Search results for: economics and financial engineering

Authors: Zidane Abderrezaq

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This paper’s primary objective is to identify the relative importance of various Islamic financial products, in theory and in practice, by examining the financing records of the Bank Islam Malaysia (Berhad) and the Algeria Islamic Bank. Currently, seven available Islamic financing products are considered viable alternatives to interest-based conventional contracts: mudarabah (trust financing), musharakah (equity financing), ijarah (lease financing), murabahah (trade financing), qard al-hassan (welfare loan), bay` bi al-thaman al-ajil (deferred payment financing), and istisna` (progressive payments). Among these financial products, mudarabah and musharakah are the most distinct. Their unique characteristics (at least in theory) make Islamic banks and Islamic financing viable alternatives to the conventional interest-based financial system. The question before us is to determine the extent of mudarabah and musharakah in Islamic financing in practice. The data are as follows: the average mudarabah is 5% of total financing, and the average musharakah is less than 3%. The combined average of mudarabah and musharakah for the two Islamic banks is less than 4% of the total finance and advances. The average qard al-hassan is about 4%, while istisna` does not yet exist in practice. Murabahah is the most popular and dominates all other modes of Islamic financing. The average use of murabahah is over 54%. When the bay` bi al-thaman al-ajil is added to the murabahah, the percentage of total financing is shown to be 82.68%. This paper also explores some possible reasons why these two Islamic banks appear to prefer murabahah to mudarabah and musharakah.

Keywords: Islamic banking, Islamic finance, Islamic banking rofitability, investment banking

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Authors: Mamiza Haq

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This paper examines the relevance of bank capital and charter value on bank insolvency and liquidity risks. Using an unbalanced panel of 2,111 unique local banks across 22 countries over 1998-2012, we find that both bank capital and charter value lower insolvency and liquidity risks, but this effect varies among conventional, Islamic, and Islamic-window banks. The risk constraining effect of bank capital becomes more prominent in the post 2007-2008 global financial crisis. Moreover, the relationships vary when conditioned upon other key bank-specific characteristics. For instance, the effect of capital on risk-reduction diminishes in the presence of high charter value for conventional-G7 and Islamic-window banks, during-GFC and pre-GFC period; respectively. Our findings have important policy implications related to bank safety. The results are robust to a range of robustness tests.

Keywords: bank capital, charter value, risk, financial crisis

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Authors: Maciej Czarnecki

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Even though growth is one of the most important strategic objectives for many enterprises, we know relatively little about this phenomenon. This research contributes to broaden our knowledge of managerial consequences of growth. Scales for measuring organizational development and growing pains were developed. Conceptual model of connections among growth, organizational development, growing pains, selected development factors and financial performance were examined. The research process contained literature review, 20 interviews with managers, examination of 12 raters’ opinions, pilot research and 7 point Likert scale questionnaire research on 138 Polish enterprises employing 50-249 people which increased their employment at least by 50% within last three years. Factor analysis, Pearson product-moment correlation coefficient, student’s t-test and chi-squared test were used to develop scales. High Cronbach’s alpha coefficients were obtained. The verification of correlations among the constructs was carried out with factor correlations, multiple regressions and path analysis. When the enterprise grows, it is necessary to implement changes in its structure, management practices etc. (organizational development) to meet challenges of growing complexity. In this paper, organizational development was defined as internal changes aiming to improve the quality of existing or to introduce new elements in the areas of processes, organizational structure and culture, operational and management systems. Thus; H1: Growth has positive effects on organizational development. The main thesis of the research is that if organizational development does not catch up　with growing complexity of growing enterprise, growing pains will arise (lower work comfort, conflicts, lack of control etc.). They will exert a negative influence on the financial performance and may result in serious organizational crisis or even bankruptcy. Thus; H2: Growth has positive effects on growing pains, H3: Organizational development has negative effects on growing pains, H4: Growing pains have negative effects on financial performance, H5: Organizational development has positive effects on financial performance. Scholars considered long lists of factors having potential influence on organizational development. The development of comprehensive model taking into account all possible variables may be beyond the capacity of any researcher or even statistical software used. After literature review, it was decided to increase the level of abstraction and to include following constructs in the conceptual model: organizational learning (OL), positive organization (PO) and high performance factors (HPF). H1a/b/c: OL/PO/HPF has positive effect on organizational development, H2a/b/c: OL/PO/HPF has negative effect on growing pains. The results of hypothesis testing: H1: partly supported, H1a/b/c: supported/not supported/supported, H2: not supported, H2a/b/c: not supported/partly supported/not supported, H3: supported, H4: partly supported, H5: supported. The research seems to be of a great value for both scholars and practitioners. It proved that OL and HPO matter for organizational development. Scales for measuring organizational development and growing pains were developed. Its main finding, though, is that organizational development is a good way of improving financial performance.

Keywords: organizational development, growth, growing pains, financial performance

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Authors: Engy Eissa, Dina M. Yousri

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COVID-19 has hit massively the world economy, financial markets and even societies’ livelihood. The infectious disease caused by the most recently discovered coronavirus was claimed responsible for a shrink in the global economy by 4.4% in 2020. Shortly after the first case in Wuhan was identified, a quick surge in the number of confirmed cases in China was evident and a vast spread worldwide is recorded with cases surpassing the 500,000 cases. Irrespective of the disease’s trajectory in each country, a call for immediate action and prompt government intervention was needed. Given that there is no one-size-fits-all approach across the world, a number of containment and adoption policies were embraced. It was starting by enforcing complete lockdown like China to even stricter policies targeted containing the spread of the virus, augmenting the efficiency of health systems, and controlling the economic outcomes arising from this crisis. Hence, this paper has three folds; first, it examines the impact of containment policies taken by governments on controlling the number of cases and deaths in the given countries. Second, to assess the ramifications of COVID-19 on financial markets measured by stock returns. Third, to study the impact of containment policies measured by the government response index, the stringency index, the containment health index, and the economic support index on financial markets performance. Using a sample of daily data covering the period 31st of January 2020 to 15th of April 2021 for the 10 most hit countries in wave one by COVID-19 namely; Brazil, India, Turkey, Russia, UK, USA, France, Germany, Spain, and Italy. The aforementioned relationships were tested using Panel VAR Regression. The preliminary results showed that the number of daily deaths had an impact on the stock returns; moreover, the health containment policies and the economic support provided by the governments had a significant effect on lowering the impact of COVID-19 on stock returns.

Keywords: COVID-19, government policies, stock returns, VAR

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Authors: Neda Jalaliyoon, Nooh Abu Bakar, Hamed Taherdoost

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The present research recommended balanced scorecard (BSC) framework to appraise the performance of the universities. As the original model of balanced scorecard has four perspectives in order to implement BSC in present research the same model with “financial perspective”, “customer”,” internal process” and “learning and growth” is used as well. With applying fuzzy Delphi method (FDM) and questionnaire sixteen measures of performance were identified. Moreover, with using the analytic network process (ANP) the weights of the selected indicators were determined. Results indicated that the most important BSC’s aspect were Internal Process (0.3149), Customer (0.2769), Learning and Growth (0.2049), and Financial (0.2033) respectively. The proposed BSC framework can help universities to enhance their efficiency in competitive environment.

Keywords: balanced scorecard, higher education, fuzzy delphi method, analytic network process (ANP)

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Authors: Ricardo Bragança, Tom Vinaimont

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This paper discusses the introduction of processes of self-determined learning (heutagogy) into a graduate course on financial modeling, using elements of entangled pedagogy and Biggs’ constructive alignment. To encourage learners to take control of their own learning journey and develop critical thinking and problem-solving skills, each session in the course receives tailor-made media-enhanced pedagogical assets. The design of those assets specifically supports entangled pedagogy, which opposes technological or pedagogical determinism in support of the collaborative integration of pedagogy and technology. Media assets for each of the ten sessions in this course consist of three components. The first component in this three-pronged approach is a game-cut-like cinematographic representation that introduces the context of the session. The second component represents a character from an open-source-styled community that encourages self-determined learning. The third component consists of a character, which refers to the in-person instructor and also aligns learning outcomes and assessment tasks, using Biggs’ constructive alignment, to the cinematographic and open-source-styled component. In essence, the course's metamorphosis helps students apply the concepts they've studied to actual financial modeling issues. The audio-visual media assets create a storyline throughout the course based on gamified and real-world applications, thus encouraging student engagement and interaction. The structured entanglement of pedagogy and technology also guides the instructor in the design of the in-class interactions and directs the focus on outcomes and assessments. The transformation process of this graduate course in financial modeling led to an institutional teaching award in 2021. The transformation of this course may be used as a model for other courses and programs in many disciplines to help with intended learning outcomes integration, constructive alignment, and Assurance of Learning.

Keywords: innovative education, active learning, entangled pedagogy, heutagogy, constructive alignment, project based learning, financial modeling, graduate business education

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Authors: Louati Salma, Louhichi Awatef, Boujelbene Younes

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Analysis of the trade-off between competition and financial stability has been at the center of academic and policy debate for over two decades and especially since the 2007-2008 global financial crises. We use information on 10 OIC countries from 2005 to 2014 to investigate the influence of bank competition on individual bank stability and risk-taking. Alternatively, we explore whether the quality of prudential regulation may affect the nexus between competition and banking stability/risk-taking. We provide a particular attention to the Islamic banking system which principally involves with the Riba-free instruments as compared to the conventional interest-based system. We first run a dynamic panel regression (GMM), and then we apply a panel vector autoregressive (PVAR) methodology to compare both banking business models.

Keywords: Lerner index, Islamic banks, non-performing loans, prudential regulations, z-score

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Authors: João Pereira Dos Santos

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The uneven spatial distribution of start-ups and their respective survival may reflect comparative advantages resulting from the local institutional background. For the first time, we explore this idea using Data Envelopment Analysis (DEA) to assess relative efficiency of Portuguese municipalities in this specific context. We depart from the related literature where expenditure is perceived as a desirable input by choosing a measure of fiscal responsibility and infrastructural variables in the first stage. Comparing results for 2006 and 2010, we find that mean performance decreased substantially with 1) the effects of the Global Financial Crisis; 2) as municipal population increases and 3) as financial independence decreases. A second stage is then computed employing a double-bootstrap procedure to evaluate how the regional context outside the control of local authorities (e.g. demographic characteristics and political preferences) impacts on efficiency.

Keywords: entrepreneurship, political economy, public finance, accountability, crisis, efficiency, Portuguese municipalities

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Authors: Delphine Vendryes, Dushyanth Sekhar, Baojia Tong, Matthew Theisen, Chester Curme

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Much of the data that inform the decisions of governments, corporations and individuals are harvested from unstructured documents. Data extraction is defined here as a process that turns non-machine-readable information into a machine-readable format that can be stored, for instance, in a database. In financial services, introducing more automation in data extraction pipelines is a major challenge. Information sought by financial data consumers is often buried within vast bodies of unstructured documents, which have historically required thorough manual extraction. Automated solutions provide faster access to non-machine-readable datasets, in a context where untimely information quickly becomes irrelevant. Data quality standards cannot be compromised, so automation requires high data integrity. This multifaceted task is broken down into smaller steps: ingestion, table parsing (detection and structure recognition), text analysis (entity detection and disambiguation), schema-based record extraction, user feedback incorporation. Selected intermediary steps are phrased as machine learning problems. Solutions leveraging cutting-edge approaches from the fields of computer vision (e.g. table detection) and natural language processing (e.g. entity detection and disambiguation) are proposed.

Keywords: computer vision, entity recognition, finance, information retrieval, machine learning, natural language processing

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Authors: A. Beril Tugrul

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Demand on production and thereby the global need of energy is growing continuously. Each country has different trends on energy demand and supply according to their geopolitical and geographical locations, underground reserves, weather conditions and level of industrialization. Conventional energy resources such as oil, gas and coal –in other words fossil resources- remain dominant on primary energy supply in spite of causing of environmental problems. Energy supply and demand securities are essential within the energy importing and exporting countries. This concept affected all sectors, but especially impressed on political aspects of the countries and also global economic views.

Keywords: energy policy, energy economics, energy strategy, global trends, petro-dollar recycling

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Authors: Feijoo E. Colomine Duran, Carlos E. Peñaloza Corredor

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There modeling component selection financial investment (Portfolio) a variety of problems that can be addressed with optimization techniques under evolutionary schemes. For his feature, the problem of selection of investment components of a dichotomous relationship between two elements that are opposed: The Portfolio Performance and Risk presented by choosing it. This relationship was modeled by Markowitz through a media problem (Performance) - variance (risk), ie must Maximize Performance and Minimize Risk. This research included the study and implementation of multi-objective evolutionary techniques to solve these problems, taking as experimental framework financial market equities Colombia Stock Exchange between 2009-2015. Comparisons three multiobjective evolutionary algorithms, namely the Nondominated Sorting Genetic Algorithm II (NSGA-II), the Strength Pareto Evolutionary Algorithm 2 (SPEA2) and Indicator-Based Selection in Multiobjective Search (IBEA) were performed using two measures well known performance: The Hypervolume indicator and R_2 indicator, also it became a nonparametric statistical analysis and the Wilcoxon rank-sum test. The comparative analysis also includes an evaluation of the financial efficiency of the investment portfolio chosen by the implementation of various algorithms through the Sharpe ratio. It is shown that the portfolio provided by the implementation of the algorithms mentioned above is very well located between the different stock indices provided by the Colombia Stock Exchange.

Keywords: finance, optimization, portfolio, Markowitz, evolutionary algorithms

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Authors: F. Ghandehari, H. Lu, L. El-Jahel, D. Jayasuriya

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Disagreement among investors is a fundamental aspect of financial markets, significantly influencing market dynamics. Measuring this disagreement has traditionally posed challenges, often relying on proxies like analyst forecast dispersion, which are limited by biases and infrequent updates. Recent movements in social media indicate that retail investors actively seek financial advice online and can influence the stock market. The evolution of the investing landscape, particularly the rise of social media as a hub for financial advice, provides an alternative avenue for real-time measurement of investor sentiment and disagreement. Platforms like Reddit offer rich, community-driven discussions that reflect genuine investor opinions. This research explores how social media empowers retail investors and the potential of leveraging textual analysis of social media content to capture daily fluctuations in investor disagreement. This study investigates the relationship between daily investor disagreement and trading volume, focusing on the role of social media platforms in shaping market dynamics, specifically using data from WallStreetBets (WSB) on Reddit. This paper uses data from 2020 to 2023 from WSB and analyses 4,896 firms with enough social media activity in WSB to define stock-day level disagreement measures. Consistent with traditional theories that disagreement induces trading volume, the results show significant evidence supporting this claim through different disagreement measures derived from WSB discussions.

Keywords: disagreement, retail investor, social finance, social media

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Authors: Ojo Johnson Adelakun

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This study explores the long-term relationships between manufacturing output (MO) and several economic determinants, interest rate (IR), inflation rate (INF), exchange rate (EX), credit to the private sector (CPSM), gross claims on the government sector (GCGS), using monthly data from March 1966 to December 2023. Employing advanced econometric techniques including Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR), the analysis provides several key insights. The findings reveal a positive association between interest rates and manufacturing output, which diverges from traditional economic theory that predicts a negative correlation due to increased borrowing costs. This outcome is attributed to the financial resilience of large enterprises, allowing them to sustain investment in production despite higher interest rates. In addition, inflation demonstrates a positive relationship with manufacturing output, suggesting that stable inflation within target ranges creates a favourable environment for investment in productivity-enhancing technologies. Conversely, the exchange rate shows a negative relationship with manufacturing output, reflecting the adverse effects of currency depreciation on the cost of imported raw materials. The negative impact of CPSM underscores the importance of directing credit efficiently towards productive sectors rather than speculative ventures. Moreover, increased government borrowing appears to crowd out private sector credit, negatively affecting manufacturing output. Overall, the study highlights the need for a coordinated policy approach integrating monetary, fiscal, and financial sector strategies. Policymakers should account for the differential impacts of interest rates, inflation, exchange rates, and credit allocation on various sectors. Ensuring stable inflation, efficient credit distribution, and mitigating exchange rate volatility are critical for supporting manufacturing output and promoting sustainable economic growth. This research provides valuable insights into the economic dynamics influencing manufacturing output and offers policy recommendations tailored to South Africa’s economic context.

Keywords: domestic credit, government claims, financial variables, manufacturing output, financial analysis

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Authors: Mariam Vardiashvili

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The economic value of the asset impairment process is quite large. Impairment reflects the reduction of future economic benefits or service potentials itemized in the asset. The assets owned by public sector entities bring economic benefits or are used for delivery of the free-of-charge services. Consequently, they are classified as cash-generating and non-cash-generating assets. IPSAS 21 - Impairment of non-cash-generating assets, and IPSAS 26 - Impairment of cash-generating assets, have been designed considering this specificity.  When measuring impairment of assets, it is important to select the relevant methods. For measurement of the impaired Non-Cash-Generating Assets, IPSAS 21 recommends three methods: Depreciated Replacement Cost Approach, Restoration Cost Approach, and  Service Units Approach. Impairment of Value in Use of Cash-Generating Assets (according to IPSAS 26) is measured by discounted value of the money sources to be received in future. Value in use of the cash-generating asserts (as per IPSAS 26) is measured by the discounted value of the money sources to be received in the future. The article provides classification of the assets in the public sector  as non-cash-generating assets and cash-generating assets and, deals also with the factors which should be considered when evaluating  impairment of assets. An essence of impairment of the non-financial assets and the methods of measurement thereof evaluation are formulated according to IPSAS 21 and IPSAS 26. The main emphasis is put on different methods of measurement of the value in use of the impaired Cash-Generating Assets and Non-Cash-Generation Assets and the methods of their selection. The traditional and the expected cash flow approaches for calculation of the discounted value are reviewed. The article also discusses the issues of recognition of impairment loss and its reflection in the financial reporting. The article concludes that despite a functional purpose of the impaired asset, whichever method is used for measuring the asset, presentation of realistic information regarding the value of the assets should be ensured in the financial reporting. In the theoretical development of the issue, the methods of scientific abstraction, analysis and synthesis were used. The research was carried out with a systemic approach. The research process uses international standards of accounting, theoretical researches and publications of Georgian and foreign scientists.

Keywords: cash-generating assets, non-cash-generating assets, recoverable (usable restorative) value, value of use

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Authors: Raymond Li

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In this project a web-based classroom response system (CRS) was used in the teaching an intermediate level economics course. This system allows the instructor to post a question on the screen and students to answer questions using their own electronic mobile devices. The questions and the results summarizing student responses can be shown to students simultaneously and the instructor can make timely feedback to students in class. CRS gives students a chance to respond to the instructor’s question privately, encouraging students who might not typically speak up in class to express their thoughts and opinions. There is a vast literature on the advantages and challenges of using CRS. However, empirical evidence on the student attributes that increase the effectiveness of CRS in improving student learning outcomes is sparse. The purpose of this project is to (1) find out if the use of CRS is beneficial to students taking economics, and (2) discover key student attributes that will likely make CRS more effective. Students’ performance in examinations and an end-of-semester questionnaire were used to assess the effectiveness of CRS in this project. Comparing the examination scores of the CRS treatment group and control group, the treatment group performed considerably better and statistically significant differences were found basing on paired t-tests on the differences. According to the questionnaire results, around 75% of the students in the treatment group generally agreed that CRS allowed them to express their views more freely. We also observed that students who prefer to use instant messaging rather than making conversations are generally more positive towards CRS. The use of CRS also benefits the instructor – students’ rating of the instructor in the teaching evaluation was significantly higher for the CRS treatment group.

Keywords: education technology, classroom response system, student attributes, economics education

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Authors: M. Otrusinova, E. Pastuszkova

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The article is addressing the currently ongoing reform processes of transforming the public finance accounting based on cash flow principle to accrual principle. The presented analysis concerns the issues associated with the introduction of the state accounting from the perspective of municipal employees in compiling the opinions of financial experts in conditions of the Czech Republic. The aim of this paper is to present outcomes of analysis focused on currently discussed topics which are related to introducing the accrual principle into accounting of selected entities, especially municipalities and municipality-funded institutions. The output of the paper consists of comparing the application of the accrual principle in the financial reporting of municipalities in the Czech Republic and Slovakia. In conclusion and based on the survey, respondents from Slovak municipalities that have already adopted the accrual accounting principle show better opinion than Czech municipalities.

Keywords: accrual principle, accounting, accounting reform, Czech Republic, municipalities, public finance

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Authors: Udeh Nneka Evelyn

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The shortcoming of traditional costing system in terms of validity, accuracy, consistency, and Relevance increased the need for modern management accounting system. Activity –Based Costing (ABC) can be used as a modern tool for planning, Control and decision making for management. Past studies on ABC system have focused on manufacturing firms thereby making the studies on service firms scanty to some extent. This paper reviewed the application and relevance of activity-based costing technique in service oriented business organizations by employing a qualitative research method which relied heavily on literature review of past and current relevant articles focusing on ABC. Findings suggest that ABC is not only appropriate for use in a manufacturing environment; it is also most appropriate for service organizations such as financial institutions, the healthcare industry and government organization. In fact, some banking and financial institutions have been applying the concept for years under other names. One of them is unit costing, which is used to calculate the cost of banking services by determining the cost and consumption of each unit of output of functions required to deliver the service. ABC in very basic terms may provide very good payback for businesses. Some of the benefits that relate directly to the financial services industry are: identification the most profitable customers: more accurate product and service pricing: increase product profitability: Well organized process costs.

Keywords: business, costing, organizations, planning, techniques

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Authors: Santi Gopal Maji, R. A. J. Syngkon

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The changing attitude of the corporate enterprises from maximizing economic benefit to corporate sustainability after the publication of Brundtland Report has attracted the interest of researchers to investigate the sustainability practices of firms and its impact on financial performance. To enrich the empirical literature in Asian context, this study examines the disclosure pattern of corporate sustainability and the influence of sustainability reporting on financial performance of firms from four Asian countries (Japan, South Korea, India and Indonesia) that are publishing sustainability report continuously from 2009 to 2016. The study has used content analysis technique based on Global Reporting Framework (3 and 3.1) reporting framework to compute the disclosure score of corporate sustainability and its components. While dichotomous coding system has been employed to compute overall quantitative disclosure score, a four-point scale has been used to access the quality of the disclosure. For analysing the disclosure pattern of corporate sustainability, box plot has been used. Further, Pearson chi-square test has been used to examine whether there is any difference in the proportion of disclosure between the countries. Finally, quantile regression model has been employed to examine the influence of corporate sustainability reporting on the difference locations of the conditional distribution of firm performance. The findings of the study indicate that Japan has occupied first position in terms of disclosure of sustainability information followed by South Korea and India. In case of Indonesia, the quality of disclosure score is considerably less as compared to other three countries. Further, the gap between the quality and quantity of disclosure score is comparatively less in Japan and South Korea as compared to India and Indonesia. The same is evident in respect of the components of sustainability. The results of quantile regression indicate that a positive impact of corporate sustainability becomes stronger at upper quantiles in case of Japan and South Korea. But the study fails to extricate any definite pattern on the impact of corporate sustainability disclosure on the financial performance of firms from Indonesia and India.

Keywords: corporate sustainability, quality and quantity of disclosure, content analysis, quantile regression, Asian countries

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Authors: Shaya Alshahrani

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Perceived risks play a major role in consumer intentions, behaviors, attitudes, and decisions about online shopping in the KSA. This paper investigates the influence of six perceived risk dimensions on Saudi consumers: product risk, information risk, financial risk, privacy and security risk, delivery risk, and terms and conditions risk empirically. To ensure the success of this study, a random survey was distributed to reflect the consumers’ perceived risk and to enable the generalization of the results. Data were collected from 323 respondents in the Kingdom of Saudi Arabia (KSA): 50 who had never shopped online and 273 who had done so. The results indicated that all six risks influenced the respondents’ perceptions of online shopping. The non-online shoppers perceived financial and delivery risks as the most significant barriers to online shopping. This was followed closely by performance, information, and privacy and security risks. Terms and conditions were perceived as less significant. The online consumers considered delivery and performance risks to be the most significant influences on internet shopping. This was followed closely by information and terms and conditions. Financial and privacy and security risks were perceived as less significant. This paper argues that introducing adequate legal solutions to addressing related problems arising from this study is an urgent need. This may enhance consumer trust in the KSA online market, increase consumers’ intentions regarding online shopping, and improve consumer protection.

Keywords: perceived risk, online contracts, Saudi Arabia, consumer protection

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Authors: Harris Maduku, Irrshad Kaseeram

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The objective of this paper is to understand the factors behind the formalisation willingness of South African black owned SMMEs. Cross-sectional data were collected using a questionnaire from 390 informal businesses in Johannesburg and Pretoria using stratified random sampling and clustered sampling. This study employed a multinomial logistic regression to quantitatively understand what encourages informal SMMEs to be willing to mainstreaming their operations. We find government support, corruption, employment compensation, family labour, success perception, education status, age and financing as key drivers on willingness of SMMEs to formalize their operations. The findings of our study points to government departments to invest more on both financial and non-financial strategies like capacity building and business education on informal SMMEs to cultivate their willingness to mainstream.

Keywords: mainstreaming, transition, informal, willingness, multinomial logit

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Authors: Sevelina Ndlovu

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Financial Technology (fintech) advancement is recognised as one of the most transformational innovations in the financial industry. Fintech has given rise to internet-only digital banking, a novel financial technology advancement, and innovation that allows banking services through internet applications with no need for physical branches. This technology is becoming a new banking normal among consumers for its ubiquitous and real-time access advantages. There is evident switching and migration from traditional banking towards these fintech facilities, which could possibly pose a systemic risk if not properly understood and monitored. Fintech advancement has also brought about the emergence and escalation of financial technology consumption themes such as trust, security, perceived risk, and sustainability within the banking industry, themes scarcely covered in existing theoretic literature. To that end, the objective of this research is to investigate factors that determine fintech adoption and propose an integrated adoption model. This study aims to establish what the significant drivers of adoption are and develop a conceptual model that integrates technological, behavioral, and environmental constructs by extending the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2). It proposes integrating constructs that influence financial consumption themes such as trust, perceived risk, security, financial incentives, micro-investing opportunities, and environmental consciousness to determine the impact of these factors on the adoption and intention to use digital banking apps. The main advantage of this conceptual model is the consolidation of a greater number of predictor variables that can provide a fuller explanation of the consumer's adoption of digital banking Apps. Moderating variables of age, gender, and income are incorporated. To the best of author’s knowledge, this study is the first that extends the UTAUT2 model with this combination of constructs to investigate user’s intention to adopt internet-only digital banking apps in the UK context. By investigating factors that are not included in the existing theories but are highly pertinent to the adoption of internet-only banking services, this research adds to existing knowledge and extends the generalisability of the UTAUT2 in a financial services adoption context. This is something that fills a gap in knowledge, as highlighted to needing further research on UTAUT2 after reviewing the theory in 2016 from its original version of 2003. To achieve the objectives of this study, this research assumes a quantitative research approach to empirically test the hypotheses derived from existing literature and pilot studies to give statistical support to generalise the research findings for further possible applications in theory and practice. This research is explanatory or casual in nature and uses cross-section primary data collected through a survey method. Convenient and purposive sampling using structured self-administered online questionnaires is used for data collection. The proposed model is tested using Structural Equation Modelling (SEM), and the analysis of primary data collected through an online survey is processed using Smart PLS software with a sample size of 386 digital bank users. The results are expected to establish if there are significant relationships between the dependent and independent variables and establish what the most influencing factors are.

Keywords: banking applications, digital banking, financial technology, technology adoption, UTAUT2

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Authors: Nishi Malhotra

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Art has developed as a mode of investment and saving. Art and culture of any nation is the source of foreign direct investment (FDI) generation and growth development. Several intermediaries and skill-building organizations thrive on at and culture for their earnings. Indian art market has grown to Rs. 2000 Crores. Art establishment houses access to privileged information is the main reason for arbitrariness and volatility in the market. The commercialization of art and development of the markets with refinement in the taste of the customers have led to the development of art as an investment avenue. Investors keen on investing in these products can do so, and earnings from art are taxable too, like any other capital asset. This research paper is aimed at exploring the role of art and culture as an investment avenue in India and reasons for increasing volatilities in the art market. Based on an extensive literature review and secondary research, a benchmarking study has been conducted to capture the growth of the art as an investment avenue. These studies indicate that during the financial crisis of 2008-10, the art emerged as an alternative investment avenue. The paper aims at discussing the financial engineering of various art funds and instruments. Based on secondary data available from Sotheby’s, Christies, Bonham, there is a positive correlation between strategic diversification and increasing return in the Art market. Similarly, digitization has led to disintermediation in the art markets and also helped to increase the market base. The data clearly enumerates the growing interest of the Indian investor towards art as an investment option. Much like any other broad asset class, art market too thrives on excess returns provided by diversification. Many financial intermediaries and art funds have emerged, to offer valuable investment planning advisory to a genuine investor. This paper clearly highlights the increasing returns of strategic diversification and its impact on reducing volatility in the art markets. Moreover, with coming up of e-auctions and websites, investors are able to analyse art more objectively. Digitization and commercialization of art have definitely helped in reducing volatility in world art markets.

Keywords: art, investment avenue, diversification, digitization

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Authors: Lidia Sanchis-Marco, Antonio Rubia

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In this paper we analyze the state-dependent risk-spillover in different economic areas. To this end, we apply the quantile regression-based methodology developed in Adams, Füss and Gropp approach to examine the spillover in conditional tails of daily returns of indices of the banking industry in the US, BRICs, Peripheral EMU, Core EMU, Scandinavia, the UK and Emerging Markets. This methodology allow us to characterize size, direction and strength of financial contagion in a network of bilateral exposures to address cross-border vulnerabilities under different states of the economy. The general evidence shows as the spillover effects are higher and more significant in volatile periods than in tranquil ones. There is evidence of tail spillovers of which much is attributable to a spillover from the US on the rest of the analyzed regions, specially on European countries. In sharp contrast, the US banking system show more financial resilience against foreign shocks.

Keywords: spillover effects, Bank Contagion, SDSVaR, expected shortfall, VaR, expectiles

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Authors: Pi Hsia Liang

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The rise of Facebook, Twitter, and other social networks significantly changes in interconnections between people, enhancing the process of information dissemination and amplify the influence of that information. Therefore, to develop informational efficiency or signaling equilibrium type of information environment among social networks, without adverse selection effects, becomes an important issue. Thus, someone may post a piece of intentional information in relation to personal interest for trying to create marginal influence. Therefore, economists are seeking to establish theories of informational efficiency under social network environment in order to resolve adverse selection issues. Reputation could be one of the important factors in the process of creating informational efficiency. Additionally, investors how to process green information, or information of corporate social responsibility is a very important study. This study essentially employs experimental study for examining how investors use stock relevant green information in Facebook and various Taiwan local networks. Facebook, and blogs of Money DJ, Technews and cnYES, respectively, are the primary sites for this examination that also allow to differentiate effects between Facebook and other local social networks. Questionnaire is developed for such an experimental testing. Note that questionnaire allows this study to group, for example, decision frequency and length of time duration focusing on social networks that are used for discriminating investor type and competence of informed investor. This study selects 500 investors that can be separated into two respective 250 samples as the control group and 250 samples in such an experimental. The quantity of sample investor sufficiently results in statistic significance of this experimental study. The empirical results of this study can be used for explaining how financial information in relation to corporate social responsibility would be disseminated in social websites. Therefore, we can lead to better interpretation of price/earnings relationship type of study and empirical studies of green information usefulness or informational efficiency Note that the above mentioned empirical studies did not exist any social network and annual report of corporate social responsibility. This study expects to find the results that both network degree and network cluster significantly affected green information dissemination frequency. In other words, investors with more connections and with high clustered connections might exert a greater influence on their green information dissemination process. The preferred users of financial social networks could make better stock decision that could amplify effects of green information. In addition, Facebook would be more influential than other local Taiwan financial social networks, although Facebook is not a specialized financial social network. In other words, the popularity and reputation effects of Facebook significantly contribute to usefulness of green information and influence of green information. Third, it has a better chance to find rumor or cheating information in local Taiwan financial social networks than Facebook. In other words, Facebook possesses reputation effect, or a better informational efficiency. Or, even though Taiwan local financial social networks have marginal informational effects on stock price, because of shortage of informational efficiency or monitoring system, information could be a tool for those whom owning superior information.

Keywords: network effect on financial services, informational efficiency theory, social networks, social websites

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Authors: Abdelmounaim Lahrech, Hajar Bousfiha

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This paper examines equity market integration between Morocco and France and its consequent implications on international portfolio diversification. In the absence of stock market linkages, Morocco can act as a diversification destination to European investors, allowing higher returns at a comparable level of risk in developed markets. In contrast, this attractiveness is limited if both financial markets show significant linkage. The research empirically measures financial market’s integration in by capturing the conditional correlation between the two markets using the Generalized Autoregressive Conditionally Heteroscedastic (GARCH) model. Then, the research uses the Dynamic Conditional Correlation (DCC) model of Engle (2002) to track the correlations. The research findings show that there is no important increase over the years in the correlation between the Moroccan and the French equity markets, even though France is considered Morocco’s first trading partner. Failing to prove evidence of the stock index linkage between the two countries, the volatility series of each market were assumed to change over time separately. Yet, the study reveals that despite the important historical and economic linkages between Morocco and France, there is no evidence that equity markets follow. The small correlations and their stationarity over time show that over the 10 years studied, correlations were fluctuating around a stable mean with no significant change at their level. Different explanations can be attributed to the absence of market linkage between the two equity markets.

Keywords: equity market linkage, DCC GARCH, international portfolio diversification, Morocco, France

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Authors: Xiaojun Wang

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In a lucky emerging market, most Sino commercial banks has developed rapidly and achieved dazzling performance in recent years. As a large sound commercial bank with long history, Wells Fargo Company(WFC) is taken as a mirror in this paper in order to roughly find out the relevance on life circle of the Sino banks in comparison with WFC. Two financial measures return on equity(ROE) and overall labor productivity(OLP), three commercial banks the Hong Kong and Shanghai Banking Corporation Limited(HSBC), the Bank of Communication(BCM) and China Minsheng Bank(CMSB) are selected. The comparison data coming from historical annual reports of each company vary from 13 years to 51 years. Several conclusions from the results indicate that most Sino commercial banks would be continually developing with lower financial measures performance for later several decades.

Keywords: commercial bank, features comparison, labor productivity, return on equity

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Authors: Puran Prasad Adhikari

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Considering the fact that when we are able to communicate science and economics effectively to broader nonprofessional audiences, it promotes a great understanding of its wider relevance to society and encourages more informed and confident decision-making at all levels, from the government to communities to individuals. The study has been conducted. This study is aimed to examine the understanding of the general public of economics and the basic sciences functioning in our surroundings in our day-to-day life. Data was gathered through historical documents related to science communication and through interviews with the public. The statistical result shows that there is a great lack of knowledge in the general public about the basic sciences and how economics impacts their life daily. The difficulties faced by the public include the view that these things can only be understood by professionals and it is beyond their capacity to grasp these concepts, the use of technical words and jargon by the professionals, and the lack of the medium to understand even if they want to learn it. The result further indicates that the lack of this basic knowledge also leads to bad decision-making, which causes frustration and anxiety. The result shows the great correlation between the confidence level of a person and the knowledge of basic science and economics. The factor behind this was the right decision-making capacity of the individual, which boosts the happy hormones of the individual. So indirectly, we found the correlation between mental health and the understanding of science and economics. The public wants to have a basic understanding and concepts of these topics, but they complain that there is no effective medium through which they can gain the understanding; the medium which is available is full of jargon and technical terms directed to professional and highly educated which they consider is beyond their reach. So, communicating the basic concepts to the general public is of great importance in the 21st century for the overall progress of society. The professional one can make this possible by considering the level of public understanding and making the communication and the programs comprehensible to the layman. Various means can be used to make this successful and effective, e.g., cartoon guide books, Q&A with the layman, animations use, and daily life examples. This study’s implication will help educators of high-level institutions and policymakers improve general public [layman] access to comprehensible knowledge.

Keywords: layman, comprehensible, decision making, frustration, confidence

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Authors: Lin Ji

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The 1923 HSBC Building is one of the landmarks of Shanghai's Bund complex and is described as "one of the finest buildings from the Suez Canal to the Bering Strait". Mr George Leopold Wilson of Palmer&Turner and his design team combine the latest British design taste with Chinese elements and bring the high standard of London manufacturing to Shanghai. This paper reviews the establishment background and construction process of the Hongkong and Shanghai Bank Corporation in Shanghai, and analyzes the characteristics of various styles and ornament of HSBC. At the same time, using the research method of iconography, compared with Britain's exploration of modern design mode in the early 20th century, we can deeply understand how this "monument of world commerce and prosperity" realizes the identity construction of its financial empire in the Far East in the perfect combination of practicality and artistry.

Keywords: early 20-century Shanghai, the bund, the HSBC building, classical styles, ornament, identity construction

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Authors: Alexander Hempfing

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The desire to understand business cycle fluctuations, trade interdependencies and co-movement has a long tradition in economic thinking. From input-output economics to business cycle theory, researchers aimed to find appropriate answers from an empirical as well as a theoretical perspective. This paper empirically analyses how the production structure of the global economy and several states developed over time, what their distributional properties are and if there are network specific metrics that allow identifying structurally important nodes, on a global, national and sectoral scale. For this, the World Input-Output Database was used, and different statistical methods were applied. Empirical evidence is provided that the importance of the Eastern hemisphere in the global production network has increased significantly between 2000 and 2014. Moreover, it was possible to show that the sectoral eigenvector centrality indices on a global level are power-law distributed, providing evidence that specific national sectors exist which are more critical to the world economy than others while serving as a hub within the global production network. However, further findings suggest, that global production cannot be characterized as a scale-free network.

Keywords: economic integration, industrial organization, input-output economics, network economics, production networks

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Authors: R. S. Quintal, J. L. Tesch Santos, M. D. Davis, E. C. de Santana, M. de F. Bandeira dos Santos

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The objective is to identify the contributions from the introduction of the computerized system deal within the Accounting Department of Brazilian Navy Financial Directorship and its possible effects on the budgetary and financial harvest of Brazilian Navy. The relevance lies in the fact that the management process is responsible for the continuous improvement of organizational performance through higher levels of quality in their activities. Improvements in organizational processes have direct effects on crops cost, quality, reliability, flexibility and speed. The method of study of this research is the case study. The choice of case study attended, among other demands, a need for greater flexibility to study processes related to a computerized system. The sources of evidence were used literature, documentary and direct observation. Direct observation was made by monitoring the implementation of the computerized system in the Division of Management Analysis. The main findings of the study point to the fact that the computerized system may contribute significantly to the standardization of information. There was improvement of internal processes in the division of management analysis, made possible the consolidation of a standard management and performance analysis that contribute to global homogeneity in the treatment of information essential to the process of decision making. This study has limitations related to the fact the search result be subject exclusively to the case studied, and it is impossible to generalize to other organs of government.

Keywords: process management, management control, business intelligence, Brazilian Navy

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