Search results for: Financial asset return predictability

Authors: Komlan Sedzro

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

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

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Authors: Barbora Chmelikova

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Current financial markets offer a wide range of financial products to the consumers. However, access to the financial products is not always provided or guaranteed, particularly in less developed countries. For this reason, financial inclusion is an important component in the modern society. This paper investigates financial inclusion and what financial products are held by university students majoring in finance fields. The OECD methodology was used to examine the awareness and use of financial products. The study was conducted via online questionnaire at Masaryk University in the Czech Republic among finance students. The results show that the students use current and savings accounts more than any other financial products.

Keywords: financial inclusion, financial products, personal finance, university students

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Authors: Carlos M. Parra, Matthew Sutherland, Ranjita Poudel

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Reduced mental-bandwidth related to low socioeconomic status (low-SES) might lead to impulsivity and risk-taking behavior, which poses as a major hurdle towards asset building (savings) behavior. Understanding the relationship between risk-related personality metrics as well as laboratory risk behavior and real-life savings behavior can help facilitate the development of effective asset building programs, which are vital for mitigating financial vulnerability and income inequality. As such, this study explored the relationship between personality metrics, laboratory behavior in a risky decision-making task and real-life asset building (savings) behaviors among individuals with low-SES from Miami, Florida (FL). Study participants (12 male, 15 female) included racially and ethnically diverse adults (mean age 41.22 ± 12.65 years), with incomplete higher education (18% had High School Diploma, 30% Associates, and 52% Some College), and low annual income (mean $13,872 ± $8020.43). Participants completed eight self-report surveys and played a widely used risky decision-making paradigm called the Balloon Analogue Risk Task (BART). Specifically, participants played three runs of BART (20 trials in each run; total 60 trials). In addition, asset building behavior data was collected for 24 participants who opened and used savings accounts and completed a 6-month savings program that involved monthly matches, and a final reward for completing the savings program without any interim withdrawals. Each participant’s total savings at the end of this program was the main asset building indicator considered. In addition, a new effective use of average pump bet (EUAPB) indicator was developed to characterize each participant’s ability to place winning bets. This indicator takes the ratio of each participant’s total BART earnings to average pump bet (APB) in all 60 trials. Our findings indicated that EUAPB explained more than a third of the variation in total savings among participants. Moreover, participants who managed to obtain BART earnings of at least 30 cents out of their APB, also tended to exhibit better asset building (savings) behavior. In particular, using this criterion to separate participants into high and low EUAPB groups, the nine participants with high EUAPB (mean BART earnings of 35.64 cents per APB) ended up with higher mean total savings ($255.11), while the 15 participants with low EUAPB (mean BART earnings of 22.50 cents per APB) obtained lower mean total savings ($40.01). All mean differences are statistically significant (2-tailed p  .0001) indicating that the relation between higher EUAPB and higher total savings is robust. Overall, these findings can help refine asset building interventions implemented by policy makers and practitioners interested in reducing financial vulnerability among low-SES population. Specifically, by helping identify individuals who are likely to readily take advantage of savings opportunities (such as matched savings programs) and avoiding the stipulation of unnecessary and expensive financial coaching programs to these individuals. This study was funded by J.P. Morgan Chase (JPMC) and carried out by scientists from Florida International University (FIU) in partnership with Catalyst Miami.

Keywords: balloon analogue risk task (BART), matched savings programs, asset building capability, low-SES participants

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Authors: Iqra Ali

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This study uses panel Vector Auto Regression (VAR) to analyses the dynamic link between banking and insurance activities based on the asset size of the insurance industry for 73 countries between 1980 and 2014. Assets in the insurance industry and banking activities usually have a Granger causal link, according to panel Granger-causality tests. Impulse response analyses for the entire sample show that the size of insurance assets responds favorably to a shock to the liquid liabilities and deposits of the financial system but negatively to a shock to deposit money bank assets and private credit offered by commercial banks, other financial institutions, and deposit banks. While the findings for middle- and low-income nations varied significantly, the observations for high-income countries are essentially the same. Furthermore, we find that there is a substantial interplay between banking and insurance activity in civil law nations as opposed to common law ones.

Keywords: vector autoregression, banking, insurance, Granger-causality

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Authors: Erindi Allaj

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This paper studies arbitrage pricing theory in financial markets with transaction costs. We extend the existing theory to include the more realistic possibility that the price at which the investors trade is dependent on the traded volume. The investors in the market always buy at the ask and sell at the bid price. Transaction costs are composed of two terms, one is able to capture the implicit transaction costs and the other the price impact. Moreover, a new definition of a self-financing portfolio is obtained. The self-financing condition suggests that continuous trading is possible, but is restricted to predictable trading strategies which have left and right limit and finite quadratic variation. That is, predictable trading strategies of infinite variation and of finite quadratic variation are allowed in our setting. Within this framework, the existence of an equivalent probability measure is equivalent to the absence of arbitrage opportunities, so that the first fundamental theorem of asset pricing (FFTAP) holds. It is also proved that, when this probability measure is unique, any contingent claim in the market is hedgeable in an L2-sense. The price of any contingent claim is equal to the risk-neutral price. To better understand how to apply the theory proposed we provide an example with linear transaction costs.

Keywords: arbitrage pricing theory,
transaction costs, fundamental theorems of arbitrage, financial markets

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Authors: Zahid Ahmad, Samia Yousaf

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The main purpose of this study is to evaluate and assess the financial position, operating performance, and recent outlook of the companies. This study investigates the impact of capital structure, dividend policy and sustainability on the value of firms of textile spinning sector of Pakistan which is listed on Pakistan stock exchange. The panel data technique has been applied to this group of textile sector which is textile spinning. This study covers the last ten years of time period. All the data related to the variables have been collected from the annual reports and financial statements of the textile sector firms. There are differently related determinants to measure the capital structure which are fixed assets turnover ratio, debt ratio, equity ratio, debt to equity ratio, assets tangibility, and shareholder’s equity. Dividend policy is being measured by two determinants which are earning per share (EPS) and dividend payout ratio. Sustainability is being measured by three suitable factors which are sales growth, gross profit margin ratio and firm size. These are three independent variables and their determinants of this study. Value of firm is measured through the return on asset (ROA). Capital structure is at the top of the list among all the three variables. According to the results of this research work, somewhere all the three variables generates positive and significant effect on the firm’s performance and its growth.

Keywords: capital structure, dividend policy, panel data, sustainability

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Authors: Randa Ismail Sharafeddine

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The Islamic economic system is distinctive in that it implicitly recognizes money as a separate, independent component of production capable of assuming risk and so entitled to the same reward as other Entrepreneurial Factors of Production (EFP). Conventional theory does not identify money capital explicitly as a component of production; rather, interest is recognized as a reward for capital, the interest rate is the cost of money capital, and it is also seen as a cost of physical capital. The conventional theory of production examines how diverse non-entrepreneurial resources (Land, Labor, and Capital) are selected; however, the economic theory community is largely unaware of the reasons why these resources choose to remain as non-entrepreneurial resources as opposed to becoming entrepreneurial resources. Should land, labor, and financial asset owners choose to work for others in return for rent, income, or interest, or should they engage in entrepreneurial risk-taking in order to profit. This is a decision made often in the actual world, but it has never been effectively treated in economic theory. This article will conduct a critical analysis of the conventional classification of factors of production and propose a classification for resource allocation and income distribution (Rent, Wages, Interest, and Profits) that is more rational, even within the conventional theoretical framework for evaluating and developing production and distribution theories. Money is an essential component of production in an Islamic economy, and it must be used to sustain economic activity.

Keywords: financial capital, production theory, distribution theory, economic activity, riba avoidance, institution of participation

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Authors: Ndagi Salihu

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Corporate governance mechanisms are the control measures for ensuring that all the interests groups are equally represented and management are working towards wealth creation in the interest of all. Therefore, there are many empirical studies during the last three decades on corporate governance and firm performance. However, little is known about the effects of family ownership on the relationship between corporate governance and firm performance, especially in the developing economy like Nigeria. This limit our understanding of the unique governance dynamics of family ownership with regards firm performance. This study examined the impact of family ownership on the relationship between governance mechanisms and financial performance of publicly listed companies in Nigeria. The study adopted quantitative research methodology using correlational ex-post factor design and secondary data from annual reports and accounts of a sample of 23 listed companies for a period of 5 years (2014-2018). The explanatory variables are the board size, board composition, board financial expertise, and board audit committee attributes. Financial performance is proxy by Return on Assets (ROA) and Return on Equity (ROE). Multiple panel regression technique of data analysis was employed in the analysis, and the study found that family ownership has a significant positive effect on the relationships between corporate governance mechanisms and financial performance of publicly listed firms in Nigeria. This finding is the same for both the ROA and ROE. However, the findings indicate that board size, board financial expertise, and board audit committee attributes have a significant positive impact on the ROA and ROE of the sample firms after the moderation. Moreover, board composition has significant positive effect on financial performance of the sample listed firms in terms of ROA and ROE. The study concludes that the use of family ownership in the control of firms in Nigeria could improve performance by reducing the opportunistic actions managers as well as agency problems. The study recommends that publicly listed companies in Nigeria should allow significant family ownership of equities and participation in management.

Keywords: profitability, board characteristics, agency theory, stakeholders

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Authors: Carlos Fontanillas

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The implementation of the lean six sigma methodology aims to implement practices to systematically improve processes by eliminating defects, making them cheaper. The implementation of projects with the methodology uses a division into five phases: definition, measurement, analysis, implementation, and control. In this process, it is understood that the implementation of said methodology generates benefits to organizations that adhere through the improvement of their processes. In the case of a telecommunications company, it was realized that the implementation of a lean six sigma project contributed to the improvement of the presented process, generating a financial return with the avoided cost. However, such study has limitations such as a specific segment of performance and procedure, i.e., it can not be defined that return under other circumstances will be the same. It is also concluded that lean six sigma projects tend to contribute to improved processes evaluated due to their methodology that is based on statistical analysis and quality management tools and can generate a financial return. It is hoped that the present study can be used to provide a clearer view of the methodology for entrepreneurs who wish to implement process improvement actions in their companies, as well as to provide a foundation for professionals working with lean six sigma projects. After the review of the processes, the completion of the project stages and the monitoring for three months in partnership with the owner of the process to ensure the effectiveness of the actions, the project was completed with the objective reached. There was an average of 60% reduction with the issuance of undue invoices generated after the deactivation and it was possible to extend the project to other companies, which allowed a reduction well above the initially stipulated target.

Keywords: quality, process, lean six sigma, organization

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Authors: Saeed Rabea Baatwah, Zalailah Salleh, Norsiah Ahmad

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This study examines whether audit committee chair with financial expertise enhances the audit committee role in financial reporting quality in emerging market. We investigate this influence by employing the direct effect and moderating effect of audit committee chair with financial expertise on financial reporting timeliness. By using Omani data and the panel data method for two proxies for financial reporting timeliness, we find that audit committee chair with financial expertise enhances the timeliness of financial reporting through making the disclosure of annual reports timely. Further, we report evidence showing that both accounting and non-accounting financial expertise on the audit committee have a positive and significant influence on the timeliness of financial reporting. We also document that the association between financial expertise and the timeliness of financial reporting is more pronounced when the chair of the audit committee has financial expertise. This study is among the first to comprehensively prove that audit committee chair with financial expertise contributes to the quality of financial reporting in emerging market.

Keywords: audit committee, chair with financial expertise, timeliness of financial reporting, Oman

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Authors: Li Sheng

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Based on an extended post-Keynesian model, we find that the association between the savings rate and income inequality is negative if savers’ funds are borrowed by spending households for consumption but positive if savings are channeled to investing firms for production. A negative association, such as the one that exists in the U.S., hinges on an income illusion created by an asset bubble and cheap credit. Thus, financial globalization leads consumption and income inequality to diverge, and the divergence is more extreme if lower-income groups have higher debt ratios. A positive association, such as the one that exists in China, relates to liquidity constraints faced by consumers such that consumption inequality closely follows income inequality. Our results imply that income inequality must be reduced in both types of countries to increase savings in deficit economies with negative associations and to reduce savings in surplus economies with positive associations.

Keywords: savings rate, income inequality, financial globalization, global imbalances

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Authors: Prasansha Kumari

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Financial Literacy is the possession of knowledge and understanding of financial matters. Financial Literacy often entails the knowledge of properly making decisions pertaining to certain personal financial areas like real estate, insurance investing, and savings. This paper intends to identify and analyze the financial knowledge among university undergraduates by using 200 undergraduates in four faculties of University of Kelaniya, Sri Lanka. Collected data will be analyzed by descriptive research method using SPSS package. Expected outcomes are considerable percentage of undergraduates have basic knowledge on financial matters while it has a law percentage for advanced financial literacy among undergraduates. Students from faculty of Commerce and Management and Science have good understanding about financial matters than undergraduates in other two faculties

Keywords: advanced finance, undergraduates, financial literacy, savings

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Authors: Yunice Karina Tumewang

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As we have seen, the number of Muslim and their awareness toward financial products and services that conform to Islamic principles are growing rapidly today. Thus, it makes the market environment potentially beneficial for Shari-compliant funds with the expanding prospective client base. However, over the last decade, only small portion of this huge potential market has been covered by the established Islamic asset management firms. This study aims to examine the factors of this untapped market particularly in the demand side. This study will use the qualitative method with primary data through a questionnaire distributed to 500 samples of Muslim population. It will shed light on Muslim attitudes and expectations toward Sharia-compliant retirement planning and pensions. It will also help to raise the awareness of market players to see Islamic pension fund as a promising industry in the foreseeable future.

Keywords: Islamic marketing, Islamic finance, Islamic asset management, Islamic pension fund

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Authors: James M. Wakiru, Liliane Pintelon, Peter Muchiri, Peter Chemweno

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The fast-changing business and operational environment are forcing organizations to adopt asset performance management strategies, not only to reduce costs but also maintain operational and production policies while addressing demand. To attain optimal asset performance management, a framework that ensures a continuous and systematic approach to analyzing an organization’s current maturity level and expected improvement regarding asset maintenance processes, strategies, technologies, capabilities, and systems is essential. Moreover, this framework while addressing maintenance-intensive organizations should consider the diverse business, operational and technical context (often dynamic) an organization is in and realistically prescribe or relate to the appropriate tools and systems the organization can potentially employ in the respective level, to improve and attain their maturity goals. This paper proposes an asset maintenance maturity model to assess the current capabilities, strength and weaknesses of maintenance processes an organization is using and analyze gaps for improvement via structuring set levels of achievement. At the epicentre of the proposed framework is the utilization of maintenance objective selected by an organization for various maintenance optimization programs. The framework adapts the Capability Maturity Model of assessing the maintenance process maturity levels in the organization.

Keywords: asset maintenance, maturity models, maintenance objectives, optimization

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Authors: Alicja Reuben, Amira Annabi

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In this paper, we explore the relationship between the selection of valuation techniques by investment banks and the banks’ risk perceptions and performance in the context of the theory of performativity. We use inferential statistics to study these relationships by building a unique dataset based on the disclosure of 12 investment banks’ 2012-2015 annual financial statements. Moreover, we create two constructs, namely intensity of use and risk perception. We measure the intensity of use as a frequency metric of how often a particular bank adopts valuation techniques for a particular asset or liability. We measure risk perception based on disclosed ranges of values for unobservable inputs. Our results are twofold: we find a significant negative correlation between (1) intensity of use and investment bank performance and (2) intensity of use and risk perception. These results indicate that a performative process takes place, and the valuation techniques are enacting their environment.

Keywords: language, linguistics, performativity, financial techniques

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Authors: Lucie Cote, Sonia McFadden

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Mental health problems in the workplace are currently one of the main causes of absences. Research work has highlighted the importance of a collaborative process involving the stakeholders in the return-to-work process and has established the best management practices to ensure a successful return-to-work. However, very few studies have specifically explored the combination of various management models and determined whether they could satisfy the needs of the stakeholders. The objective of this study is to analyze two models for managing the return to work: the ‘medical-administrative’ and the ‘support of the worker’ in order to understand the actions and actors involved in these models. The study also aims to explore whether these models meet the needs of the actors involved in the management of the return to work. A qualitative case study was conducted in a Canadian federal organization. An abundant internal documentation and semi-directed interviews with six managers, six workers and four human resources professionals involved in the management of records of employees returning to work after a mental health problem resulted in a complete picture of the return to work management practices used in this organization. The triangulation of this data facilitated the examination of the benefits and limitations of each approach. The results suggest that the actions of management for employee return to work from both models of management ‘support of the worker’ and ‘medical-administrative’ are compatible and can meet the needs of the actors involved in the return to work. More research is needed to develop a structured model integrating best practices of the two approaches to ensure the success of the return to work.

Keywords: return to work, mental health, management models, organizations

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Authors: Sam Ng, Lewis Leighton, Sam Atkinson, Carson Yan, Landan Hu, Leslie Cheung, Brian Yap, Kent Lung, Ketat Sarakune

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This paper introduces a method for verifying cryptocurrency reserves that balances the need for both transparency and data confidentiality. Our methodology employs cryptographic techniques, including Merkle Trees, Bulletproof, and zkSnark, to verify that total assets equal or exceed total liabilities, represented by customer funds. Importantly, this verification is achieved without disclosing sensitive information such as the total asset value, customer count, or cold wallet addresses. We delve into the construction and implementation of this methodology. While the system is robust and scalable, we also identify areas for potential enhancements to improve its efficiency and versatility. As the digital asset landscape continues to evolve, our approach provides a solid foundation for ensuring continued trust and security in digital asset platforms.

Keywords: cryptocurrency, crypto-currency, proof-of-reserve, por, zero-knowledge, ZKP

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Authors: Ben Kwame Agyei-Mensah

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This study investigated the influence of firm-specific characteristics which include proportion of Non-Executive Directors, ownership concentration, firm size, profitability, debt equity ratio, liquidity and leverage on the extent and quality of financial ratios disclosed by firms listed on the Ghana Stock Exchange. The research was conducted through detailed analysis of the 2012 financial statements of the listed firms. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis which forms the main data analysis. The results of the extent of financial ratio disclosure level, mean of 62.78%, indicate that most of the firms listed on the Ghana Stock Exchange did not overwhelmingly disclose such ratios in their annual reports. The results of the low quality of financial ratio disclosure mean of 6.64% indicate that the disclosures failed woefully to meet the International Accounting Standards Board's qualitative characteristics of relevance, reliability, comparability and understandability. The results of the multiple regression analysis show that leverage (gearing ratio) and return on investment (dividend per share) are associated on a statistically significant level as far as the extent of financial ratio disclosure is concerned. Board ownership concentration and proportion of (independent) non-executive directors, on the other hand were found to be statistically associated with the quality of financial ratio disclosed. There is a significant negative relationship between ownership concentration and the quality of financial ratio disclosure. This means that under a higher level of ownership concentration less quality financial ratios are disclosed. The findings also show that there is a significant positive relationship between board composition (proportion of non-executive directors) and the quality of financial ratio disclosure.

Keywords: voluntary disclosure, firm-specific characteristics, financial reporting, financial ratio disclosure, Ghana stock exchange

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Authors: Nadezhda Kvatashidze, Elena Kharabadze

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It is broadly known that lease is a flexible means of funding enterprises. Lease reduces the risk related to access and possession of assets, as well as obtainment of funding. Therefore, it is important to refine lease accounting. The lease accounting regulations under the applicable standard (International Accounting Standards 17) make concealment of liabilities possible. As a result, the information users get inaccurate and incomprehensive information and have to resort to an additional assessment of the off-balance sheet lease liabilities. In order to address the problem, the International Financial Reporting Standards Board decided to change the approach to lease accounting. With the deficiencies of the applicable standard taken into account, the new standard (IFRS 16 ‘Leases’) aims at supplying appropriate and fair lease-related information to the users. Save certain exclusions; the lessee is obliged to recognize all the lease agreements in its financial report. The approach was determined by the fact that under the lease agreement, rights and obligations arise by way of assets and liabilities. Immediately upon conclusion of the lease agreement, the lessee takes an asset into its disposal and assumes the obligation to effect the lease-related payments in order to meet the recognition criteria defined by the Conceptual Framework for Financial Reporting. The payments are to be entered into the financial report. The new lease accounting standard secures supply of quality and comparable information to the financial information users. The International Accounting Standards Board and the US Financial Accounting Standards Board jointly developed IFRS 15: ‘Revenue from Contracts with Customers’. The standard allows the establishment of detailed revenue recognition practical criteria such as identification of the performance obligations in the contract, determination of the transaction price and its components, especially price variable considerations and other important components, as well as passage of control over the asset to the customer. IFRS 15: ‘Revenue from Contracts with Customers’ is very similar to the relevant US standards and includes requirements more specific and consistent than those of the standards in place. The new standard is going to change the recognition terms and techniques in the industries, such as construction, telecommunications (mobile and cable networks), licensing (media, science, franchising), real property, software etc.

Keywords: assessment of the lease assets and liabilities, contractual liability, division of contract, identification of contracts, contract price, lease identification, lease liabilities, off-balance sheet, transaction value

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Authors: S. L. Tulasi Devi, Shivam Azad

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The primary objective of this study is to analyze the impact of green bond issuance on the stock prices of respective Indian companies. An event study methodology has been employed to study the effect of green bond issuance. For in-depth study and analysis, this paper used different window frames, including 15-15 days, 10-10 days, 7-7days, 6-6 days, and 5-5 days. Further, for better clarity, this paper also used an uneven window period of 7-5 days. The period of study covered all the companies which issued green bonds during the period of 2017-2022; Adani Green Energy, State Bank of India, Power Finance Corporation, Jain Irrigation, and Rural Electrification Corporation, except Indian Renewable Energy Development Agency and Indian Railway Finance Corporation, because of data unavailability. The paper used all three event study methods as discussed in earlier literature; 1) constant return model, 2) market-adjusted model, and 3) capital asset pricing model. For the fruitful comparison between results, the study considered cumulative average return (CAR) and buy and hold average return (BHAR) methodology. For checking the statistical significance, a two-tailed t-statistic has been used. All the statistical calculations have been performed in Microsoft Excel 2016. The study found that all other companies have shown positive returns on the event day except for the State Bank of India. The results demonstrated that constant return model outperformed compared to the market-adjusted model and CAPM. The p-value derived from all the methods has shown an almost insignificant impact of the issuance of green bonds on the stock prices of respective companies. The overall analysis states that there’s not much improvement in the market efficiency of the Indian Stock Markets.

Keywords: green bonds, event study methodology, constant return model, market-adjusted model, CAPM

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Authors: Laura de Zwaan, Tracey West

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There is a sustained observable gender gap in financial literacy, with females consistently having lower levels than males. This research explores the knowledge and experiences of high school students in Australia aged 14 to 18 in order to understand how this gap can be improved. Using a predominantly qualitative approach, we find evidence to support impacts on financial literacy from financial socialization and socio-economic environment. We also find evidence that current teaching and assessment approaches to financial literacy may disadvantage female students. We conclude by offering recommendations to improve the way financial literacy education is delivered within the curriculum.

Keywords: financial literacy, financial socialization, gender, maths

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Authors: Omran Al Balushi, Haitham Al Rawahi

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Enterprise Asset Management (eAM) has been implemented across different Generation, Transmission and Distribution subsidiaries in Nama Group companies. As part of Nama group, Oman Electricity Transmission Company (OETC) was the first company to implement this system. It was very important for OETC to implement and maintain such a system to achieve its business objectives and for effective operations, which will also support the delivery of the asset management strategy. Enterprise Asset Management (eAM) addresses the comprehensive asset maintenance requirements of Oman Electricity Transmission Company (OETC). OETC needs to optimize capacity and increase utilization, while lowering unit production. E-AM will enable OETC to adopt this strategy. Implementation of e-AM has improved operation performance with preventive and scheduled maintenance as well as it increased safety. Implementation of e-AM will also enable OETC to create optimal asset management strategy which will increase revenue and decrease cost by effectively monitoring operational data such as maintenance history and operation conditions. CMMS (Computerised Maintenance Management System) is the main software and the back-bone of e-AM system. It is used to provide an improved working practice to properly establish information and data flow related to maintenance activities. Implementation of e-AM system was one of the factors that supported OETC to achieve ISO55001 Certificate on fourth quarter of 2016. Also, full implementation of e-AM system will result in strong integration between CMMS and Geographical Information Systems (GIS) application and it will improve OETC to build a reliable maintenance strategy for all asset classes in its Transmission network. In this paper we will share our experience and knowledge of implementing such a system and how it supported OETC’s management to make decisions. Also we would highlight the challenges and difficulties that we encountered during the implementation of e-AM. Also, we will list some features and advantages of e-AM in asset management, preventive maintenance and maintenance cost management.

Keywords: CMMS, Maintenance Management, Asset Management, Maintenance Strategy

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Authors: I. Hakki Eraslan, Birol Ozturk, Istemi Comlekci

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This paper begins by defining what is meant by “globalization” in finance and by identifying the sources of value-added in the internationally-competitive financial services sector origination, trading and distribution of debt and equity capital market instruments and their derivatives, foreign exchange trading and securities brokerage, management of market risk and credit risk, loan syndication and structured bank financings, corporate finance and advisory services, and asset management. These activities are considered in terms of a “value-chain” one that ultimately gives rise to the real economic gains attributable to financial-center operations. The research presents available evidence as to where the relevant value-added activities usually take place. It then examines the “centrifugal” and “centripetal” forces that determine the concentration or dispersal of value-added activity in financial intermediation, both interregionally and internationally. Next, the research assesses the factors, which appear to underlie the locational pattern of international financial centers that has evolved. In preparing this paper, also it is examined the current position and the main opportunities and challenges facing world major financial services sector, and attempted to lay out a potential vision and strategies. It is conducted extensive research, including many internal research materials and publications. It is also engaged closely with the academia, industry practitioners and regulators, and consulted market experts from major world financial centers. More than 60 in‐depth consultative sessions were conducted in the past two years which provided insightful suggestions and innovative ideas on how to further financial industry’s position as an international financial centre. The paper concludes with the outlook for the future pattern of financial centers in the global competitive environment. The ideas and advice gathered are condensed into this paper that recommends to the strategic decision leaders a vision and a strategy for financial services sector to move forward amid a highly competitive environment.

Keywords: financial centers, competitiveness, financial services industry, economics

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Authors: Seyed Sajjad Habibi

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The aim of this study is to investigate the impact of global financial crises and corporate financial crisis on tax evasion of companies listed on the Tehran Stock Exchange. For this purpose, panel data in the periods of financial crisis period (2007 to 2012) and without a financial crisis (2004, 2005, 2006, 2013, 2014, and 2015) was analyzed using multivariate linear regression. The results indicate a significant relationship between the corporate financial crisis (bankruptcy risk) and tax evasion in the global financial crisis period. The results also showed a significant relationship between the corporate bankruptcy risk and tax evasion in the period with no global financial crisis. A significant difference was found between the bankruptcy risk and tax evasion in the period of the global financial crisis and that with no financial crisis so that tax evasion increased in the financial crisis period.

Keywords: global financial crisis, corporate financial crisis, bankruptcy risk, tax evasion risk, emerging markets

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Authors: Zouari Ezzeddine, Ghraieb Ikram

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From the results of the academic literature which evokes the limitations of previous studies, this article shows the reasons for multidimensionality Prediction of financial bubbles. A new framework for modeling study predicting financial bubbles by linking a set of variable presented on several dimensions dictating its multidimensional character. It takes into account the preferences of financial actors. A multicriteria anticipation of the appearance of bubbles in international financial markets helps to fight against a possible crisis.

Keywords: classical measures, predictions, financial bubbles, multidimensional, artificial neural networks

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Authors: Nkongho Ayuketang Arreyndip, Ebobenow Joseph

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In this paper, temperature extremes are forecast by employing the block maxima method of the generalized extreme value (GEV) distribution to analyse temperature data from the Cameroon Development Corporation (CDC). By considering two sets of data (raw data and simulated data) and two (stationary and non-stationary) models of the GEV distribution, return levels analysis is carried out and it was found that in the stationary model, the return values are constant over time with the raw data, while in the simulated data the return values show an increasing trend with an upper bound. In the non-stationary model, the return levels of both the raw data and simulated data show an increasing trend with an upper bound. This clearly shows that although temperatures in the tropics show a sign of increase in the future, there is a maximum temperature at which there is no exceedance. The results of this paper are very vital in agricultural and environmental research.

Keywords: forecasting, generalized extreme value (GEV), meteorology, return level

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Authors: Bilal Arshad

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This study aims to analyse the impact of financial globalisation on economic growth, specifically focusing on how it is influenced by the implementation of International Financial Reporting Standards (IFRS). In addition, we analyze the influence of IFRS and a country's level of financial development on this relationship. Available literature suggested that this study expands upon previous research on financial globalization, financial development, and economic growth by examining the impact of International Financial Reporting Standards (IFRS) on advanced and developed countries from 1996 to 2019. The application of the Generalised Method of Moments estimator reveals that financial globalisation in nations that have adopted the International Financial Reporting Standards (IFRS) has a substantial and favourable impact on economic growth. The impact of financial globalisation on economic growth is influenced by the level of financial development.

Keywords: financial globalization, financial development, IFRS, economic growth

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Authors: Natalia Feruleva

Abstract:

The goal of this paper is to develop the fraud risk assessment model basing on both relational and financial data and test the impact of the relationships between Russian non-public companies on the likelihood of financial fraud commitment. Relationships mean various linkages between companies such as parent-subsidiary relationship and person-related relationships. These linkages may provide additional opportunities for committing fraud. Person-related relationships appear when firms share a director, or the director owns another firm. The number of companies belongs to CEO and managed by CEO, the number of subsidiaries was calculated to measure the relationships. Moreover, the dummy variable describing the existence of parent company was also included in model. Control variables such as financial leverage and return on assets were also implemented because they describe the motivating factors of fraud. To check the hypotheses about the influence of the chosen parameters on the likelihood of financial fraud, information about person-related relationships between companies, existence of parent company and subsidiaries, profitability and the level of debt was collected. The resulting sample consists of 160 Russian non-public firms. The sample includes 80 fraudsters and 80 non-fraudsters operating in 2006-2017. The dependent variable is dichotomous, and it takes the value 1 if the firm is engaged in financial crime, otherwise 0. Employing probit model, it was revealed that the number of companies which belong to CEO of the firm or managed by CEO has significant impact on the likelihood of financial fraud. The results obtained indicate that the more companies are affiliated with the CEO, the higher the likelihood that the company will be involved in financial crime. The forecast accuracy of the model is about is 80%. Thus, the model basing on both relational and financial data gives high level of forecast accuracy.

Keywords: financial fraud, fraud prediction, non-public companies, regression analysis, relational data

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Authors: Eunsup Daniel Shim, Jooh Lee

Abstract:

The US financial crisis of 2008 and subsequent Global Financial Crisis were considered by many economists the worst financial crisis since the Great Depression of the 1930s. As a results, Dodd-Frank Act has passed and aims '(1) to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", (2) to protect the American taxpayer by ending bailouts, (3) to protect consumers from abusive financial services practices, and for other purposes.' The enactment of Dodd-Frank Act, in part, intended to significantly influence accountability on executive compensation especially for the financial institutions. This paper empirically investigates the changes in Financial CEOs’ compensation since the Financial Crisis of 2008. Our findings show that in the post- Financial Crisis period financial leverage is significant factor influencing the CEOs’ total compensation. In addition market based performance such as stock price and market-to-book ratio shows significant positive relationship with CEO compensation. This change can be interpreted an attempt to reduce opportunistic behavior of top executives after the financial crisis and the enactment of the Dodd-Frank Act.

Keywords: financial CEO compensation, firm performance, financial crisis of 2008, dodd-frank act

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Authors: Elena Tkachenko, Elena Rogova, Daria Koval

Abstract:

The paper examines the ways of cash flows forecasting in the dynamic external environment. The so-called new reality in economy lowers the predictability of the companies’ performance indicators due to the lack of long-term steady trends in external conditions of development and fast changes in the markets. The traditional methods based on the trend analysis lead to a very high error of approximation. The macroeconomic situation for the last 10 years is defined by continuous consequences of financial crisis and arising of another one. In these conditions, the instruments of forecasting on the basis of fuzzy sets show good results. The fuzzy sets based models turn out to lower the error of approximation to acceptable level and to provide the companies with reliable cash flows estimation that helps to reach the financial stability. In the paper, the applicability of the model of cash flows forecasting based on fuzzy logic was analyzed.

Keywords: cash flow, industrial enterprise, forecasting, fuzzy sets

Procedia PDF Downloads 210