Search results for: financial development

Authors: Irfan Ullah Munir, Shen Yue, Muhammad Shahzad Ijaz, Saad Hussain, Syeda Yumna Zaidi

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Financial literacy is fundamental to every decision-making process and has received attention from researchers, regulatory bodies and policy makers in the recent past. This study is an attempt to evaluate financial literacy in an emerging economy, particularly Pakistan, and its influence on people's stock market participation. Data of this study was collected through a structured questionnaire from a sample of 300 respondents. EFA is used to check the convergent and discriminant validity. Data is analyzed using Hayes (2013) approach. A set of demographic control variables that have passed the mean difference test is used. We demonstrate that participants with financial literacy tend to invest more in the stock market. We also find that association among financial literacy and participation in stock market gets moderated by gender.

Keywords: Financial literacy, Stock market participation, Gender, PSX

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Authors: Zijian Cheng, Frank Liu, Yupu Sun

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The relationship between the intensity of share pledging activities and the level of financial constraint in publicly listed firms in China is examined in this paper. Empirical results show that the high financial constraint level may motivate insiders to use share pledging as an alternative funding source and an expropriation mechanism. Share collateralization can cause a subsequently more constrained financing condition. Evidence is found that share pledging made by the controlling shareholder is likely to mitigate financial constraints in the following year. Research findings are robust to alternative measures and an instrumental variable for dealing with endogeneity problems.

Keywords: share pledge, financial constraint, controlling shareholder, dividend policy

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Authors: Sankar Majumder

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Development of Rural Entrepreneurs requires a holistic approach involving social, economic, political, technical, and environmental and many other issues. It needs a thorough understanding of the economy and society. It's true that agricultural development, rural development and many other social and right based development programmes have resulted in the growth of income in the rural sector. The development of rural entrepreneurs is necessary to utilise these opportunities. Many programmes and policies in the spheres of organisational, financial, infrastructural and technical supports have been taken to promote rural industries. But if one looks at the growth and development of rural industrial units, especially the manufacturing units, the picture is not promising. This paper aims at analysing the possible causes and its solutions in terms of (1) Mind set of the society towards business as a livelihood; (2) Sufficiency and appropriateness of the existing organisational, financial, infrastructural and technical supports. The paper is based on secondary data on various aspects of rural enterprises and the author’s experiences in the course of his work as a practitioner in this field. Growth of units and employment in the rural industries shows that the entrepreneurs are more inclined towards trading units than towards manufacturing ventures. The growth of rural industries is constrained not by the insufficiency of the supply of finance but by the insufficient demand for finance. The task is to increase the supply of entrepreneurs by creating an entrepreneurial environment. Incubation for rural entrepreneurs is the need of the hour.

Keywords: business mind set, entrepreneurial environment, supply of finance, technical support

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Authors: Muhammad Irfan

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The UN General Assembly has advocated improving energy efficiency by SDG criteria to promote global economic growth. Pakistan is confronted with financial obstacles when it comes to acquiring energy efficiency because of the COVID-19 pandemic, economic and political instability, budgetary strains, and poor financial circumstances. The study examines how cutting-edge financing approaches like FinTech, financial inclusion, and green financing affect Pakistan's energy consumption. It finds noteworthy outcomes. The study's results have demonstrated the important impact of these funding methods on energy conservation. The best and most helpful finance tool for energy efficiency is green financing; yet, because of differences in characteristics, workings, and financial institutions, FinTech, and financial inclusion play a smaller role in Pakistan. The researchers propose that to achieve energy efficiency, FinTech activities and funding criteria such as green bonds should be reviewed. It also advised authorities to create energy system-friendly regulations for green finance in Pakistan.

Keywords: green finance, FinTech, financial inclusion, energy efficiency, Pakistan

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Authors: Firano Zakaria, Filali Adib Fatine

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The issue f convergence in theoretical models (classical or Keynesian) has been widely discussed. The results of the work affirm that most countries are seeking to get as close as possible to a steady state in order to catch up with developed countries. In this paper, we have retested this question whether it is absolute or conditional. The results affirm that the degree of convergence of countries like Morocco is very low and income is still far from its equilibrium state. Moreover, the analysis of financial convergence, of the countries in our panel, states that the pace in this sector is more intense: countries are converging more rapidly in financial terms. The question arises as to why, with a fairly convergent financial system, growth does not respond, yet the financial system should facilitate this economic convergence. Our results confirm that the degree of information exchange between the financial system and the economic system did not change significantly between 1985 and 2017. This leads to the hypothesis that the financial system is failing to serve its role as a creator of information in developing countries despite all the reforms undertaken, thus making the existence of an economic demon in the Maxwell prevail.

Keywords: economic convergence, financial convergence, financial system, entropy

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Authors: Teguh Sugiarto

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Background: The research aims to explore if there is fraud in a financial statement, use the Act stated that Benford's distribution all digits must compare the number will follow the trend of lower number. Research methods: This research uses all the analysis number being in Benford's law. After receiving the results of the analysis of all the digits, the author makes a distinction between implementation using the scale above and below 5%, the rate of occurrence of difference. With the number which have differences in the range of 5%, then can do the follow-up and the detection of the onset of fraud against the financial statements. The findings: From the research that has been done can be drawn the conclusion that the average of all numbers appear in the financial statements, and compare the rates of occurrence of numbers according to the characteristics of Benford's law. About the existence of errors and fraud in the financial statements of PT medco Energy Tbk did not occur. Conclusions: The study concludes that Benford's law can serve as indicator tool in detecting the possibility of in financial statements to case studies of PT Medco Energy Tbk for the fiscal year 2000-2010.

Keywords: Benford law, first digits, all digits number Benford law, financial statement

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Authors: B. O. Oyedoyin, M. O. Ilori, T. O. Oyebisi, B. A. Oluwale, O. O. Jegede

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The study was designed to evaluate the business development and transfer of technologies to small manufacturing companies by research institutes in South Western Nigeria. The study covered all the industrial research institutions with headquarters in South Western Nigeria. The study showed that the involvement of scientists in innovation process was rated highest in the idea generation (4.14) and idea screening (4.29) phases; high in R&D (3.86) and fairly high in pilot plant development (2.71) and commercialization (2.43) phase. Their involvement was rated low in business analysis and development (2.14), and test marketing (2.29) phase. The involvement of engineers was rated highest in idea generation (3.28), fairly high in R&D (2.71), pilot plant development (2.57), and idea screening (2.40) phases. However, their involvement was rated low in business analysis and development (2.0), test marketing (2.0), and commercialization (1.28) phases. The involvement of technology marketers in innovation process was generally rated fairly high in R&D (2.7) and business analysis and development (2.6), and low in all the other phases of innovation. However, their involvement at IAR&T, FIIRO, and NIOMR in all the phases was rated very high (3.0-5.0). The involvement of entrepreneurs was generally rated from fairly high to low (2.7-2.3) in all the phases of innovation. The involvement of financial institutions in all the phases of innovation was generally rated low (1.28-1.71). In conclusion, the study showed that the involvement of stakeholders like entrepreneurs and financial institutions in technology packaging for commercialization is very low.

Keywords: research institutes, national innovation system, Nigeria, entrepreneurs, financial institution

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Authors: Layal Mansour

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This paper breaks down Egypt’s financial crisis by constructing a customized financial stress index by including the vulnerable economic indicator “dollarization” as a vulnerable indicator in the credit and exchange sector. The Financial Stress Index for Egypt (FSIE) includes informative vulnerable indicators of the main financial sectors: the banking sector, the equities market, and the foreign exchange market. It is calculated on a monthly basis from 2010 to December 2022, so to report the two recent world’s most devastating financial crises: Covid 19 crisis and Ukraine-Russia War, in addition to the local 2016 and 2022 financial crises. We proceed first by a graphical analysis then by empirical analysis in running under Vector Autoregression (VAR) Model, dynamic causality tests between foreign reserves, dollarization rate, and FSIE. The graphical analysis shows that unexpectedly, Egypt’s economy seems to be immune to internal economic/political instabilities, however it is highly exposed to the foreign and exchange market. Empirical analysis confirms the graphical observations and proves that dollarization, or more precisely debt in foreign currency seems to be the main trigger of Egypt’s current financial crisis.

Keywords: egypt, financial crisis, financial stress index, dollarization, VAR model, causality tests

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Authors: Edmond Jaro Malihan

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This study aimed to develop and propose Project Financial Literacy Information Program (FLIP) for the Schools Division of Quezon to improve the financial management skills of Supreme Student Government (SSG) officers across different school sizes. This employed a descriptive research design covering the participation of 424 selected SSG officers using purposive sampling procedures from the SDO-Quezon. The consultation was held with DepEd officials, budget officers, and financial advisors to validate the design of the self-made questionnaires in which the computed mean was verbally interpreted using the four-point Likert scale. The data gathered were presented and analyzed using weighted arithmetic mean and ANOVA test. Based on the findings, generally, SSG officers in the SDO-Quezon possess high financial management skills in terms of budget preparation, resource mobilization, and auditing and evaluation. The size of schools has no significant difference and does not contribute to the financial management skills of SSG officers, which they apply in implementing their mandated programs, projects, and activities (PPAs). The Project Financial Literacy Information Program (FLIP) was developed considering their general level of financial management skills and the launched PPAs by the organization. The project covered the suggested training program vital in conducting the Virtual Division Training on Financial Management Skills of the SSG officers.

Keywords: financial management skills, SSG officers, school size, financial literacy information program

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Authors: Zineb Abidi, Marc-Arthur Diaye

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There exists a large empirical literature concerning the relationship between corporate social responsibility (CSR) and corporate financial performance. This literature, however, applies mainly to large corporations and/or listed firms. To the best of our knowledge, the question of whether meeting CSR requirements impacts the financial performance of small and medium-sized unlisted SMEs has not so far been analyzed. This paper aims to analyze, for the first time, the effect of CSR on the financial performance of SMEs. Using an original database including 5,257 French SMEs, we show that adopting CSR practices has a positive but weak effect on a firm’s financial performance. To develop this further, we analyzed CSR practices interactions assessing the best combination of CSR components that positively influence SME financial performance. Our results show that French SMEs benefit more from their pro-social behavior when they choose a combination of CSR components best adapted to their individual characteristics.

Keywords: corporate social responsibility, financial performance, unlisted firms, SMEs

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Authors: Aayushi Lyngwa, Bimal Kishore Sahoo

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The study discusses the relationship between cognitive ability and the level of education attained by the tribal street entrepreneurs on their financial literacy. It is driven by the objective of examining the effect of cognitive ability on financial ability on the one hand and determining the effect of the same on financial literacy on the other. A field experiment was conducted on 203 tribal street vendors in the north-eastern Indian state of Mizoram. This experiment's calculations are conditioned by providing each question scores like math score (cognitive ability), financial score and debt score (financial ability). After that, categories for each of the variables, like math category (math score), financial category (financial score) and debt category (debt score), are generated to run the regression model. Since the dependent variable is ordinal, an ordered logit regression model was applied. The study shows that street vendors' cognitive and financial abilities are highly correlated. It, therefore, confirms that cognitive ability positively affects the financial literacy of street vendors through the increase in attainment of educational levels. It is also found that concerning the type of street vendors, regular street vendors are more likely to have better cognitive abilities than temporary street vendors. Additionally, street vendors with more cognitive and financial abilities gained better monthly profits and performed habits of bookkeeping. The study attempts to draw a particular focus on a set-up which is economically and socially marginalized in the Indian economy. Its finding contributes to understanding financial literacy in an understudied area and provides policy implications through inclusive financial systems solutions in an economy limited to tribal street vendors.

Keywords: financial literacy, education, street entrepreneurs, tribals, cognitive ability, financial ability, ordered logit regression.

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Authors: Daisy Owomugasho Ndikuno

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The paper explores the extent to which mindset change has been critical in the community rural development in Uganda. It is descriptive research with The Parish Development Model as a case study. The results show that rural community development is possible and its success largely depends on harnessing local resources and knowledge; leveraging education, empowerment and awareness; creating sustainable livelihoods and encouraging entrepreneurship and innovation; access to financial resources; and building collaborative networks and partnerships. In all these, the role of mindset change is critical. By instilling a positive, collaborative and innovative mindset, rural communities can overcome challenges and chat a path towards sustainable development.

Keywords: community, development, mindset, change

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

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

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

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Authors: Muhammad Akhtaruzzaman

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The impact of corporate environmental social and governance (ESG) on financial performance is often difficult to quantify despite the ESG related theories predict that ESG performance improves financial performance of a company. This research examines the link between corporate ESG performance and the financial performance of the NZX (New Zealand Stock Exchange) listed companies. For this purpose, this research utilizes mixed methods approaches to examine and understand this link. While quantitative results found no robust evidence of such a link, however, the qualitative analysis of content data suggests a strong cooccurrence exists between ESG performance and financial performance. The findings of this research have important implications for policymakers to support higher ESG-performing companies and for management practitioners to develop ESG-related strategies.

Keywords: ESG, financial performance, New Zealand firms, thematic analysis, mixed methods

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Authors: Syafril Hendrik Hutabarat, Hartiwiningsih, Pujiyono Suwadi

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The Financial Service Authority (FSA) was formed as a response to the 1997 monetary crisis and the 2008 financial crisis so that it was more defensive in nature while developments in information and communication technology have required state policies to be more offensive to keep up with times. Reconstruction of Authorities of the FSA's Investigator is intended to keep the agency worthy to be part of an integrated criminal justice system in Indonesia which has implications for expanding its authority in line with efforts to protect and increase the welfare of the people. The results show that internal synergy between sub-sectors in the financial services sector is not optimised, some are even left behind so that the FSA is not truly an authority in the financial services sector. This research method is empirical. The goal of synergy must begin with internal synergy which has its moment when Indonesia gets a demographic bonus in the 2030s and becomes an international logistics hub supported by the national financial services sector.

Keywords: reconstruction, authorities, FSA investigators, synergy, demography

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Authors: Edward C. W. Chan, Benny C. F. Cheung

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In the knowledge economy, the financial indicator is not the unique instrument to gauge the performance of a company. The role of intellectual capital contributing to the company performance is increasing. To measure the company performance due to intellectual capital, the value-added intellectual capital (VAIC) model is adopted to measure the intellectual capital utilisation efficiency of the subject companies. The purpose of this study is to review the readiness of measuring intellectual capital for the Hong Kong listed companies in the property development and property investment industry by using VAIC model. This study covers the financial reports from the representative Hong Kong listed property development companies and property investment companies in the period 2014-2019. The findings from this study indicated the industry is ready for IC measurement employing VAIC framework but not yet ready for using the extended VAIC model.

Keywords: intellectual capital, intellectual capital measurement, property development, property investment, Skandia navigator, VAIC

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Authors: Yusuf Abdullahi

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The contribution of entrepreneurship in the economic development cannot be over-emphasized neither it should be underestimated for any reason as this is already a known fact that it plays an important role as a change agent and as a prime mover of economy. In developed or underdeveloped economy, the essence of entrepreneurship is highly significant as this exist in both private as well as public sectors of any economy. The roles of entrepreneurship are worldly acclaimed but yet as laudable as these roles there can be no significant success by any entrepreneur except with availability of finance. Nonetheless, mere availability of finance also cannot guarantee the success of an enterprise but there must be in place appropriate financial strategies for the funding/investment needs of an enterprise. Thus, little has been said when it comes to strategies needed to access various sources of finance. This paper, therefore, establishes appropriate strategies to obtain funds sources of finance by both small and as well as medium enterprises.

Keywords: entrepreneurship, Nigeria, financial strategies, economic development

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Authors: Abdous Noureddine

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The problem of funding in Algeria emerged as a problem you need to study after many Algerians researchers pointed out that the faltering Algerian public economic institution due to the imbalance in the financial structures and lower steering and marketing efficiency, as well as a result of severe expansion of borrowing because of inadequate own resources, and the consequent inability This institution to repay loans and interest payments, in addition to increasing reliance on overdraft so used to finance fixed assets, no doubt that this deterioration requires research and study of the causes and aspects of treatment, which addresses the current study, aside from it.

Keywords: financial structure, financial capital, equity, debt, firm’s value, return, leverage

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Authors: C. F. Popoola, K. Akinsanya, S. B. Babarinde, D. A. Farinde

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This study investigated published financial statement as correlate of investment decision among commercial bank stakeholders in Nigeria. A correlation research design was used in the study. 180 users of published financial statement were purposively sampled from Lagos and Ibadan. Data generated were analyzed using Pearson correlation and regression. The findings of the study revealed that, balance sheet is negatively related with investment decision (r=-.483; p < .01) while income statement (r= .249; p < .001), notes on the account (r= .230; p < .001), cash flow statement (r= .202; p < .001), value added statement (r= .328; p < .001) and five-year financial summary (r= .191 ;p < .01) are positively related with investment decision. Findings also revealed that components of published financial statement significantly predicted good investment decision (R2= .983; F(5,175)=284.5; p < .05) for commercial bank stakeholders. Therefore, it was suggested that Nigeria banks and professional bodies should instigate programs that will increase the knowledge of stakeholders on published financial statement.

Keywords: commercial banks, financial statement, income statement, investment decision, stakeholders

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Authors: Rafikoddin Kazi

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Almost all the major religions of the world condemn the transactions based on interest which promotes self-centered and materialistic thinking. Still, it is amazing to note that it has become the tradition of transaction at world level hence it is called traditional financial system. The main feature of this system is that it considers economic aspects of the transaction only. This system supports the economic development and not the welfare of humankind. However, it is worth mentioning the fact that, except Islamic financial system no other financial system stood in front of it as a viable alternative system. Although many countries have tried to create financial infrastructure and system, still the Malaysian Islamic financial system has got its own peculiarity. It has made tremendous progress in creating sound Islamic Financial system. However, the historical aspect of this country which has passed through Islamic and traditional financial system has got its own advantages and disadvantages. The advantageous factor is that, despite having mix and heterogeneous culture, it has succeeded in creating Islamic Financial System based on the dual legal system to satisfy the needs of multi-cultural factors. This fact has proved that Islamic Financial System does not need purely Muslim population. However, due to adoption of the dual legal system, several legal issues have been taken place. According to this system, the application of Islamic Law has been limited only up to some family and religious matters. The rest of the matters are being dealt with under the traditional laws, the principles and practices of which are different from that of the Islamic Legal System. The matter becomes all the more complicated when the cases are partially or simultaneously concerned with traditional vis-à-vis Islamic Laws as it requires expertise in both the legal systems. However, the educational principles and systems are different in respect of both the systems. To face this problem, Shariah Advisory Council has been established. But the Multiplicity of Shariah authorities without judicial power has created confusion at various levels. Therefore, some experts have stressed the need for improving, empowering the Islamic financial, legal system to make it more integrated and holistic. In view of the above, an endeavor has been made in this paper to throw some light on the matters related to the adoption of the dual legal system. The paper is conceptual in nature and the method adopted is the intensive survey of literature thereby all the information has been gathered from the secondary sources.

Keywords: Islamic financial system, Islamic legal system, Islamic capital market (ICM) , traditional financial system

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Authors: Sana Masmoudi, Yosra Makni

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Regulators highlight the importance of the Audit Committee (AC) as a key internal corporate governance mechanism. One of the most important roles of this committee is to oversee the financial reporting process. The purpose of this paper is to examine the link between the characteristics of an audit committee and the financial reporting quality by investigating whether the formation of audit committees and their characteristics are associated with improved financial reporting quality. This study provides empirical evidence of the association between audit committee independence, financial expertise, gender diversity, and meetings and Real Earnings Management (REM) as a proxy of financial reporting quality. Using data from, with a sample of 80 companies listed on the Amsterdam Stock Exchange during 2010-2017, the study finds that independence and AC Gender diversity are strongly related to financial reporting quality. In fact, these two characteristics constrain REM. The results also suggest that AC-financial expertise reduces to some extent, the likelihood of engaging in REM. These conclusions provide support then to the audit committee requirement under the Dutch Corporate Governance Code rules regarding gender diversity and AC meetings.

Keywords: audit committee, financial expertise, independence, real earnings management

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Authors: Vasudev Das

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In a global survey of more than 5,000 participants in 99 territories, PwC found a loss of $42 billion through fraud in the last 24 months. The specific problem is that private and public organizational leaders often do not understand the importance of sonic therapeutic intervention in preventing financial fraud. The study aimed to explore sonic therapeutic intervention practitioners' lived experiences regarding the value of sonic therapeutic intervention in preventing financial fraud. The data collection methods were semi-structured interviews of purposeful samples and documentary reviews, which were analyzed thematically. Four themes emerged from the analysis of interview transcription data: Sonic therapeutic intervention enabled self-control, pro-spiritual values, consequentiality mindset, and post-conventional consciousness. The itemized four themes helped non-engagement in financial fraud. Implications for positive social change include enhanced financial fraud management, more significant financial leadership, and result-oriented decision-taking in the financial market. Also, the study results can improve the increased de-escalation of anxiety/stress associated with defrauding.

Keywords: consciousness, consequentiality, rehabilitation, reintegration

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Authors: Torben Hansen

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While trust has long been regarded as one of the most critical variables for developing and maintaining well-functioning financial customer-seller relationships it can be suggested that trust not only relates to customer trust in individual companies (narrow-scope trust). Trust also relates to the broader business context in which consumers may carry out their financial behaviour (broad-scope trust). However, despite the well-recognized significance of trust in marketing research, only few studies have investigated the role of broad-scope trust in consumer financial behaviour. Moreover, as one of its many serious outcomes, the global financial crisis has elevated the need for an improved understanding of the role of broad-scope trust in consumer financial services markets. Only a minority of US and European consumers are currently confident in financial companies and ‘financial stability’ and ‘trust’ are now among the top reasons for choosing a bank. This research seeks to address this shortcoming in the marketing literature by investigating direct and moderating effects of broad-scope trust on consumer financial behaviour. Specifically, we take an ability-effort approach to consumer financial behaviour. The ability-effort approach holds the basic premise that the quality of consumer actions is influenced by ability factors, for example consumer knowledge and cognitive effort. Our study is based on two surveys. Survey 1 comprises 1,155 bank consumers, whereas survey 2 comprises 764 pension consumers. The results indicate that broad-scope trust negatively moderates relationships between knowledge and financial healthiness and between cognitive effort and financial healthiness. In addition, it is demonstrated that broad-scope trust negatively influences cognitive effort. Specifically, the results suggest that broad-scope trust contributes to the financial well-being of consumers with limited financial knowledge and processing capabilities. Since financial companies are dependent on customers to pay their loans and bills they have a greater interest in developing relations with consumers with a healthy financial behaviour than with the opposite. Hence, financial managers should be engaged with monitoring and influencing broad-scope trust. To conclude, by taking into account the contextual effect of broad-scope trust, the present study adds to our understanding of knowledge-effort-behaviour relationship in consumer financial markets.

Keywords: cognitive effort, customer-seller relationships, financial healthiness, knowledge, trust

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Authors: Mohamed Aljarallah, Mohamed Nurullah, George Saridakis

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This paper aims and objectives are to investigate how the structural change of the financial regulatory bodies affect the financial supervision and how the regulators can design such a structure with taking into account; the Central Bank, the conduct of business and the prudential regulators, it will also consider looking at the structure of the international regulatory bodies and what barriers are found. There will be five questions to be answered; should conduct of business and prudential regulation be separated? Should the financial supervision and financial stability be separated? Should the financial supervision be under the Central Bank? To what extent the politician should intervene in changing the regulatory and supervisory structure? What should be the regulatory and supervisory structure when there is financial conglomerate? Semi structure interview design will be applied. This research sample selection contains a collective of financial regulators and supervisors from the emerged and emerging countries. Moreover, financial regulators and supervisors must be at a senior level at their organisations. Additionally, senior financial regulators and supervisors would come from different authorities and from around the world. For instance, one of the participants comes from the International Bank Settlements, others come from European Central Bank, and an additional one will come from Hong Kong Monetary Authority and others. Such a variety aims to fulfil the aims and objectives of the research and cover the research questions. The analysis process starts with transcription of the interview, using Nvivo software for coding, applying thematic interview to generate the main themes. The major findings of the study are as follow. First, organisational structure changes quite frequently if the mandates are not clear. Second, measuring structural change is difficult, which makes the whole process unclear. Third, effective coordination and communication are what regulators looking for when they change the structure and that requires; openness, trust, and incentive. In addition to that, issues appear during the event of crisis tend to be the reason why the structure change. Also, the development of the market sometime causes a change in the regulatory structure. And, some structural change occurs simply because of the international trend, fashion, or other countries' experiences. Furthermore, when the top management change the structure tends to change. Moreover, the structure change due to the political change, or politicians try to show they are doing something. Finally, fear of being blamed can be a driver of structural change. In conclusion, this research aims to provide an insight from the senior regulators and supervisors from fifty different countries to have a clear understanding of why the regulatory structure keeps changing from time to time through a qualitative approach, namely, semi-structure interview.

Keywords: financial regulation bodies, financial regulatory structure, global financial regulation, financial crisis

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Authors: Saima Akbar

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The global financial crisis severely and adversely impacted the Pakistanis’ financial setups with far-reaching consequences for its victims. This study aimed to analyze the various determinants of the banks’ financial performance in Pakistan. The stepwise multiple regression analysis and pre-post analysis were carried out in this regard by using SPSS ver 22. The study found that the assets quality is the most influential determinant of return over assets followed by bank size and solvency. Advances, liquidity, investments, and size have positive while poor assets quality and deposits have a negative impact on the return over assets. The comparison of the pre-crisis and post-crisis coefficient values of the independent variables revealed that the global financial crisis had exerted a significant impact on the relative ability of the financial performance determinants to explain variations in return over assets.

Keywords: pre-crisis, post-crisis, coefficient values, determinants

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Authors: Nomakhosi Tshuma, Carley Chetty

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This study employed panel regression analysis to investigate the financial performance determinants of MTN and Vodacom’s rest of Africa businesses between 2012 to 2020. It used net profit margin, return on assets (ROA), and return on equity (ROE) as financial performance proxies. Financial performance determinants investigated were asset size, debt ratio, liquidity, number of subscribers, and exchange rate. Data relating to exchange rates were obtained from the World Bank website, while financial data and subscriber information were obtained from the companies’ audited financial statements. The study found statistically significant negative relationships between debt and both ROA and net profit, exchange rate and both ROA and net profit, and subscribers and ROE. It also found significant positive relationships between ROE and both asset size and exchange rate. The study recommends strategic options that optimise on the above findings, and these include infrastructure sharing to reduce infrastructure costs and the minimisation of foreign-denominated debt.

Keywords: financial performance, determinants of financial performance, business in Africa, telecommunications industry

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Authors: My Linh Hoang, Van Dung Hoang

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Environmental, Social, and Governance (ESG) factors have become a focus for companies globally, as businesses are now focusing on long-term sustainable goals rather than only operating for the goals of profit maximization. According to recent research, in several countries, companies have shown positive results in their financial performance by improving their ESG performance. The construction industry is one of the most crucial components of social and economic development; as a result, considerations for ESG factors are becoming more and more essential for companies in this sector. In Vietnam, the construction industry has been growing rapidly in recent years; however, it has yet to be discussed and studied extensively in Vietnam how ESG factors create impacts on corporate financial performance in general and construction corporations’ financial performance in particular. This research aims to examine the relationship between ESG factors and financial indicators in construction companies from 2011 to 2021 through panel data analysis of 75 listed construction companies in Vietnam and to provide insights into how these companies can better integrate ESG considerations into their operations to enhance their financial performance. The data was analyzed through 3 main methods: descriptive statistics, correlation coefficient analysis applied to all dependent, explanatory and control variables, and panel data analysis method. In panel data analysis, the study uses the fixed effects model (FEM) and random effects model (REM). The Hausman test will be used to select which model is suitable to be used. The findings indicate that maintaining a strong commitment to ESG principles can have a positive impact on financial performance. Finally, FGLS estimation will be performed when the problem of autocorrelation and variable variance appears in the model. This is significant for all parties involved, including investors, company managers, decision-makers, and industry regulators.

Keywords: ESG, financial performance, construction company, Vietnam

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Authors: Narvada Ramdhany, Reena Bhattu Babajee

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The 2007-2008 Global Financial Crisis which initiated in the US had a global outreach, impacting the financial and banking sectors of several economies; such as European countries, developing and emerging countries in Asia, Latin America and Africa. European countries represent one of the main sources of export earnings for Mauritius and given that Europe has been quite profoundly affected by the crisis, the Mauritian economy also could have been negatively affected. This study is being undertaken to see if the crisis had a spill-over effect on the Mauritian banking system. It will also enable to determine if the measures put in place to counteract the crisis by regulatory authorities have been effective. The study will be carried out on 17 banks and data will be collected over a time frame of seven years; with a pre-crisis period from 2005 to 2007 and a post-crisis period from 2009 to 2011. The impact of the crisis as such will be measured through the financial performance of the banks, using financial ratios and regression analysis. The results show that during the period concerned Mauritian banks have remained solvent and relatively stable. One of the main explanations put forward to explain the resilience of the banking sector to the crisis is that foreign exposure was relatively low. Another explanation put forward is that Mauritian banks normally transact mainly with prime borrowers unlike most the banks which were affected by the financial crisis.  

Keywords: global financial crisis, banking sector, financial performance, Mauritian banks

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Authors: Eliane Abdo

Abstract:

Small and medium sized firms “SMEs” play essential role in the countries’ economic development mainly in terms of production, employment and equitable distribution of income. For innovative SMEs, the investment in the human capital and in research and development are crucial to survive in a competitive environment. In this paper we perform a literature review to underline the financing difficulties and constraints which innovative SMEs face while investing in intangible assets: not only when defining amount of the investments but also while choosing its financing methods. Literature review revealed that in order to finance their intangible assets, SMEs rely in first on their internal financing: the availability of internal cash flows can then determine their investment’s decision. Moreover SMEs face difficulties to finance their intangibles by financial debts due to the uncertainty of future cash flow and the absence of physical guarantees; they will therefore go for the issuance of new shares as a second choice, since innovative companies have high opportunity of growth that attract new shareholders.

Keywords: small and medium sized firms, capital structure, intangible investment, financial constraints

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Authors: Rodrigo Zepeda

Abstract:

Transaction cost analysis (TCA) is a way of analyzing the relative performance of different intermediaries and different trading strategies for trades undertaken in financial instruments. It is a way for an investor to determine the overall quality of execution of a particular trade, and there are many different approaches to undertaking TCA. Under the updated Markets in Financial Instruments Directive (2014/65/EU) (MiFID II), investment firms are required when executing orders, to take all sufficient steps to obtain the best possible result for their clients. This requirement for 'Best Execution' must take into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. The new regulatory compliance framework under MiFID II will now also apply across a very broad range of financial instruments. This article will provide a comprehensive technical analysis of how TCA and Best Execution will significantly change under MiFID II. It will also explain why harmonization of post-trade reporting requirements under MiFID II could potentially support the development of peer group analysis, which in turn could provide a new and highly advanced framework for TCA that could more effectively support Best Execution requirements under MiFID II. The study is significant because there are no studies that have dealt with TCA and Best Execution under MiFID II in the literature.

Keywords: transaction cost analysis, execution quality, best execution, MiFID II, financial instruments

Procedia PDF Downloads 267