Search results for: financial enabling environment

Authors: Yosia Mulumba, Klaus Schmidt

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Financial Inclusion is considered a key pillar for development in most countries around the world. Access to affordable financial services in a country’s economy can be a driver to overcome poverty and reduce income inequalities, and thus increase economic growth. Nevertheless, the number of financially excluded populations in developing countries continues to be very high. This paper explores the role of Financial Technology (Fintech) as a key driver for achieving financial inclusion in developing countries post the COVID-19 pandemic with an emphasis on four East African countries: Kenya, Tanzania, Uganda, and Rwanda. The research paper is inspired by the positive disruption caused by the pandemic, which has compelled societies in East Africa to adapt and embrace the use of financial technology innovations, specifically Mobile Money Services (MMS), to access financial services. MMS has been further migrated and integrated with other financial technology innovations such as Mobile Banking, Micro Savings, and Loans, and Insurance, to mention but a few. These innovations have been adopted across key sectors such as commerce, health care, or agriculture. The research paper will highlight the Mobile Network Operators (MNOs) that are behind MMS, along with numerous innovative products and services being offered to the customers. It will also highlight the regulatory framework under which these innovations are being governed to ensure the safety of the customers' funds.

Keywords: financial inclusion, financial technology, regulatory framework, mobile money services

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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: Budiman Ibnu

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This study investigates about enabling conditions to facilitate social innovation in the energy sector. This is important to support the energy transition in Indonesia. This research provides appropriate project direction, including research (and action) gaps for the energy actors in Indonesia. The actors are allowed to work further with the result of this study to stimulate the energy transition in Indonesia. This report uses systemic change framework which recognizes four drivers of systemic change in a region: 1. transforming political ecologies; 2. configuring green economies; 3. building of adaptive communities; 4. social innovation. These drivers are interconnected, and this report particularly focuses on how social innovation can be supported by other drivers. This study used methods of interview and literature review as the main sources for data collection in this report. There were interviews with eight experts in the related topic which come from different countries which have experienced social innovation in the energy sector. Afterwards, this research reviewed related journal papers from last five years, to check the latest development within the topic, to support the interview result. The result found that the enabling condition can focus on one of the drivers of systemic change, which is building communities by increasing their participation, through several integrated actions. This can be implemented in two types of citizen energy initiatives which are energy cooperatives and sustainable consumption initiatives. This implementation requires study about its related policy and governance support, in order to create complete enabling conditions to facilitate social innovation in the energy transition.

Keywords: enabling condition, social innovation, citizen initiatives, community participation

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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: 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: 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: Mamadou Diop, Florence Crick, Momadou Sow, Kate Elizabeth Gannon

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Understanding SME leaders’ responses to climate is essential to cope with ongoing changes in temperature and rainfall. This study analyzes the response of SME leaders to the adverse effects of climate change in semi-arid lands (SAL) in Senegal. Based on surveys administrated to 161 SME leaders, this research shows that 91% of economic units are affected by climatic conditions, although 70% do not have a plan to deal with climate risks. Economic actors have striven to take measures to adapt. However, their efforts are limited by various obstacles accentuated by a lack of support from public authorities. In doing so, substantial political, institutional and financial efforts at national and local levels are needed to promote an enabling environment for economic actors to adapt. This will focus on information and training about the threats and opportunities related to global warming, the creation of an adaptation support fund to support local initiatives and the improvement of the institutional, regulatory and political framework.

Keywords: small and medium-sized enterprises, climate change, adaptation, semi-arid lands

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Authors: Rym Ghariani, Younes Boujelbene

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This study aimed to examine the impact of digitalization and supply chain integration on the financial performance of companies in the agro-industrial sector in Tunisia, highlighting the growing importance of digital technologies in modern economies. The results were analyzed using a questionnaire and using principal component analysis, as well as linear regression modeling with SPSS26. The results demonstrate that the digitalization and integration of the supply chain have a significant impact on the financial results of Tunisian agro-industrial companies. In theory, this study provides a better understanding of the effects of digital advancements and supply chain strategies on financial results in this specific area. This study, therefore, studies the relationship between these variables and financial efficiency, highlighting the significant impacts of these technological and strategic elements on the financial results of agro-industrial companies in Tunisia.

Keywords: digitalization, supply chain integration, financial performance, Tunisian agro-industrial sector

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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: Yuzhi Cai

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In this paper, we introduce a newly developed quantile function model that can be used for estimating conditional distributions of financial returns and for obtaining multi-step ahead out-of-sample predictive distributions of financial returns. Since we forecast the whole conditional distributions, any predictive quantity of interest about the future financial returns can be obtained simply as a by-product of the method. We also show an application of the model to the daily closing prices of Dow Jones Industrial Average (DJIA) series over the period from 2 January 2004 - 8 October 2010. We obtained the predictive distributions up to 15 days ahead for the DJIA returns, which were further compared with the actually observed returns and those predicted from an AR-GARCH model. The results show that the new model can capture the main features of financial returns and provide a better fitted model together with improved mean forecasts compared with conventional methods. We hope this talk will help audience to see that this new model has the potential to be very useful in practice.

Keywords: DJIA, financial returns, predictive distribution, quantile function model

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Authors: Kwadwo Yeboah

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Background and Aims: The adoption of International Accounting Standards (IAS) is considered to be one of the most significant developments in the accounting profession. The adoption of IAS aims to improve financial reporting quality by ensuring that financial information is transparent and comparable across borders. However, there is a lack of research on the impact of IAS on financial reporting quality in emerging economies. This study aims to fill this gap by evaluating the impact of IAS on financial reporting quality in emerging economies. Methods: This study uses a sample of firms from emerging economies that have adopted IAS. The sample includes firms from different sectors and industries. The financial reporting quality of these firms is measured using financial ratios, such as earnings quality, financial leverage, and liquidity. The data is analyzed using a regression model that controls for firm-specific factors, such as size and profitability. Results: The results show that the adoption of IAS has a positive impact on financial reporting quality in emerging economies. Specifically, firms that adopt IAS exhibit higher earnings quality and lower financial leverage compared to firms that do not adopt IAS. Additionally, the adoption of IAS has a positive impact on liquidity, suggesting that firms that adopt IAS have better access to financing. Conclusions: The findings of this study suggest that the adoption of IAS has a positive impact on financial reporting quality in emerging economies. The results indicate that IAS adoption can improve transparency and comparability of financial information, which can enhance the ability of investors to make informed investment decisions. The study contributes to the literature by providing evidence of the impact of IAS adoption in emerging economies. The findings of this study have implications for policymakers and regulators in emerging economies, as they can use this evidence to support the adoption of IAS and improve financial reporting quality in their respective countries.

Keywords: accounting, international, standards, finance

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Authors: Hossein Emari, Hossein Vazifehdoust, Hashem Nikoo Maram

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This study aims to develop an original framework of Environmental Consciousness (EC) to explore the positive effect of environmental consciousness on financial performance through the partial mediator - green intellectual capital. A questionnaire survey on the environmental consciousness, intellectual capital, and financial performance of Iran’s manufacturing firms was conducted, and 324 samples were analyzed. This study utilizes structural equation modeling to explore the direct and indirect influences of EC on financial performance. Research results reveal that environmental consciousness had an indirect impact on financial performance through investment in green intellectual capital. It was thus known that green intellectual capital is a mediator of the relationship between environmental consciousness and financial performance. This paper may serve as a reference for firms mapping out future environmental policies and provide an input of various perspectives and arguments into the discipline of green management.

Keywords: environmental consciousness, social responsibility, green intellectual capital, financial performance

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Authors: Levan Sabauri

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In this paper, we discuss the deteriorated standing of engineering companies, some of the reasons behind it and the problems facing engineering enterprises during the financial crisis. We show the part that financial analysis plays in the detection of the main factors affecting the standing of a company, classify internal problems and the reasons influencing efficiency thereof. The publication contains the analysis of municipal engineering companies in post-Soviet transitional economies. In the wake of the 2008 world financial crisis the issue became even more poignant. It should be said though that even before the problem had been no less acute for some post-Soviet states caught up in a lengthy transitional period. The paper highlights shortcomings in the management of transportation companies, with new, more appropriate methods suggested. In analyzing the financial stability of a company, three elements need to be considered: current assets, investment policy and structural management of the funding sources leveraging the stability, should be focused on. Inappropriate management of the three may create certain financial problems, with timely and accurate detection thereof being an issue in terms of improved standing of an enterprise. In this connection, the publication contains a diagram reflecting the reasons behind the deteriorated financial standing of a company, as well as a flow chart thereof. The main reasons behind low profitability are also discussed.

Keywords: efficiency, financial management, financial analysis funding structure, financial sustainability, investment policy, profitability, solvency, working capital

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Authors: Bianca Price, Jennifer Stokes

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Academic and social support systems are critical for students in enabling education; these support systems have the potential to enhance the student experience whilst also serving a vital role for student retention. In the context of international moves toward widening university participation, Australia has developed enabling programs designed to support underrepresented students to access to higher education. The purpose of this study is to examine the effectiveness of a mentor program based within an enabling course. This study evaluates how the mentor program supports new students to develop social networks, improve retention, and increase satisfaction with the student experience. Guided by Social Learning Theory (SLT), this study highlights the benefits that can be achieved when students engage in peer-to-peer based mentoring for both social and learning support. Whilst traditional peer mentoring programs are heavily based on face-to-face contact, the present study explores the difference between mentors who provide face-to-face mentoring, in comparison with mentoring that takes place through the virtual space, specifically via a virtual community in the shape of a Facebook group. This paper explores the differences between these two methods of mentoring within an enabling program. The first method involves traditional face-to-face mentoring that is provided by alumni students who willingly return to the learning community to provide social support and guidance for new students. The second method requires alumni mentor students to voluntarily join a Facebook group that is specifically designed for enabling students. Using this virtual space, alumni students provide advice, support and social commentary on how to be successful within an enabling program. Whilst vastly different methods, both of these mentoring approaches provide students with the support tools needed to enhance their student experience and improve transition into University. To evaluate the impact of each mode, this study uses mixed methods including a focus group with mentors, in-depth interviews, as well as engaging in netnography of the Facebook group ‘Wall’. Netnography is an innovative qualitative research method used to interpret information that is available online to better understand and identify the needs and influences that affect the users of the online space. Through examining the data, this research will reflect upon best practice for engaging students in enabling programs. Findings support the applicability of having both face-to-face and online mentoring available for students to assist enabling students to make a positive transition into University undergraduate studies.

Keywords: enabling education, mentoring, netnography, social learning theory

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Authors: Luan Vardari, Dena Arapi-Vardari

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Financial stability is a critical component of economic growth and development, and it has been recognized as a key policy objective in many countries around the world. In the Western Balkans, financial stability has been a key issue in recent years, with a number of challenges facing the region, including high levels of public debt, weak banking systems, and economic volatility. Corporate finance, which refers to the financial management practices of firms, is an important factor that can impact financial stability. This paper aims to investigate corporate finance's impact on financial stability in Western Balkan countries. This study will use a mixed-methods approach to investigate the impact of corporate finance on financial stability in the Western Balkans. The study will begin with a comprehensive review of the existing literature on corporate finance and financial stability, focusing on the Western Balkan region. This will be followed by an empirical analysis of regional corporate finance practices using data from various industries and firms. The analysis will explore the relationship between corporate finance practices and financial stability, taking into account factors such as regulatory frameworks, economic conditions, and firm size. The results of the study are expected to provide insights into the impact of corporate finance on financial stability in the Western Balkans. Specifically, the study will identify the key corporate finance practices that contribute to financial stability in the region, as well as the challenges and obstacles that firms face in implementing effective corporate finance strategies. The study will also provide recommendations for policymakers and firms looking to enhance financial stability and resilience in the region.

Keywords: financial regulation, debt management, investment decisions, dividend policies, economic volatility, banking systems, public debt, prudent financial management, firm size, policy recommendations

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Authors: Rania Mousa, Peterson Ozili

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A key agenda of policymakers in developed and developing countries is to increase the level of financial inclusion. Microlending institutions have been recognized as important agents of financial inclusion, which have the potential to achieve this objective and help move toward a more accessible, inclusive, and equitable path to financial sustainability. In that respect, this case study attempts to identify and assess the key initiatives undertaken by Grameen America as it responded to the COVID-19 pandemic within the framework of selected United Nations’ Sustainability Development Goals (UN’s SD Goals). This study goes beyond the stated objective by using the vulnerable group theory and special agent theory of financial inclusion to support the analysis of financial and non-financial information collected from Grameen America’s Annual Reports and audited financial statements. The study follows a qualitative content analysis method to precisely gauge the shift in Grameen’s strategy and focus, as well as to assess the impact of its initiatives on the small business community before and after the pandemic. The findings showcase that Grameen’s longstanding mission to alleviate poverty is in line with the UN’s Sustainability Development Goal 1. Furthermore, Grameen’s commitment to creating partnerships with external organizations to offer credit and non-credit services and support is consistent with UN’s Sustainability Development Goal 17. The study suggests that policymakers should foster the creation of more member-based financial and non-financial institutions which are ethically and morally responsible to their members in both good and bad times.

Keywords: COVID-19, financial inclusion, microfinance, sustainable development, microlending

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Authors: Dinesh Sivaguru, Kamal Thilakasiri

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Preventing money laundering and terrorist financing is a major national and international problem today. Several attempts have been made to prevent money laundering by national and international dimension. These are often counteracted by the multi dynamic nature of the crimes. However, launders are often to use remittance systems to clean their ill-gotten money. This study presents the role of domestic financial institutions and the effective practices and actions should implement within domestic financial institutions to control and prevent financial crimes. This thesis highlights the progress that is required to prevent money laundering and terrorist financing, further it is an original contribution to the knowledge in an under researched field in Sri Lanka.

Keywords: money laundering, terrorists financing, financial institutions, regulatory bodies

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Authors: Piotr Prewysz-Kwinto, Grazyna Voss

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In June 2013, the European Parliament and the Council adopted a directive on financial reporting (Directive 2013/34/EU). The main objective was to simplify the principles of the preparation of financial statements, including the principles of the presentation and disclosures of financial information by adapting reporting burdens to the type and size of an undertaking. Therefore, the Directive introduced a classification of all undertakings into five groups, i.e. micro, small, medium-sized, large and public-interest entities, and defined in detail the classification criteria. The principles of the preparation of financial statements and the presentation of financial information as well as applicable simplifications were defined for each group. The EU Member States had to implement the provisions of Directive 34 relating to accounting and financial reporting into domestic norms until January 1, 2016. In Poland, the provisions of Directive 34 were implemented into domestic accounting norms specified in the Polish Accounting Act on a gradual basis. On July 11, 2014, the Polish Parliament adopted an amendment to the Act, introducing the Directive's solutions for micro-undertakings and on July 23, 2015, for the remaining undertakings. The aim of this paper is to present Polish solutions relating to financial reporting after the implementation of Directive 34 and the results of the survey conducted among accountants regarding the evaluation of the implemented simplifications for micro and small undertakings.

Keywords: accounting standards, financial reporting, financial statement, simplification

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Authors: Shumaila Zeb

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The proposed study aims to investigate insolvency risk of commercial banks of Pakistan. Furthermore, it empirically estimates the effect of already implemented financial regulations on the insolvency risk of banks. To carry out the empirical analysis, a balanced bank-level panel data covering the period 2008-2016 is used. The Z-score is used for calculating the insolvency risk of each bank. The panel regression is used to investigate the relationship between financial regulations and insolvency risk of banks. The empirics reveal that the financial regulations enforced by State Bank of Pakistan have significant impacts on the insolvency risk of banks. The results further indicate that loan ratio and reserve ratio are positively and significantly related to the insolvency risk of banks.

Keywords: insolvency risk, Z-score, financial regulations, banks

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Authors: Ying-Hsiu Chen, Pao-Peng Hsu

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This paper adopts a two-stage data envelopment analysis to explore the impacts of financial development and bank operational scale on bank efficiencies. The sample comprises of unbalanced panel data of 32 Taiwanese enlisted in domestic commercial banks over the period 1998 to 2013. Empirical results show that technical efficiency is positively related to financial development, whereas the effect of financial development on scale efficiency is insignificant. The effect of operational scale exerts a significantly positive effect on bank efficiencies, but the gain of efficiency is decreased gradually when operational scale increases. Furthermore, increase in capital adequacy ratio and market power of banks leads to a growth of bank efficiencies.

Keywords: financial development, operational scale, efficiency, DEA

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Authors: Jamila Garba Audu, Shehu Usman Hassan

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The widespread failure in the financial information quality has created the need to improve the financial information quality and to strengthen the control of managers by setting up good firms structures. Published accounting information in financial statements is required to provide various users - shareholders, employees, suppliers, creditors, financial analysts, stockbrokers and government agencies – with timely and reliable information useful for making prudent, effective and efficient decisions. The relationship between corporate governance and performance to financial reporting quality is imperative; this is because despite rapid researches in this area the findings obtained from these studies are constantly inconclusive. Data for the study were extracted from the firms’ annual reports and accounts. After running the OLS regression, a robustness test was conducted for the validity of statistical inferences; the data was empirically tested. A multiple regression was employed to test the model as a technique for data analysis. The results from the analysis revealed a negative association between all the regressors and financial reporting quality except the performance of listed manufacturing firms in Nigeria. This indicates that corporate governance plays a significant role in mitigating earnings management and improving financial reporting quality while performance does not. The study recommended among others that the composition of audit committee should be made in accordance with the provision for code of corporate governance which is not more than six (6) members with at least one (1) financial expert.

Keywords: corporate governance, financial reporting quality, manufacturing firms, Nigeria, performance

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Authors: Taylan Kabbani, Ekrem Duman

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The design of adaptive systems that take advantage of financial markets while reducing the risk can bring more stagnant wealth into the global market. However, most efforts made to generate successful deals in trading financial assets rely on Supervised Learning (SL), which suffered from various limitations. Deep Reinforcement Learning (DRL) offers to solve these drawbacks of SL approaches by combining the financial assets price "prediction" step and the "allocation" step of the portfolio in one unified process to produce fully autonomous systems capable of interacting with its environment to make optimal decisions through trial and error. In this paper, a continuous action space approach is adopted to give the trading agent the ability to gradually adjust the portfolio's positions with each time step (dynamically re-allocate investments), resulting in better agent-environment interaction and faster convergence of the learning process. In addition, the approach supports the managing of a portfolio with several assets instead of a single one. This work represents a novel DRL model to generate profitable trades in the stock market, effectively overcoming the limitations of supervised learning approaches. We formulate the trading problem, or what is referred to as The Agent Environment as Partially observed Markov Decision Process (POMDP) model, considering the constraints imposed by the stock market, such as liquidity and transaction costs. More specifically, we design an environment that simulates the real-world trading process by augmenting the state representation with ten different technical indicators and sentiment analysis of news articles for each stock. We then solve the formulated POMDP problem using the Twin Delayed Deep Deterministic Policy Gradient (TD3) algorithm, which can learn policies in high-dimensional and continuous action spaces like those typically found in the stock market environment. From the point of view of stock market forecasting and the intelligent decision-making mechanism, this paper demonstrates the superiority of deep reinforcement learning in financial markets over other types of machine learning such as supervised learning and proves its credibility and advantages of strategic decision-making.

Keywords: the stock market, deep reinforcement learning, MDP, twin delayed deep deterministic policy gradient, sentiment analysis, technical indicators, autonomous agent

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Authors: Jamel Boukhatem, Semia Rachid, Marmar Nasr

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Considering the differences between oil- and non-oil-producing countries, this paper aims to evaluate the impact of financial development (FD) and institutional quality (IQ) on CO2 emissions in 15 MENA (Middle East and North Africa) countries over the period 1996-2018 using the Panel ARDL approach. We found evidence to support an unconditional long run effect of FD on environmental conditions (EC), with quite significant differences between the two groups of countries. While FD leads to environmental degradation (ED) in non-oil-producing countries, it helps protect the environment in oil-producing ones. Regarding the effects of IQ on EC, they are not significant in both short- and long run for non-oil-producing countries, but they are significant for oil-producing ones only in the long run. In the short run, IQ indicators haven’t significant effects on EC for the two groups of countries.

Keywords: financial development, institutional quality, environmental conditions, Panel ARDL

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Authors: O. Colot, M. Croquet, L. Cultrera, Y. Fandja Collince

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The objective of our research is to evaluate the impact of the allowance for corporate equity (ACE) on the financial structure of Belgian SME in order to highlight the potential existence of a fiscal leverage. To limit the biases linked to the rationing of the capital further to the financial crisis, we compare first the dynamic evolution of the financial structure of the Belgian firms over the period 2006-2015 by focusing on three sub-periods: 2006-2008, 2009-2012 and 2013-2015. We give then an international size to this comparison by including SMEs from countries adjoining Belgium (France, Germany, Netherlands and the United Kingdom) and within which there is no ACE. This comparison allows better understanding the fiscal advantage linked to the ACE of firms evolving in a relatively unstable economic environment further to the financial crisis of 2008. This research is relevant given the economic and political context in which Belgium operates and the very uncertain future of the Belgian ACE. The originality of this research is twofold: the long study period and the consideration of the effects of the financial and economic crisis on the financing structure of Belgian SMEs. The results of this research, even though they confirm the existence of a positive fiscal leverage for the tax deduction for venture capital on the financing structure of Belgian SMEs, do not allow the extent of this leverage to be clearly quantified. The comparative evolution of financing structures over the period 2006-2015 of Belgian, French, German, Dutch and English SMEs shows a strong similarity in the overall evolution of their financing.

Keywords: allowance for corporate equity, Belgium, financial structure, small and medium sized firms

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Authors: Fahad Ahmed Qureshi

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There were abundant renowned financial markets in Pre-Islamic Arabs. Most of those were patterned and settled during pre-particularized sunshine. Those markets were classified either as vernacular markets helping the neighboring clans, or habitual markets that people sojourned to from all articulations of the Arabian Peninsula, such as Okaz near Mecca. Some of those markets had leading significance due to their geographical positions, such as Prime market of Eden, because of their entanglement in international trade i.e. with the markets of Sub-Continent, Abyssinia, Persia and China. Other markets such as Market of Yamamah annex its gist from being situated on the caravan crossroads. Islamic worldview and Islamic epistemology base of Financial Market’s realistic theory, pragmatic model and operative approach is moderately constrained in terms of its growth. The existent situation only parasol the form of accommodative-modification and splendid-methodologies, which due to depleted and decorous endeavor in explaining Islamic financial market theoretically. This is the demand of time that particular studies should be conduct to magnify the devours in developing theoretical framework for Islamic Financial Market.

Keywords: Islam, financial market, history, research, product development

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Authors: Lemuel David

Abstract:

The importance of the Micro, Small, and Medium Enterprises sector is well recognized for its legitimate contribution to the Macroeconomic objectives of the Republic of Liberia, like generation of employment, input t, exports, and enhancing entrepreneurship. Right now, Medium and Small enterprises accounts for about 99 percent of the industrial units in the country, contributing 60 percent of the manufacturing sector output and approximately one-third of the nation’s exports. The role of various financial institutions like ECO bank and Non-financial Institutions like Bearch Limited support promoting the growth of Micro, Small, and Medium Enterprises is unique. A small enterprise or entrepreneur gets many types of assistance from different institutions for varied purposes in the course of his entrepreneurial journey. This paper focuses on the factors related to financial institutional support and non-financial institutional support entrepreneurs to the growth of Medium and Small enterprises in the Republic of Liberia. The significance of this paper is to support Policy and Institutional Support for Medium and Small enterprises to know the views of entrepreneurs about financial and non-financial support systems in the Republic of Liberia. This study was carried out through a survey method, with the use of questionnaires. The population for this study consisted of all registered Medium and Small enterprises which have been registered during the years 2004-2014 in the republic of Liberia. The sampling method employed for this study was a simple random technique and determined a sample size of 400. Data for the study was collected using a standard questionnaire. The questionnaire consisted of two parts: the first part consisted of questions on the profile of the respondents. The second part covers (1) financial, promotional factors and (2) non-financial promotional factors. The results of the study are based on financial and non-financial supporting activities provided by institutions to Medium and Small enterprises. After investigation, it has been found that there is no difference in the support given by Financial Institutions and non-financial Institutions. Entrepreneurs perceived “collateral-free schemes and physical infrastructure support factors are highest contributing to entry and growth of Medium and Small enterprises.

Keywords: micro, small, and medium enterprises financial institutions, entrepreneurship

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Authors: Olurankinse Felix, Fatukasi Bayo

Abstract:

Over the years, the medium through which government financial statements are prepared has been on cash basis of accounting. This basis was characterised with some shortcomings ranging from non- disclosure of quality and detail information relating to government financial transactions, ill informed assessment of government resource allocation, weak internal control system that inhibits accountability and transparency and non- standardisation of reporting ethics for the purpose of comparability. The emergence of international public sector accounting standards (IPSAS) is therefore seen as leverage as it aims at improving the quality of general purpose financial reporting by public sector entities thereby increasing transparency and accountability. IPSAS is a new concept that all institutions must fully adopts. The crux of this paper is to find out to what extent is the awareness and adoption of IPSAS to both students and lecturers interms of teaching, learning and inclusion in the curriculum of accounting education. The methodology involved the use of well designed questionnaires to obtain information from some selected institutions and the analysis was done with the use of maximum likelihood ordered probit regression. The result of the analysis shows that despite a high level of sensitisation/awareness of IPSAS, the degree of adoption is still low due to low level of desirability by students and lecturers. The paper recommend the need for the government to enact an enabling law to back up the adoption and more importantly to institute appropriate sanctions to ensure full compliance.

Keywords: assessment, awareness, adoption, IPSAS, cash basis

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Authors: Radhakumari Challa

Abstract:

In India the commercial banks have taken the initiative of visiting the villages and helping the villagers open the no-frill accounts as part of the mission towards achieving the total financial inclusion. As an extension to the first phase of the study conducted a year back which revealed that the required awareness that the no-frill accounts creation is the initiative of the government to transfer either the financial assistance or other benefits of economic development directly was lacking among the villagers, the present study is undertaken to review the change in perceptions of beneficiaries in villages over a year period. The study reveals that that there is increase in the awareness among villagers regarding the purpose for which no-frills accounts are opened, about the method of operating these accounts. Awareness about their right for accessing all the financial services is also found to be on the rise.

Keywords: business correspondence, financial inclusion no-frill account, percolation

Procedia PDF Downloads 341