International Journal of Financial Studies

14 pages, 274 KiB

Open AccessArticle

Developing a Measure of Financial Privacy: A Pilot Study of U.S. College Students

by Thomas A. Hanson and Andrew J. Byrd

Int. J. Financial Stud. 2024, 12(4), 116; https://doi.org/10.3390/ijfs12040116 - 21 Nov 2024

Viewed by 238

This study applied communication privacy management (CPM) theory to develop a new measure of financial privacy, encompassing three dimensions of ownership, permeability, and linkages. The exploratory factor analysis was based on a pilot survey of 371 U.S. college students. The development of this [...] Read more.

This study applied communication privacy management (CPM) theory to develop a new measure of financial privacy, encompassing three dimensions of ownership, permeability, and linkages. The exploratory factor analysis was based on a pilot survey of 371 U.S. college students. The development of this scale was motivated by previous research establishing links between financial literacy, financial socialization, and family communication patterns to suggest the importance of understanding and measuring the role of communication and privacy in the transmission of financial knowledge. Therefore, correlations are also presented between the new measure of financial privacy and measures of financial knowledge, confidence, and experience. The financial privacy scale attained adequate validity and reliability to encourage further refinement and utilization in future theoretical and practical research related to family financial socialization. Full article

(This article belongs to the Special Issue Advance in the Theory and Applications of Financial Literacy)

20 pages, 467 KiB

Open AccessArticle

Mobile Financial Services and the Shadow Economy in Southern African Countries: Does Regulatory Quality Matter?

by Adewale Hassan

Int. J. Financial Stud. 2024, 12(4), 115; https://doi.org/10.3390/ijfs12040115 - 21 Nov 2024

Viewed by 217

Abstract

This study investigated the impact of mobile financial services on the shadow economy in Southern Africa countries and explored how regulatory quality moderates this relationship. Utilising panel data from 1993 to 2022, this study employed dynamic common-correlated effect (DCCE) and dynamic seemingly unrelated [...] Read more.

This study investigated the impact of mobile financial services on the shadow economy in Southern Africa countries and explored how regulatory quality moderates this relationship. Utilising panel data from 1993 to 2022, this study employed dynamic common-correlated effect (DCCE) and dynamic seemingly unrelated regression (DSUR) methods to assess long-run effects. The findings reveal that increased mobile financial services adoption markedly diminishes the scale of the underground economy by enhancing transaction transparency and accessibility, thus drawing more participants into the formal economy. The results are consistent across DCCE and DSUR estimations. Additionally, improvements in regulatory quality further diminish the shadow economy by bolstering trust and compliance within the financial system, suggesting that well-crafted regulations enhance the effectiveness of mobile financial services. Economic and financial sector developments also contribute to a reduced shadow economy, indicating that broader economic growth and advanced financial systems facilitate formal sector participation. Conversely, larger public sector expenditures appear to expand the shadow economy enterprises, likely due to inefficient resource allocation and increased fiscal burdens that push economic activities underground. Policy recommendations include the need to expand mobile financial services infrastructure, enhance financial literacy, and optimise financial regulatory frameworks to balance oversight with innovation encouragement. Full article

17 pages, 2133 KiB

Open AccessArticle

Black–Scholes 50 Years Later: Has the Outperformance of Passive Option Strategies Finally Faded?

by Andrew Kumiega, Greg Sterijevski and Eric Wills

Int. J. Financial Stud. 2024, 12(4), 114; https://doi.org/10.3390/ijfs12040114 - 20 Nov 2024

Viewed by 238

Abstract

Slightly over fifty years ago, the Black–Scholes option pricing model revolutionized investing by enabling a shift from linear to non-linear payoff structures. Myron Scholes later published two papers documenting the performance of passive option strategies that outperformed the underlying index on a risk–return [...] Read more.

Slightly over fifty years ago, the Black–Scholes option pricing model revolutionized investing by enabling a shift from linear to non-linear payoff structures. Myron Scholes later published two papers documenting the performance of passive option strategies that outperformed the underlying index on a risk–return basis. The options market has evolved considerably over the last fifty years from an open outcry trading structure with options being single-listed to a high-frequency computer-based market. This paper re-evaluates the trilogy of foundational studies to determine whether passive-option-enhanced portfolios still produce superior performance in the current high-frequency options market environment. Full article

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20 pages, 1411 KiB

Open AccessArticle

Unraveling Youth Indebtedness in China: A Case Study Based on the “Debtors Avengers” Community on Douban

by Junan Zhang and Dong Liu

Int. J. Financial Stud. 2024, 12(4), 113; https://doi.org/10.3390/ijfs12040113 - 13 Nov 2024

Viewed by 425

Abstract

Over-indebtedness is an increasingly serious issue among young people in China. Using Atlas.ti, this study analyzes textual data from the online community “Debtors Avengers” on Douban.com, applying a combined framework of life cycle and credit liberalization hypotheses. The findings reveal that youth indebtedness [...] Read more.

Over-indebtedness is an increasingly serious issue among young people in China. Using Atlas.ti, this study analyzes textual data from the online community “Debtors Avengers” on Douban.com, applying a combined framework of life cycle and credit liberalization hypotheses. The findings reveal that youth indebtedness is not solely driven by irrational consumer behavior but is closely linked to economic activities during specific life stages. Structurally, it reflects sociofinancial digitization and normalized credit use. Factors such as life circumstances, financial literacy, labor market instability, and public safety risks contribute to a “debt spiral”. Addressing these challenges requires the refinement of financial policies, enhanced education, and intervention in financial aggression. Full article

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19 pages, 807 KiB

Open AccessArticle

Factors Influencing Hotel Revenue Management in Times of Crisis: Towards Financial Sustainability

by Luís Lima Santos, Conceição Gomes, Cátia Malheiros, Catarina Crespo and Carla Bento

Int. J. Financial Stud. 2024, 12(4), 112; https://doi.org/10.3390/ijfs12040112 - 13 Nov 2024

Viewed by 385

Abstract

(1) Background: Facing the challenges of a post-pandemic period and the Ukraine War and recognising the gap in scientific research on the application of revenue management (RM) in the Portuguese hotel industry, the main objective of this study is to identify the most [...] Read more.

(1) Background: Facing the challenges of a post-pandemic period and the Ukraine War and recognising the gap in scientific research on the application of revenue management (RM) in the Portuguese hotel industry, the main objective of this study is to identify the most effective and least appropriate RM practices for use in periods of low demand and crises, reflecting the financial sustainability perspective. The theoretical framework of this study focuses on the main RM practices, grouping them into price and non-price strategies. (2) Methods: A quantitative methodology was employed, collecting information from Portuguese hotels through an online questionnaire, and statistical analysis using Mann–Whitney and Chi-square tests was conducted. (3) Results: Hotels offered discounts during the pandemic, but room rates were reduced during the recovery period. These findings also revealed that commonly used techniques were the best available rate (BAR) and rate fences, particularly during the pandemic. Quality, brand image, strategic partnerships, and marketing actions are recognised as essential. However, loyalty programs, length of stay (LOS) control, rate parity, and bundled services are not commonly implemented despite their importance during periods of low demand. Larger hotels, five-star hotels, and members of international chains applied more RM practices than smaller four-star independent hotels. (4) Originality: This study provides original and valuable insights into increasing hotel revenues and occupancy rates during future periods of low demand, which benefit financial sustainability. Full article

(This article belongs to the Special Issue Sustainable Corporate Governance and Financial Performance)

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21 pages, 320 KiB

Open AccessArticle

Unveiling Intangible Assets: Exploring Voluntary Disclosure and Its Interaction with Accounting Conservatism and Analyst Attention on Financing Constraints

by Congrong Li and Zhe Ning

Int. J. Financial Stud. 2024, 12(4), 111; https://doi.org/10.3390/ijfs12040111 - 5 Nov 2024

Viewed by 556

Abstract

This paper examines the relationship between the voluntary disclosure of intangible assets and financing constraints using a sample of 2850 listed companies from 2017 to 2021. Additionally, we examine the moderating effects of prudence in accounting and the attention given to the disclosures [...] Read more.

This paper examines the relationship between the voluntary disclosure of intangible assets and financing constraints using a sample of 2850 listed companies from 2017 to 2021. Additionally, we examine the moderating effects of prudence in accounting and the attention given to the disclosures by analysts from both an internal and an external perspective. The results show that voluntarily disclosing intangible assets helps to alleviate a firm’s financing constraints, with more significant effects observed in state-owned enterprises and companies listed on the Growth Enterprise Market index than for private enterprises and those listed on the main board of the Chinese capital market. Further, conservatism in accounting and attention given by financial analysts both positively moderate this relationship. The theoretical and empirical insights provided by this study should help listed companies in China to enhance the quality of their voluntary intangible asset disclosures, while also helping to mitigate financing constraints. Full article

51 pages, 454 KiB

Open AccessArticle

Corporate Social Responsibility and Country Governance: An International Comparative Study Amid the COVID-19 Pandemic

by Dimitrios Vortelinos, Ioannis Passas, Christos Floros and Alexandros Garefalakis

Int. J. Financial Stud. 2024, 12(4), 110; https://doi.org/10.3390/ijfs12040110 - 1 Nov 2024

Viewed by 714

Abstract

This paper assesses the association of ESG scores with stock returns and highlights the moderating role of the COVID-19 pandemic and the country’s governance. The study uses panel data regression models to assess the relationship between ESG factors and stock returns, focusing on [...] Read more.

This paper assesses the association of ESG scores with stock returns and highlights the moderating role of the COVID-19 pandemic and the country’s governance. The study uses panel data regression models to assess the relationship between ESG factors and stock returns, focusing on the moderating role of country governance and the COVID-19 pandemic. The results reveal that governance quality significantly enhances the positive effects of ESG practices on returns, particularly during times of crisis. These suggest that higher overall ESG scores are related positively to financial performance, and this relation is enhanced during the COVID-19 pandemic. Specifically, the two dimensions of ESG that matter most are environmental and governance. Country-level governance is important because firms in well-governed countries amplify the benefits of high ESG scores. The opposite is true for the higher controversies scores, whose bad financial outcome is magnified during the pandemic. These results present an argument for the resilience of firm financial performance, dependent on strong ESG practices and governance frameworks. This holds great interest for investors and policymakers in associating good ESG considerations with the effective management of financial risks, leading to sustainable returns during periods of widespread economic uncertainty. Full article

15 pages, 422 KiB

Open AccessArticle

Overcoming Financial Constraints on Firm Innovation: The Role of R&D Human Capital

by Sung-Tae Lee and Sun-Moon Jung

Int. J. Financial Stud. 2024, 12(4), 109; https://doi.org/10.3390/ijfs12040109 - 30 Oct 2024

Viewed by 570

Abstract

This paper examines how R&D human capital can mitigate the negative effects of financing constraints on firm innovation, using survey data from 4000 South Korean manufacturing firms. The results confirm that financing constraints are generally associated with lower levels of product innovation. However, [...] Read more.

This paper examines how R&D human capital can mitigate the negative effects of financing constraints on firm innovation, using survey data from 4000 South Korean manufacturing firms. The results confirm that financing constraints are generally associated with lower levels of product innovation. However, firms with stronger R&D human capital—measured by higher education levels and a larger proportion of R&D employees—are better able to overcome these financial barriers. Moreover, the positive moderating effect of R&D human capital is significantly enhanced in firms with an entrepreneurial culture, which supports risk-taking and innovation. These findings underscore the importance of investing in intangible assets, such as human capital and fostering a culture of entrepreneurship to sustain innovation during periods of financial distress. Policymakers should consider expanding financial support for R&D activities, particularly for small and medium-sized enterprises (SMEs) that face higher costs of capital. This study contributes to the literature by using direct measures of financial constraints and highlighting the role of human capital in innovation, especially in financially constrained environments. Full article

20 pages, 6077 KiB

Open AccessArticle

Research on the Impact of Economic Policy Uncertainty and Investor Sentiment on the Growth Enterprise Market Return in China—An Empirical Study Based on TVP-SV-VAR Model

by Junxiao Gui, Nathee Naktnasukanjn, Xi Yu and Siva Shankar Ramasamy

Int. J. Financial Stud. 2024, 12(4), 108; https://doi.org/10.3390/ijfs12040108 - 25 Oct 2024

Viewed by 1543

Abstract

This study employs the economic policy uncertainty index to gauge the level of economic policy uncertainty in China. Utilizing textual data from the growth enterprise market internet community, we construct the growth enterprise market investor sentiment index by applying the deep learning ERNIE [...] Read more.

This study employs the economic policy uncertainty index to gauge the level of economic policy uncertainty in China. Utilizing textual data from the growth enterprise market internet community, we construct the growth enterprise market investor sentiment index by applying the deep learning ERNIE (Enhanced Representation through Knowledge Integration) model, thereby capturing investors’ sentiment within the growth enterprise market. The dynamic interplay between economic policy uncertainty, investor sentiment, and returns of the growth enterprise market is scrutinized via the TVP-SV-VAR (time-varying parameter stochastic volatility vector auto-regression) model, and the asymmetric response of different industries’ stock returns within the growth enterprise market to economic policy uncertainty and investor sentiment shock. The findings of this research are that economic policy uncertainty exerts a negative influence on both investor sentiment and returns of the growth enterprise market. While it may trigger a temporary decline in stock prices, the empirical evidence suggests that the impact is of short duration. The influence of investor sentiment on the growth enterprise market returns is characterized by a reversal effect, suggesting that improved sentiment may initially boost stock prices but could lead to a subsequent decline over the long term. The relationship between economic policy uncertainty, investor sentiment, and returns of the growth enterprise market is time-variant, with heightened sensitivity observed during bull markets. Lastly, the effects of economic policy uncertainty and investor sentiment on the returns of different industries within the growth enterprise market are found to be asymmetric. These conclusions contribute to the existing body of literature on the Chinese capital market, offering a deeper understanding of the complex dynamics and the factors influencing market behavior. Full article

(This article belongs to the Special Issue Risks and Uncertainties in Financial Markets)

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30 pages, 738 KiB

Open AccessArticle

Blockchain Tokens, Price Volatility, and Active User Base: An Empirical Analysis Based on Tokenomics

by Roberto Moncada, Enrico Ferro, Maurizio Fiaschetti and Francesca Medda

Int. J. Financial Stud. 2024, 12(4), 107; https://doi.org/10.3390/ijfs12040107 - 23 Oct 2024

Viewed by 882

Abstract

Blockchain tokens have accumulated tremendous market value but remain highly controversial, given their price volatility and seemingly speculative nature. Ironically, this very characteristic can foster token retention as users wait for occasions of appreciation. In this paper, we conduct an empirical analysis with [...] Read more.

Blockchain tokens have accumulated tremendous market value but remain highly controversial, given their price volatility and seemingly speculative nature. Ironically, this very characteristic can foster token retention as users wait for occasions of appreciation. In this paper, we conduct an empirical analysis with 58 tokens in two steps: first, an investigation of the drivers of user activity and token price volatility using a new blockchain token classification framework, searching for possible tokenomics links. Our findings suggest that there is an intrinsic relationship between the way tokens are used as a means of exchange and how token usage dynamics influence user engagement oppositely to market stability. Only some features, such as earning potential and voting rights, foster token-holding strategies, while only Ethereum ecosystem membership has positive effects on price volatility. Second, we analyze the direct relationship between price volatility and active users. Results show that, on average, a 10% increase in volatility is related to a decrease in active addresses ranging between 3.96% and 5.88%. The finding is supportive of the hypothesis that token price volatility may be treated as an opportunity to increase token retention. Full article

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19 pages, 347 KiB

Open AccessArticle

The Real Value of CSR Performance in the NEV Industry: Evidence from China

by Qing Wu and Theeralak Satjawathee

Int. J. Financial Stud. 2024, 12(4), 106; https://doi.org/10.3390/ijfs12040106 - 23 Oct 2024

Viewed by 655

Abstract

Corporate social responsibility (CSR) is increasingly becoming a major concern for investors and consumers, prompting companies to devote more resources to community engagement to manage conflict and improve business performance. In this study, we conducted an empirical analysis with a sample of 385 [...] Read more.

Corporate social responsibility (CSR) is increasingly becoming a major concern for investors and consumers, prompting companies to devote more resources to community engagement to manage conflict and improve business performance. In this study, we conducted an empirical analysis with a sample of 385 listed companies in China’s new energy vehicle (NEV) industry to analyze the relationship between CSR performance and corporate value (CV). With the ordinary least squares (OLS) regression analysis, our study’s results show a positive relationship between the CSR performance of these companies and corporate value. In addition, our findings indicate a lagged effect in the relationship between CSR and CV. The mechanism analysis suggests that corporate CSR performance helps to improve corporate reputation, reduce financing constraints, and thus increase corporate value. Moreover, high analyst attention and information transparency can enhance the positive effects of corporate CSR. This study contributes to the existing literature and empirical evidence by exploring the correlation between CSR performance and firm value in the context of emerging countries and the NEV industry. Full article

(This article belongs to the Special Issue New Quality Productive Forces: The Role of Green Finance and Artificial Intelligence in Finance)

12 pages, 472 KiB

Open AccessFeature PaperArticle

The Impact of Ownership Authority on Cash Conversion Cycle in Public Hospitals: A Comparative Analysis of Provincial and County Hospitals

by Bartlomiej Krzeczewski

Int. J. Financial Stud. 2024, 12(4), 105; https://doi.org/10.3390/ijfs12040105 - 23 Oct 2024

Viewed by 536

Abstract

(1) Background: The aim of the paper is to identify and assess if there are differences concerning the cash conversion cycle (CCC) according to different types of ownership authority of hospitals. The main research hypothesis developed for the purpose of this study assumes [...] Read more.

(1) Background: The aim of the paper is to identify and assess if there are differences concerning the cash conversion cycle (CCC) according to different types of ownership authority of hospitals. The main research hypothesis developed for the purpose of this study assumes that the ownership authority is of great importance for the short-term financial management analyzed through the prism of the cash conversion cycle in hospitals. (2) Methods: A statistical hypothesis testing method is employed in the empirical part of the study, analyzing differences both in the values of the cash conversion cycle itself as well as in the values of its components, i.e., inventory conversion period, receivables conversion period, and payables conversion period. The research sample consists of public hospitals subordinated to different types of ownership authorities, i.e., provinces and counties. (3) Results: It turns out that there are indeed statistically significant differences between the provincial and county hospitals as far as the cash conversion cycle and its components are analyzed, which supports the research hypothesis. (4) Conclusions: The county hospitals are characterized by a better financial situation as compared to their provincial counterparts concerning CCC management. Full article

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21 pages, 584 KiB

Open AccessArticle

The Impact of Corporate Social Responsibility on Cash Holdings: The Moderating Role of Board Gender Diversity

by Abdelmoneim Bahyeldin Mohamed Metwally, Saleh Aly Saleh Aly and Mohamed Ali Shabeeb Ali

Int. J. Financial Stud. 2024, 12(4), 104; https://doi.org/10.3390/ijfs12040104 - 21 Oct 2024

Viewed by 689

Abstract

This research investigates the association between corporate social responsibility and cash holdings, while also exploring the moderating effect of board gender diversity on this association. The study utilizes a dataset of non-financial firms listed on the Egyptian Exchange (EGX) from 2012 to 2021, [...] Read more.

This research investigates the association between corporate social responsibility and cash holdings, while also exploring the moderating effect of board gender diversity on this association. The study utilizes a dataset of non-financial firms listed on the Egyptian Exchange (EGX) from 2012 to 2021, comprising a final sample of 52 firms with a total of 520 firm-year observations. A statistical analysis was performed using pooled OLS, a fixed effects regression analysis, and two-step system GMM estimations to test the research hypotheses. The results show a significant positive association between CSR and cash holdings. Further, board gender diversity is found to have a negative moderating role as it weakens the association between CSR and cash holdings. These findings are relevant for regulators, investors, and stakeholders in Egypt and other emerging markets. Companies are encouraged to prioritize gender diversity in board appointments, while regulators should track and promote female representation in all listed firms. Investors are advised to focus on boards with strong female representation and high CSR disclosure. The insights offered by this research extend the literature by examining the moderating role of gender diversity in an unexplored context, namely Egypt, which fill part of the gap in early studies. Full article

(This article belongs to the Special Issue Sustainable Corporate Governance and Financial Performance)

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17 pages, 704 KiB

Open AccessArticle

Financial Innovation and Crowdfunding: Influencing Investment Decisions in Tech Startups

by Kaimuk Panitkulpong, Amnuay Saengnoree and Thapong Teerawatananond

Int. J. Financial Stud. 2024, 12(4), 103; https://doi.org/10.3390/ijfs12040103 - 14 Oct 2024

Viewed by 809

Abstract

This study investigates the financial behavior of Thai investors in equity crowdfunding (ECF), focusing on the factors that influence their investment intentions. Drawing upon the Information System Success Model (ISSM), the Theory of Diffusion of Innovations, and the Technology Acceptance Model 3 (TAM3), [...] Read more.

This study investigates the financial behavior of Thai investors in equity crowdfunding (ECF), focusing on the factors that influence their investment intentions. Drawing upon the Information System Success Model (ISSM), the Theory of Diffusion of Innovations, and the Technology Acceptance Model 3 (TAM3), the research examines the platform quality (PQ), platform characteristics (PC), and social influence (SI) as independent variables, with the perceived usefulness (PU) and perceived ease of use (PEOU) acting as mediators. Data were gathered from 275 Thai investors and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that the PU significantly influences investment decisions both directly and indirectly through the PEOU, which also directly affects investment intention. Furthermore, SI, PC, and PQ have indirect effects on investment decisions via the PU and PEOU, with SI being the most influential factor. This study provides valuable insights into optimizing ECF platform design, fostering investor trust, and enhancing regulatory frameworks to facilitate financial inclusion and innovation in the Thai crowdfunding landscape. Full article

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29 pages, 379 KiB

Open AccessArticle

Executive Green Perception and Green Innovation Improve New Quality Productivity in Chinese Listed Firms

by Jiaran Li and Haslindar Ibrahim

Int. J. Financial Stud. 2024, 12(4), 102; https://doi.org/10.3390/ijfs12040102 - 11 Oct 2024

Viewed by 1121

Abstract

This research focuses on Chinese listed companies to explore the influence of green-oriented strategies and green innovation on corporate productivity. Using empirical data from 2011 to 2022, the study investigates the positive effects of executives’ green perceptions on new quality productivity and the [...] Read more.

This research focuses on Chinese listed companies to explore the influence of green-oriented strategies and green innovation on corporate productivity. Using empirical data from 2011 to 2022, the study investigates the positive effects of executives’ green perceptions on new quality productivity and the enhancing role of green innovation. The results indicate that executives’ green perceptions significantly enhance new quality productivity. Furthermore, heterogeneity analyses reveal variations in this effect based on firm size, type, and pollution levels, demonstrating the environmental sensitivity of green strategies. Robustness tests reinforce the consistency of these results. Additionally, the research establishes that green innovation not only directly boosts new quality productivity but also strengthens the positive influence of executive green perceptions on productivity. These insights emphasize the critical synergy between green innovation and executive commitment to sustainability as a means to boost productivity, offering valuable guidance for policymakers and business leaders aiming to advance corporate productivity through sustainable practices. Full article

(This article belongs to the Special Issue New Quality Productive Forces: The Role of Green Finance and Artificial Intelligence in Finance)

26 pages, 652 KiB

Open AccessArticle

Exchange Rate Pass-Through on Prices in Nigeria—A Threshold Analysis

by Olajide O. Oyadeyi, Oluwadamilola A. Oyadeyi and Faith A. Iyoha

Int. J. Financial Stud. 2024, 12(4), 101; https://doi.org/10.3390/ijfs12040101 - 10 Oct 2024

Viewed by 946

Abstract

Persistent exchange rate depreciation and its debilitating effects on rising inflation have remained a concern in Nigeria. This article explores the effects of exchange rate pass-through on producer prices, consumer prices, export prices, import prices and the Taylor rule from 2000 to 2023, [...] Read more.

Persistent exchange rate depreciation and its debilitating effects on rising inflation have remained a concern in Nigeria. This article explores the effects of exchange rate pass-through on producer prices, consumer prices, export prices, import prices and the Taylor rule from 2000 to 2023, using quarterly data and adopting threshold autoregression and self-exciting smooth threshold regression methods. The findings suggest that there are non-linearities in the way that exchange rate depreciation affects prices in Nigeria. Furthermore, the findings suggest a threshold of 5 percent depreciation. Two sub-sample analyses corroborate the main findings, showing that a threshold of 5 percent is the optimum benchmark if demand and supply are not to be weakened. At this level or below, the effects of exchange rate depreciation on inflation are much lower, even though prices will rise. However, above this benchmark, the effects of depreciation on inflation are much larger, weakening consumer demand for both imported and domestic goods as well as producer supply of both exported and domestic goods and services in the economy. This result implies that an average exchange rate depreciation not higher than 5 percent within a quarter is reasonable if the Nigerian economy is to remain competitive both domestically and globally. Finally, the results suggest that the exchange rate pass-through to prices is considerably higher in Nigeria below the threshold, while it overshoots for producer prices, export prices, and import prices above the threshold. To keep inflation in check, this paper suggests that the monetary authorities should try to keep exchange rate depreciation below the established thresholds, while also considering adjusting the policy rate to take into account the exchange rate depreciation thresholds in order to keep domestic prices stable. Full article

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11 pages, 591 KiB

Open AccessArticle

Do Foreign Investors Underperform or Outperform Domestic Investors in Trading Activities? Evidence from Indonesia

by Deddy P. Koesrindartoto, Aurelius Aaron and Shuqi Wang

Int. J. Financial Stud. 2024, 12(4), 100; https://doi.org/10.3390/ijfs12040100 - 9 Oct 2024

Viewed by 765

Abstract

The performance of foreign investors relative to domestic investors has been a subject of mixed evidence. While foreign investors are often perceived to underperform due to an information disadvantage, they are also known for their aggressive trading and superior performance in initiated orders. [...] Read more.

The performance of foreign investors relative to domestic investors has been a subject of mixed evidence. While foreign investors are often perceived to underperform due to an information disadvantage, they are also known for their aggressive trading and superior performance in initiated orders. We provide further clarity on this issue. Specifically, by analyzing over five million transactions on the Jakarta Stock Exchange, our findings reveal that foreign investors consistently outperform domestic investors in terms of both annualized returns and profit amounts. Further investigation attributes this outperformance to the higher sophistication of foreign investors, who demonstrate superior stock-picking abilities and effective growth investing strategies. Full article

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14 pages, 865 KiB

Open AccessArticle

Estimating Tail Risk in Ultra-High-Frequency Cryptocurrency Data

by Kostas Giannopoulos, Ramzi Nekhili and Christos Christodoulou-Volos

Int. J. Financial Stud. 2024, 12(4), 99; https://doi.org/10.3390/ijfs12040099 - 8 Oct 2024

Viewed by 780

Abstract

Understanding the density of possible prices in one-minute intervals provides traders, investors, and financial institutions with the data necessary for making informed decisions, managing risk, optimizing trading strategies, and enhancing the overall efficiency of the cryptocurrency market. While high accuracy is critical for [...] Read more.

Understanding the density of possible prices in one-minute intervals provides traders, investors, and financial institutions with the data necessary for making informed decisions, managing risk, optimizing trading strategies, and enhancing the overall efficiency of the cryptocurrency market. While high accuracy is critical for researchers and investors, market nonlinearity and hidden dependencies pose challenges. In this study, the filtered historical simulation is used to generate pathways for the next hour on the one-minute step for Bitcoin and Ethereum quotes. The innovations in the simulation are standardized historical returns resampled with the method of block bootstrapping, which helps to capture any hidden dependencies in the residuals of a conditional parameterization in the mean and variance. Ordinary bootstrapping requires the feed innovations to be free of any dependencies. To deal with complex data structures and dependencies found in ultra-high-frequency data, this study employs block bootstrap to resample contiguous segments, thereby preserving the sequential dependencies and sectoral clustering within the market. These techniques enhance decision-making and risk measures in investment strategies despite the complexities inherent in financial data. This offers a new dimension in measuring the market risk of cryptocurrency prices and can help market participants price these assets, as well as improve the timing of their entry and exit trades. Full article

(This article belongs to the Special Issue Digital and Conventional Assets (2nd Edition))

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33 pages, 3608 KiB

Open AccessArticle

The Impact of COVID-19 on the Fama-French Five-Factor Model: Unmasking Industry Dynamics

by Niall O’Donnell, Darren Shannon, Barry Sheehan and Badar Nadeem Ashraf

Int. J. Financial Stud. 2024, 12(4), 98; https://doi.org/10.3390/ijfs12040098 - 3 Oct 2024

Viewed by 977

Abstract

This analysis investigates the performance and underlying dynamics of the Fama–French Five-Factor Model (FF5M) in the context of the COVID-19 pandemic, exploring its implications on the U.S. stock market across 30 industries. Our findings reveal marked shifts in the significance of factors. The [...] Read more.

This analysis investigates the performance and underlying dynamics of the Fama–French Five-Factor Model (FF5M) in the context of the COVID-19 pandemic, exploring its implications on the U.S. stock market across 30 industries. Our findings reveal marked shifts in the significance of factors. The SMB (size) gained in strength, while the HML (value) factor rose and fell in response to shifting flight-to-quality, liquidity, and inflation concerns. Both the RMW (profitability) and CMA (investment) factors saw a decline in their overall significance during the pandemic. Our results illustrate the oscillation of investor preferences from 2018 to 2023, capturing three distinct periods: pre-COVID-19, COVID-19, and post-COVID-19. Full article

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17 pages, 1078 KiB

Open AccessArticle

Corporate Governance and Employee Productivity: Evidence from Jordan

by Abdullah Ajlouni, Francisco Bastida and Mohammad Nurunnabi

Int. J. Financial Stud. 2024, 12(4), 97; https://doi.org/10.3390/ijfs12040097 - 27 Sep 2024

Viewed by 930

Abstract

This research paper aims to investigate the impact of ownership concentration, insider ownership, and board size on employee productivity for 136 Jordanian public shareholding firms listed on the Amman Stock Exchange (ASE) from 2012 to 2021. Ownership concentration has been measured by Herfindahl–Hirschman [...] Read more.

This research paper aims to investigate the impact of ownership concentration, insider ownership, and board size on employee productivity for 136 Jordanian public shareholding firms listed on the Amman Stock Exchange (ASE) from 2012 to 2021. Ownership concentration has been measured by Herfindahl–Hirschman Index (HHI), whereas insider ownership and board size have been represented as the proportion of shares held by insiders and by the number of board members, respectively. Lastly, employee productivity has been measured using a data envelopment analysis (DEA) tool. We employed ordinary least squares regression (OLS) including firm-year-fixed effects. Our empirical results indicate a non-linear relation between ownership concentration and employee productivity, whereby the productivity of employees increases in firms with a proportion of ownership concentration less than 60%. In addition, we found a non-linear relation between insider ownership and employee productivity, whereby the productivity of employees increases in firms with proportion of insider ownership less than 50%. Moreover, we found a non-linear relation between board size and employee productivity, whereby the productivity of employees increases in firms that have less than 11 board members. Our outcome contributed to the knowledge found in the previous literature, as it is the first to highlight the productivity of employees in emerging economies, such as the economy in Jordan. Furthermore, our findings could be useful for the Jordan Securities Commission (JSC) and the ASE on their continuous process to improve and develop corporate governance instructions. Full article

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23 pages, 902 KiB

Open AccessArticle

Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies

by Amar Johri

Int. J. Financial Stud. 2024, 12(4), 96; https://doi.org/10.3390/ijfs12040096 - 24 Sep 2024

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Abstract

This research delves into the influence of adopting international financial reporting standards (IFRSs) on the financial reporting quality (FRQ) of Indian multinational corporations (MNCs). It also investigates the moderating impact of the internal control system (ICS) on the relationship between IFRSs and FRQ. [...] Read more.

This research delves into the influence of adopting international financial reporting standards (IFRSs) on the financial reporting quality (FRQ) of Indian multinational corporations (MNCs). It also investigates the moderating impact of the internal control system (ICS) on the relationship between IFRSs and FRQ. The data collection involves a survey using a previously validated and adjusted scale from earlier studies. A sample of 512 participants is selected through purposive sampling methods. The analysis employs partial least square structural equation modelling (PLS-SEM) to validate the data and test the hypotheses. The results indicate a significantly positive influence of perceived benefits, perceived ease of implementation, and government policy on IFRS adoption within Indian MNCs. However, the impact of legal requirements on IFRS adoption in Indian MNCs is insignificantly positive. Furthermore, adopting IFRSs substantially positively affects FRQ within Indian MNCs. Similarly, FRQ significantly positively affects the relevance, accuracy, understandability, comparability, and timeliness of MNCs’ financial reports in India. The moderating role of the ICS in the connections between IFRS adoption and FRQ is positive yet insignificant within Indian MNCs. The insights derived from this study are valuable for investors, shareholders, government authorities, financiers, board members, and top executives of organisations. Full article

(This article belongs to the Special Issue Accounting and Financial/Non-financial Reporting Developments)

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Int. J. Financial Stud., Volume 12, Issue 4 (December 2024) – 21 articles

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