. For leaders who are morally attentive and have a high moral identity, themes of ethics interventions are consistent with their way of seeing the word. As a result, these leaders could become critical components of change in organizations and could provide the energy and skills necessary for these efforts to be successful. Ethical behavior of leader from the financial sector and marketing sectors must be joined to manage the change. In this study, a leader’s moral identity, leader’s moral attentiveness, and self-importance of Ethical Leadership are measured for financial and marketing leaders to be compared to determine the relationship between the three variables in each sector. Other conclusion related to gender, educational level or generation are obtained.

Keywords: ethical leadership, moral identity, moral attentiveness, financial leaders, marketing leaders, ethical behavior

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Authors: Dimitrios J. Dimitriou, Maria F. Sartzetaki

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Transport infrastructures are high-cost, long-term investments that serve as vital foundations for the operation of a region or nation and are essential to a country’s or business’s economic development and prosperity, by improving well-being and generating jobs and income. The development of appropriate financing options is of key importance in the decision making process in order develop viable transport infrastructures. The development of transport infrastructure has increasingly been shifting toward alternative methods of project financing such as Public Private Partnership (PPPs) and hybrid forms. In this paper, a methodological decision-making framework based on the evaluation of the financial viability of transportation infrastructure for different financial schemes is presented. The framework leads to an assessment of the financial viability which can be achieved by performing various financing scenarios analyses. To illustrate the application of the proposed methodology, a case study of rail transport infrastructure financing scenario analysis in Greece is developed.

Keywords: rail transport infrastructure, financial viability, scenario analysis, rail project feasibility

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Authors: Gururaj Bhajantri

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Financial sector is the backbone of any economy and it plays a crucial role in the mobilisation and allocation of resources. One of the main objectives of financial sector is inclusive growth. The constituents of the financial sector are banks, and financial Institutions, which mobilise the resources from the surplus sector and channelize the same to the different needful sectors in the economy. Micro Small and the Medium Enterprises sector in India cover a wide range of economic activities. These enterprises are divided on the basis of investment on equipment. The micro enterprises are divided into manufacturing and services sector. Micro Service enterprises have investment limit up to ten lakhs on equipment. Hairdresser is one who not only cuts and shaves but also provides different types of hair cut, hairstyles, trimming, hair-dye, massage, manicure, pedicure, nail services, colouring, facial, makeup application, waxing, tanning and other beauty treatments etc., hairdressing salons provide these services with the help of equipment. They need investment on equipment not more than ten lakhs. Hence, they can be considered as Micro service enterprises. Hairdressing salons require more than Rs 2.50,000 to start a moderate salon. Moreover, hairdressers are unable to access the organised finance. Still these individuals access finance from money lenders with high rate of interest to lead life. The socio economic conditions of hairdressers are not known properly. Hence, the present study brings a light on the role of financial institutions in promoting hairdressing salons. The study also focuses the socio-economic background of individuals in hairdressings salons, problems faced by them. The present study is based on primary and secondary data. Primary data collected among hairdressing salons in Davangere city. Samples selected with the help of simple random sampling techniques. Collected data analysed and interpreted with the help of simple statistical tools.

Keywords: micro service enterprises, financial institutions, hairdressing salons, financial sector

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Authors: Adamu Danlami Ahmed

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Inventory management is the determinant of effective and efficient work for any manager. This study looked at the relationship between inventory management and financial performance. The population of the study comprises all conglomerate quoted companies in the Nigerian Stock Exchange market as at 31^st December 2010. The scope of the study covered the period from 2010 to 2014. Descriptive, Pearson correlation and multiple regressions are used to analyze the data. It was found that inventory management is significantly related to the profitability of the company. This entails that an efficient management of the inventory cycle will enhance the profitability of the company. Also, lack of proper management of it will hinder the financial performance of organizations. Based on the results, it was recommended that a conglomerate company should try to see that inventories are kept to a minimum, as well as make sure the proper checks are maintained to make sure only needed inventories are in the store. As well as to keep track of the movement of goods, in order to avoid unnecessary delay of finished and work in progress (WIP) goods in the store and warehouse.

Keywords: finished goods, work in progress, financial performance, inventory

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Authors: Süleyman Günes

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The crucial effects of the COVID-19 pandemic have on social and economic systems in Turkey as well as all over the world. It has impacted logistic providers and worldwide supply chains. Unexpected risks played a central role in creating vulnerabilities for logistics service operations during the pandemic terms. This study aims to research and design qualitative and quantitive contributions to logistic services. The COVID-19 pandemic brought unavoidable risks to the logistics industry in Turkey. The Logistic Service Providers (LSPs) have learned how to ensure uncertainties and risks triggered by main and adverse effects. The risks that LSPs encounter during the COVID-19 pandemic have been investigated and unveiled, and identified uncertainties and risks. The cause-effect structures were displayed by the qualitative and quantitive studies. The results suggest that supply chains and demand changes triggered by the COVID-19 pandemic while it influenced financial failure and forecast horizon with operational performances.

Keywords: logistic service providers, COVID-19, development, financial failure

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Authors: Sharmin Shahid, Zaher Zain

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The purpose of this study is to explore and examines the theoretical frameworks of ethical leadership style and affective organizational commitment. Additionally, to investigate the extent to which employee orientation and ethical guidance either strengthen or weaken on the relationship between ethical leadership style and affective commitment. The study will also measure the mediating effects of leader’s integrity either influence to inspire and revival employee’s affective commitment or not. The methodology of the study comprised sample of 237 managers, departmental heads, top-level executives, and professors of several financial institutions, banks, and universities in Bangladesh who are directly related with decision making process of respective organization. A cross sectional research design will be used to examine the direct, moderating, and mediating analysis among the research key variables. Data were gathered based on personal administered questionnaire. The findings of the study will be significance because it will provide the real scenario of leadership style which leads to financial and strategic success of any organizations. In addition, the results will be interesting enough to find out either ethical leadership style have positive relationship with affective commitment or not. Employee-orientation and ethical guidance is a moderator to improve leadership style and affective commitment, whereas, leader’s integrity mediates the relationships between leadership style and affective organizational commitment to do the right thing in the right way for the betterment of entire organizational success. Research limitations of the study are the data collected by self administered questionnaire, a method with well-known shortcomings. Second, the study concentrated on financial institutions, banks top executives, and universities professors in Bangladesh. An important implication of the research is that the interesting findings will give some insight to the leadership style and helps management to focus on their management and leadership efficacy, as that could improve their affective organizational commitment. The findings will be original and unique value adding with the existing literature on leadership studies. The study is based on a comprehensive literature review. The results will be based on a sample of financial institutions, banks, and universities in Bangladesh. The research findings are useful to academics and corporate leaders of financial institutions, banks, and universities all over the world.

Keywords: affective organizational commitment, Bangladesh, ethical guidance, ethical leadership style

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Authors: Iraklis Argyriou

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The transition to net-zero emission urban bus (ZEB) systems is receiving increased attention in research and policymaking throughout the globe. Most studies in this area tend to address techno-economic aspects and the perspectives of a narrow group of stakeholders, while they largely overlook analysis of current bus system dynamics. This offers limited insight into the types of ZEB governance challenges and opportunities that are encountered in real-world contexts, as well as into some of the immediate actions that need to be taken to set off the transition over the longer term. This research offers a multi-stakeholder perspective into both the technical and non-technical factors that influence ZEB transitions within a particular context, the UK. It does so by drawing from a recent transition visioning stakeholder workshop (June 2023) with key public, private and civic actors of the urban bus transportation system. Using NVivo software to qualitatively analyze the workshop discussions, the research examines the key technological and funding aspects, as well as the short-term actions (over the next five years), that need to be addressed for supporting the ZEB transition in UK cities. It finds that ZEB technology has reached a mature stage (i.e., high efficiency of batteries, motors and inverters), but important improvements can be pursued through greater control and integration of ZEB technological components and systems. In this regard, telemetry, predictive maintenance and adaptive control strategies pertinent to the performance and operation of ZEB vehicles have a key role to play in the techno-economic advancement of the transition. Yet, more pressing gaps were identified in the current ZEB funding regime. Whereas the UK central government supports greater ZEB adoption through a series of grants and subsidies, the scale of the funding and its fragmented nature do not match the needs for a UK-wide transition. Funding devolution arrangements (i.e., stable funding settlement deals between the central government and the devolved administrations/local authorities), as well as locally-driven schemes (i.e., congestion charging/workplace parking levy), could then enhance the financial prospects of the transition. As for short-term action, three areas were identified as critical: (1) the creation of whole value chains around the supply, use and recycling of ZEB components; (2) the ZEB retrofitting of existing fleets; and (3) integrated transportation that prioritizes buses as a first-choice, convenient and reliable mode while it simultaneously reduces car dependency in urban areas. Taken together, the findings point to the need for place-based transition approaches that create a viable techno-economic ecosystem for ZEB development but at the same time adopt a broader governance perspective beyond a ‘net-zero’ and ‘bus sectoral’ focus. As such, multi-actor collaborations and the coordination of wider resources and agency, both vertically across institutional scales and horizontally across transport, energy and urban planning, become fundamental features of comprehensive ZEB responses. The lessons from the UK case can inform a broader body of empirical contextual knowledge of ZEB transition governance within domestic political economies of public transportation.

Keywords: net-zero emission transition, stakeholders, transition governance, UK, urban bus transportation

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Authors: Seyedmohsen Mortazavi

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The purpose of this research is to investigate the personality types of internal auditors on the quality of financial reporting in companies admitted to the Tehran Stock Exchange. Personality type is one of the issues that emphasizes the field of auditors' behavior, and this field has attracted the attention of shareholders and stock companies today, because the auditors' personality can affect the type of financial reporting and its quality. The research is applied in terms of purpose and descriptive and correlational in terms of method, and a researcher-made questionnaire was used to check the research hypotheses. The statistical population of the research is all the auditors, accountants and financial managers of the companies admitted to the Tehran Stock Exchange, and due to their large number and the uncertainty of their exact number, 384 people have been considered as a statistical sample using Morgan's table. The researcher-made questionnaire was approved by experts in the field, and then its validity and reliability were obtained using software. For the validity of the questionnaire, confirmatory factor analysis was first examined, and then using divergent and convergent validity; Fornell-Larker and cross-sectional load test of the validity of the questionnaire were confirmed; Then, the reliability of the questionnaire was examined using Cronbach's alpha and composite reliability, and the results of these two tests showed the appropriate reliability of the questionnaire. After checking the validity and reliability of the research hypotheses, PLS software was used to check the hypotheses. The results of the research showed that the personalities of internal auditors can affect the quality of financial reporting; The personalities investigated in this research include neuroticism, extroversion, flexibility, agreeableness and conscientiousness, all of these personality types can affect the quality of financial reporting.

Keywords: flexibility, quality of financial reporting, agreeableness, conscientiousness

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Authors: Radosław Pastusiak, Anna Kaźmierska, Magdalena Jasiniak

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The impact of Special Economic Zones (SEZs) has been analyzed for many years by researchers. There are lot of theoretical studies proving the SEZs importance for regional development, however, there is lack of empirical studies (and they are mainly focused on China market) that are based on available data. The theoretical studies indicate the various impacts of enterprises operating within SEZs on the economy. The article proves that, in case of Poland, locating SEZs in municipalities is an important part of increasing municipalities’ income. Therefore SEZs have a positive impact on regional development. Municipality income is understood as taxes paid by taxpayers who depend on SEZ companies’ performance. The analysis includes the Corporate Income Tax (CIT), Personal Income Tax (PIT) and real estate tax. The effects of SEZs on regional development were narrowed to a few variables that are most significant for the financial system. The analysis indicates the significant impact of SEZs on the amount of taxes influencing the municipality budget.

Keywords: special economic zone, local finance, municipal finance, government

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Authors: Sadia Bibi, Karim Ullah

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Islamic banks have excess liquidity, which needs proper management to earn a high rate of return on them to remain competitive. However, they lack assets-backed avenues and rely on a few sukuks, which led them to liquidity management issues. Financial engineering comes forward to innovate and develop instruments for the requisite financial problem. Still, they face many challenges, explored in the context of liquidity management in Islamic banks. The rigorous literature review shows that Shariah compliance, competition from the conventional banks, lack of sufficient instruments, derivatives are still not accepted as legitimate products, the inter-bank market being less developed, and no possibility of lender of last resort is the six significant constraints to financial engineering for liquidity management of Islamic banks. To further explore the problem, a multiple case study strategy is used to extend and develop the theory with the philosophical stance of social constructivism. Narrative in-depth interviews over the telephone are conducted with key personnel at treasury departments of selected banks. Data is segregated and displayed using NVivo 11 software, and the thematic analysis approach identifies themes related to the constraints. The exploration of further constraints to financial engineering for liquidity management of Islamic banks achieves the research aim. The theory is further developed by the addition of three more constraints to the theoretical framework, which are i) lack of skilled human resources, ii) lack of unified vision, and iii) lack of government support to the Islamic banks. These study findings are fruitful for the use of the government, regulatory authorities of the banking sector, the State Bank of Pakistan (Central Bank), and the product design & development division of Islamic banks to make the financial engineering process feasible and resolve liquidity management issues of Islamic banks.

Keywords: financial engineering, liquidity management, Islamic banks, shariah compliance

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Authors: Stephen Acheampong Amoafoh

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In today's dynamic economic landscape, businesses face multifaceted challenges that demand strategic foresight and informed decision-making. This abstract explores the pivotal role of financial analytics in driving business performance amidst evolving market conditions. By integrating accounting principles with economic insights, organizations can harness the power of data-driven strategies to optimize resource allocation, mitigate risks, and capitalize on emerging opportunities. This presentation will delve into the practical applications of financial analytics across various sectors, highlighting case studies and empirical evidence to underscore its efficacy in enhancing operational efficiency and fostering sustainable growth. From predictive modeling to performance benchmarking, attendees will gain invaluable insights into leveraging advanced analytics tools to drive profitability, streamline processes, and adapt to changing market dynamics. Moreover, this abstract will address the ethical considerations inherent in financial analytics, emphasizing the importance of transparency, integrity, and accountability in data-driven decision-making. By fostering a culture of ethical conduct and responsible stewardship, organizations can build trust with stakeholders and safeguard their long-term viability in an increasingly interconnected global economy. Ultimately, this abstract aims to stimulate dialogue and collaboration among scholars, practitioners, and policymakers, fostering knowledge exchange and innovation in the realms of accounting, business, and economics. Through interdisciplinary insights and actionable recommendations, participants will be equipped to navigate the complexities of today's business environment and seize opportunities for sustainable success.

Keywords: financial analytics, business performance, data-driven strategies, sustainable growth

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Authors: Saad Saeed Althiabi

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This paper discusses the corporate positioning and how it became popular as a way to systematize production because of the unique manner in which incorporation legalized organizers to secure financial capital through locking it in. The power to lock in capital comes from the fact that a corporate exists as a separate legal entity, whose survival and governance are separated from any of its participants. The law essentially creates a different legal person when a corporation is created. Although this idea has been played down in the legal learning of the last decades in favor of the view that a corporation is purely something through which natural persons interrelate, recent legal research has begun to reassess the importance of entity status. Entity status, under the law and the related separation of governance from input of financial capital through the configuration of a corporation, sanctioned corporate participants to do somewhat more than connect in a series of business transactions.

Keywords: corporate law, entity status, locking in capital, financial capital

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Authors: Josip Visković, Josip Arnerić, Ante Rozga

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Based on the fact that volatility is time varying in high frequency data and that periods of high volatility tend to cluster, the most successful and popular models in modelling time varying volatility are GARCH type models. When financial returns exhibit sudden jumps that are due to structural breaks, standard GARCH models show high volatility persistence, i.e. integrated behaviour of the conditional variance. In such situations models in which the parameters are allowed to change over time are more appropriate. This paper compares different GARCH models in terms of their ability to describe structural changes in returns caused by financial crisis at stock markets of six selected central and east European countries. The empirical analysis demonstrates that Markov regime switching GARCH model resolves the problem of excessive persistence and outperforms uni-regime GARCH models in forecasting volatility when sudden switching occurs in response to financial crisis.

Keywords: central and east European countries, financial crisis, Markov switching GARCH model, transition probabilities

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Authors: Omar Farahat Hassanein, A. Samer Ezeldin

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The construction industry is a very dynamic field. Every day new technologies and methods are developing to fasten the process and increase its efficiency. Hence, if a project uses fewer resources, it will be more efficient. This paper examines the recycling of concrete construction and demolition (C&D) waste to reuse it as aggregates in on-site applications for construction projects in Egypt and possibly in the Middle East. The study focuses on a stationary plant setting. The machinery set-up used in the plant is analyzed technically and financially. The findings are gathered and grouped to obtain a comprehensive cost-benefit financial model to demonstrate the feasibility of establishing and operating a concrete recycling plant. Furthermore, a detailed business plan including the time and hierarchy is proposed.

Keywords: construction wastes, recycling, sustainability, financial model, concrete recycling, concrete life cycle

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Authors: Stephen Gerome

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This study examines the translation and use of metaphors in the realm of public safety discourse and intends to shed light on a continuing problem in cross-cultural communication. Metaphors can cause problems not only within languages but also in interlingual communication. The use and misuse of metaphors may hinder the ability to adequately communicate prevention efforts and, in some cases, facilitate and allow financial crime to go undetected. The use of lexicalized metaphors in communications by political entities, journalists, and legal agents in communications regarding law, policy making, compliance monitoring and enforcement as well as in adjudication can have negative consequences if misconstrued. This study provides examples of metaphor usage in published documents in a corpus linguistic study that compares the use of lexicalized metaphors in this discourse to shed light on possible unexpected consequences as well as counterproductive ones.

Keywords: translation, legal, corpus linguistics, financial

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Authors: Sabur Mollah, Asma Mobarek

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This study aims to explore the endogenous relationship between Shari’ah governance and board governance for Islamic banks to identify complementary or substituting relationship between these governance parameters. By using a sample of 161 Islamic Banks from 24 countries for the period of 2005-2013, we show an endogenous relationship between Shari’ah Supervisory Board (SSB) and Board of Directors (BoD). In this relationship, SSB and BoD complement each other. We also show that this complementary relationship between SSB and BoD helps enhance both management and asset quality, but mitigates capital adequacy, earnings, and liquidity in Islamic banks. The study has important implications for financial stability in the Islamic banking system.

Keywords: Shari’ah Supervisory Board, Boards of Directors, Islamic banking, financial stability

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Authors: Hadi Mousavi, Majid Davoudi Nasr

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Executives can maximize profits by recognizing the factors that affect investment and using them to obtain the optimal level of investment. Inefficient markets have shortcomings that can impact the optimal level of investment, leading to the process of over-investment or under-investment. In the present study, the relationship between the overconfidence of senior managers and abnormal cash fluctuations with respect to financial flexibility in companies listed in the Tehran stock exchange from 2009 to 2013 were evaluated. In this study, the sample consists of 84 companies selected by a systematic elimination method and 420 year-companies in total. In this research, EVIEWS software was used to test the research hypotheses by linear regression and correlation coefficient and after designing and testing the research hypothesis. After designing and testing research hypotheses that have been used to each hypothesis, it was concluded that there was a significant relationship between the overconfidence of senior managers and abnormal cash fluctuations, and this relationship was not significant at any level of financial flexibility. Moreover, the findings of the research showed that there was a significant relationship between senior manager’s overconfidence and positive abnormal cash flow fluctuations in firms, and this relationship is significant only at the level of companies with high financial flexibility. Finally, the results indicate that there is no significant relationship between senior managers 'overconfidence and negative cash flow abnormalities, and the relationship between senior managers' overconfidence and negative cash flow fluctuations at the level of companies with high financial flexibility was confirmed.

Keywords: abnormal cash fluctuations, overconfidence of senior managers, financial flexibility, accounting

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Authors: Naomi W. Maina

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Fertility preference is a subject of great significance in developing countries. Studies reveal that the preferences of fertility are actually significant in determining the society’s fertility levels because the fertility behavior of the future has a high likelihood of falling under the effect of currently observed fertility inclinations. The objective of this study was to establish the factors associated with fertility preference amongst couples in Kenya by fitting a multinomial logistic regression model against 5,265 couple data obtained from Kenya demographic health survey 2014. Results revealed that the type of place of residence, the region of residence, age and spousal age gap significantly influence desire for additional children among couples in Kenya. There was the notable high likelihood of couples living in rural settlements having similar fertility preference compared to those living in urban settlements. Moreover, geographical disparities such as in northern Kenya revealed significant differences in a couples desire to have additional children compared to Nairobi. The odds of a couple’s desire for additional children were further observed to vary dependent on either the wife or husbands age and to a large extent the spousal age gap. Evidenced from the study, was the fact that as spousal age gap increases, the desire for more children amongst couples decreases. Insights derived from this study would be attractive to demographers, health practitioners, policymakers, and non-governmental organizations implementing fertility related interventions in Kenya among other stakeholders. Moreover, with the adoption of devolution, there is a clear need for adoption of population policies that are County specific as opposed to a national population policy as is the current practice in Kenya. Additionally, researchers or students who have little understanding in the application of multinomial logistic regression, both theoretical understanding and practical analysis in SPSS as well as application on real datasets, will find this article useful.

Keywords: couples' desire, fertility, fertility preference, multinomial regression analysis

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Authors: T. Miková

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This paper analyzes the effect of a single uniform accounting rule on reporting quality by investigating the influence of IFRS on earnings management. This paper examines whether earnings management is reduced after IFRS adoption through the use of “loss avoidance thresholds”, a method that has been verified in earlier studies. This paper concentrates on two European countries: one that represents the continental code law tradition with weak protection of investors (France) and one that represents the Anglo-American common law tradition, which typically implies a strong enforcement system (the United Kingdom). The research investigates a sample of 526 companies (6822 firm-year observations) during the years 2000 – 2013. The results are different for the two jurisdictions. This study demonstrates that a single set of accounting standards contributes to better reporting quality and reduces the pervasiveness of earnings management in France. In contrast, there is no evidence that a reduction in earnings management followed the implementation of IFRS in the United Kingdom. Due to the fact that IFRS benefit France but not the United Kingdom, other political and economic factors, such legal system or capital market strength, must play a significant role in influencing the comparability and transparency cross-border companies’ financial statements. Overall, the result suggests that IFRS moderately contribute to the accounting quality of reported financial statements and bring benefit for stakeholders, though the role played by other economic factors cannot be discounted.

Keywords: accounting standards, earnings management, international financial reporting standards, loss avoidance, reporting quality

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Authors: Mussa Hussaini, Supasith Chonglerttham

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Stocks are usually classified according to their characteristics which are unique enough such that the performance of each category can be differentiated from another. The reasons behind such classifications in the financial market are sometimes financial innovation or it can also be because of finding a premium in a group of stocks with similar features. One of the major classifications in stocks market is called momentum strategy. Based on this strategy stocks are classified according to their past performances into past winners and past losers. Momentum in a stock market refers to the idea that stocks will keep moving in the same direction. In other word, stocks with rising prices (past winners stocks) will continue to rise and those stocks with falling prices (past losers stocks) will continue to fall. The performance of this classification has been well documented in numerous studies in different countries. These studies suggest that past winners tend to outperform past losers in the future. However, academic research in this direction has been limited in countries such as Thailand and to the best of our knowledge, there has been no such study in Thailand after the financial crisis of 1997. The significance of this study stems from the fact that Thailand is an open market and has been encouraging foreign investments as one of the means to enhance employment, promote economic development, and technology transfer and the main equity market in Thailand, the Stock Exchange of Thailand is a crucial channel for Foreign Investment inflow into the country. The equity market size in Thailand increased from $1.72 billion in 1984 to $133.66 billion in 1993, an increase of over 77 times within a decade. The main contribution of this paper is evidence for size category in the context of the equity market in Thailand. Almost all previous studies have focused solely on large stocks or indices. This paper extends the scope beyond large stocks and indices by including small and tiny stocks as well. Further, since there is a distinct absence of detailed academic research on momentum strategy in the Stock Exchange of Thailand after the crisis, this paper also contributes to the extension of existing literature of the study. This research is also of significance for those researchers who would like to compare the performance of this strategy in different countries and markets. In the Stock Exchange of Thailand, we examined the performance of momentum strategy from 2010 to 2014. Returns on portfolios are calculated on monthly basis. Our results on momentum strategy confirm that there is positive momentum profit in large size stocks whereas there is negative momentum profit in small size stocks during the period of 2010 to 2014. Furthermore, the equal weighted average of momentum profit of both small and large size category do not provide any indication of overall momentum profit.

Keywords: momentum strategy, past loser, past winner, stock exchange of Thailand

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Authors: Anna M. Pretorius

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The emerging markets category for portfolio investment was introduced in 1986 in an attempt to promote capital market development in less developed countries. Investors traditionally diversified their portfolios by investing in different developed markets. However, high growth opportunities forced investors to consider emerging markets as well. Examples include the rapid growth of the “Asian Tigers” during the 1980s, growth in Latin America during the 1990s and the increased interest in emerging markets during the global financial crisis. As such, portfolio flows to emerging markets have increased substantially. In 2002 7% of all equity allocations from advanced economies went to emerging markets; this increased to 20% in 2012. The stronger links between advanced and emerging markets led to increased synchronization of asset price movements. This increased level of stock market integration for emerging markets is confirmed by various empirical studies. Against the background of increased interest in emerging market assets and the increasing level of integration of emerging markets, this paper focuses on the determinants of stock market integration of emerging market countries. Various studies have linked the level of financial market integration with specific economic variables. These variables include: economic growth, local inflation, trade openness, local investment, budget surplus/ deficit, market capitalization, domestic bank credit, domestic institutional and legal environment and world interest rates. The aim of this study is to empirically investigate to what extent trade-related determinants have an impact on stock market integration. The panel data sample include data of 16 emerging market countries: Brazil, Chile, China, Colombia, Czech Republic, Hungary, India, Malaysia, Pakistan, Peru, Philippines, Poland, Russian Federation, South Africa, Thailand and Turkey for the period 1998-2011. The integration variable for each emerging stock market is calculated as the explanatory power of a multi-factor model. These factors are extracted from a large panel of global stock market returns. Trade related explanatory variables include: exports as percentage of GDP, imports as percentage of GDP and total trade as percentage of GDP. Other macroeconomic indicators – such as market capitalisation, the size of the budget deficit and the effectiveness of the regulation of the securities exchange – are included in the regressions as control variables. An initial analysis on a sample of developed stock markets could not identify any significant determinants of stock market integration. Thus the macroeconomic variables identified in the literature are much more significant in explaining stock market integration of emerging markets than stock market integration of developed markets. The three trade variables are all statistically significant at a 5% level. The market capitalisation variable is also significant while the regulation variable is only marginally significant. The global financial crisis has highlighted the urgency to better understand the link between the financial and real sectors of the economy. This paper comes to the important finding that, apart from the level of market capitalisation (as financial indicator), trade (representative of the real economy) is a significant determinant of stock market integration of countries not yet classified as developed economies.

Keywords: emerging markets, financial market integration, panel data, trade

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Authors: Megersa Dugasa Fite

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This paper analyses regulatory and supervisory issues in the Ethiopian micro finance sector, which caters to the needs of those who have been excluded from the formal financial sector. Micro-finance has received increased importance in development because of its grand goal to give credits to the poor to raise their economic and social well-being and improve the quality of lives. The micro-finance at present has been moving towards a credit-plus period through covering savings and insurance functions. It thus helps in reducing the rate of financial exclusion and social segregation, alleviating poverty and, consequently, stimulating development. The Ethiopian micro finance policy has been generally positive and developmental but major regulatory and supervisory limitations such as the absolute prohibition of NGOs to participate in micro credit functions, higher risks for depositors of micro-finance institutions, lack of credit information services with research and development, the unmet demand, and risks of market failures due to over-regulation are disappointing. Therefore, to remove the limited reach and high degree of problems typical in the informal means of financial intermediation plus to deal with the failure of formal banks to provide basic financial services to a significant portion of the country’s population, more needs to be done on micro finance. Certain key regulatory and supervisory revisions hence need to be taken to strengthen the Ethiopian micro finance sector so that it can practically provide majority poor access to a range of high quality financial services that help them work their way out of poverty and the incapacity it imposes.

Keywords: micro-finance, micro-finance regulation and supervision, micro-finance institutions, financial access, social segregation, poverty alleviation, development, Ethiopia

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Authors: Sonia Rebai, Mohamed Naceur Azaiez, Dhafer Saidane

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In this study, we develop a performance evaluation model based on a multi-attribute utility approach aiming at reaching the sustainable banking (SB) status. This model is built accounting for various banks’ stakeholders in a win-win paradigm. In addition, it offers the opportunity for adopting a global measure of performance as an indication of a bank’s sustainability degree. This measure is referred to as banking sustainability performance index (BSPI). This index may constitute a basis for ranking banks. Moreover, it may constitute a bridge between the assessment types of financial and extra-financial rating agencies. A real application is performed on three French banks.

Keywords: multi-attribute utility theory, performance, sustainable banking, financial rating

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Authors: Komlan Sedzro

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We apply the non-parametric, unconditional, hyperbolic order-α quantile estimator to appraise the relative efficiency of Microfinance Institutions in Africa in terms of outreach. Our purpose is to verify if these institutions, which must constantly try to strike a compromise between their social role and financial sustainability are operationally efficient. Using data on African MFIs extracted from the Microfinance Information eXchange (MIX) database and covering the 2004 to 2006 periods, we find that more efficient MFIs are also the most profitable. This result is in line with the view that social performance is not in contradiction with the pursuit of excellent financial performance. Our results also show that large MFIs in terms of asset and those charging the highest fees are not necessarily the most efficient.

Keywords: data envelopment analysis, microfinance institutions, quantile estimation of efficiency, social and financial performance

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Authors: Nikolaos Konstantopoulos, Aristeidis Samitas, Vasileiou Evangelos

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The purpose of this study is to examine if the financial trends influence not only the stock markets’ returns, but also their anomalies. We choose to study the day of the week effect (DOW) for the Greek stock market during the Euro period (2002-12), because during the specific period there are not significant structural changes and there are long term financial trends. Moreover, in order to avoid possible methodological counterarguments that usually arise in the literature, we apply several linear (OLS) and nonlinear (GARCH family) models to our sample until we reach to the conclusion that the TGARCH model fits better to our sample than any other. Our results suggest that in the Greek stock market there is a long term predisposition for positive/negative returns depending on the weekday. However, the statistical significance is influenced from the financial trend. This influence may be the reason why there are conflict findings in the literature through the time. Finally, we combine the DOW’s empirical findings from 1985-2012 and we may assume that in the Greek case there is a tendency for long lived turn of the week effect.

Keywords: day of the week effect, GARCH family models, Athens stock exchange, economic growth, crisis

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Authors: Patricia Chinyere Oranefo

Abstract:

This study examined the effect of sustainability accounting disclosure on financial performance of listed Brewery firms in Nigeria. The dearth of empirical evidence and literature on “governance disclosure” as one of the explanatory variables of sustainability accounting reporting were the major motivation for this study. The main objective was to ascertain the effect of sustainability accounting disclosure on financial performance of listed Brewery firms in Nigeria. An ex–post facto research design approach was adopted for the study. The population of this study comprises of five (5) Brewery firms quoted on the floor of the Nigeria exchange group (NSX) and the sample size of four (4) listed firms was drawn using purposive sampling method. Secondary data were carefully sourced from the financial statement/annual reports and sustainability reports from 2012 to 2021 of the Brewery firms quoted on the Nigeria exchange group (NSX). Panel regression analysis by aid of E-views 10.0 software was used to test for statistical significance of the effect of sustainability accounting disclosure on financial performance of listed Brewery firms in Nigeria. The results showed that economic sustainability disclosure indexes do not significantly affect return on asset of listed Brewery firms in Nigeria. The findings further revealed that environmental sustainability disclosure indexes do not significantly affect return on equity of listed Brewery firms in Nigeria. More so, results showed that Social Sustainability disclosure indexes significantly affect Net Profit Margin of listed Brewery firms in Nigeria. Finally, the result established also that governance sustainability disclosure indexes do not significantly affect Earnings per share of listed Brewery firms in Nigeria. Consequent upon the findings, this study recommended among others; that managers of Brewers in Nigeria should improve and sustain full disclosure practices on economic, environmental, social and governance disclosures following the guidelines of the Global Reporting Index (GRI) as they are capable of exerting significant effect on financial performance of firms in Nigeria.

Keywords: sustainability, accounting, disclosure, financial performance

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Authors: Torben Hansen, Lars Gronholdt, Alexander Josiassen, Anne Martensen

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Consumers often exhibit a bias in their knowledge; they often think that they know more or less than they do. The concept of 'knowledge over/underconfidence' (O/U) has in previous studies been used to investigate such knowledge bias. O/U appears as a combination of subjective and objective knowledge. Subjective knowledge relates to consumers’ perception of their knowledge, while objective knowledge relates to consumers’ absolute knowledge measured by objective standards. This separation leads to three scenarios: The consumer can either be knowledge calibrated (subjective and objective knowledge are similar), overconfident (subjective knowledge exceeds objective knowledge) or underconfident (objective knowledge exceeds subjective knowledge). Knowledge O/U is a highly useful concept in understanding consumer choice behavior. For example, knowledge overconfident individuals are likely to exaggerate their ability to make right choices, are more likely to opt out of necessary information search, spend less time to carry out a specific task than less knowledge confident consumers, and are more likely to show high financial trading volumes. Through the use of financial services as a case study, this study contributes to previous research by examining how consumer knowledge O/U affects two types of trust (broad-scope trust and narrow-scope trust) and consumer relationship satisfaction. Trust does not only concern consumer trust in individual companies (i.e., narrow.-scope confidence NST), but also concerns consumer confidence in the broader business context in which consumers plan and implement their behavior (i.e., broad scope trust, BST). NST is defined as "the expectation that the service provider can be relied on to deliver on its promises’, while BST is defined as ‘the expectation that companies within a particular business type can generally be relied on to deliver on their promises.’ This study expands our understanding of the interplay between consumer knowledge bias, consumer trust, and relationship marketing in two main ways: First, it is demonstrated that the more knowledge O/U a consumer becomes, the higher/lower NST and levels of relationship satisfaction will be. Second, it is demonstrated that BST has a negative moderating effect on the relationship between knowledge O/U and satisfaction, such that knowledge O/U has a higher positive/negative effect on relationship satisfaction when BST is low vs. high. The data for this study comprises 756 mutual fund investors. Trust is particularly important in consumers’ mutual fund behavior because mutual funds have important responsibilities in providing financial advice and in managing consumers’ funds.

Keywords: knowledge, cognitive bias, trust, customer-seller relationships, financial services

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Authors: Maria Krambia-Kapardis, Elisavet Charalambous

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Corruption has given rise to extensive discussion due to its notorious consequences. It undermines democracy, brings in inequalities and imbalances and weakens governance. With the recent financial turmoil pinpointing that corruption has played a vital part, lessons have to be learned and actions have to be taken. Regulation can be the means for doing so as it advances transparency and accountability, leaving no space for corruption to flourish. Much depends though on the culture of a state and how determined it is to mark the end of corruption.

Keywords: banking regulation, corruption, culture, European Union

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Authors: Nadezhda Kvatashidze

Abstract:

The conceptual framework of International Financial Reporting Standards determines the basic principles of accounting. The said principles have multiple applications, with professional judgments being one of those. Recognition and assessment of the information contained in financial reporting, especially so the somewhat uncertain events and transactions and/or the ones regarding which there is no standard or interpretation are based on professional judgments. Professional judgments aim at the formulation of expert assumptions regarding the specifics of the circumstances and events to be entered into the report based on the conceptual framework terms and principles. Experts have to make a choice in favor of one of the aforesaid and simulate the situations applying multi-variant accounting estimates and judgment. In making the choice, one should consider all the factors, which may help represent the information in the best way possible. Professional judgment determines the relevance and faithful representation of the presented information, which makes it more useful for the existing and potential investors. In order to assess the prospected net cash flows, the information must be predictable and reliable. The publication contains critical analysis of the aforementioned problems. The fact that the International Financial Reporting Standards are developed continuously makes the issue all the more important and that is another point discussed in the study.

Keywords: conceptual framework, faithful representation, professional judgement, relevance

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