Search results for: financial models

Authors: H. C. Chinwenyi, H. D. Ibrahim, F. A. Ahmed

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In modern financial mathematics, valuing derivatives such as options is often a tedious task. This is simply because their fair and correct prices in the future are often probabilistic. This paper examines three different Stochastic Differential Equation (SDE) models in finance; the Constant Elasticity of Variance (CEV) model, the Balck-Karasinski model, and the Heston model. The various Martingales option price valuation formulas for these three models were obtained using the replicating portfolio method. Also, the numerical solution of the derived Martingales options price valuation equations for the SDEs models was carried out using the Monte Carlo method which was implemented using MATLAB. Furthermore, results from the numerical examples using published data from the Nigeria Stock Exchange (NSE), all share index data show the effect of increase in the underlying asset value (stock price) on the value of the European Put Option for these models. From the results obtained, we see that an increase in the stock price yields a decrease in the value of the European put option price. Hence, this guides the option holder in making a quality decision by not exercising his right on the option.

Keywords: equivalent martingale measure, European put option, girsanov theorem, martingales, monte carlo method, option price valuation formula

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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: Clive L. Morley

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Gravity models and panel data modelling of tourism flows are receiving renewed attention, after decades of general neglect. Such models have quite different underpinnings from conventional demand models derived from micro-economic theory. They operate at a different level of data and with different theoretical bases. These differences have important consequences for the interpretation of the results and their policy and managerial implications. This review compares and contrasts the two model forms, clarifying the distinguishing features and the estimation requirements of each. In general, gravity models are not recommended for use to address specific management and marketing purposes.

Keywords: gravity models, micro-economics, demand models, marketing

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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: Kachout Mnaouer, Bel Hadj Tahar Jamel, Choubani Fethi

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In this paper, three electric equivalent models to evaluate crosstalk between three-conductor transmission lines are proposed. First, electric equivalent models for three-conductor transmission lines are presented. Secondly, rigorous equations to calculate the per-unit length inductive and capacitive parameters are developed. These models allow us to calculate crosstalk between conductors. Finally, to validate the presented models, we compare the theoretical results with simulation data. Obtained results show that proposed models can be used to predict crosstalk performance.

Keywords: near-end crosstalk, inductive parameter, L, Π, T models

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Authors: Mai A. Ibrahim, Mohammed El-Beltagy, Motaz Khorshid

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Emerging Markets return distributions have shown significance departure from normality were they are characterized by fatter tails relative to the normal distribution and exhibit levels of skewness and kurtosis that constitute a significant departure from normality. Therefore, the classical Markowitz Mean-Variance is not applicable for emerging markets since it assumes normally-distributed returns (with zero skewness and kurtosis) and a quadratic utility function. Moreover, the Markowitz mean-variance analysis can be used in cases of moderate non-normality and it still provides a good approximation of the expected utility, but it may be ineffective under large departure from normality. Higher moments models and median models have been suggested in the literature for asset allocation in this case. Higher moments models have been introduced to account for the insufficiency of the description of a portfolio by only its first two moments while the median model has been introduced as a robust statistic which is less affected by outliers than the mean. Tail risk measures such as Value-at Risk (VaR) and Conditional Value-at-Risk (CVaR) have been introduced instead of Variance to capture the effect of risk. In this research, higher moment models including the Mean-Variance-Skewness (MVS) and Mean-Variance-Skewness-Kurtosis (MVSK) are formulated as single-objective non-linear programming problems (NLP) and median models including the Median-Value at Risk (MedVaR) and Median-Mean Absolute Deviation (MedMAD) are formulated as a single-objective mixed-integer linear programming (MILP) problems. The higher moment models and median models are compared to some benchmark portfolios and tested on real financial data in the Egyptian main Index EGX30. The results show that all the median models outperform the higher moment models were they provide higher final wealth for the investor over the entire period of study. In addition, the results have confirmed the inapplicability of the classical Markowitz Mean-Variance to the Egyptian stock market as it resulted in very low realized profits.

Keywords: Egyptian stock exchange, emerging markets, higher moment models, median models, mixed-integer linear programming, non-linear programming

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Authors: Salah Alrabeei, Mohammad Yousuf

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The goal of option pricing theory is to help the investors to manage their money, enhance returns and control their financial future by theoretically valuing their options. However, most of the option pricing models have no analytical solution. Furthermore, not all the numerical methods are efficient to solve these models because they have nonsmoothing payoffs or discontinuous derivatives at the exercise price. In this paper, we solve the American option under jump diffusion models by using efficient time-dependent numerical methods. several techniques are integrated to reduced the overcome the computational complexity. Fast Fourier Transform (FFT) algorithm is used as a matrix-vector multiplication solver, which reduces the complexity from O(M2) into O(M logM). Partial fraction decomposition technique is applied to rational approximation schemes to overcome the complexity of inverting polynomial of matrices. The proposed method is easy to implement on serial or parallel versions. Numerical results are presented to prove the accuracy and efficiency of the proposed method.

Keywords: integral differential equations, jump–diffusion model, American options, rational approximation

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Authors: Emily Fortune Super, Ameerah Khadaroo, Aurore Bardey

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Fashion models are often assumed to have a glamorous job with limited consideration for their well-being. This study aims to assess the well-being of models through semi-structured interviews with six professional fashion models and six industry professionals. Thematic analysis revealed that although models experienced improved self-confidence, they also reported heightened anxiety levels, body image issues, and the negative influence of modelling on their self-esteem. By contrast, industry professionals reported no or minimum concerns about anxious behaviours or the general well-being of fashion models. Being resilient as a model was perceived as an essential attribute to have by both models and industry professionals as they face recurrent rejection in this industry. These results demonstrate a significant gap in the current understanding of the well-being of fashion models between industry professionals and the models themselves. Findings imply that there is an inherent need for change in the modelling industry to promote and enhance their well-being.

Keywords: body image, fashion industry, modelling, well-being

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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: Krishna Prasad Sharma

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Nepal’s financial sector has become deeper and wider, and the number and types of financial intermediaries have grown rapidly over the past two decades. However, access to financial services remains limited for many people in many parts of rural Nepal. While financial institutions have been expanding rapidly in an urban area in recent years, the access to the rural poor is excessively inadequate due to financial illiteracy and limited numbers of financial institutions that confined only to the district headquarters. Based on the focus group discussion, semi-structured interview of key people and literature review, this paper aims to examine the supply of and demand for financial services in Nepal and the constraints to increasing access to them, and offers way forward for making the financial sector work for all of Nepal’s people, especially the rural poor. While Nepal’s government has tried to increase access to formal financial services for small businesses and low-income households through directed lending programs for small businesses and low-income households, created specialized wholesale and retail institutions, and lowered market entry requirements, formal financial services are declining, and financial intermediation is stagnating. Supply and demand indicators show that, despite government efforts, formal financial institutions do not serve the needs of most of the Nepalese population. While access to and use of formal financial services are limited, in general, the problem is acute for small businesses and low-income households. Indeed, both access and use are closely correlated with business loan size and household income. This study concludes that banks and microfinance institutions with the use of mobile phones can connect hundreds of millions of unbanked and low-income people, especially rural poor to financial services at low costs. While there are many challenges ahead in expanding the service to rural areas, the mobile financial services will be beneficial that makes payments faster and cheaper, more convenient and accessible to a greater number of senders and recipients in rural areas. In rural areas, clients will benefit from money transfer and other mobile and online services.

Keywords: financial inclusion, financial enabling environment, microfinance, branchless banking, rural poor

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Authors: Lemuel David

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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: Radhakumari Challa

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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

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Authors: Aliyu Aminu Baba, Yahaya Danjuma, Ahmad Sule Liman-Katagum

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This paper examines the effects of the board of directors’ diversity on firm performance. We investigate the relationship between the number of women directors on the board and important board committees and financial performance measured as return on assets. Our statistical analysis supports the theoretical position of the effect diversity on financial performance. These studies enhanced the previous studies on the board of director’s gender diversity, board committees, and its impacts on firm financial performance. The study uses data from eighteen (18) Nigerian commercial banks. The study finds that banks with a higher number of females directors on board and board committees have higher Earning per share(EPS)) and Return on Assets (ROA). It also finds that some banks did not even have a single female on its corporate board. Evidence imply that decisions concerning the appointment of women to corporate boards should be on criteria and financial performance. It is recommended that banks can enhance their financial performance by having more female directors on their corporate board.

Keywords: board of directors, gender diversity, board committees, financial performance

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Authors: Wanlapha Phraibueng, Patrick Sentis, Geraldine Riviere-Giordano

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Corporate Social Responsibility (CSR) initiatives have been widely discussed especially in investor-oriented firms. In contrast, cooperatives pay less attention to CSR because their activities have integrated the responsibility and the solidity of social, economic and environment. On the other hand, by adopting ownership theory and agency theory – cooperatives ignore CSR investment due to unclarified decision control in the governance and the limitation to acquire the capital financed. The unique governance and financial structures in cooperatives lead to the conflict among the stakeholders and long-term investment which have an impact on firm financial performance. As an illustration of cooperatives dilemmas, we address the question of Whether or not cooperatives in term of governance and financial structures are the constraints on implementing CSR policies. We find that the governance and financial structures in large cooperatives are the influence factors which predispose cooperatives to invest on CSR. In contrast, in the startup or small cooperatives, its governance and financial structures are the constraints on implementing CSR policies. We propose the alternative financial structure based on the trade-off between debt and equity which aims to relax the restrictions in cooperatives’ governance and allow cooperatives to acquire the capital financed either from its members or non-members. We suggest that engaging equity as a financial structure induces cooperatives to invest on CSR policies. Alternative financial structure eliminates not only cooperative ownership control problem but also the constraints in capital acquisition. By implementing CSR activities consistent with the alternative financial choice, cooperatives can increase firm’s value and reduce the conflict among their stakeholders.

Keywords: cooperatives, corporate social responsibility, financial, governance

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Authors: Moses Pinto, Ana Paula Monte

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The present research analyses the interactions between various categories of corporate social responsibility (CSR) that mediate the relationship between CSR and financial performance in Multinational Enterprises (MNE) in light of the present socio-political factors prevalent in the countries under observation. In the research it has been hypothesized that the absence of consensus in the empirical literature on the CSR–financial performance relationship may be explained by the existence of synergies (Complementarities) between the different CSR components. Upon investigation about whether such relationships exist, a final unbalanced panel sample of 1000 observations taken from 100 Multinational Enterprises per year functioning in the Schengen countries and one south east Asian country namely: India, over the span of 10 years i.e. from the year 2008 to 2018 has been analyzed. The empirical analysis used in the research methodology employs dynamic Panel Data in time series specifically, the system Generalized Method of Moments (GMM) which had been used to detect the varying degrees of relationships between the CSR and financial performance parameters in the background of the socio-political factors prevailing in the countries at the time and also taking into account the bilateral treaty obligations between the countries under observation. The econometric model has employed the financial ratio namely the Return on Assets (ROA) as an indicator of financial performance in order to gauge the internal performance and valuation of a firm as opposed to the Tobin’s Q that provides for the external evaluation of a firm’s financial performance which may not always be accurate. The various CSR dimensions have demonstrated significant correlations to the ‘ROA’ which include some negatively associated correlations and one positively associated correlation that is highly significant throughout the analysis of the observations, namely the correlation between the ‘ROA’ and the CSR dimension: ‘Environment’. The results provide a deeper insight in the synergistic CSR activities that managers could adapt into their Firm’s CSR strategy in order to enhance the ‘ROA’ and also to understand which interactions between the CSR dimensions can be adapted together due to their positively correlated association with each other and the ROA. The future lines of research would be inclined to investigate the effects of socio-political factors on the ROA of the MNEs through better designed econometric models.

Keywords: CSR, financial performance, complementarity, sociopolitical factors

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Authors: Abhishek Ranga

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The study examined the effect of accounting choice and level of disclosure on the firm’s implied cost of equity in Indian environment. For the study accounting choice was classified as aggressive or conservative depending upon the firm’s choice of accounting methods, accounting policies and accounting estimates. Level of disclosure is the quantum of financial and non-financial information disclosed in firm’s annual report, essentially in note to accounts section, schedules forming part of financial statements and Management Discussion and Analysis report. Regression models were developed with cost of equity as a dependent variable and accounting choice, level of disclosure as an independent variable along with selected control variables. Cost of equity was measured using Edward-Bell-Ohlson (EBO) valuation model, to measure accounting choice Modified-Jones-Model (MJM) was used and level of disclosure was measured using a disclosure index essentially drawn from Botosan study. Results indicated a negative association between the implied cost of equity and conservative accounting choice and also between level of disclosure and cost of equity.

Keywords: aggressive accounting choice, conservative accounting choice, disclosure, implied cost of equity

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Authors: Azar Baghtaghi

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Financial risk management is critically important as it enables companies to maintain stability and profitability amidst market fluctuations and unexpected events. It involves the precise identification of risks that could impact investments, assets, and potential revenues. By implementing effective risk management strategies, companies can insure themselves against adverse market changes and prevent potential losses. In today's era, where markets are highly complex and influenced by various factors such as macroeconomic policies, exchange rate fluctuations, and natural disasters, the need for meticulous planning to cope with these uncertainties is more pronounced. Ultimately, financial risk management means being prepared for the future and the ability to sustain business in changing environments. A company capable of managing its risks not only achieves sustainable profitability but also gains the confidence of shareholders, investors, and business partners, enhancing its competitive position in the market. In this article, the types of financial risk and risk management strategies for improving financial performance were investigated. By identifying the risks stated in this article and their evaluation techniques, it is possible to improve the organization's financial performance.

Keywords: strategy, risk, risk management, financial performance

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Authors: Malik Shahzad Shabbir, Muhammad Saarim Ghazi, Amir Khalil ur Rehman

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This study examines the factors which influence and contribute towards the financial viability of Islamic finance and its impact on global financial stability. However, the purpose of this paper is to differentiate the practical implications of both Islamic and conventional finance on global financial stability. The Islamic finance is asset backed financing which creates wealth through trade, commerce and believes in risk and return sharing. Islamic banking is asset driven as against to conventional banking which is liability driven. In order to introduce new financial products for market, financial innovation in Islamic finance must be within the Shari’ah parameters that are tested against the ‘Maqasid al-Shari’ah’. Interest-based system leads to income and wealth inequalities and mis-allocation of resources. Moreover, this system has absence of just and equitable aspect of distribution that may exploit either the debt holder or the financier. Such implications are reached to a tipping point that leaves only one choice: change or face continued decline and misery.

Keywords: viability, global financial stability, practical implications, asset driven, tipping point

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Authors: Niloofar Yousefi, Marie Alaghband, Ivan Garibay

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With the increase of credit card usage, the volume of credit card misuse also has significantly increased, which may cause appreciable financial losses for both credit card holders and financial organizations issuing credit cards. As a result, financial organizations are working hard on developing and deploying credit card fraud detection methods, in order to adapt to ever-evolving, increasingly sophisticated defrauding strategies and identifying illicit transactions as quickly as possible to protect themselves and their customers. Compounding on the complex nature of such adverse strategies, credit card fraudulent activities are rare events compared to the number of legitimate transactions. Hence, the challenge to develop fraud detection that are accurate and efficient is substantially intensified and, as a consequence, credit card fraud detection has lately become a very active area of research. In this work, we provide a survey of current techniques most relevant to the problem of credit card fraud detection. We carry out our survey in two main parts. In the first part, we focus on studies utilizing classical machine learning models, which mostly employ traditional transnational features to make fraud predictions. These models typically rely on some static physical characteristics, such as what the user knows (knowledge-based method), or what he/she has access to (object-based method). In the second part of our survey, we review more advanced techniques of user authentication, which use behavioral biometrics to identify an individual based on his/her unique behavior while he/she is interacting with his/her electronic devices. These approaches rely on how people behave (instead of what they do), which cannot be easily forged. By providing an overview of current approaches and the results reported in the literature, this survey aims to drive the future research agenda for the community in order to develop more accurate, reliable and scalable models of credit card fraud detection.

Keywords: Credit Card Fraud Detection, User Authentication, Behavioral Biometrics, Machine Learning, Literature Survey

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Authors: Muhammad Umar Kibiya

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The study aims to examine whether regulatory changes have an impact on the financial reporting quality of Microfinance Banks in Nigeria. The research employed a panel data analysis technique, using data from 2018 to 2022. The sample includes 72 microfinance banks, using regression analyses to examine the relationship between variables. The findings indicate that Board Chairmanship has a positive and significant effect on financial reporting quality. It also reveals that share ownership has a negative and significant impact on financial reporting quality. The results suggest that regulatory changes have a positive and significant influence on financial reporting quality. Thus, findings have important implications for microfinance banks in Nigeria. It suggests that having a strong and competent board chairperson can enhance financial reporting quality, leading to more transparent and reliable information for stakeholders. Furthermore, the study highlights the importance of regulatory changes in improving financial reporting practices in the microfinance banking sector. The study contributes to the extant literature by providing empirical evidence on the relationship between board chairmanship, share ownership, financial reporting quality, and regulatory changes in microfinance banks. It further supports the concept that governance mechanisms and regulatory reforms play a crucial role in ensuring transparency and accountability within the microfinance banking sector. It recommends that microfinance banks should appoint experienced and qualified individuals as board chairpersons to enhance financial reporting quality. Furthermore, policymakers and regulatory authorities should continue to implement and enforce regulations that promote transparent financial reporting practices in microfinance banks.

Keywords: board chairman, share ownership, financial reporting quality, microfinance, regulatory changes

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Authors: K. Matušínská, H. Starzyczná, M. Stoklasa

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The paper deals with behaviour of the segment 50+ in the financial market in the Czech Republic. This segment could be said as the strong market power and it can be a crucial business potential for financial business units. The main defined objective of this paper is analysis of the customers´ behaviour of the segment 50-60 years in the financial market in the Czech Republic and proposal making of the suitable marketing approach to satisfy their demands in the area of product, price, distribution and marketing communication policy. This paper is based on data from one part of primary marketing research. Paper determinates the basic problem areas as well as definition of financial services marketing, defining the primary research problem, hypothesis and primary research methodology. Finally suitable marketing approach to selected sub-segment at age of 50-60 years is proposed according to marketing research findings.

Keywords: population aging in the Czech Republic, segment 50-60 years, financial services marketing, marketing research, marketing approach

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Authors: Saikiran Subbagari, Avinash Malladhi

Abstract:

Anti Money Laundering (AML) regulations are designed to prevent money laundering and terrorist financing activities worldwide. Financial institutions around the world are legally obligated to identify, assess and mitigate the risks associated with money laundering and report any suspicious transactions to governing authorities. With increasing volumes of data to analyze, financial institutions seek to automate their AML processes. In the rise of financial crimes, optical character recognition (OCR), in combination with machine learning (ML) algorithms, serves as a crucial tool for automating AML processes by extracting the data from documents and identifying suspicious transactions. In this paper, we examine the utilization of OCR for AML and delve into various OCR techniques employed in AML processes. These techniques encompass template-based, feature-based, neural network-based, natural language processing (NLP), hidden markov models (HMMs), conditional random fields (CRFs), binarizations, pattern matching and stroke width transform (SWT). We evaluate each technique, discussing their strengths and constraints. Also, we emphasize on how OCR can improve the accuracy of customer identity verification by comparing the extracted text with the office of foreign assets control (OFAC) watchlist. We will also discuss how OCR helps to overcome language barriers in AML compliance. We also address the implementation challenges that OCR-based AML systems may face and offer recommendations for financial institutions based on the data from previous research studies, which illustrate the effectiveness of OCR-based AML.

Keywords: anti-money laundering, compliance, financial crimes, fraud detection, machine learning, optical character recognition

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Authors: Ramona Zharfpeykan, Paul Rouse

Abstract:

Organizational sustainability is important to both organizations themselves and their stakeholders. Despite its increasing popularity and increasing numbers of organizations reporting sustainability, research on evaluating and comparing the sustainability performance of companies is limited. The aim of this study was to develop models to measure sustainability performance for both cross-sectional and longitudinal comparisons across companies in the same or different industries. A secondary aim was to see if sustainability reports can be used to evaluate sustainability performance. The study used both a content analysis of Australian sustainability reports in mining and metals and financial services for 2011-2014 and a survey of Australian and New Zealand organizations. Two methods ranging from a composite index using uniform weights to data envelopment analysis (DEA) were employed to analyze the data and develop the models. The results show strong statistically significant relationships between the developed models, which suggests that each model provides a consistent, systematic and reasonably robust analysis. The results of the models show that for both industries, companies that had sustainability scores above or below the industry average stayed almost the same during the study period. These indices and models can be used by companies to evaluate their sustainability performance and compare it with previous years, or with other companies in the same or different industries. These methods can also be used by various stakeholders and sustainability ranking companies such as the Global Reporting Initiative (GRI).

Keywords: data envelopment analysis, sustainability, sustainability performance measurement system, sustainability performance index, global reporting initiative

Procedia PDF Downloads 149