Search results for: financial studies' devolution

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: 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: 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: Bikash Ranjan Mishra, Lopamudra D. Satpathy

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In the wake of the phenomenal surge in international business in the last decades or more, both the developed and developing economies around the world are in massive competition to attract more and more FDI flows. While the developed countries have marched ahead in the race, the developing countries, especially those of Asian economies, have followed them at a rapid pace. While most of the previous studies have analysed the role of institutional quality in the promotion of FDI flows in developing countries, very few studies have taken an integrated approach of examining the comprehensive impact of institutional quality, globalization pattern and domestic financial development on FDI flows. In this context, the paper contributes to the literature in two important ways. Firstly, two composite indices of institutional quality and domestic financial development for the Asian countries are constructed in comparison to earlier studies that resort to a single variable for indicating the institutional quality and domestic financial development. Secondly, the impact of these variables on FDI flows through their interaction with geographical region is investigated. The study uses panel data covering the time period of 1996 to 2012 by selecting twenty Asian developing countries by emphasizing the quality of institutions from the geographical regions of eastern, south-eastern, southern and western Asia. Control of corruption, better rule of law, regulatory quality, effectiveness of the government, political stability and voice and accountability are used as indicators of institutional quality. Besides these, the study takes into account the domestic credits in the hands of public, private sectors and in stock markets as domestic financial indicators. First in the specification of model, a factor analysis is performed to reduce the vast determinants, which are highly correlated with each other, to a manageable size. Afterwards, a reduced version of the model is estimated with the extracted factors in the form of index as independent variables along with a set of control variables. It is found that the institutional quality index and index of globalization exert a significant effect on FDI inflows of the host countries; in contrast, the domestic financial index does not seem to play much worthy role. Finally, some robustness tests are performed to make sure that the results are not sensitive to temporal and spatial unobserved heterogeneity. On the basis of the above study, one general inference can be drawn from the policy prescription point of view that the government of these developing countries should strengthen their domestic institution, both financial and non-financial. In addition to these, welfare policies should also target for rapid globalization. If the financial and non-financial institutions of these developing countries become sound and grow more globalized in the economic, social and political domain, then they can appeal to more amounts of FDI inflows that will subsequently result in advancement of these economies.

Keywords: Asian developing economies, FDI, institutional quality, panel data

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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: Ayman Haddad, Wafaa Sbeiti, Amr Qasem

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The main aim of this paper is to provide an overview of the most influential economic changes and accounting legislation affecting financial reporting and disclosure practices in Jordan. It also provides an overview of disclosure studies conducted in Jordan covering the year(s) between 1986 and 2014. The economic changes in Jordan required conducting economic reform and revising/issuing new regulations and financial market reforms that led to an improvement in disclosure practices. The issuance of Temporary Securities Law and its Directives of Disclosure in 1997, which came into effect in 1998, is considered as the turning point in the improvement of disclosure practice in Jordan. Based on a review of prior disclosure studies, we conclude that disclosure practices have improved overtime. We also observe that that firm size as a factor has always affected the level of disclosure in Jordan and followed by external auditing while liquidity was found to have the least effect. The paper also addresses the disclosure items required in Corporate Governance Codes that exist for listed shareholding companies, banks, and insurance companies. Finally, the paper discusses the quality of accounting education in Jordan since prior studies noted its impact on accounting practice.

Keywords: accounting legislation, corporate governance, disclosure practice, Jordan

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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: Shobhit Mittal

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Headcount budgeting stands as a pivotal element in organizational financial management, extending beyond traditional budgeting to encompass strategic resource allocation for workforce-related expenses. This process is integral to maintaining financial stability and fostering a productive workforce, requiring a comprehensive analysis of factors such as market trends, business growth projections, and evolving workforce skill requirements. It demands a collaborative approach, primarily involving Human Resources (HR) and finance departments, to align workforce planning with an organization's financial capabilities and strategic objectives. The dynamic nature of headcount budgeting necessitates continuous monitoring and adjustment in response to economic fluctuations, business strategy shifts, technological advancements, and market dynamics. Its significance in talent management is also highlighted, aligning financial planning with talent acquisition and retention strategies to ensure a competitive edge in the market. The consequences of incorrect headcount budgeting are explored, showing how it can lead to financial strain, operational inefficiencies, and hindered strategic objectives. Examining case studies like IBM's strategic workforce rebalancing and Microsoft's shift for long-term success, the importance of aligning headcount budgeting with organizational goals is underscored. These examples illustrate that effective headcount budgeting transcends its role as a financial tool, emerging as a strategic element crucial for an organization's success. This necessitates continuous refinement and adaptation to align with evolving business goals and market conditions, highlighting its role as a key driver in organizational success and sustainability.

Keywords: strategic planning, fiscal budget, headcount planning, resource allocation, financial management, decision-making, operational efficiency, risk management, headcount budget

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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: Edward Chamisa, Colin C. Smith, Hamutyinei H. Pamburai, Abdul C. Abdulla

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South Africa (SA) adopted International Financial Reporting Standards (IFRS) for listed firms effective 1 January 2005. However, it was not until 2011 that substantial financial reporting enforcement changes were introduced, which were meant to ensure compliance with IFRS. This innovative setting allows us to examine the value relevance of accounting amounts during the (1) pre-IFRS adoption period (2002-2004); (2) post-IFRS adoption, but pre-enforcement changes period (2006-2010); and (3) post-enforcement changes period (2011-2012). The results show that accounting amounts were most value relevant in the post-enforcement changes period (R2, 75.5%) compared to both the pre-IFRS adoption period (adjusted R2 is 24.3%) and the period after IFRS adoption but before enforcement changes (adjusted R2 is 37.5%). Also, during the 2008 financial crisis, the equity book value per share was significantly value relevant (at 1%) but not earnings per share, whereas before the crisis, the opposite was true. We make two important contributions to the literature. First, we identify SA as an innovative setting that allows researchers to examine separately the effects of IFRS adoption and enforcement changes on capital markets and accounting quality. This is a departure from prior studies that are dominated by the European Union setting, where IFRS adoption occurred contemporaneously with enforcement and other regulatory changes. Second, we provide preliminary findings which suggest that while the adoption of IFRS seems to have improved the financial reporting quality of accounting amounts of SA listed firms, its impact appears to be limited unless combined with effective enforcement.

Keywords: international financial reporting standards (ifrs), ifrs adoption, financial reporting enforcement, value relevance, price model, equity book value, earnings per share

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Authors: Fuchun Li, Hong Xiao

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We propose a new early warning model for predicting financial stress events for a given future time. In this model, we examine whether credit conditions play an important role as a nonlinear propagator of shocks when predicting the likelihood of occurrence of financial stress events for a given future time. This propagation takes the form of a threshold regression in which a regime change occurs if credit conditions cross a critical threshold. Given the new early warning model for financial stress events, we evaluate the performance of this model and currently available alternatives, such as the model from signal extraction approach, and linear regression model. In-sample forecasting results indicate that the three types of models are useful tools for predicting financial stress events while none of them outperforms others across all criteria considered. The out-of-sample forecasting results suggest that the credit-regime switching model performs better than the two others across all criteria and all forecasting horizons considered.

Keywords: cut-off probability, early warning model, financial crisis, financial stress, regime-switching model, forecasting horizons

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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: Elizabeth Stojanovski

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Associations between life events and various forms of cancers have been identified. The purpose of a recent random-effects meta-analysis was to identify studies that examined the association between adverse events associated with changes to financial status including decreased income and breast cancer risk. The same association was studied in four separate studies which displayed traits that were not consistent between studies such as the study design, location and time frame. It was of interest to pool information from various studies to help identify characteristics that differentiated study results. Two random-effects Bayesian meta-analysis models are proposed to combine the reported estimates of the described studies. The proposed models allow major sources of variation to be taken into account, including study level characteristics, between study variance, and within study variance and illustrate the ease with which uncertainty can be incorporated using a hierarchical Bayesian modelling approach.

Keywords: random-effects, meta-analysis, Bayesian, variation

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Authors: Pedram Saadati, Zahra Nazari

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Today, the role and importance of financial technology businesses in Iran have increased significantly. Although, in Iran, there is no Islamic or non-Islamic personal financial planning field of study in the universities or educational centers, the profession of personal financial planning is not defined, and there is no software introduced in this regard for advisors or consumers. The largest sales network of financial services in Iran belongs to the insurance industry, and there is an untapped market for international companies in Iran that can contribute to 130 thousand representatives in the insurance industry and 28 million families by providing training and personal financial advisory software. To the best of the author's knowledge, despite the lack of previous internal studies in this field, the present study investigates the level of readiness of the salesforce of the insurance industry to accept this career and its technology. The statistical population of the research is made up of managers, insurance sales representatives, assistants and heads of sales departments of insurance companies. An 18-minute video was prepared that introduced and taught the job of Islamic personal financial planning and explained its difference from its non-Islamic model. This video was provided to the respondents. The data collection tool was a research-made questionnaire. To investigate the factors affecting technology acceptance and job change, independent T descriptive statistics and Pearson correlation were used, and Friedman's test was used to rank the effective factors. The results indicate the mental perception and very positive attitude of the insurance industry activists towards the usefulness of this job and its technology, and the studied sample confirmed the intention of training in this knowledge. Based on research results, the change in the customer's attitude towards the insurance advisor and the possibility of increasing income are considered as the reasons for accepting. However, Restrictions on using investment opportunities due to Islamic financial services laws and the uncertainty of the position of the central insurance in this regard are considered as the most important obstacles.

Keywords: fintech, insurance, personal financial planning, wealth management

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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: Muhammad Umar Kibiya

Abstract:

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: Ugbede Onalo, Mohd Lizam, Ahmad Kaseri, Otache Innocent

Abstract:

Giving the paucity of studies on IFRS adoption and quality of banks accounting quality, particularly in emerging economies, this study is motivated to investigate whether the Nigeria decision to adopt IFRS beginning from 1 January 2012 is associated with high quality accounting measures. Consistent with prior literatures, this study measure quality of financial statement information using earnings measurement, timeliness of loss recognition and value relevance. A total of twenty Nigeria banks covering a period of six years (2008-2013) divided equally into three years each (2008, 2009, 2010) pre adoption period and (2011, 2012, 2013) post adoption period were investigated. Following prior studies eight models were in all employed to investigate earnings management, timeliness of loss recognition and value relevance of Nigeria bank accounting quality for the different reporting regimes. Results suggest that IFRS adoption is associated with minimal earnings management, timely recognition of losses and high value relevance of accounting information. Summarily, IFRS adoption engenders higher quality of banks financial statement information compared to local GAAP. Hence, this study recommends the global adoption of IFRS and that Nigeria banks should embrace good corporate governance practices.

Keywords: IFRS, SAS, quality of accounting information, earnings measurement, discretionary accruals, non-discretionary accruals, total accruals, Jones model, timeliness of loss recognition, value relevance

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

Abstract:

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

Procedia PDF Downloads 351