Search results for: prudent financial management

Authors: Nela Milosevic, Sladjana Barjaktarovic Rakocevic, Sladjana Benkovic, Nemanja Milanovic

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Nowadays, performance measurement systems play a key role in evaluating the strategic performances of an organization. On the other hand, there has been a shift towards the Balanced Scorecard (BSC), which has been recognized as a valuable managerial approach. The main goal of this paper is to analyze the main performances of Serbian banks measured at the branches level, through the usage of the Balanced Scorecard framework. Although an extensive number of practitioners have an interest in the Balanced Scorecard approach, little empirical research has been conducted on the implementation of its concept in the service sector like banks, especially within developing countries. From the beginning of August till the end of September 2015, authors have been conducting in-depth interviews among a number of experts from the most successful banks in Serbia. The results show that the non-financial measures, especially, customer oriented indicators and product/ service oriented indicators, seem to be very important factors for improving not only the financial situation within the bank, but also overall business performances. Additionally, the findings prove that there is the cause-effect relationship between non-financial and financial dimensions of the Balanced Scorecard. Having in mind that the banks are still using outdated performance evaluation systems, such as annual, quarterly and monthly reports, we hope that this paper will contribute to the knowledge of how banks in Serbia may apply the Balanced Scorecard approach to evaluate their performance on the most efficient and effective way.

Keywords: balanced scorecard approach, bank management, performance measurement systems, strategic performances

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Authors: Prateep Wajeetongratana

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The objectives of the research were to examine that how management accounting techniques were perceived and used by companies listed on the stock exchange and to investigate similarities or differences of management accounting practices between companies listed on the stock exchange and Thai SMEs. Descriptive and inferential statistics were employed. The finding found that almost all of the companies used traditional management accounting techniques more than advanced management accounting techniques. Four management accounting techniques having no significant association with business characteristic were standard costing, job order costing, process costing. The barriers that Thai SMEs encountered were a lack of proper accounting system and the insufficient knowledge in management accounting of the accountants. The comparison results revealed that both companies listed on the stock exchange and Thai SMEs used traditional management accounting techniques more than advanced techniques.

Keywords: companies listed on the stock exchange, financial budget, management accounting, operating budget

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Authors: Petr Gurný

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One of the most important tasks in the risk management is the correct determination of probability of default (PD) of particular financial subjects. In this paper a possibility of determination of financial institution’s PD according to the credit-scoring models is discussed. The paper is divided into the two parts. The first part is devoted to the estimation of the three different models (based on the linear discriminant analysis, logit regression and probit regression) from the sample of almost three hundred US commercial banks. Afterwards these models are compared and verified on the control sample with the view to choose the best one. The second part of the paper is aimed at the application of the chosen model on the portfolio of three key Czech banks to estimate their present financial stability. However, it is not less important to be able to estimate the evolution of PD in the future. For this reason, the second task in this paper is to estimate the probability distribution of the future PD for the Czech banks. So, there are sampled randomly the values of particular indicators and estimated the PDs’ distribution, while it’s assumed that the indicators are distributed according to the multidimensional subordinated Lévy model (Variance Gamma model and Normal Inverse Gaussian model, particularly). Although the obtained results show that all banks are relatively healthy, there is still high chance that “a financial crisis” will occur, at least in terms of probability. This is indicated by estimation of the various quantiles in the estimated distributions. Finally, it should be noted that the applicability of the estimated model (with respect to the used data) is limited to the recessionary phase of the financial market.

Keywords: credit-scoring models, multidimensional subordinated Lévy model, probability of default

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Authors: Shazia Ali, Yves Mard, Éric Severin

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To the best of our knowledge, this is the first study to have analyzed the impact of a) firm-specific product-market power and b) industry competition on earnings management behavior of European firms in distress versus healthy years while controlling for firm-level characteristics. We predicted a significant relationship between firms’ product market power and earnings management tools and their trade-off under the moderation effect of financial distress. We found that the firm-level market power hereinafter referred to as MP (proxied by the industry-adjusted Lerner Index) is positively associated with both real and accrual earnings management. However, MP is associated with a higher level of real earnings management compared to accrual earnings management in distress years compared to healthy years. On the other hand, industry product market power (representing low competition and proxied by the inverse of the total number of firms in an industry hereinafter referred to as NUMB) and firms product market power (proxied by firm market share hereinafter referred to as MS) are associated with lower inflationary accruals and higher deflationary accruals respectively. On the other hand, they are found to be linked with higher real earnings management in distress versus healthy years. When we divided the sample into small and big firms based on their respective industry-year median total assets, we found that all three measures of industry competition (Industry Median Lerner Index (hereinafter referred to as IMLI), NUMB, and Herfindahl–Hirschman Index (hereinafter referred to as HHI) indicate that small firms in low-competitive industries in financial distress are more likely to inflate their earnings through discretionary accruals. While big firms in this situation are more likely to lower the use of both inflationary and deflationary discretionary accruals as indicated by IMLI and HHI and trade-off accruals earnings management for real earnings management as indicated by NUMB. Moreover, IMLI and HHI did not show any interesting results when we divided the sample based on the firm Lerner Index/Market Power. However, the distressed firms with high market power (MP>industry median) are found to engage in income-decreasing discretionary accruals in low-competitive industries (high NUMB). Whereas firms with low market power in the same industry use downward discretionary accruals but inflate income using real activities (abnCFO). Our findings are robust across alternate measures of discretionary accruals and financial distress, such as the Altman Z-Score. The finding of the study is valuable for accounting standard setters, competition authorities, policymakers, and investors alike to help in informed decision-making.

Keywords: financial distress, earnings management, market competition

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Authors: Ifedapo Francis Awolowo

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The unrelenting series of embarrassing audit failures should stimulate a paradigm shift in accounting. And in this age of information revolution, there is need for a constant improvement on the products or services one offers to the market in order to be relevant. This study explores the perceptions of external auditors, forensic accountants and accounting academics on whether a paradigm shift to forensic accounting can reduce financial statement frauds. Through Neo-empiricism/inductive analytical approach, findings reveal that a paradigm shift to forensic accounting might be the right step in the right direction in order to increase the chances of fraud prevention and detection in the financial statement. This research has implication on accounting education on the need to incorporate forensic accounting into present day accounting curriculum. Accounting professional bodies, accounting standard setters and accounting firms all have roles to play in incorporating forensic accounting education into accounting curriculum. Particularly, there is need to alter the ISA 240 to make the prevention and detection of frauds the responsibilities of bot those charged with the management and governance of companies and statutory auditors.

Keywords: financial statement fraud, forensic accounting, fraud prevention and detection, auditing, audit expectation gap, corporate governance

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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: Ndagi Salihu

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

Keywords: profitability, board characteristics, agency theory, stakeholders

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Authors: 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: Nidhin Dani Abraham, T. K. Sri Shilpa

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Asset liability management is an important aspect in banking business. Moreover, the today’s banking is based on BASEL III which strictly regulates on the counterparty default. This paper focuses on prediction and analysis of counter party default risk, which is a type of risk occurs when the customers fail to repay the amount back to the lender (bank or any financial institutions). This paper proposes an approach to reduce the counterparty risk occurring in the financial institutions using an appropriate data mining technique and thus predicts the occurrence of NPA. It also helps in asset building and restructuring quality. Liability management is very important to carry out banking business. To know and analyze the depth of liability of bank, a suitable technique is required. For that a data mining technique is being used to predict the dormant behaviour of various deposit bank customers. Various models are implemented and the results are analyzed of saving bank deposit customers. All these data are cleaned using data cleansing approach from the bank data warehouse.

Keywords: data mining, asset liability management, BASEL III, banking

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Authors: Ahuva Even-Zohar

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Context: Families living in poverty often struggle with poor financial management and accumulating debts. Social workers play a crucial role in assisting these families, but they typically receive no formal training in financial management. Research Aim: The aim of this study was to assess the impact of a voluntary organization called Paamonim on social work students' attitudes toward providing material support and assistance in financial management to families living in poverty. Additionally, the study aimed to evaluate the students' perception of the workshop's contribution and their actual use of the tools acquired during the training. Methodology: The study involved 134 social work students, with 55 in a regular program and 79 in a retraining program. The first stage of the study involved the students receiving an explanation of the research, ensuring confidentiality, and signing informed consent. The students completed two questionnaires: The Student Attitudes Questionnaire and a sociodemographic questionnaire. In the second stage, three months after the workshop, the students completed the questionnaires again, along with a feedback questionnaire. Findings: The study found that there were no significant differences in the students' attitudes toward providing material support and proper financial management to families living in poverty before and after the workshop. However, their attitudes remained positive, at a medium level or higher. The students reported that the workshop provided them with tools to assist families in poverty, and they used these tools to some extent in their practical training. They found the workshop interesting and acknowledged its importance in raising awareness about budget management and enriching their knowledge of money management. The students acknowledged the workshop's effectiveness but mentioned that it was too short. Theoretical Importance: This study highlights the importance of developing programs to help families living in poverty manage their household finances. The workshop enriched the students' knowledge and skills, which are vital for their role as social workers working with families in poverty to rehabilitate their financial situations. Data Collection and Analysis Procedures: The students completed self-report questionnaires before and after the workshop, providing insights into their attitudes and perception about the role of social workers in providing material support for families living in poverty and helping them manage their household finances. Statistical analysis was conducted to compare the students' attitudes pre and post-workshop, and a feedback questionnaire assessed the students' perception of the contribution of the workshop. Question Addressed: This study addressed the question of whether a workshop on financial management can positively impact social work students' attitudes and skills in assisting families living in poverty with their household finances. Conclusion: Despite being short and consisting of only one session, the workshop proved to be valuable in enriching the students' knowledge and providing them with important tools for their role as social workers. The students reported positive attitudes toward providing material support and financial assistance to families in need. The practical recommendation is to continue offering such workshops as part of the social work curriculum to further enhance students' abilities to help families manage their finances effectively.

Keywords: financial literacy, poverty, social work students, workshop

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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: Takwa Belwakess

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With the wave of the digitization that invades the modern world, communication tools took their place in the world of business. As for organizations, being part of the digital era necessarily involves an evolution of the management style, mainly in processes management, knowing also as quality management system (QMS). For more than 50 years quality management standards have been adopted by organizations to prove their operational and financial performances. We believe that achieving a high-level of communication can lead to better quality management and greater customer satisfaction, which is essential to make sure long-term competitiveness. In this paper, a questionnaire survey was developed to investigate the use of collaboration tools such as Content Management System and Social Networks. Data from more than 100 companies based in France was analyzed, the results show that adopting new digital communication tools while applying quality management practices over a reasonable period, contributed to delivering a better implementation of the QMS for a better business performance.

Keywords: communication tools, content management system, digital, effectiveness, French companies, quality management system, quality management practices, social networks

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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: 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: 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

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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: Aristeidis Samitas, Evangelos Vasileiou

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The aim of this study is to examine the month and the trading month effect under changing financial trends. We choose the Greek stock market to implement our assumption because there are clear and long term periods of financial growth and recession. Daily financial data from Athens Exchange General Index for the period 2002-2012 are considered. The paper employs several linear and non-linear models, although the TGARCH asymmetry model best fits in this sample and for this reason we mainly present the TGARCH results. Empirical results show that changing economic and financial conditions influences the calendar effects. Especially, the trading month effect totally changes in each fortnight according to the financial trend. On the other hand, in Greece the January effect exists during the growth periods, although it does not exist when the financial trend changes. The findings are helpful to anybody who invest and deals with the Greek stock market. Moreover, they may pave the way for an alternative calendar anomalies research approach, so it may be useful to investors who take into account these anomalies when they draw their investment strategy.

Keywords: month effect, trading month effect, economic cycles, crisis

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Authors: Priyatma Singh, Manpreet Kaur

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Climate change is progressively being identified as a global crisis and this has immediate repercussions for Fiji Islands due to its geographical location being prone to natural disasters. In the Pacific, it is common to find significant differences between men and women, in terms of their roles and responsibilities. In the pursuit of prudent preparedness before disasters, Fijian women’s engagement is constrained due to socially constructed roles and expectation of women here in Fiji. This vulnerability is aggravated by viewing women as victims, rather than as key people who have vital information of their society, economy, and environment, as well as useful skills, which, when recognized and used, can be effective in disaster risk reduction. The focus of this study on disaster management is to outline ways in which Fijian women can be actively engaged in disaster risk management, articulating in decision-making, negating the perceived ideology of women’s constricted roles in Fiji and unveiling social constraints that limit women’s access to practical disaster management strategic plan. This paper outlines the importance of gender mainstreaming in disaster risk reduction and the ways of mainstreaming gender based on a literature review. It analyses theoretical study of academic literature as well as papers and reports produced by various national and international institutions and explores ways to better inform and engage women for climate change per ser disaster management in Fiji. The empowerment of women is believed to be a critical element in constructing disaster resilience as women are often considered to be the designers of community resilience at the local level. Gender mainstreaming as a way of bringing a gender perspective into climate related disasters can be applied to distinguish the varying needs and capacities of women, and integrate them into climate change adaptation strategies. This study will advocate women articulation in disaster risk management, thus giving equal standing to females in Fiji and also identify the gaps and inform national and local Disaster Risk Management authorities to implement processes that enhance gender equality and women’s empowerment towards a more equitable and effective disaster practice.

Keywords: disaster risk management, climate change, gender mainstreaming, women empowerment

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Authors: A. W. Chalmers, O. M. van den Broek

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This article examines the relationship between the global financial crisis and corporate social responsibility activities of financial services firms. It challenges the general consensus in existing studies that firms, when faced with economic hardship, tend to jettison CSR commitments. Instead, and building on recent insights into the institutional determinants of CSR, it is argued that firms are constrained in their ability to abandon CSR by the extent to which they are subject to intense public scrutiny by regulators and the news media. This argument is tested in the context of the European sovereign debt crisis drawing on a unique dataset of 170 firms in 15 different countries over a six-year period. Controlling for a battery of alternative explanations and comparing financial service providers to firms operating in other economic sectors, results indicate considerable evidence supporting the main argument. Rather than abandoning CSR during times of economic hardship, financial industry firms ramp up their CSR commitments in order to manage their public image and foster public trust in light of intense public scrutiny.

Keywords: corporate social responsibility (CSR), public scrutiny, global financial crisis, financial services firms

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Authors: Bi-Huei Tsai

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Previous studies on financial distress prediction choose the conventional failing and non-failing dichotomy; however, the distressed extent differs substantially among different financial distress events. To solve the problem, “non-distressed”, “slightly-distressed” and “reorganization and bankruptcy” are used in our article to approximate the continuum of corporate financial health. This paper explains different financial distress events using the two-stage method. First, this investigation adopts firm-specific financial ratios, corporate governance and market factors to measure the probability of various financial distress events based on multinomial logit models. Specifically, the bootstrapping simulation is performed to examine the difference of estimated misclassifying cost (EMC). Second, this work further applies macroeconomic factors to establish the credit cycle index and determines the distressed cut-off indicator of the two-stage models using such index. Two different models, one-stage and two-stage prediction models, are developed to forecast financial distress, and the results acquired from different models are compared with each other, and with the collected data. The findings show that the two-stage model incorporating financial ratios, corporate governance and market factors has the lowest misclassification error rate. The two-stage model is more accurate than the one-stage model as its distressed cut-off indicators are adjusted according to the macroeconomic-based credit cycle index.

Keywords: Multinomial logit model, corporate governance, company failure, reorganization, bankruptcy

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Authors: Melissa Anguah Nortey

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As populations around the globe continue to age rapidly in an era of increasing life expectancies, the financial wellbeing of older adults becomes crucial. This has led to an extensive discourse on financial literacy and its role in attaining financial wellbeing. In Ireland, the aging demographic presents both opportunities and challenges concerning financial literacy and wellbeing. In addition to increasing life expectancy, evolving pension systems make it imperative for older adults to manage their finances effectively to sustain their quality of life in later years. However, research and relevant financial reports indicate that financial literacy levels among older populations in Ireland lags behind other European countries. Against this backdrop, the current study seeks to identify the financial literacy needs of older adults required to attain wellbeing in older age. Financial wellbeing refers to the ability to confidently manage money and be in a position to meet current and future financial needs. In recent years, the importance of financial wellbeing has been recognized globally due to its significant impact on mental and physical health, relationships, and overall quality of life. In regards to such global recognition, the Sustainable Development Goals (SDGs) outline an ambitious agenda to achieve global prosperity by 2030 by meeting objectives such as eradicating extreme poverty (SDG 1) and ensuring good health and well-being (SDG3). To achieve financial wellbeing, the importance of financial literacy is underscored as a key factor. Research has shown that financial literacy and responsible financial behavior are positively associated with financial wellbeing in retirement and in older age. Older persons are more vulnerable to financial mistakes and fraud due to declining financial literacy, making it essential for them to possess a strong understanding of financial concepts. Studies highlight the benefits of financial literacy for older persons to include the ability to maintain financial resilience. Moreover, financial literacy contributes to the physical and mental well-being of older adults. Older persons however face challenges such as declining cognitive abilities and health factors like increased medical expenses, which can negatively impact their financial literacy levels and reduce financial resilience. To address these challenges, recommendations from extant studies encourage financial literacy programs tailored for older adults should consider their cognitive abilities and health factors. Efforts to increase financial literacy in Ireland was borne out of a need to fill an information gap in understanding financial literacy. In contrast to several Northern European nations, Ireland exhibits low levels of financial literacy. The National financial Literacy strategy in Ireland was launched late 2023 to help increase the financial literacy needs of Irish people. So far, the Department of Finance has conducted a stakeholder engagement process to gather insights on existing financial literacy initiatives in Ireland. Subsequently, based on the findings of this assessment and informed by international best practices, the Department will initiate the development of a national strategy for financial literacy. The main aim of this qualitative research is thus to find out what knowledge and skills people in Ireland need to ensure financial wellbeing into older age.

Keywords: financial literacy, financial wellbeing, Ireland, older persons

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Authors: Ummu Salma Al Azizah, Herri Mulyono, Anisa Mauliata Suryana

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The significance of corporate governance regarding to the agency problem have been transparent. This study examine the impact of corporate governance on the performance of Islamic banking in Indonesia. By using fixed effect model and added some control variable, the current study try to explore the correlation between the theoretical framework on corporate governance, such as agency theory and risk management theory. The bank performance (Return on Asset and Return on Equity) which are operational performance and financial performance. And Corporate governance based on Board size, CEO duality, Audit committee and Shariah supervisory board. The limitation of this study only focus on the Islamic banks performance from year 2015 to 2020. The study fill the gap in the literature by addressing the issue of corporate governance on Islamic banks performance in Indonesia.

Keywords: corporate governance, financial performance, islamic banks, listed companies, Indonesia

Procedia PDF Downloads 86