Issue #3 (Volume 20 2023)

Companies and investors in emerging markets have started paying attention to ESG (Environmental, Social, and Governance) issues. There has been a growing demand for aligning ESG disclosure of companies to UN SDGs (United Nations Sustainable Development Goals), so understanding how the firm-level ESG affects the country-level SDG is very important for evaluating the advances in ESG and SDG implementation in emerging markets. This study examines the linkage between firm-level ESG disclosures and their relationship with country-level SDG scores over ten years for three emerging countries: India, China, and Brazil. The analysis of 1,500 top-listed firms in these countries reveals an increasing trend of firms going for ESG disclosures and increased ESG scores over the years in the three markets. Out of the total sample, almost 75% of firms make ESG disclosures in Brazil, followed by 54% in India and 32% in China. Additionally, companies in all these countries tend to emphasize governance-related disclosures more, with Brazil having higher ESG disclosures than India and China. The correlation and causality tests indicate a significant positive correlation between mean ESG scores and country-specific SDG scores. The Dumitrescu-Hurlin panel causality tests provide stronger linkages between firm-specific Environment scores and SDG scores, indicating that a firm’s environment disclosures translate into higher SDG scores. However, the same is not valid for Social and Governance factors. These findings have important implications given the global attention on the linkages between ESG disclosure and SDG score.

Acknowledgments
The financial and infrastructure support provided by FORE School of Management, New Delhi in completing this paper is gratefully acknowledged.

This study was conducted to examine the factors affecting the level of disclosure of local government financial statements. The study uses the internal control system as a moderating variable. Local government financial reports in Indonesia were the subject of this study’s audit by the Supreme Audit Agency. The number of research samples used was 487 local/city governments in Indonesia for the 2021 period with purposive sampling as a sampling technique. In this study, the Structural Equation Model-Partial Least Square (SEM-PLS) Version 3 data analysis method was employed. Based on the test results, it was found that local government budget expenditures (β = 0.263; p < 0.05) have a significant effect on the level of financial statement disclosure. Meanwhile, financial condition (β = 0.173; p > 0.05) has no significant effect on the level of financial statement disclosures. The internal control system as a moderating variable can moderate the influence of local government budget expenditure (β = 0.263; p < 0.05) on the level of disclosure of financial statements, but cannot moderate the effect of financial condition (β = –0.073; p > 0.05) on the level of disclosure of financial statements. Local governments in Indonesia are expected to be able to further optimize disclosure in accordance with Government Regulations in the future. One of the approaches used by regional governments to execute financial report transparency is the use of information technology to satisfy social expectations more effectively and efficiently.

Identifying and managing credit risk is vital for all lending institutions. Historically, credit risk is assessed using financial data from published financial statements. However, research indicates that the ability to detect financial hardship may be improved by textual analysis of firms’ disclosed records. This study aims to establish an association between themes and words from Management Discussion and Analysis (MDA) reports of firms and corporate failures. The study took a sample of 57 Indian listed firms declared bankrupt under the Insolvency and Bankruptcy Code (IBC) along with a matched sample of 55 solvent firms (matched by industry and size) for the period of FY2011–2019. The first part of analysis identifies negative words from the published reports and compares them with the negative words of the Loughran-McDonald dictionary. Then a thematic analysis is done to identify the key themes from the MDA reports and the significant themes are validated with their corresponding financial ratios in the third step using a panel logistic regression. Word analysis results show that IBC firms have significantly greater negative tone (2.21 percent) as against 1.30 percent of solvent firms. Thematic analysis results show that manageability, activity and performance are significant themes for predicting financial distress. Financial variables such as ownership pattern, promoters’ shares pledged, return on capital employed, asset utilization are some of the ratios in sync with the key themes. The study recommends that lenders and other stakeholders should look beyond financial statements which may be ‘window dressed’ by firms to qualitative disclosures in annual reports which may forewarn against impending financial distress.

Acknowledgments
The infrastructural support provided by FORE School of Management, New Delhi in completing this paper is gratefully acknowledged.

This study aims to examine the spillover and contagion effects of global financial markets on the Indonesian Sharia Stock Index (ISSI) post-COVID-19. The study uses the Vector Error Correction Model method to explore the short-term and long-term relationships between ISSI and global financial markets. The data used in this study are time series data, namely the ISSI and several other countries that have a significant influence on the global economy, which were observed from May to July 2022. The results of the study show that the USD has a positive influence on ISSI in the short and long term. At the same time, the JPY and HKD have a negative influence on ISSI. The GBP and SGD do not have a significant influence on ISSI developments. The economic, business and financial sectors began to adjust after the COVID-19 pandemic ended, including the Indonesian Sharia Stock Index. Contagion occurs from one country’s financial system to another, which is influenced by aspects of volatility, exchange rates, the global crisis, the stock market, and stock indices. It is considered that this study can help the government to adjust better conditions of Islamic stocks in Indonesia.

Acknowledgment
The authors would like to thank the Research and Innovation Institute (LRI), Universitas Muhammadiyah Surakarta, for the enormous financial support in writing this study through the HIT funding scheme with number 02/A.6-II/FAI/1/2022.

Can higher uncertainty increase the valuation (market-to-book value) of young firms compared to more established ones? As the current market shows higher levels of uncertainty about companies’ expected cash flows and changes in firm value, the question of the fundamental convex relationship between the two becomes more relevant. This paper aims to study how cash flow uncertainty affects the capital structure/leverage of a firm over time. A simple Bayesian learning framework is employed to assess leverage ratios in the presence of parameter uncertainty about expected cash flow. This study provides an analytical solution for leverage as a function of firm age and explores the implications using numerical results. The model links market leverage with expected cash flow volatility and firm age. Young firms face uncertainty about their expected cash flows and hence their firm value. Managers continuously update their evaluation of leverage ratios when they observe realized cash flow until firms reach maturity. Therefore, the paper provides a novel explanation of why the leverage ratio for many start-ups increases over time: the resolution of uncertainty decreases upside shock expectations as the firm ages. This result is useful both for academics, who can test the formulas derived in this paper for various industries, countries, and conditions, and for practitioners, who can use them to calibrate algorithmic trading models when linking uncertainty and firm valuation.

Intellectual capital is widely recognized as one of the most important assets in modern businesses, but it is only reported in the financial statement in certain conditions. This study aims to evaluate the role of value-added intellectual capital (VAIC) in moderating the relationship between earnings management and financial performance. This research uses data from non-financial companies listed on the Singapore Exchange and Indonesia Stock Exchange covering the period of 2016–2021, with a total of 3,303 firm-year observations. VAIC is measured using Pulic’s intellectual capital model and earnings management using the Kasznik Model (1999). This study uses multiple linear regressions to examine the relationship between variables. The findings indicate that earnings management has no significant effect on the financial performance of Singapore, but it has a significant positive effect on the financial performance of Indonesia. Furthermore, this study discovers that intellectual capital moderates the relationship between earnings management and financial performance in both countries differently, that intellectual capital moderation is positive (negative) for the Singapore (Indonesia) sample. These findings suggest that the role of intellectual capital varies depending on stock exchanges; Singapore is considered a developed country in Southeast Asia, whilst Indonesia is considered a developing one. This study concludes that the role of intellectual capital in the relationship between earnings management and financial performance varies between market characteristics and across industries.

This study examines the impact of foreign exchange rate fluctuations on various NSE capitalized indices of India. Five exchange rates were chosen based on trading contracts in the currency derivative segment of NSE. These exchange rates are US Dollar-Indian Rupee (USD/INR), Euro-Indian Rupee (EUR/INR), Great Britain Pound-Indian Rupee (GBP/INR), Chinese Yuan-Indian Rupee (CNY/INR) and Japanese Yen-Indian Rupee (JPY/INR), which are used as a regressor in this study. The data of NSE Nifty large-cap 100, Nifty mid-cap 100 and Nifty small-cap from December 1, 2012 to December 1, 2022 was considered for the study. GARCH (1, 1) model was used to analyze the nexus between exchange rate fluctuations and capitalized indices, and it was further validated by DCC GARCH to evaluate the volatility spillover. The result shows that exchange rate fluctuations have a positive effect on stock market volatility along with a varying degree of incidence on small-cap, mid-cap, and large-cap. DCC α has been found to be significant in USD & GBP for small-cap, and GBP & CNY for mid-cap. On the other hand, USD, Euro, CNY and JPY have a significant impact on the large-cap index in the short-run. Further, it is found that there is long-run spillover effect (DCC β) of exchange rates on all capitalized indices of the Indian stock market, and it is highest in in the large-cap case.

Absolute return strategies attempt to generate positive returns that are uncorrelated with equity or bond markets and can be used to increase diversification and performance within multi-asset class portfolios. The current paper compared diversification and portfolio performance between traditional multi-asset class portfolios and multi-asset class portfolios with the addition of absolute return strategies. Using closing prices from January 1, 2000 – June 30, 2018, this paper back-tested two multi-asset class portfolios, one composed of equities, fixed income securities, and real return strategies, and the other portfolio composed of the same asset classes but with the addition of absolute return strategies. In particular, the absolute return strategies that this paper added were equity market neutral strategies, managed futures, and global macro strategies. Results indicated that the use of absolute return strategies improved diversification by increasing the portfolio’s effective number of bets (ENB) and enhanced risk adjusted returns as measured by improved Sharpe ratios, Treynor ratios, Jensen’s Alphas, and Sortino ratios. In addition, results showed that the benefits of adding absolute return strategies accrued throughout a full market cycle, which included declines and advances. These results support previous research on the individual absolute return strategies and demonstrate that the portfolio performance and investor wealth can be improved with the addition of these absolute return strategies to multi-asset class portfolios.

In the current social conditions, pension systems have become the most important topic on the agenda for many countries. Therefore, governments have started paying attention and should reform their pension systems to guarantee an adequate contribution to pensions. Thus, this study analyzes the impact of investments and social factors on pension savings using Kazakhstan as an example. The paper is based on secondary data from the annual reports of the Unified Accumulative Pension Fund and annual statistical reports of the Bureau of National Statistics of the Republic of Kazakhstan from 2014 to 2022. SPSS software was used to analyze the collected data, specifically through correlation and regression analysis, to determine the impact and relationships between selected indicators (i.e., inflation rate, number of contributors, pension contribution, investment income and average wage). To check the reliability of the models, Fisher’s F-test and Student’s t-test were conducted. Therefore, a VIF diagnosis was conducted. The correlation analysis results showed that in the group of investment factors, pension savings are more dependent on pension contributions (,900**), and in social factors, on average wages (1,000**). Based on the results obtained, all factors have a positive impact on pension savings, except inflation. Inflation growth by 1% on average reduces the amount of pension savings by 23% over the nine-year period between 2014 to 2022, which is reflected in the results of Model 2. The study’s results can be applied to managing pension funds and reforms related to the pension system.

Acknowledgments
This research was funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (Grant “Exploring the impact of economic, social, and environmental factors on the relationship between urbanization and greenhouse gas emissions” No. AP19576071).

Market crashes pose significant risks to the stability and performance of financial markets, making the development of an early warning system crucial. This study utilizes exchange rate volatility and investor sentiment to predict market crashes. While several studies have examined factors affecting market crashes in developing countries. This study aims to develop an early warning system for investors to minimize investment risk using Exchange Rate Volatility and Investor Sentiment. The study focused on seven countries: Indonesia, Malaysia, Singapore, the Philippines, Thailand, Vietnam, and Mongolia. The stock exchanges examined included Jakarta Stock Exchange Composite, FTSE Malaysia KLCI, FTSE Singapore, SET Index, PSEi, HNX/HNXI, and MNE Top 20/MNETOP20. The analysis involved assessing early warning systems to provide valuable supplementary information for decision making and evaluating market vulnerabilities. The logistic regression equation was utilized to model market crashes, incorporating variables such as exchange rate volatility and investor sentiment while considering their interactions as moderating factors. The results indicate that exchange rate volatility and investor sentiment have a significant negative effect on market crashes, with probabilities of 0.0082 and 0.000 Furthermore, investor sentiment acts as a mediator for exchange rate volatility, amplifying its impact on market crashes. This suggests that higher exchange rate volatility and negative investor sentiment increase the likelihood of market crashes. Exchange rate volatility and investor sentiment can serve as early warning indicators, emphasizing the importance of monitoring these factors for market participants and policymakers.

The paper examines the impact of a firm’s financial leverage on its investment decisions in the period 2011–2019, which occurred between two financial crises (2008–2010 and 2020–2022) and was globally marked by low interest rates and high leverage. The study focuses on non-financial listed firms in world’s top 13 largest economies consisting of 11 OECD+ countries and two emerging nations. The analysis explores the relationship between firm leverage and investment decisions, considering the growth opportunities and corporate risks of the firms, as well as the type of economy they operate in. The findings indicate that, overall, there is a negative relationship between leverage and investment. In developed nations, such as the OECD+ countries, this negative effect is more pronounced for firms with limited growth opportunities. Contrary to the existing literature, emerging economies exhibit a positive relationship between firm leverage and investment. Specifically, in China and India, firms with low growth opportunities display a stronger positive correlation between leverage and investment. These results suggest that in developed countries, debt continues to have a disciplining effect on firm investment, even in a high liquidity environment. However, in high-growth emerging economies, both firm management and lending institutions show less concern regarding leverage. Lastly, the study finds that firm risk has an adverse impact on investment decisions. These empirical findings highlight the non-uniform nature of the relationship between firm leverage and investment, which depends on the type of economy and the growth opportunities of the firms.

Acknowledgments
The infrastructural support provided by Management Development Institute, Murshidabad, India and FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged.

The Norwegian maritime industry is at the forefront of green technology development, with shipyards playing a crucial role in testing, verification, and development. However, the industry faces challenges such as high personal costs, increasing competition from abroad, and cyclical market trends. This study aims to assess financial performance as indicator of firm-level competitiveness based on a set of 12 financial measures and test the hypothesis of the positive impact of portfolio diversification on shipyards’ competitiveness.
The analysis utilizes data from four large construction yards and four medium-sized construction, repair, and maintenance yards in the Møre region. The methodology involves constructing a Shipyard Competitiveness Index with sub-indices for liquidity, profitability, solvency, and efficiency. Regression analysis is conducted to investigate the impact of ship variety, as a diversification parameter, on the competitiveness level.
The obtained results reveal that during the analyzed period (2009–2020), companies in the group of large shipyards had better financial performance until 2017, while on the contrary, the second group of shipyards in the same period showed an increase in their competitiveness index. Moreover, the findings proved the presence of the positive relationship between diversification of portfolio and competitiveness index.
This study contributes valuable insights for the Norwegian shipbuilding industry, highlighting the importance of financial performance assessment in measuring competitiveness. The study provides a foundation for future discussions on fostering sustainable growth and innovation within the maritime sector.

This paper addresses the macroeconomic determinants of Jordan’s external debt. The study aims at exploring the impact of foreign direct investment inflows on external debt service, gross domestic product (GDP), inflation, government spending, and real exchange rate, on the external debt of Jordan from 1980 to 2022. The study utilizes the autoregressive distributed lag (ARDL) bound cointegration econometric model to establish long-run relationships between variables. The model also investigates short-run dynamics via an error correction model to give insight into how quickly the system returns to equilibrium following a shock. Statistical results demonstrate an inverse link between foreign direct investment and debt, where a 1% increase in investment reduces debt by 0.15311%. Similar patterns are seen with GDP and external debt, where a 1% GDP rise reduces debt by 0.4743%. Government spending shows a direct relationship, with a 1% increase causing a 1.02049% debt rise. Real exchange rate and inflation impact debt, with a 1% rise causing debt to increase by 0.067 and decrease by 0.00771 dollars, respectively, though these effects are relatively small. In the short run, the system adjusts to shocks with an error correction coefficient indicating a 24% correction to equilibrium each period.

The speed of financial technology (Fintech) adoption in delivering financial services has raised concerns among researchers on the future of traditional banks, especially as authors believe that Fintech comes with both prospects and problems. This study therefore aims to examine the growth, measurements, and the impact of Fintech on traditional banks in a panel of sixteen African countries for the period 1800–2020. These periods were divided into three phases: the analogue (1800–1967), the digital (1967–2008), and the modern phases (2008–2020). The autoregressive distributed lag (ARDL) and descriptive analyses methods were used to investigate the study’s objectives. It found that the analogue era witnessed the birth of Fintech ideas, while the digital era witnessed structural changes within the financial system. Results from the pooled mean group ARDL estimation technique based on the third/modern era reveal that, on average, a unit increase in Fintech adoption significantly reduces bank profitability (ROA) by 12.6%. Hence, although early Fintech adoption poses no threat to bank profitability; however, beyond certain threshold, its continuous adoption reduces profitability. Again, the speed of adjustment at 90.9% per annum is an indication that short-run Fintech disruptive impact/disequilibrium is corrected within one year and one month. The Principal Component Analysis used to generate Fintech index shows that African Fintech’s operation is more susceptible to changes in mobile banking. The study concludes that too much Fintech adoption is unhealthy for traditional banks in Africa and therefore it recommends that Fintech should collaborate with banks to correct for its disruptive impacts.

Stable regular dividends can deliver the steady operation of a firm’s performance to its investors. When firms experience lower operation efficiency and more negative performance, they can affect their cash burden and lower the regular dividends. According to the cash conversion cycle theory, quicker inventory turnover could benefit the firm, and it is a significant signal of efficiency and high performance. In the real business environment, the expectation of future production, logistics and inflation can all affect managers’ decisions. This paper uses data from all Chinese manufacturing companies listed on the Shanghai and Shenzhen stock exchanges from 2017 to 2020 as a sample. The paper provides the empirical causality between inventory turnover, operating efficiency indicators, and dividend distribution, by applying the regression method to find the causality relationship between inventory as the efficiency indicator and the distribution of dividends. The findings indicate that inventory consideration can be complicated and experience the inverse U-shape relationship with dividend decisions. Further, state-owned enterprises (SOEs) have different considerations about operating efficiency. They prefer to pay stable regular dividends, even if they are under pressure on operating efficiency and suffer from large inventories. SOEs believe that following political guidance and meeting their social obligations is their prioritized mission.

In today’s fast-paced business environment, integrating sustainability into financial decision-making has been a key driver of change. As stakeholders increasingly demand greater corporate transparency and accountability, regulatory bodies have stepped in to ensure that sustainability reporting is standardized and robust. This paper aims to establish the relationship between the sustainability-related disclosure rules and the dynamic indicators of the financial market. The object of the study is 74 countries of the world, which are grouped into developed and developing countries. The time period is 2021, for the stock market capitalization indicators – 2020, as the most recent years with available data. The research methods are normality tests (Shapiro-Wilk and Shapiro-Francia test), comparison methods (Student’s t-test and Mann-Whitney U test, regression analysis with dummy variables), linear and non-linear correlation and regression analysis (logarithmic, polynomial). The results obtained confirmed that the sustainability-related disclosure rules are higher in developed countries than in developing ones. At the same time, in developed countries, the growth of such requirements affects the increase in stock price volatility, stock market capitalization, foreign direct and portfolio investments. For developing countries, there is also an increase in the stock market capitalization, portfolio investments and the volume of stock trading. Recognizing these trends can benefit both financial market regulators and participants to encourage the formation of a transparent and efficient financial market, thereby mitigating the problems associated with information asymmetry.

The behavior of investors and their investment decision-making process in the financial markets are guided by psychological (sentiments) and personal characteristics (personality traits). Research in recent years has shown the connection between investor sentiment and personality traits and investment decisions. Though academic works in the field of behavioral finance are growing, studies on personality traits and investment decision-making with investor sentiment as a mediator are sparse. To this end, the paper aims to analyze the effects of Indian retail investors’ Big-five personality traits (Neuroticism, Extraversion, Openness to experience, Agreeableness, and Conscientiousness) on their short-term and long-term investment decision-making with the mediating effect of investor sentiment. The study employs the Partial Least Square-Structural Equation Model to test the framed hypotheses. The findings of the study reveal that Neuroticism has a significant positive effect (β=0.352, p<0.05) on investor sentiment. It further shows that Extraversion has a significant positive effect (β=0.186, p<0.05) on long-term decision-making. On the contrary, the consciousness trait has a significant negative effect (β=-0.335, p<0.05) on short-term investment decision-making. Furthermore, the Openness trait demonstrates a significant effect on both short-term and long-term investment decision-making (β=0.357, p<0.05; β=0.007, p<0.05). However, the findings reveal no significant intervening effect of investor sentiment between personality traits and investment decision-making. Thus, the study strongly exerted the impact of investors’ personality traits on their investment decision-making due to the high influence of personal characteristics over sentiment effects.

Determining the capital and cash holdings pattern is among the most critical decisions of firm executives. This study investigates the link between cash holdings and capital structure to help executives consider the best pattern of capital and cash. The study collected a sample of 5,747 observations from public companies in Vietnam during 2019–2022 and employed the panel data regression method for analysis. The findings demonstrate a correlation between capital structure and cash holding ratio that is statistically significant. However, these relationships are inconsistent between the cash holdings and each component of the capital structure. Current debt and total debt ratios have a positive and linear association with cash holdings, while non-current debt ratio has a negative and nonlinear association. The study highlights a heterogeneous association of the cash holding ratio with three proxies of debt structure. The results reveal that, during COVID-19, the effects of the non-current debt ratio on cash holding and of cash holding on the current debt ratio have no statistical significance.

The long-term financial health of a corporation is assessed by its capacity to meet short-term financial commitments. Optimum working capital that maximizes enterprise value varies across companies. The purpose of this paper is to investigate whether Indian manufacturing enterprises’ firm values are influenced by working capital management efficiency. The data are taken from 2016 to 2022 (a seven-year period) for 223 top BSE-listed manufacturing companies. Firm value (explained variable) is proxied using Tobin’s Q, and the constituents of working capital, which include the net trade cycle, inventory period, debtors’ collection period, and creditor payment period, are taken as explanatory variables. The study also controls for any differences in firm characteristics and economic conditions by employing firm size, age, current ratio, net profit ratio, sale growth and GDP growth rate. Balanced-panel data analysis is conducted by employing a two-step generalized method of moment technique. Net trade cycle, inventory period and debtors’ collection period are found to have a strong and significant positive impact on Tobin’s Q. The findings however did not report any evidence of the significant relationship between creditor payment period and Tobin’s Q. Additionally, the outcomes also evidenced that firm value is positively impacted by company size, net profit ratio, sales growth and GDP, whereas negatively affected by firm age. This paper suggests that manufacturing firms may potentially enhance their firm value by prolonging the net trade cycle, period of inventory and lengthening the credit period to customers till the level of attainment of an optimum working capital.

Financial management behavior is an implementation action of planning and managing a person’s financial resources, both in consumption and investment activities, which can show a person’s characteristics in financial management based on the risks that arise so that each needs good control. This study aims to determine the impact of financial literacy and financial attitude on financial management behavior, mediated by the behavioral intentions of university students. The participants in this study are undergraduate students currently enrolled at prestigious private universities in Medan (North Sumatra, Indonesia). This study’s population and sample consisted of students from the Faculty of Economics and Business at Private Universities in North Sumatra, Indonesia. Purposive and snowball sampling were used with data collection techniques, namely online questionnaires. The Likert scale measures indicators in responses to statements and questions. There were 150 respondents for this study’s data collection. The findings of the study indicate that financial literacy influences financial management behavior and behavioral intentions (p < 0.05). Financial attitude affects financial management behavior (p < 0.05), financial attitude does not affect behavioral intentions (p > 0.05), and behavioral intention affects Financial Management Behavior (p < 0.05). Behavioral intentions do not mediate the effect of financial literacy on Financial Management Behavior (p > 0.05), and the effect of financial attitudes on Financial Management Behavior is not mediated by behavioral intentions (p > 0.05).

Acknowledgments
This study is supported by all levels of management at Universitas Muhammadiyah Sumatera Utara for funding Fundamental research in 2022 and thanks also to the ranks of the Institute of Research and Community Service (LPPM) Universitas Muhammadiyah Sumatera Utara.

The implementation of the international accounting framework has led to a new philosophy of estimating and valuing the financial performance of companies. In this respect, the accounting indicators derived from financial statements constitute the classic measures of performance evaluation, such as ROE, ROA, BPA, and Payout. However, their usefulness is contested in the face of market-based indicators like TSR, MVA, PBR, and dividend yield. This paper aims to assess the effect of adopting IFRS on the relevance of financial performance measures through a comparative approach with Moroccan GAAP. At the empirical level, the use of multiple regressions on panel data remains strongly solicited to test the informational relevance of these indicators. In number, there are 115 observations collected from IFRS-adopting companies and 418 observations from non-adopting companies over the period 2013–2022. The study revealed a significant impact of the adoption of IFRS on the informational relevance of accounting indicators (adjusted R2(IFRS) = 71.12% against adjusted R2(Moroccan GAAP) = 55.03%). However, this study found a less significant effect of IFRS on the degree of relevance of stock market performance indicators (adjusted R2 (IFRS) = 50.36% versus adjusted R2(Moroccan GAAP) = 63.84 %). The study also showed a significant effect of IFRS on the complementarity between accounting and stock market performance indicators to explain the total shareholder return (adjusted R2(IFRS) = 69.02% against adjusted R2(Moroccan GAAP) = 58.01%).

This paper investigates the impact of operating cash flows, company size, and debt (including both cash and operating flows) on the financial performance of Kosovo’s ten most prominent publicly traded companies. Various analytical techniques were employed for hypothesis testing, including OLS linear regression analysis, correlation analysis between variables, and statistical tests such as the T-test and Ratio test. The financial performance analysis involves utilizing Return on Assets (ROA) as the dependent variable, while the independent variables encompass operating cash flows (CFO), firm size, and financial leverage.
The study’s findings reveal noteworthy insights. Although cash flow (p > 0.05) is not observed to have a significant impact, larger company size (p < 0.01) is associated with diminished financial performance. Conversely, higher debt leverage (p < 0.01) is linked to enhanced financial performance. Consequently, the results underscore the significant economic implications that firm size and financial leverage hold for the financial performance of corporations in Kosovo, as indicated by ROA.
The observation that firms size plays a substantial role in financial performance aligns cohesively with established economic theory. As companies expand, they often encounter challenges related to efficient resource management.

Although internal control systems in firms aim to provide reasonable assurance regarding objectives related to operations, reporting, and compliance, research focusing on operational efficiency is limited. This study investigates the impact of both quantitative and qualitative investments in internal control personnel on a firm’s operational efficiency. Utilizing a fixed-effect regression model, the Heckman (1979) two-stage model, and a two-stage least squares procedure, this study analyzes 4,471 firm-year observations from Korean listed firms from 2018 to 2020. The findings indicate a positive association between investment in internal control personnel and operational efficiency. This relationship remains robust even under sensitivity tests and concerns of potential endogeneity, as confirmed by the Heckman and two-stage least squares models. Specifically, the Heckman model shows that the ratio of the number of employees (coef = 0.023, t-value = 5.20) and certified public accountants (coef = 0.256, t-value = 5.43) responsible for internal control is positively associated with operational efficiency. Average work experience (coef = 0.002, t-value = 1.84) of internal control personnel is also positively related to operational efficiency. This study provides empirical evidence for the significance of investing in internal control personnel to boost operational efficiency and suggests that firms should consider both quantitative and qualitative aspects of internal control.

The efficient market hypothesis (EMH) asserts that financial markets are efficient, meaning that current market values of stocks incorporate all available information. This study examines the weak-form efficiency of Palestine Stock Exchange stocks using the indices returns from 2010 to 2022. The study used parametric tests (Augmented Dickey-Fuller (ADF) unit root, serial autocorrelation) and nonparametric tests (Phillips-Perron (PP) unit root, run test, variance ratio test). The findings of these tests provide insights into the behavior of the Palestine Stock Exchange market.
The run test outcomes reveal a statistically significant pattern in the data for general, insurance, and service indices, with a p-value below the significance level. Furthermore, the unit root tests indicate statistical significance for all indices with 0.00 p-values and t-statistic below the critical values of –2.86 for level and intercept, and –3.14 for level, trend, and intercept, signifying that the indices returns are stationary. In addition, serial autocorrelation test show that the general and Al-Quds indices show statistically significant links between consecutive observations at all four lags. However, the insurance, investment, and services indices show statistically significant results on three lags. The variance ratio test results challenge the random-walk hypothesis for all indices except industry and insurance. With low probability values, a discernible, long-term, predictable pattern is evident in the Palestine Stock Exchange indices.
The analysis reveals that Palestine Stock Exchange index returns exhibit nonrandom behavior, suggesting predictability and patterns in daily returns, indicating the possibility of exploiting market inefficiencies in investment strategies.

Financial statements are often number intensive, and determining the importance and relevance of these numbers from the perspective of investors and equity holders is paramount. However, empirical studies concerning the correlation between several accounting and economic-based indicators with shareholder returns have yielded contradictory results. Additionally, considering the relatively limited studies on economic-based indicators such as refined economic value-added and economic value-added momentum, this study evaluated the predictive power of refined economic value added, economic value-added momentum, and economic value added (economic-based indicators), along with traditional accounting-based indicators such as return on equity and earnings per share on the shareholders' returns. The study employed fixed-effect instrumental variable regression and panel quantile regression techniques to examine 49 non-financial companies listed on the Johannesburg Stock Exchange from 2007 to 2021. Overall, the results showed that economic value added is a significant negative predictor of shareholder returns, while refined economic value-added is a positive determinant. In addition, the refined economic value-added coefficient remains positive, with the impact increasing across the conditional quantiles. This study concludes that refined economic value-added provides a superior and realistic determinant of shareholder value on the Johannesburg Stock Exchange compared to other measures.

Economic policy uncertainty intensified as a result of the global financial crisis. To overcome these obstacles, firms handle issues with financial distress and crash risk more proactively. This paper offers new insights into the relationship between financial distress and crash risk on the Egyptian stock market during the period of 2014–2021 and presents how managers strengthen the bad news hoarding mechanism to their advantage. Data were collected via financial statements and reports obtained from the Thomson Reuters database using 824 annual observations of 103 Egyptian firms via the generalized method of moments and ordinary least squares. Results show a strong positive impact of financial distress on crash risk using OLS and GMM. Results support the role of managerial opportunism to cover up bad news that undermines a firm’s economic fundamentals. The findings support an agency theory of how financial distress affects crash risk. The findings support conducting robust tests for alternative financial distress and crash risk measures.

The relationship between economic growth and the development of financial systems has been analyzed from different perspectives for a long time. This paper addresses the effects of the informal economy on the relationship between financial development and economic growth, using a panel data covering 20 countries during the period 1993–2020. The results show that financial development, as measured by the IMF’s Financial Development Index, is positively associated with economic growth (the coefficient α1 related to financial development fd is positive and statistically significant at 5%). The results also show that large sizes of the informal economy moderate the influence of this association (α1 remains positive and statistically significant at 1%, while the coefficient α2 related to the interaction between financial development and informal economy, fd and ie, is negative and statistically significant at 1%). In effect, financial development has the greatest impact on economic growth whenever there is control over the informal economy’s size. Inversely, a favorable ground for the informal economy limits the positive association between financial development and economic growth.
However, the results show the absence of a causality relationship between financial development and economic growth (W-bar = 1.0015 and Z-bar = 0.0048; p-value = 0.9980). The informal economy plays no role in making this type of link significant (W-bar = 0.9761 and Z-bar = -0.0756; p-value = 0.9520).

This study analyzes the possible impact of diversity in non-interest income on Nepalese Depository Financial Institutions (DFIs) performance. The study examines variables such as service fees, dividends on equity instruments, and the non-interest revenue ratio to total operational income as endogenous factors. The ROE serves as the key profitability indicator. Additionally, the study explores the impact of control variables on the performance of financial institutions, such as the cost-to-income ratio, the equity-to-total assets ratio, and the ratio of non-performing loans to total loans. Secondary data from fiscal year 2015/16 to 2021/22 are utilized for analysis, employing correlation and regression analyses to assess the relationships between variables. Based on the Hausman Specification test, this study uses a Dynamic Analysis of Panel Data approach, adopting a Random effects regression model. The findings indicate that dividends from equity instruments ( = –0.565*) adversely affect profitability. At the same time, service fees and non-interest revenue as a proportion of overall operating revenue show no significant impact. Control factors like the cost-to-income ratios ( = –0.432**) and the equity-to-total assets ( = –94.101**) adversely affect profitability. The study suggests that income diversification may not be beneficial, urging Nepalese DFIs to prioritize interest income and consider alternative investment opportunities. Reducing the cost-to-income ratios and equity-to-total assets is recommended for enhancing profitability.