Search results for: financial firms

Authors: Philippe Gugler

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Goal of the study: The concept of competitiveness has been addressed by economic theorists and policymakers for several hundreds of years, with both groups trying to understand the drivers of economic prosperity and social welfare. The goal of this contribution is to address the major useful theoretical contributions that permit to identify the main drivers of a territory’s competitiveness. We first present the major contributions found in the classical and neo-classical theories. Then, we concentrate on two majors schools providing significant thoughts on the competitiveness of locations: the Economic Geography (EG) School and the International Business (IB) School. Methodology: The study is based on a literature review of the classical and neo-classical theories, on the economic geography theories and on the international business theories. This literature review establishes links between these theoretical mainstreams. This work is based on the academic framework establishing a meaningful literature review aimed to respond to our research question and to develop further research in this field. Results: The classical and neo-classical pioneering theories provide initial insights that territories are different and that these differences explain the discrepancies in their levels of prosperity and standards of living. These theories emphasized different factors impacting the level and the growth of productivity in a given area and therefore the degree of their competitiveness. However, these theories are not sufficient to more precisely identify the drivers and enablers of location competitiveness and to explain, in particular, the factors that drive the creation of economic activities, the expansion of economic activities, the creation of new firms and the attraction of foreign firms. Prosperity is due to economic activities created by firms. Therefore, we need more theoretical insights to scrutinize the competitive advantages of territories or, in other words, their ability to offer the best conditions that enable economic agents to achieve higher rates of productivity in open markets. Two major theories provide, to a large extent, the needed insights: the economic geography theory and the international business theory. The economic geography studies scrutinized in this study from Marshall to Porter, aim to explain the drivers of the concentration of specific industries and activities in specific locations. These activity agglomerations may be due to the creation of new enterprises, the expansion of existing firms, and the attraction of firms located elsewhere. Regarding this last possibility, the international business (IB) theories focus on the comparative advantages of locations as far as multinational enterprises (MNEs) strategies are concerned. According to international business theory, the comparative advantages of a location serves firms not only by exploiting their ownership advantages (mostly as far as market seeking, resource seeking and efficiency seeking investments are concerned) but also by augmenting and/or creating new ownership advantages (strategic asset seeking investments). The impact of a location on the competitiveness of firms is considered from both sides: the MNE’s home country and the MNE’s host country.

Keywords: competitiveness, economic geography, international business, attractiveness of businesses

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Authors: Ahmet Sekreter

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Although there are conceptual similarities in terms of financial products between conventional and Islamic finance, they are entirely different financial systems. Despite Islamic finance’s small size in the conventional finance world, its promising growth makes Islamic finance a hot topic both in academia and business world. Today customers can access sophisticated Islamic financial products not only in Muslim countries but also in Europe. This study analyzes Islamic finance and its products and includes a brief overview of Islamic finance in Europe. Literature review is the basis of this paper. The author analyzed the academic papers, numerical data, and estimations to set a perspective for the future of Islamic finance in Europe. Findings show that UK is the main hub for the Islamic finance, and it will remain so in the near future.

Keywords: islamic finance, islamic banking, islamic finance in Europe, finance

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Authors: Feddaoui Amina

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Through this study we will try to shed light on the theoretical framework proposed for understanding creative accounting as a financial numbers game and one of the most important techniques of accounts manipulation, its main actors and its practices. We will discover the role of the modified Jones model (1995) in detecting creative accounting practices using discretionary accruals. Finally we will try to confirm the importance and the need to address this type of practices using corporate governance as a main control system and an important defense line to reduce these dangerous accounts manipulation.

Keywords: financial numbers game, creative accounting, modified Jones model, accounts manipulation

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Authors: Omar Bendjimaa, Karzabi Abdelatif

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Small and medium enterprises have witnessed several developments in recent years thanks to the policies and programs of support given by the state, and that is due to their importance in local and national development. Nevertheless, the success and development of these firms depends on a number of factors, especially the human element, for instance, the culture of the manager has its origin in the culture of the community and is of crucial influence in these firms. In fact, this culture is nothing more than a set of values, perceptions, beliefs, symbols and practices repeated, in addition to the knowledge it has received from the readings and the modern means of education. All these factors have an impact on the effectiveness of governance, its resolutions, instructions and performance of its function as a manager of a medium or small enterprise is inevitably affected by these cultural values, it is the driving force, the leader, and the observer at the same time.

Keywords: small and medium enterprises, the culture of the manager, the culture of the community, values, perceptions, beliefs, symbols, performance

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Authors: Ishmael Tingbani

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This paper adopts a contingency theory approach to investigate the relationship between working capital management and profitability using data of 225 listed British firms on the London Stock Exchange for the period 2001-2011. The paper employs a panel data analysis on a series of interactive models to estimate this relationship. The findings of the study confirm the relevance of the contingency theory. Evidence from the study suggests that the impact of working capital management on profitability varies and is constrained by organizational contingencies (environment, resources, and management factors) of the firm. These findings have implications for a more balanced and nuanced view of working capital management policy for policy-makers.

Keywords: working capital management, profitability, contingency theory approach, interactive models

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Authors: Jarrod Haar, David Brougham, Azka Ghafoor

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Māori are the indigenous people of Aotearoa (New Zealand) and have a unique perspective called Te Ao Māori (the Māori worldview) and important cultural values around utu (reciprocation), collectivism, long-term orientation, and whanaungatanga (networking, relationships). The present research conducts two studies to better understand how Māori businesses might have similarities and differences to New Zealand businesses. In study 1, we conducted 50 interviews with 25 Māori business owners and 25 New Zealand (non-Māori) owners. For the indigenous population, we used a kaupapa Māori research approach using Māori protocols. This ensured the research is culturally safe. Interviews were conducted around semi-structured questions tapping into the existing business challenges, the role of innovation, and business values and approaches. Transcripts were analyzed using interpretative phenomenological analytic techniques. We identified several themes shared across all business owners: (1) the critical challenge around staff attraction and retention; (2) cost pressures including inflation; (3) and a focus on human resource (HR) practices to address issues including retention. Amongst the Māori businesses, the analysis also identified (4) a unique cultural approach to business relationships. Specifically, amongst the indigenous businesses we find a strong Te Ao Māori perspective amongst Māori business towards innovation. Analysis within this group only identified, within the following sub-themes: (a) whanaungatanga, around the development of strong relationships as a way to aid recruitment and retention, and business fluctuations; (b) mātauranga (knowledge) whereby Māori businesses seek to access advanced knowledge via universities; (c) taking a long-term orientation to business relationships – including with universities. The findings suggest people practices might be a way that firms address workforce retention issues, and we also acknowledge that Māori businesses might also leverage cultural practices to achieve better gains. Thus, in study 2, we survey 606 New Zealand private sector firms including 85 who self-identify as Māori Firms. We test the benefits of high-performance work-systems (HPWS), which represent bundle of human-resource practices designed to bolster workforce productivity through enhancing knowledge, skills, abilities, and commitment of the workforce. We test these on workforce retention and include Māori firm status and cultural capital (reflecting workforce knowledge around Māori cultural values) as moderators. Overall, we find all firms achieve superior workforce retention when they have high levels of HPWS, but Māori firms with high cultural capital are better able to leverage these HR practices to achieve superior workforce retention. In summary, the present study highlights how indigenous businesses in New Zealand might achieve superior performance by leveraging their unique cultural values. The study provides unique insights into established literatures around retention and HR practices and highlights the lessons around indigenous cultural values that appear to aid businesses.

Keywords: Māori business, cultural values, employee retention, human resource practices

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Authors: Angrita Denziana, Haninun, Hepiana Patmarina, Ferdinan Fatah

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The aims of the study are to determine the effect of the company's financial performance with Return on Asset (ROA) and Return on Equity (ROE) indicators. The macroeconomic factors with the indicators of Indonesia interest rate (SBI) and exchange rate on stock returns of non-financial companies listed in IDX. The results of this study indicate that the variable of ROA has negative effect on stock returns, ROE has a positive effect on stock returns, and the variable interest rate and exchange rate of SBI has positive effect on stock returns. From the analysis data by using regression model, independent variables ROA, ROE, SBI interest rate and the exchange rate very significant (p value < 0.01). Thus, all the above variable can be used as the basis for investment decision making for investment in Indonesia Stock Exchange (IDX) mainly for shares in the non- financial companies.

Keywords: ROA, ROE, interest rate, exchange rate, stock return

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Authors: Mohammad Azam

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This work is an endeavor to empirically investigate the Gross Domestic Product-Growth as mediating variable between various factors and portfolio returns using a broad sample of 522 financial and non-financial firms enlisted on Pakistan Stock Exchange between January-1993 and June-2022. The study employs the Structural Equation modeling and Ordinary Least Square regression to determine the findings before and during the Covid-19 epidemiological situation, which has not received due attention by researchers. The analysis reveals that market and investment factors are redundant, whereas size and value show significant results, whereas Gross Domestic Product-Growth performs significant mediating impact for the whole time frame. Using before Covid-19 period, the results reveal that market, value, and investment are redundant, but size, profitability, and Gross Domestic Product-Growth are significant. During the Covid-19, the statistics indicate that market and investment are redundant, though size and Gross Domestic Product-Growth are highly significant, but value and profitability are moderately significant. The Ordinary Least Square regression shows that market and investment are statistically insignificant, whereas size is highly significant but value and profitability are marginally significant. Using the Gross Domestic Product-Growth augmented model, a slight growth in R-square is observed. The size, value and profitability factors are recommended to the investors for Pakistan Stock Exchange. Conclusively, in the Pakistani market, the Gross Domestic Product-Growth indicates a feeble moderating effect between risk-premia and portfolio returns.

Keywords: asset pricing puzzle, mediating role of GDP-growth, structural equation modeling, COVID-19 pandemic, Pakistan stock exchange

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Authors: Joel Vilca Tarazona, Igor Aguilar-Alonso

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The problem of this research related to business intelligence is the lack of a tool that supports automated and efficient financial analysis for decision-making and allows an evaluation of the financial statements, which is why the availability of the information is difficult. Relevant information to managers and users as an instrument in decision making financial, and administrative. For them, a business intelligence solution is proposed that will reduce information access time, personnel costs, and process automation, proposing a 4-layer architecture based on what was reviewed by the research methodology.

Keywords: decision making, business intelligence, Google Cloud, Microsoft Power BI

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Authors: Andrea Paltrinieri, Alberto Dreassi, Stefano Miani, Alex Sclip

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The financial crises caused a collapse in prices of most asset classes, raising the attention on alternative investments such as Sukuk, a smaller, fast growing but often misunderstood market. We study diversification benefits of Sukuk, their correlation with other asset classes and the effects of their inclusion in investment portfolios of institutional and retail investors, through a comprehensive comparison of their risk/return profiles during and after the financial crisis. We find a beneficial performance adjusted for the specific volatility together with a lower correlation especially during the financial crisis. The distribution of Sukuk returns is positively skewed and leptokurtic, with a risk/return profile similarly to high yield bonds. Overall, our results suggest that Sukuk present diversification opportunities, a significant volatility-adjusted performance and lower correlations especially during the financial crisis. Our findings are relevant for a number of institutional investors. Long term investors, such as life insurers would benefit from Sukuk’s protective features during financial crisis yet keeping return and growth opportunities, whereas banks would gain due to their role of placers, advisors, market makers or underwriters.

Keywords: sukuk, zero beta asset, asset allocation, sukuk market

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Authors: Disha Batra

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With the advent of economic reforms in India in 1992, economic journalism in India has undergone a sea change along with the rise in the Indian economy. Squeezing out of economic news stories (economy-in-general) over business (individual corporate stories) and financial (financial and equity markets) news stories have been done and are still underway. The objective of the study is to explore how economic journalism – news stories about macroeconomic issues or economy-in-general has changed over the past three decades with the emergence of LPG (Liberalisation, Privatisation, and Globalisation) policies in India. The purpose of the study is to examine to what extent business and financial news are constricting economic news which is done by analysing news stories and content of business papers. The study is based on the content analyses of the top three Indian business dailies as per IRS (Indian Readership Survey) 2017. The parametric analysis of the different parameters (source of information, sub-topic, a dominant source in economic news, layout and framing, etc.) has been done in order to come across with the distinct adaptations and modifications by these dailies. The paper significantly dwells upon the thematic analysis of these newspapers in order to explore and find out the coverage given to various sub-themes of EBF (economic, business, and financial) journalism. The study revealed that stories concerning broader issues about the economy which are likely to be of public concern had been dropped. The paper further indicates an upward trend for the stories concerning individual corporate, equity, and financial markets. Findings of the study raise concern over the indicated disparity between economic and business news stories which may further limit the information that people need in order to make well-versed decisions.

Keywords: business-papers, business news, economic news, financial news

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Authors: Ofuan James Ilaboya, Okhae J. Ibhadode

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The objective of this paper is to theoretically examine the truism of the “true and fair view” in the context of financial reporting. The paper examines the concepts such as true, fair, true and fair view, problems of true and fair view, the origin/history of true and fair view, review of attributes and key issues relating to true and fair view. The methodological approach adopted in this paper is library-based research, focusing on the review of relevant and related extant literature. The findings based on the review of relevant and related literature is suggestive of the fact that the true and fair concept in financial reporting environment is contentious. The study concludes that given the circumstances as chronicled on this paper, it is evident that the truism of the true and fair view of the auditor’s opinion is under serious threat. The way forward may be for the auditor to certify the accuracy and the correctness of the financial statement. While this position being canvassed here may help to substantially bridge the age-long expectation gap, it may as well require an upward review of the current audit fee structure in order to be able to operationalize the onerous task of certifying the accuracy and correctness of the financial statement. This position is contentious and will require a robust consideration which is not within the purview of the present review.

Keywords: fiduciary duty, financial statement, true and correct, true and fair

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Authors: Paola Bordon, Breno Braga

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This paper investigates whether firms use university prestige to statistically discriminate among college graduates. The test is based on the employer learning literature which suggests that if firms use a characteristic for statistical discrimination, this variable should become less important for earnings as a worker gains labor market experience. In this framework, we use a regression discontinuity design to estimate a 19% wage premium for recent graduates of two of the most selective universities in Chile. However, we find that this premium decreases by 3 percentage points per year of labor market experience. These results suggest that employers use college selectivity as a signal of workers' quality when they leave school. However, as workers reveal their productivity throughout their careers, they become rewarded based on their true quality rather than the prestige of their college.

Keywords: employer learning, statistical discrimination, college returns, college selectivity

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Authors: Sunday Odunaiya

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The statistics of banks in operation in this current dispensation compared to some decades ago has brought about a lot of changes on the face of the financial system. The demand of customers, technological advancement, and government policies among others has therefore generated a lot of heat for financial sector’s growth, sustenance and survival. This paper discusses mergers and acquisitions (M&A) in banking sector using West Africa as a yardstick of evaluation. It explains rigorously the conditions that warrant mergers and acquisitions in the banking sector, its effect, and how to ensure mergers and acquisitions effectiveness in the banking sector. The conceptual and empirical review of the relevant literature were done systematically while value-increasing and value-decreasing theories were used to substantiate the discourse. Findings of this paper show that mergers and acquisitions is a practical and conscious activity in Nigeria, Ghana and Ivory Coast from earliest time till date with tremendous turnaround in the financial sector. It was found out that M&A is consensually arrived at by the targets and the acquirer on a value-based account. In other words, merger and acquisition is a deliberate decision reached by the management of such bank for a ‘just cause’.

Keywords: acquisitions, merger, management, financial sector

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Authors: Nada Hamed, Mariam Aldhaheri, Sonia Abdennadher

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Islamic Finance is not a new term that emerging in the global market, but it is still under scope by many countries. Its characteristics and regulation are not widely clear and implemented. In 2015, The United Nation announced a plan about potential benefits of using Islamic Finance as a sustainable development approach. Enhancing its application in financial markets could protect from unexpected crisis that might be created from the traditional tools of finance. This paper focuses on this area to test if Islamic finance could be used for maintaining sustainable development and if the term of 'Green Islamic Finance' could be implemented to minimize the deficiencies and 'pollution’ generated from traditional techniques and tools of finance. This paper intends to measure the impact on financial performance and sustainability when financial institutions use Islamic finance or better practice it. The objective of this explanatory research is to measure the performance of Islamic Finance with using a case study of an Islamic bank. The paper would analyze and compare the behavior of financial institutions that used traditional financing tools and converted to Islamic banking system. The methodology used is based on a case study of an Islamic bank in Dubai with comparing its performance before implementing Islamic Finance and after. The selected case study represents the first national bank in Emirates Arab Unis who adopt the Islamic finance approach. Based on a time series analysis, a quantitative analysis would be also used through looking at various set of ratios that are routinely used to measure bank performance.

Keywords: Islamic finance, financial stability, green finance, Islamic finance practices, financial ratios

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Authors: Yasmin Umar Assegaf, Falikhatun, Salamah Wahyuni

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This study aims to provide empirical evidence about the influence of Islamic Corporate Social Responsibility Disclosures of the financial performance of Islamic banking with the characteristics of the company, as a control variable in Islamic banking in Indonesia. ICSR disclosures are an independent variable, while the Financial Performance is the dependent variable (proxied by Return on Assets (ROA), Return on Equity (ROE), Income Expense Ratio (IER), and Non-net Interest Margin (NIM). The control variables used are firm size, firm age and the type of audit. The population of the study was all Islamic Banks (BUS) operate in Indonesia. The research sample is Islamic Commercial Bank which has existed in Indonesia since 2002 and publishes financial statements between the years of 2007-2011. The sample of the study were include 31 Annual Report published. The results of this study concluded that there are significant influences between the ICSR Disclosures and financial performance. The disclosure is partially effect on ROA, IER and NIM, whereas there is no influence on ROE. Further result shows that all control variables (Firm Size, Age, and Type of Audit Companies) does not have any influence on ICSR Disclosures in Indonesia. This research gives a suggestion for further research to compare these ICSR disclosures in Indonesia with ICSR disclosures in other countries that have Islamic banking, by using other measure variables of financial performance, to get more comprehensive model and real picture.

Keywords: ROA, ROE, IER, NIM, company size, age of the company, audit type, Islamic banking

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Authors: Antoine F. Dedewanou, Eric N. Ekpinda

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We investigate whether and how deposit insurance program affects savings decisions in the Economic Community of Central African States (ECCAS). Specifically, using the World Bank’s 2014 and 2011 Global Financial Inclusion (Global Findex) databases, we apply special regressor approach. We find that the deposit insurance program increases significantly, everything else equal, the probability that people save their money at a financial institution by 11 percentage points in Gabon, by 22.2 percentage points in DR Congo and by 15.1 percentage points in Chad. These effects are matched with positive effects of age and education level. But in Cameroon, the effect of deposit insurance is not significant. The policies aimed at fostering financial inclusion will be more effective if there is a deposit insurance scheme in place, along with awareness among young people, and education programs. JEL Classification: G21, O12, O16

Keywords: deposit insurance, savings, special regressor, ECCAS countries

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Authors: WenYing Claire Shih, Konstantinos Agrafiotis

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The circular economy has become one of the seven fundamental pillars of Taiwan’s economic development, as this is promulgated by the government. The model of the circular economy, with its fundamental premise of waste elimination, can transform the textile and clothing sectors from major pollutant industries to a much cleaner alternative for a better quality of all citizens’ lives. In a related vein, the notion of the creative economy and more specifically the fashion industry can prompt similar results in terms of jobs and wealth creation. The combining forces of the circular and creative economies and their beneficial output have resulted in the configuration of ethical urban networks which potentially may lead to sources of competitive advantage. All actors involved in the configuration of this urban ethical fashion network from public authorities to private enterprise can bring about positive changes in the urban setting. Preliminary results through action research show that this configuration is an attainable task in terms of circularity by reducing fabric waste produced from local textile mills and through innovative methods of design, production and retail around urban spaces where the network has managed to generate a stream of jobs and financial revenues for all participants. The municipal authorities as the facilitating platform have been of paramount importance in this public-private partnership. In the explorative pilot study conducted about a network of production, consumption in terms of circularity of fashion products, we have experienced a positive disposition. As the network will be fully functional by attracting more participant firms from the textile and clothing sectors, it can be beneficial to Taiwan’s soft power in the region and simultaneously elevate citizens’ awareness on circular methods of fashion production, consumption and disposal which can also lead to the betterment of urban lifestyle and may open export horizons for the firms.

Keywords: the circular economy, the creative economy, ethical urban networks, action research

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Authors: Muhadam Labolo, Afdal R. Anwar, Sucia Miranti Sipisang

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Electronic Local Finance Management Information System (ELFMIS) is integrated application that was used as a tool for local governments to improve the effectiveness of the implementation of the various areas of financial management regulations. Appropriate With Exceptions Opinion (WDP) of Indonesia Audit Agency (BPK) for local governments Mempawah is a financial management problem that must be improved to avoid mistakes in decision-making. The use of Electronic Local Finance Management Information System (ELFMIS) by Mempawah authority has not yet performed maximally. These problems became the basis for research in measuring the effectiveness LFMIS in Mempawah regency. This research uses an indicator variable for measuring information systems effectiveness proposed by Bodnar. This research made use descriptive with inductive approach. Data collection techniques were mixed from qualitative and quantitative techniques, used questionnaires, interviews and documentation. The obstacles in Local Finance Board (LFB) for the application of ELFMIS such as connection, the quality and quantity of human resources, realization of financial resources, absence of maintenance and another facilities of ELFMIS and verification for financial information.

Keywords: effectiveness, E-LFMIS, finance, local government, system

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Authors: Amir Mohagheghzadeh, Solaleh Salimi, Ramin Tafazzoli

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Ecosystem and networks plays significant roles in product innovation. External innovation within developing firms can bring a wide range of advantages for a firm in a competitive market. Using external innovation can be mentioned as one of the most significant concepts regarding the firm’s transition phase into openness. Derivative concepts such as open or shared platform and app stores are the main result of this thinking within the firms. However, adopting this concept and leverage the defined advantages of external innovation should be aligned with other strategies and policies of a firm. Consequently, one of the key aspects that have been raised while using external innovation is how to govern external innovation within a developing firm. This paper describes the frameworks that two pioneer companies in mobile operating system development have used in order to control and govern external innovation through platform.

Keywords: external innovation, open innovation, governance, governance mechanisms, innovation, Apple, iOS, Google, Android

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Authors: Pallavi Malhotra

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This paper examines the importance of ethics in cloud computing. In the modern society, cloud computing is offering individuals and businesses an unlimited space for storing and processing data or information. Most of the data and information stored in the cloud by various users such as banks, doctors, architects, engineers, lawyers, consulting firms, and financial institutions among others require a high level of confidentiality and safeguard. Cloud computing offers centralized storage and processing of data, and this has immensely contributed to the growth of businesses and improved sharing of information over the internet. However, the accessibility and management of data and servers by a third party raise concerns regarding the privacy of clients’ information and the possible manipulations of the data by third parties. This document suggests the approaches various stakeholders should take to address various ethical issues involving cloud-computing services. Ethical education and training is key to all stakeholders involved in the handling of data and information stored or being processed in the cloud.

Keywords: IT ethics, cloud computing technology, cloud privacy and security, ethical education

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Authors: Petr Gurný

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One of the most important tasks in the risk management is the correct determination of probability of default (PD) of particular financial subjects. In this paper a possibility of determination of financial institution’s PD according to the credit-scoring models is discussed. The paper is divided into the two parts. The first part is devoted to the estimation of the three different models (based on the linear discriminant analysis, logit regression and probit regression) from the sample of almost three hundred US commercial banks. Afterwards these models are compared and verified on the control sample with the view to choose the best one. The second part of the paper is aimed at the application of the chosen model on the portfolio of three key Czech banks to estimate their present financial stability. However, it is not less important to be able to estimate the evolution of PD in the future. For this reason, the second task in this paper is to estimate the probability distribution of the future PD for the Czech banks. So, there are sampled randomly the values of particular indicators and estimated the PDs’ distribution, while it’s assumed that the indicators are distributed according to the multidimensional subordinated Lévy model (Variance Gamma model and Normal Inverse Gaussian model, particularly). Although the obtained results show that all banks are relatively healthy, there is still high chance that “a financial crisis” will occur, at least in terms of probability. This is indicated by estimation of the various quantiles in the estimated distributions. Finally, it should be noted that the applicability of the estimated model (with respect to the used data) is limited to the recessionary phase of the financial market.

Keywords: credit-scoring models, multidimensional subordinated Lévy model, probability of default

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Authors: A. Bolaji Adesoye, Alimi Olorunfemi

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This paper examines the impact of small and medium-scale enterprises (SMEs) credit financing and financial market development and their shocks on the output growth of Nigeria. The study estimated a VAR model for Nigeria using 1970-2013 annual data series. Unit root tests and cointegration are carried out. The study also explores IRFs and FEVDs in a system that includes output, commercial bank loan to SMEs, domestic credit to private sector by banks, money supply, lending rate and investment. Findings suggest that shocks in commercial bank credit to SMEs has a major impact on the output changes of Nigeria. Money supply shocks also have a sizeable impact on output growth variations amidst other financial instruments. Lastly, neutrality of investment does not hold in Nigeria as it also has impact on output fluctuations.

Keywords: SMEs financing, financial development, investment, output, Nigeria

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Authors: Nico Rosamilia

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The study evaluates the importance of non-financial disclosure practices for regulators, investors, businesses, and markets. It aims to create a sector-specific set of indicators for environmental, social, and governance (ESG) performances alternative to the ratings of the agencies. The existing literature extensively studies the implementation of ESG rating systems. Conversely, this study has a twofold outcome. Firstly, it should generalize incentive systems and governance policies for ESG and sustainable principles. Therefore, it should contribute to the EU Sustainable Finance Disclosure Regulation. Secondly, it concerns the market and the investors by highlighting successful sustainable investing. Indeed, the study contemplates the effect of ESG adoption practices on corporate value. The research explores the asset pricing angle in order to shed light on the fragmented argument on the finance of ESG. Investors may be misguided about the positive or negative effects of ESG on performances. The paper proposes a different method to evaluate ESG performances. By comparing the results of a traditional econometric approach (Lasso) with a machine learning algorithm (Random Forest), the study establishes a set of indicators for ESG performance. Therefore, the research also empirically contributes to the theoretical strands of literature regarding model selection and variable importance in a finance framework. The algorithms will spit out sector-specific indicators. This set of indicators defines an alternative to the compounded scores of ESG rating agencies and avoids the possible offsetting effect of scores. With this approach, the paper defines a sector-specific set of indicators to standardize ESG disclosure. Additionally, it tries to shed light on the absence of a clear understanding of the direction of the ESG effect on corporate value (the problem of endogeneity).

Keywords: ESG ratings, non-financial information, value of firms, sustainable finance

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Authors: Piotr Prewysz-Kwinto, Grazyna Voss

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Accounting policies are a set of solutions compliant with legal regulations that an entity selects and adopts, and which guarantee a proper quality of financial statements. Those solutions may differ depending on whether the entity adopts national or international accounting standards. The aim of this article is to present accounting principles (policies) in Polish and international legal regulations and their adoption in selected Polish companies listed on the Warsaw Stock Exchange. The research method adopted in this work is the analysis and evaluation of legal conditions in Polish companies.

Keywords: accounting policies, international financial reporting standards, financial statement, method of measuring

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Authors: G. C. Surya Bahadur, Ranjana Kothari

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The paper attempts to analyze linkages between corporate governance and firm performance in India. The study employs a panel data of 50 Nifty companies from 2008 to 2012. Using LSDV panel data model and 2SLS model the study reveals that that good corporate governance practices adopted by companies is positively related with financial performance. Board independence, number of board committees and executive compensation are found to have positive relationship while ownership by promoters and financial leverage have negative relationship with performance. There is existence of bi-directional relationship between corporate governance and financial performance. Companies with sound financial performance are more likely to conform to corporate governance norms and standards and implement sound corporate governance system. The findings indicate that companies can enhance business performance and sustainability by embracing sound corporate governance practices.

Keywords: board structure, corporate governance, executive compensation, ownership structure

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Authors: Abdul-Nasser El-Kassar, Walid Elgammal, Hisham Jawhar

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This paper studies the determinants of the dividends payout ratio. The factors affecting the dividends payout ratio are to be identified. The study focuses only on the cement and construction industry within the MENA region in an attempt to isolate any incoherent behavior. The factors under consideration are: sales growth, ROE, ROA, ROS, debt to equity ratio, firm size, and free cash flow. Data were collected from official stock exchange markets in addition to annual reports. The study considered all firms that paid dividend in each of the three consecutive years starting from 2010 till 2012. Out of the 123 listed firms that work in cement and construction industry in MENA region, only 19 paid dividends in the three consecutive years 2010-12. Our sample consists of the 19 firms (57 observations) which are selected according to purposive sampling. Moreover, the study uses the homogeneous subcategory within the purposive sampling since only similar firms in the construction industry had been examined. The outcome of the study provides a vital insight into the determinants of dividends payout ratio of companies in MENA region. The results showed that the dividend payout ratio has a strong and positive relationship with return on assets and strong but negative relationship with return on equity. On the other hand, the results detected weak relationships between dividend payout ratio and sale growth, debt to equity ratio, firm size, and free cash flow. The study suggests that board of directors tend to compensate shareholders and minimize the agency cost by distributing a high portion of profits in form of dividends whenever return on equity decreases. Also, when the performance of the firm improves, and hence return on assets increases, boards of directors are more generous in distributing profits.

Keywords: dividends payout ratio, profitability firm size, free cashflow, debt to equity ratio

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Authors: Emma Van Schie

Abstract:

The purpose of this study is to use mixed methods research to create typologies of the performance of firms in the cotton-to-clothing value chain in Zimbabwe, and to use these typologies to achieve the objective of adding to the small pool of studies on Sub-Saharan African value chains performing in the context of economic liberalisation and achieving development. The uptake of economic liberalisation measures across Sub-Saharan Africa has led to the restructuring of many value chains. While this action has resulted in some African economies positively reintegrating into global commodity chains, it has also been deeply problematic for the development impacts of the majority of others. Over and above this, these nations have been placed at a disadvantage due to the fact that there is little scholarly and policy research on approaches for managing economic liberalisation and value chain development in the unique African context. As such, the central question facing these less successful cases is how they can integrate into the world economy whilst still fostering their development. This paper draws from quantitative questionnaires and qualitative interviews with 28 stakeholders in the cotton-to-clothing value chain in Zimbabwe. This paper examines the performance of firms in the value chain, and the subsequent local socio-economic development impacts that are affected by the revival of the cotton-to-clothing value chain following its collapse in the wake of Zimbabwe’s uptake of economic liberalisation measures. Firstly, the paper finds the relatively undocumented characteristics and structures of firms in the value chain in the post-economic liberalisation era. As well as this, it finds typologies of the status of firms as either being in operation, closed down, or being placed under judicial management and the common characteristics that these typologies hold. The key findings show how a mixture of macro and local level aspects, such as value chain governance and the management structure of a business, leads to the most successful typology that is able to add value to the chain in the context of economic liberalisation, and thus unlock its socioeconomic development potential. These typologies are used in making industry and policy recommendations on achieving this balance between the macro and the local level, as well as recommendations for further academic research for more typologies and models on the case of cotton value chains in Sub-Saharan Africa. In doing so, this study adds to the small collection of academic evidence and policy recommendations for the challenges that African nations face when trying to incorporate into global commodity chains in attempts to benefit from their associated socioeconomic development opportunities.

Keywords: cotton-to-clothing value chain, economic liberalisation, restructuring value chain, typologies of firms, value chain governance, Zimbabwe

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Authors: Muhammad Yousaf Sadiq

Abstract:

The complexity arises in defining the construction quality due to its perception, based on inherent market conditions and their requirements, the diversified stakeholders itself and their desired output. An quantitative survey based approach was adopted in this constructive study. A questionnaire-based survey was conducted for the assessment of construction Quality perception and expectations in the context of quality improvement technique. The survey feedback of professionals of the leading construction organizations/companies of Pakistan construction industry were analyzed. The financial capacity, organizational structure, and construction experience of the construction firms formed basis for their selection. The quality perception was found to be project-scope-oriented and considered as an excess cost for a construction project. Any quality improvement technique was expected to maximize the profit for the employer, by improving the productivity in a construction project. The study is beneficial for the construction professionals to assess the prevailing construction quality perception and the expectations from implementation of any quality improvement technique in construction projects.

Keywords: construction quality, expectation, improvement, perception

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Authors: Kateřina Struhařová

Abstract:

The paper gives the evidence of quality of accounting information of Czech private companies. In general the private companies in the Czech Republic do not see the benefits of providing accounting information of high quality. Based on the research of financial statements of entrepreneurs and companies in Zlin region it was confirmed that the quality of accounting information differs among the private entities and that the major impact on the accounting information quality has the fact if the financial statements are audited as well as the size of the entity. Also the foreign shareholders and lenders have some impact on the accounting information quality.

Keywords: accounting information quality, financial statements, Czech Republic, private companies

Procedia PDF Downloads 290