Issue #1 (Volume 21 2024)
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ReleasedMarch 29, 2024
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Articles33
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106 Authors
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248 Tables
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48 Figures
- 2SLS
- abnormal return
- accounting conservatism
- ADO-TCM framework
- agency problem
- alpha
- analyst coverage
- anchoring
- asset allocation
- asset intangibility
- auditing
- audit opinion
- balanced scorecard
- Bangladesh
- banks
- basic earning power
- behavior
- behavioral biases
- behavioral factor
- bibliometric analysis
- board composition
- board independence
- board size
- bonds
- capital structure
- cash
- cash flow
- cash holdings
- cash management
- catering
- Certified Public Accountant
- Chaebol
- China
- climate news
- climate risks
- cluster analysis
- compensation
- compliance
- connectedness
- conservatism
- convenience
- corporate governance
- corporate governance disclosure
- corporate governance report
- corporate social responsibility
- corporate sustainability-related disclosure
- cost of capital
- cost perception
- COVID-19
- credit guarantee schemes
- customer
- cybersecurity awareness
- data mining
- decision-making
- demand
- Dhaka Stock Exchange
- disclosure
- disclosure policies
- dividend
- earnings
- education hours
- effectiveness
- emissions
- endogeneity
- energy and mining firms
- environment
- ESG
- ESG ratings
- expertise
- Fama-French
- family ownership
- finance
- financial determinants
- financial information
- financial leverage
- financial market
- financial market participation
- financial performance
- financiers
- fintech
- firm age
- firm performance
- firm size
- forecasting
- foreign investors
- foreign ownership
- FTSE
- GMM
- gold
- governance
- government
- government credit guarantees
- green investment
- growth
- hedge
- herding
- holding periods
- household decision
- household finance
- incentives
- income diversity
- India
- Indonesia Islamic Stock Index
- intellectual capital
- intention to use
- interest rate
- internal control
- internal control personnel
- internal control system manager
- internet industry
- investment
- investment decisions
- investment experience
- investor
- investor decisions
- investor overconfidence
- investors
- investors protection
- Korea
- large-cap
- lasso
- legitimacy
- leverage
- losses recognition
- M-SWARA
- macroeconomic
- managerial ownership
- measurement
- mobile fintech services
- monetary policies
- Morocco
- non-financial companies
- non-financial reporting
- Omani industrial companies
- online banking
- operation
- overconfidence
- overinvestment
- ownership concentration
- ownership structure
- Pakistan Stock Exchange
- payout
- perception
- performance
- performance analysis
- persistence
- platinum
- portfolio choice
- portfolio flows
- portfolio rebalancing
- practices
- profitability
- public institutions
- Public Value Theory
- random forest
- regret aversion
- regularization
- reporting quality
- report rating
- representative
- research and development expenditure
- return on assets
- return on equity
- Richardson model
- risk
- risk asset
- service awareness
- silver
- size
- SMEs
- socially responsible companies
- social media
- stock market
- stock markets
- stock performance
- stock price
- structural equation model
- structural topic model
- sustainability indices
- sustainability report
- sustainability reporting
- sustainable environment
- tax
- technical analysis
- thematic analysis
- trading
- transactional efficacy
- trend
- underinvestment
- value added intellectual coefficient
- VOSviewer
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The determinants of audit report lag: Evidence from Indonesia
Endri Endri , Santi Sari Dewi , Sigid Eko Pramono doi: http://dx.doi.org/10.21511/imfi.21(1).2024.01Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 1-12
Views: 1051 Downloads: 393 TO CITE АНОТАЦІЯThe determining factors that cause delays in audit reports are essential for shareholders to pay attention to when making quick decisions. Delays in audit reports receive significant attention in the capital markets where audited financial statements in annual reports are the only reliable source of information available to investors. This study aims to identify factors that cause delays in audit reports in the form of company and industry specifics consisting of profitability, company size, audit committee, audit opinion, and size of a public accounting firm. The research method uses a panel data regression model to test five hypotheses based on data collected from annual reports from 2011 to 2021. The research sample selected were 46 companies in the construction and property services sector listed on the Indonesian Sharia Stock Index. Empirical findings show that a public accounting firm’s profitability, audit opinion, and size hurt audit report lag, while the audit committee has a positive impact. Company size is the only factor that does not have an impact on audit reporting delays. The research results provide recommendations for company management and shareholders that delays in audit reports can be reduced by increasing company profits. Apart from that, audit delay lag can also be reduced by appointing a reputable or international public accounting firm and providing a quality audit opinion.
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Financial determinants of environmental, social and governance performance: Empirical evidence from India
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 13-24
Views: 522 Downloads: 140 TO CITE АНОТАЦІЯThe present study aims to examine the firm-level financial determinants of ESG performance. It elucidates what financial resources it takes to enable the integration of ESG practices and improve a firm’s ESG scores, based on a sample of 94 Indian firms listed on the National Stock Exchange of India between 2015 and 2020. Econometrically, the study employs fixed effects and random effects panel data models as an appropriate methodology. The findings show that firm size, asset intangibility, analyst coverage, and operating cash flow influence firms’ ESG scores positively, whereas leveraging and strategic holding impact them negatively. In addition to the mentioned variables, cash holdings positively influence firms’ environmental, social, and governance scores. While dividend yield does not contribute to combined ESG and governance scores, it has a positive impact on a firm’s environmental and social scores. This is the first study examining the determinants of firm-level ESG performance in an emerging market. Results endorse the interaction of legitimacy theory and slack resource theory in determining a firm’s ESG performance.
Acknowledgement
The infrastructural support provided by FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged. -
Unraveling behavioral biases in decision making: A study of Nepalese investors
Rajesh Gurung , Rewan Kumar Dahal , Binod Ghimire , Nischal Koirala doi: http://dx.doi.org/10.21511/imfi.21(1).2024.03Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 25-37
Views: 445 Downloads: 122 TO CITE АНОТАЦІЯThe Nepalese stock market has experienced substantial transformations in recent years. Research on investors’ herding behavior is of paramount importance since it explores the influence of collective choices made by investors, which could result in intensified market price fluctuations. This study examined the influence of behavioral biases on investment decisions among Nepalese investors – general individuals who actively participate in the country’s stock market, considering overconfidence, representative, anchoring, regret aversion, and herding biases as explanatory variables, with investment decisions as the response variable. The study employed a linear regression model, establishing relationships using a structured questionnaire with 379 observations. The study revealed the significant influence of overconfidence, anchoring, and regret aversion biases on investment decisions among Nepalese investors. Conversely, the influence of representative bias had a little impact on investment choices, and herding behavior showed no significant relationship with investment decisions. Hence, it suggests that behavioral biases have a greater impact on individual investment choices in the Nepalese financial market. It is essential for investors, advisers, and policymakers to be aware of and address these biases to make well-informed decisions, maintain financial stability, and foster market development.
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ESG ratings and stock performance in the internet industry
Lan Wang , Zhenyuan Weng , Chunxiao Xue , Jianing Zhang doi: http://dx.doi.org/10.21511/imfi.21(1).2024.04Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 38-50
Views: 688 Downloads: 105 TO CITE АНОТАЦІЯAmidst the escalating emphasis on sustainable development, numerous corporations and organizations have intensified their environmental, social, and governance (ESG) efforts. The internet sector, intrinsically linked to the ESG domain, has consequently garnered amplified scrutiny. This study delves into the correlation between ESG ratings and the stock performance of publicly listed Chinese companies in the internet sector from 2016 to 2020. The findings reveal that initiatives in the ESG sphere significantly and negatively influence stock performance in these firms, assessed through raw stock returns, stock excess returns relative to the market index, Jensen’s one-factor alpha, and the Fama-French three-factor alpha. This inverse correlation between ESG ratings and stock performance is nonlinear and convex, indicating a lessening negative impact at elevated ESG levels. Moreover, this adverse effect is more pronounced in value stocks compared to growth stocks. Predominantly manifesting before 2018, this negative trend diminishes amidst the COVID-19 period. The reverse causality analysis employing lagged ESG ratings suggests that higher ESG ratings precipitate reduced stock performance, as opposed to vice versa. This study bridges a gap in the existing literature concerning ESG and stock performance specific to the Chinese internet industry and proposes recommendations for its sustainable evolution.
Acknowledgment
This research was supported by the Department of Education of Zhejiang Province General Program (Y202249981, Y202353438), the Wenzhou Association for Science and Technology – Service and Technology Innovation Program (jczc0254), the Wenzhou-Kean University Student Partnering with Faculty Research Program (WKUSPF2023004), the Wenzhou-Kean University International Collaborative Research Program (ICRP2023002, ICRP2023004), and the Wenzhou-Kean University Internal Research Support Program (IRSPG202205, IRSPG202206). -
The expertise of internal accounting control personnel and financial statement conservatism: Korean evidence
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 51-62
Views: 303 Downloads: 95 TO CITE АНОТАЦІЯThe purpose of this study is to analyze how the expertise of internal accounting control personnel impacts financial statement conservatism. This study analyzed companies listed on the Korean stock market. Listed companies in Korea have been disclosing information on internal accounting personnel since 2012. Using a fixed-effect regression model, an analysis of 3,276 firm-years from 2012 to 2018 shows a positive correlation between the expertise of internal accounting control personnel and financial statement conservatism. The results from Ball and Shivakumar’s (2006) CF, DD, and Jones models are all significant at the 1% level, enhancing the robustness of the study’s findings. The coefficients were 0.872, 0.869, and 0.846, and the t-values were 3.93, 3.95, and 3.83 in each model. This indicates that firms with CPAs (Certified Public Accountant) among their internal accounting control personnel show stronger tendencies toward conservatism compared to those without CPAs. Furthermore, an analysis based on the firm ownership structure reveals a positive correlation between internal accounting control personnel expertise and financial statement conservatism in a non-Chaebol subsample (coefficient = 1.043, t-value = 3.58 in CF model); however, the results in the Chaebol subsample were not significant. This suggests that while having CPAs involved in non-Chaebol firms’ internal control is effective, it is not effective in Chaebol companies that are highly influenced by their owners.
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Is corporate governance a significant factor in corporate social responsibility disclosure? Insights from China
Oleh Pasko , Tetyana Kharchenko , Oleksandr Kovalenko , Viktoriia Tkachenko , Oleksandr Kuts doi: http://dx.doi.org/10.21511/imfi.21(1).2024.06Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 63-75
Views: 404 Downloads: 101 TO CITE АНОТАЦІЯThis comprehensive study delves into the intricate relationship between corporate governance and Corporate Social Responsibility Disclosure (CSRD) within the framework of China’s institutional landscape. By analyzing an extensive dataset comprising 35,435 firm-year observations from 3,889 A-share listed companies spanning the years 2006 to 2019, the research scrutinizes various governance mechanisms, including board size, independence, CEO duality, and ownership concentration.
The investigation affirms that larger boards and a higher proportion of independent directors exert a positive influence on CSRD. In contrast, a substantial shareholding ratio held by the largest shareholder proves to be a hindrance to the transparent disclosure of CSR initiatives. While the impact of CEO duality on CSRD is noted, the statistical significance of this relationship remains inconclusive.
These findings underscore the nuanced dynamics of governance and ownership structures in shaping CSR initiatives. The findings highlight the nuanced impact of governance and ownership structures on CSR initiatives, offering valuable insights for managers and policymakers navigating CSR strategies in China’s business landscape. The insights garnered from this study hold valuable implications for both corporate managers and policymakers navigating the landscape of CSR strategies within the unique contours of China’s business environment.Acknowledgment
This paper is co-funded by the European Union through the European Education and Culture Executive Agency (EACEA) within the project “Embracing EU corporate social responsibility: challenges and opportunities of business-society bonds transformation in Ukraine” – 101094100 – EECORE – ERASMUS-JMO-2022-HEI-TCH-RSCH-UA-IBA / ERASMUS-JMO-2022-HEI-TCHRSCH https://eecore.snau.edu.ua/
Oleh PASKO expresses sincere gratitude for the support received from the Kirkland Research Program, generously provided by the Leaders of Change Foundation established by the Polish-American Freedom Foundation.
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A literacy of the relevance of Asian value sustainability reporting in Indonesia
Pancawati Hardiningsih , Cahyani Nuswandari , Ceacilia Srimindarti , Gregorius Anggana Lisiantara , Ira Setiawati doi: http://dx.doi.org/10.21511/imfi.21(1).2024.07Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 76-87
Views: 319 Downloads: 89 TO CITE АНОТАЦІЯAn independent institution gives appreciation to companies in Indonesia that have published their sustainability reports by ranking their sustainability reports in the Asia Sustainability Reporting Rating. This institution plays a role in facilitating and encouraging companies, organizations and other entities in Indonesia to adopt good sustainability reporting practices. This ranking factor is predicted to influence the movement of abnormal returns so that it can influence value relevance through the earnings response coefficient. The aim of this study is to reveal the relevance of value in order to obtain empirical evidence regarding the influence of sustainability reports, sustainable report ratings and earnings persistence on the earnings response coefficient. The research sample was 130 companies in Indonesia that were included in the Asia Sustainability Reporting Ranking for the period 2019 to 2022. This paper uses a quantitative multiple linear regression method to test the hypothesis. The research results show that consistent profits can be predicted from the past and make a positive contribution to future earnings response. A company transparently discloses its performance in the sustainability aspect, thereby making the profit response more positive. Companies with high sustainability ratings tend to get a more positive profit response from the market and stakeholders. This study suggests that management and company owners in Indonesia are aware of the need to pay attention to long-term sustainability through the publication of sustainability reports to become a company’s commitment to implementing sustainability and minimizing risks arising from the company’s economic, social and environmental activities.
Acknowledgments
The authors would like to thank the Directorate of Research, Community Service and Publications (DPPMP) of Stikubank University for supporting the funding of this research. Thanks also to fellow FEB lecturers who have helped provide the facilities needed for this research. -
Foreign investor portfolio flow and monetary policy response in the Indonesian stock market considering the COVID-19 pandemic
Herry Subagyo , Hersugondo Hersugondo , Wijaya Marcellino Candra , Kardison Lumban Batu , Dwi Eko Waluyo doi: http://dx.doi.org/10.21511/imfi.21(1).2024.08Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 88-97
Views: 351 Downloads: 119 TO CITE АНОТАЦІЯForeign portfolio investment in developing countries, including Indonesia, plays a crucial role in the economy, where this fund flow can influence exchange rates and stimulate price increases in the stock market. During the COVID-19 pandemic, the volatility of foreign portfolio flows by investors has significantly increased. To anticipate these conditions, the monetary authorities in Indonesia have implemented various monetary policies to address the possibility of more adverse situations. This study examines the impact of the inflow or outflow of foreign portfolio investments and the monetary policies reflected in the 7-day repo rate of Bank Indonesia on the Indonesian stock market. The data were collected from April 4, 2016, to March 18, 2022. The research methodology involves the Non-Linear Autoregressive Distributed Lag and the Markov Switching Regression (MSR) model. The findings indicate that foreign investor portfolio flows influence the Jakarta Composite Index. There is a tendency for domestic investors to analyze the habits of foreign investors. The study also found that monetary policy is not proven to affect the Jakarta Composite Index, while the USD/IDR exchange rate has an impact on the Indonesian stock market. This indicates many companies listed on the Indonesia Stock Exchange have debt in dollars or are paid in US dollars, making them vulnerable to exchange rate fluctuations.
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Capital structures of surviving Fortune 500 companies: A retrospective analysis for the past seven decades
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 98-115
Views: 336 Downloads: 116 TO CITE АНОТАЦІЯSixty companies on the inaugural “Fortune 500” list still remained on this list in 2020 and they have monotonically increased their leverage (median debt to total assets ratio rose from 0.5% to 20.4%) over the past 70 years. This study applies factors from classic capital structure theories to this sample and explains the dynamic choice of debt usage. The methods employed include a Bayesian information criterion selection process of explanatory variables and a set of pooled cross section and panel tests with 3,536 firm-year observations. The tests use an array of factors extracted from several established theories on capital structure, including general economic growth, tax rate, interest rate and many company-specific variables proxying profitability and growth opportunities. The firm-level results first provide support to the free cash flow theory and confirm that company size and fixed assets proportion are the two factors associated with increased borrowing. Firms in the sample also actively respond to certain debt market and macroeconomic conditions, and their leverage ratio is significantly associated with credit spread and real interest rate. Further tests across subperiods and with risk measures illustrate the impact of expected inflation, investments activities, and stock volatility, providing supporting evidence to the organizational theory. The main research conclusion is that large US companies adopt a balance sheet-based approach to increase the use of debt, and they stay sensitive and versatile to market conditions and risk landscape.
Acknowledgements
The author declares no financial or personal relationships with other people or organizations that could inappropriately influence my work. The author thanks the journal editor and anonymous referees, Ahmad Etebari, Fred Kaen, discussants and participants at the Northeast Business and Economics Association 2022 annual meeting and the 2023 Global Finance Conference for their constructive critiques. All errors remain my responsibility. -
Corporate governance report compliance rate and accounting conservatism: New evidence from Korea
Hyoung Seok Choo , Sun-ae Cho , Jeongeun Emilia Lee doi: http://dx.doi.org/10.21511/imfi.21(1).2024.10Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 116-130
Views: 279 Downloads: 118 TO CITE АНОТАЦІЯThis study investigates the relationship between the corporate governance report (CGR) compliance rate and a company’s accounting conservatism, utilizing the CGR compliance rate as a novel method to evaluate the effectiveness of corporate governance practices. Given the challenges of applying global indices to measure corporate governance in the Korean market, this study focuses on the CGR compliance rate as a key indicator. Utilizing the ordinary least squares (OLS) regression model, specifically the Ball and Shivakumar (2005) model widely employed in previous studies to assess accounting conservatism, this paper conducts empirical analyses based on 784 observations from Korean listed firms between 2018 and 2021. The main analysis reveals a positive association between the CGR compliance rates (coef = –2.416, p-value < 0.01) and accounting conservatism. A fixed-effect model and a propensity score matching (PSM) model also show a positive association between the CGR compliance rates, respectively (coef = –2.507, p-value < 0.01; coef = –3.118, p-value < 0.1) and accounting conservatism. This study proves that firms with high CGR compliance rates tend to promptly recognize financial losses in financial reporting, thereby safeguarding investors. This suggests that investors should consider the CGR compliance rates when evaluating potential investments. Overall, these findings contribute to validating the CGR compliance rates as a valuable proxy for assessing corporate governance practices in Korean firms.
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Impact of banking functions on online investment intention in India: Examining the mediating role of service experience
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 131-145
Views: 290 Downloads: 64 TO CITE АНОТАЦІЯThe study aimed to determine the various antecedents of banking functions that may lead to consumers’ intention to use online banking channels for investment with the role of service experience in mediating the relationship between banking function, online investment intention, cost perception, and behavioral factors. Data were collected through an online survey to understand consumer perceptions and behavioral intentions among online banking users in India. The population of this study is Indian residents who are customers of banks providing online services. Purposive sampling and snowball sampling were used as sampling methods. The study used an online survey with a list-based sample frame using social media chat functions or messaging applications in which the Google forms link was shared. A total of 561 valid responses were successfully accumulated from 1,136 Google forms, indicating a response rate of 61.78%. The study employs SEM-PLS using PLS 2.0 software for data analysis. The results validated the direct effect of online investment intention through a bank on different components of banking channel function linkages: information and service awareness, transactional efficacy, trust, brand effect, convenience, and information technology support (p < 0.05). The findings also highlighted that customer service experience mediates the relationship between banking channel function and consumers’ investment intention through online banking channels, significantly impacting customers’ cost perception and behavioral factors (p < 0.05). The research implications are expected to improve the banking service experience of customers and might motivate them to use the online banking channel for investment.
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Role of behavioral biases in the investment decisions of Pakistan Stock Exchange investors: Moderating role of investment experience
Saima Aziz , Shahid Mehmood , Muhammad Asif Khan , Anita Tangl doi: http://dx.doi.org/10.21511/imfi.21(1).2024.12Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 146-156
Views: 532 Downloads: 110 TO CITE АНОТАЦІЯDespite many revolutionary asset pricing models developed over the past decades, traditional finance does not explain investor behavior very well. The purpose of this study is to examine the influence of behavioral biases on the investment decisions of investors of Pakistan Stock Exchange. In addition, the moderating influence of investment experience investigated in this study. The findings were reported using a sample of 230 individual investors, who make their own investments, typically through a mutual fund, bank, or internet broker. They make investments to achieve their unique investment objectives, such as saving for retirement, a child’s education, or increasing their overall wealth. The influence of behavioral biases on investment decisions was calculated using regression analysis. Regression results show that beta and t-values are significant and have a significant impact on investment decisions. Regression findings show that Confirmation Bias, Gamblers Fallacy Bias, Negativity Bias, Bandwagon Effect Bias, Loss Aversion Bias, and Overconfidence Bias all have a substantial impact on Investment Decisions. Status quo prejudice and endowment bias have a favorable but minor influence on Investment Decisions. Investment Experience is regarded as an essential component that contributes to successful decision making under risk and uncertainty, however the results of this study show that moderating variables have a minor influence. According to the findings, the moderating variable had no effect on the connection between behavioral biases and investment decisions. And the reason for this is that behavioral biases persist regardless of investing experience.
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Precious metals as hedging assets: Evidence from MENA countries
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 157-167
Views: 283 Downloads: 71 TO CITE АНОТАЦІЯIn the context of the global pandemic of 2020 and the Russian invasion of Ukraine in 2022, a newfound interest is emerging in understanding the interconnections between the Dow Jones (United States), Amman SE General (Jordan), BLSI (Lebanon), EGX 30 (Egypt), ISRAEL TA 125 (Israel), MASI (Morocco), and MOEX (Russia) indices and the precious metals markets Gold Bullion LBM, Silver, Handy & Harman, London Platinum, from January 1, 2018 to November 23, 2023. The study aimed to determine whether precious metals such as Gold, Silver, and Platinum can be considered hedging assets to the stock markets of the Middle East and North Africa (MENA) countries, i.e., whether investors operating in these regional markets can rebalance their portfolios with these precious metals. The structural vector autoregressive (SVAR) methodology allowed assessing the influence of the analyzed markets on each other regarding price formation. The results show that the markets interacted very significantly during the stress period. Platinum was the market that most influenced its peers (1 to 8 comovements), the MOEX, 1 to 7, MASI, 2 to 6, the Dow Jones went from 4 to 7 comovements, the Amman SE General and EGX 30 markets went from 1 to 4, the Israeli market (ISRAEL TA 125) and Silver went from 2 to 4 comovements, and finally the Gold Bullion LBM from 3 to 4. The study’s conclusions contain important information for investors, policymakers, and other participants in the financial energy markets.
Acknowledgments
The authors are grateful for the comments and suggestions from reviewers that helped improve the quality of the manuscript. Rui Dias is pleased to acknowledge the financial support from Instituto Superior de Gestão (ISG) [ISG - Business & Economics School], CIGEST. -
Neuro quantum-inspired decision-making for investor perception in green and conventional bond investments
Aigerim Birzhanova , Aliya Nurgaliyeva , Azhar Nurmagambetova , Hasan Dinçer , Serhat Yüksel doi: http://dx.doi.org/10.21511/imfi.21(1).2024.14Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 168-184
Views: 287 Downloads: 67 TO CITE АНОТАЦІЯThe purpose of this study is to make a comprehensive analysis of investor perceptions in the context of green and conventional bond investments. For this purpose, a new model is presented by considering two steps. First, a criteria set is generated by considering balanced scorecard perspectives that are finance, customer, organizational effectiveness and learning and growth. After that, the neuro Quantum fuzzy M-SWARA method is considered to weight these criteria. Secondly, seven critical determinants for bond investments are identified that are coupon rates, volume, maturity, riskiness, liquidity, volatility, and tax considerations. Neuro Quantum fuzzy TOPSIS approach is employed to rank these factors. The main contribution of the study is that by combining the balanced scorecard framework and quantum-inspired decision-making techniques, this paper offers a novel and sophisticated decision-making model to understanding investor behavior. Similarly, in the proposed model, a new methodology is generated by the name of M-SWARA. In this framework, some enhancements are adopted to the SWARA technique. The weighting results indicate that meeting customer expectations is the most critical factor that affects the investor perception to make investments to the bonds. Moreover, according to the ranking results, it is concluded that coupon rates are the most important item for both conventional and green bond investors. On the other hand, with respect to the conventional bond investor, tax is the second most essential factor. However, regarding the green bond investors, volatility plays a critical role.
Acknowledgment
This research has been/was/is funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (№ AP 19679105 “Transformation of ESG financial instruments in the context of the development of the green economy of the Republic of Kazakhstan”). -
Does climate news sway investors away from large financiers of fossil fuel projects?
Chekani Nkwaira , Huibrecht Margaretha van der Poll doi: http://dx.doi.org/10.21511/imfi.21(1).2024.15Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 185-197
Views: 208 Downloads: 61 TO CITE АНОТАЦІЯDespite rapid growth in climate news coverage, some banks are increasing financing towards greenhouse gas emitters with investors whose decisions intensify climate challenges. This study aims to establish the impact of climate news on investment decisions involving banks’ intensified fossil fuel financing and recommend remedies. Descriptive, linear regression analyses and the two-sample t-test are applied. The list of bank stems from the Consumer News and Business Channel website. Share prices, traded shares and market capitalizations are obtained from Macrotrends and Companies’ market cap websites for computing demand and holding periods. Results reveal more demand for riskier banks after European symposiums in contrast to Asia’s reduction. It is established that no significant linear relationships exist between demand and holding periods with t < T and p-value > 0.05. The null hypothesis of no linear relationship is not rejected. There is more price risk in Europe than in Asia with average volatilies of 0.439871 and 0.067472, respectively, at p-value 0.002117 < 0.05 based on the two-sample t-test. The null hypothesis of no difference in volatility means is rejected. The higher volality risk corresponds to higher demand for riskier bank shares in Europe. Climate news persuades Asian investors to reduce the demand for the banks’ shares. Conversely, European investors demonstrate behaviors incompatible with climate risk mitigation, particularly in periods after symposiums. A Global climate risk blacklisting initiative and a publicised Global climate risk index should accompany downgrades aimed at fossil fuel project financiers. Coverage of these measures at conferences may influence more investors to make correct decisions.
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Corporate governance and cash holdings: Focusing on a corporate governance report in Korea
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 198-212
Views: 324 Downloads: 105 TO CITE АНОТАЦІЯThis study examines the effect of corporate governance on a company’s cash holdings, focusing on a firm’s compliance levels with core corporate governance indicators as outlined in the corporate governance report. Utilizing a random effect generalized least squares (GLS) regression model, this study evaluates 812 firm-year observations from Korean publicly traded companies covering the period 2018 to 2021. The results indicate that companies with robust governance structures generally maintain lower levels of cash holdings (coefficient = –0.0263, p-value = 0.044), corroborating the flexibility hypothesis. Moreover, higher compliance levels with governance matters concerning shareholder protection (coefficient = –0.0388, p-value = 0.090) and board of directors (coefficient = –0.0512, p-value = 0.052) are associated with reduced cash holdings. Further analysis, accounting for a firm’s organizational capital, underscores that the inverse relationship between corporate governance and cash holdings is more pronounced in organizations with lesser organizational capital (coefficient = –0.0548, p-value < 0.01). This study contributes empirical evidence showing that strict compliance with core corporate governance indicators, indicative of strong corporate governance, substantially affects a firm’s cash management. Additionally, this study offers valuable insights for regulatory authorities and investors and enhances the existing body of knowledge on the interplay between corporate governance and cash holdings.
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Predictive modeling of return volatility in sustainable investments: An in-depth analysis of ARIMA, GARCH, and ARCH techniques
Srihari G. , Kusuma T. , Chetanraj D. B. , J. P. Senthil Kumar , Ravi Aluvala doi: http://dx.doi.org/10.21511/imfi.21(1).2024.17Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 213-228
Views: 413 Downloads: 102 TO CITE АНОТАЦІЯThis paper aims to forecast the stock price and analyze the return volatility of India’s top three socially responsible companies. This study used ARIMA and GARCH models to forecast the stock price and analyze return volatility. For the analysis, the required time series data are collected from Yahoo Finance from 01-08-2012 to 29-07-2022 of the companies’ Monthly and daily closing stock prices. The socially responsible companies are selected based on India’s sustainability indices. The findings of the study show that the ARIMA (9,1,9) model for HDFC Ltd, ARIMA (10,1,7) for Reliance Industries Ltd, and ARIMA (2,1,2) are suitable models to forecast the stock price. Also, the study’s findings forecasted stock prices from August 2022 to July 2023. The forecasted stock price for July 2023 of HDFC Ltd is INR 2,613.78, Reliance industries Ltd is INR 3,073.75, and ICICI Bank Ltd is INR 857.73. Reliance Industries Ltd (σ2t = 0.9270586) is less volatile, and HDFC Ltd (σ2t = 0.9665041) is more volatile among the three companies, ICICI Bank Ltd (σ2t = 0.9507527) is the second high volatile company. The present study is limited to the top three companies that were selected from the three sustainability indices of BSE. The study is also limited to analysis of past volatility of stock price returns.
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Green investment in South Africa: A perception of overinvestment or underinvestment in energy and mining firms
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 229-243
Views: 202 Downloads: 62 TO CITE АНОТАЦІЯThis paper investigates green investments in energy and mining firms in South Africa to determine the efficiency level in terms of overinvestment and underinvestment. The general Richardson residual measurement model is employed, and an enhanced model is created by including variables that influence green investment, such as political connections and pollutant emissions. Data from 17 companies (5 energy and 12 mining) were used because of the significant effects of their operations on the environment over the period between 2015 and 2022. The study findings show that, in comparison to the estimated optimal investment level, South African energy and mining firms are not consistent regarding their investment level. It interplays between underinvestment and overinvestment. However, both firms demonstrated the tendency to green investment inefficiency due to underinvestment recorded in the latter years of the sample period. The study provides understanding as regards green investment levels of energy and mining firms and hence recommends adequate oversight and formulation of environmental policy by the government to ensure green investment efficiency in line with both national and international policies and regulations to facilitate a sustainable environment.
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Unlocking SME investment potential: The determinants of an effective credit guarantee scheme in Morocco
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 244-258
Views: 232 Downloads: 58 TO CITE АНОТАЦІЯThis research seeks to identify the factors influencing the investment potential of SMEs following their receipt of government-guaranteed loans. To this end, an empirical methodology based on the statistical analysis of data collected from a representative sample of Moroccan companies was employed. This sample of 335 SMEs that had benefited from loans with government guarantees was selected at random to ensure its relevance to the population of SMEs in Morocco. The methodological approach is based on a regression analysis using the robust least squares (RLS) method. Firm profitability is positively related to higher investment, suggesting that government guarantees should encourage investment by profitable SMEs. Liquidity, repayment capacity and indebtedness at the time of applying for finance do not appear to influence investment. These elements can be improved after financing, which indicates that government guarantees should not penalize SMEs in difficulty. Decision-making maturity has a negative effect on investment, suggesting that young companies and entrepreneurs tend to invest more. A negative correlation is observed between company size and investment, which suggests that government guarantees should be geared towards small SMEs and young companies and entrepreneurs. Finally, managers with a large share of capital invest more, leading us to believe that government guarantees should favor this type of SME.
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Changing dividend payout behavior and predicting dividend policy in emerging markets: Evidence from India
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 259-274
Views: 288 Downloads: 107 TO CITE АНОТАЦІЯDividends have become increasingly important for capital market participants to achieve financial goals in the rapidly changing Indian economy. This study aims to simplify the evolving Indian dividend puzzle by analyzing the dividend trends, examining the evolving nature of firm and macroeconomic determinants of dividends, and developing a dividend policy prediction model. Dividend trends of 3,162 non-financial listed Indian firms from 2006–2022 are studied to gain insights about the Indian dividend puzzle. Regularization and logit models are used to explore the nature of impact of important dividend determinants. Data-mining methods are employed to build a robust model for dividend policy prediction. Trend analysis reveals a decline in the quantum of dividends and proportion of dividend-paying firms with approximately 90% of the dividend-payers belonging to the manufacturing and service sector. Further findings suggest that size, age, maturity, profitability, past dividends, earnings, and bank monitoring of firms had a favorable impact on the likelihood of dividend payments. Macroeconomic indicators such as GDP growth rate, repo rate, percentage change in equity issues, listings, gross fixed assets formation also had a positive impact. The annual percentage change in debt issues and new project announcements at the macro level with investment prospects at firm level negatively impacted dividends. Dividend prediction model based on the random forest technique achieved the highest prediction accuracy of 90.77% and 77.31% under binomial and multi-class situations. These findings are expected to help corporate executives, portfolio managers and investors proactively design optimal dividend policies and formulate their investment strategies.
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Navigating the technical analysis in stock markets: Insights from bibliometric and topic modeling approaches
Sarveshwar Kumar Inani , Harsh Pradhan , Surender Kumar , Baidyanath Biswas doi: http://dx.doi.org/10.21511/imfi.21(1).2024.21Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 275-288
Views: 479 Downloads: 96 TO CITE АНОТАЦІЯIn stock markets, technical analysis plays a vital role by offering valuable insights into price trends, patterns, and anticipated market movements, aiding investors in making well-informed decisions. This study employs bibliometric and topic modelling approaches on 589 English-language journal articles indexed in Scopus in the last two decades (from 2003 to 2023), exclusively focusing on technical analysis in stock markets. The keyword co-occurrence analysis identifies five topic clusters. The application of structural topic modelling also unravels five prominent thematic clusters, namely pattern-based forecasting, rule-based trading, algorithmic trading, techno-fundamental trading, and machine learning & sentiment analysis. The topic of pattern-based forecasting involves researching the application of various patterns or models to predict stock prices. Rule-based trading concentrates on utilizing technical analysis tools to generate buy and sell signals, aiming for profitability. The algorithmic trading cluster explores the use of algorithms to systematically execute buy and sell actions, especially in high-frequency trading scenarios. Techno-fundamental trading investigates the integration of both fundamental and technical analysis in trading and investment decisions. Lastly, machine learning & sentiment analysis focus on applying advanced machine learning techniques and sentiment analysis for predicting stock prices, highlighting the use of sophisticated methods in this domain. The three predominant topics in the dataset are "rule-based trading," "machine learning & sentiment analysis," and "algorithmic trading" constituting 26.79%, 23.52%, and 21.11% of the dataset, respectively. These findings underscore the prominence and significance of these themes within the context of the research domain.
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Do labor unions enhance corporate social performance? Evidence from Korean financial markets
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 289-301
Views: 204 Downloads: 71 TO CITE АНОТАЦІЯThis study examines the impact of labor unionization on corporate social responsibility (CSR) in South Korean listed companies, particularly in the context of chaebol-affiliated firms. Using a dataset of 2,622 firm-year observations between 2005 and 2009, the study employs regression analyses to explore the relationship between unionization and CSR performance. Key findings indicate a significant negative correlation between labor unionization and CSR engagement, suggesting that unionized firms exhibit less involvement in CSR activities. This association, however, is not significant in chaebol-affiliated firms, where the unique corporate structure and shared resources appear to mitigate the influence of labor unions on CSR. Furthermore, the study reveals a positive link between CSR initiatives and labor productivity in unionized firms, indicating that CSR may enhance employee efficiency. The study highlights the intricate relationships between labor unionization, corporate governance, and CSR, particularly in the context of Korean business conglomerates. It emphasizes the importance of aligning labor interests with CSR commitments and underscores the role of effective corporate governance in promoting CSR activities. The positive impact of CSR on labor productivity underscores its potential in boosting employee performance.
Acknowledgment
This work was supported by the Gachon University research fund of 2023. (GCU-202303770001). -
Overconfidence bias among retail investors: A systematic review and future research directions
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 302-316
Views: 692 Downloads: 200 TO CITE АНОТАЦІЯThis paper comprehensively evaluates the literature on retail investor overconfidence using a framework-based systematic approach to understand the various dimensions of overconfidence bias, its effect on investing choices, and market dynamics. A systematic review of 137 publications from the Scopus database have been done to detect the research trend concerning investor overconfidence bias from its inception. An integrated ADO-TCM framework has been employed to present a systematic analysis of the theory, context, and methodologies (TCM) employed in the reviewed studies. The ADO (Antecedents, Decisions, and Outcomes) framework thoroughly examines the antecedents, decisions, and results of investor overconfidence.
The study identified four broad sets of factors contributing to investor overconfidence, as found in the existing literature. These factors include demographic characteristics, personality traits of investors, their knowledge and experience, and the features of investments and investor types. The Prospect theory is the most popular theory in the literature, with much research using secondary data and experiment-based analysis. The prospective study directions, based on the gaps in the existing literature, are as follows: further investigation into the decision-making processes of overconfident retail and professional investors is a worthwhile subject. Future research may shift their focus from financial outcome variables to non-financial outcome variables such as the impact of investor overconfidence on individuals’ stress levels, subjective financial well-being, and overall life happiness. -
The mediating effect of accrual earnings management on the relationship between ownership structure and firm value: Evidence from Jordan
Laith Al-Shouha , Ohoud Khasawneh , Wan Nur Syahida Wan Ismail , Nik Mohd Norfadzilah Nik Mohd Rashid doi: http://dx.doi.org/10.21511/imfi.21(1).2024.24Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 317-330
Views: 355 Downloads: 109 TO CITE АНОТАЦІЯFirm value is considered a primary and essential driver for investors when making investment decisions, so they are interested in the quality of the financial data in companies’ annual reports related to firm value in an attempt by the owners to improve the company’s image and raise its value. Therefore, this study examined the relationship between ownership structure and firm value through the mediating role of accrual earnings management. Panel data were extracted from the financial reports of 88 non-financial companies listed on the Amman Stock Exchange for 11 years (2009–2019). The Barron and Kenny, Sobel, and other test approaches were applied to investigate the mediation effect and mediating relationships. The outcomes identified a positive impact of managerial ownership on firm value and a positive impact of foreign ownership on firm value. Also, it showed a negative impact of managerial ownership and foreign ownership on accrual earnings management, while accrual earnings management positively impacted firm value. Regarding mediating relationships, the results identified a mediating effect of accrual earnings management on the relationship between managerial ownership and firm value and a mediating effect of accrual earnings management on the relationship between foreign ownership and firm value. However, accrual earnings management does not mediate the relationship between family ownership and firm value. This shows the importance of reducing accrual earnings management through the identities of investors (managerial and foreign), which helps increase control and improve the value of a company.
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The impact of the investment expectation gap on households’ risky financial asset investment
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 331-342
Views: 247 Downloads: 51 TO CITE АНОТАЦІЯRational household asset allocation is crucial for the accumulation of household wealth. However, there is still a widespread phenomenon of limited participation among households. This paper aims to explore the impact of the investment expectation gap on households’ risky financial asset investment. Utilizing data from the China Household Finance Survey 2019, this paper systematically investigates the role of the investment expectation gap in risky financial asset investment through the Probit and Tobit models. The study reveals that the investment expectation gap has a significant negative impact on the investment probability (Average Marginal Effect, –0.118, p < 0.01) and holding proportion (β, –0.082, p < 0.01) of household investment in risky financial assets. This conclusion remains robust after conducting robustness tests by replacing the explanatory variable and performing subsample tests and endogenous treatment. The analysis of transmission mechanisms revealed that an expanding of the investment expectation gap would concurrently result in a decline in households’ assessment of stock’s profitability (Average Marginal Effect, –0.080, p < 0.01), the satisfaction with current asset allocation (β, –0.167, p < 0.05), and the subjective well-being of household members (β, –0.289, p < 0.01). Furthermore, the investment expectation gap not only hampers household investment in risky financial asset, but also diminish the household savings rate (β, –0.055, p < 0.01). This study demonstrates that helping households form reasonable expectations for risky financial assets investment returns will contribute to diversifying household asset allocation and enhancing satisfaction with investment decisions.
Acknowledgment
This study is funded by the Chongqing Social Science Planning Fund, grant number (2021BS052). -
The impact of intellectual capital on company financial performance: Evidence from the Omani industrial sector
Serhii Lehenchuk , Dmytro Zakharov , Iryna Vyhivska , Viktoriia Makarovych , Yaroslav Sheveria doi: http://dx.doi.org/10.21511/imfi.21(1).2024.26Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 343-355
Views: 335 Downloads: 108 TO CITE АНОТАЦІЯThe article aims to investigate, using the VAIC and MVAIC models, the impact of intellectual capital on the financial performance of Omani companies listed on the Muscat Stock Exchange from 2017 to 2021. Regression analysis revealed a significant positive influence of VAIC and MVAIC only on the Asset Turnover Ratio at a 10% significance level. This suggests that an increase in VAIC or MVAIC by one unit could lead to a respective increase in earnings for Omani listed industrial companies by 0.0017 and 0.0016. However, the overall impact of VAIC and MVAIC on financial performance appears limited, necessitating measures for enhanced efficacy. Moreover, company size and leverage were found to significantly influence EBITDA and Return on Assets, suggesting the positive effect of increased activity and resource utilization. Conversely, Return on Customer Equity negatively affected only Asset Turnover Ratio, implying that investments in marketing and advertising may not significantly enhance financial performance. Human Capital Efficiency showed no significant impact on financial performance measures, highlighting the necessity for Omani industrial enterprises to focus on enhancing employee skills and experience for improved value-creation processes. These findings underscore the intricate relationship between intellectual, physical, and financial capital in shaping financial performance, necessitating targeted strategies for enhancement. Further analysis of suggested models indicated the significance of company size on EBITDA, highlighting the importance of scaling activities for performance improvement. VAIC and MVAIC structural elements showed mixed results, while Capital Employed Efficiency negatively affected Return on Equity, Structural Capital Efficiency positively impacted EBITDA and Asset Turnover Ratio.
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Leverage-induced profitability in Bangladeshi firms: An empirical analysis
Ummay Mahima Ima , Maliha Rabeta , Nurun Nahar , Mst. Sharmin Sultana Sumi doi: http://dx.doi.org/10.21511/imfi.21(1).2024.27Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 356-372
Views: 267 Downloads: 83 TO CITE АНОТАЦІЯThe intent of the inquiry is to extensively examine the impact of leveraged financing on firm performance in Bangladesh, revealing the subtle dynamics of leverage-induced profitability and emphasizing the importance of a balanced debt and equity structure for financial sustainability in emerging markets. To explore how financial leverage in an entity’s capital structure affects a business’s financial sustainability and analyze how it may be used to improve company performance, the study has employed a 22-year data set (2000–2021) from the Dhaka Stock Exchange. To perform Fixed Effect Regression based on the Hausman test, ‘Firm performance’ is used as the regressand, which was further proxied by Earnings per Share, Return on Assets, Return on Equity, and Basic Earning Power respectively. Alternatively, proxy variables for the regressor ‘Financial leverage’ include Debt-to-Equity, Debt-to-Asset, Current Liability-to-Equity, and Current Liability-to-Asset. The test has shown that leverage in the capital structure could lead to both favorable and unfavorable effects in emerging countries like Bangladesh. Age, along with Debt-to-Asset, has shown a substantial negative impact on Earnings per Share. Also, the Debt-to-Asset and Current Liability-to-Asset negatively affect the Return on Assets. However, Debt-to-Equity, Current Liability-to-Equity and Size have a substantial positive impact, however Age has a negative effect on Return on Equity. Lastly, Debt-to-Asset has shown a positive impact on Basic Earning Power. The findings suggest that balancing debt and equity is crucial to benefit from leverage-induced profitability, and the models can be extended or amended across industries to expand the study on this persistent leverage-induced profitability argument.
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Exploring the role of corporate governance in driving financial performance: An empirical investigation of Nepalese commercial banks
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 373-385
Views: 292 Downloads: 178 TO CITE АНОТАЦІЯThis study delves into the substantial impact of corporate governance practices on a company’s financial performance, focusing specifically on Nepalese commercial banks in the Kathmandu Valley. With 419 participants from all 27 «A» grade commercial banks, the study concentrates on employees currently working in these banks, particularly top-level staff such as managers, department heads, and officers. The primary objective is to investigate the role of corporate governance in driving financial performance, using Return on Assets (ROA) and Return on Equity (ROE) as financial performance indicators of banks. The study explores various factors influencing corporate governance’s impact, including corporate governance policies, disclosure policies, board size, income diversity, and ethnic diversity. Data collection involves primary data from participants associated with the banks, and the analysis is conducted using the Statistical Package for the Social Sciences (SPSS). Descriptive, correlation, and regression analyses are employed to understand the relationship between corporate governance and financial performance variables. Notably, regular evaluations of the board of directors are found to have a beneficial impact on financial performance. A bank’s transparency in sharing performance information exhibits a stronger positive correlation with ROE (R=0.183) compared to ROA (R=0.060), suggesting that ROE is more sensitive to disparities in information availability. Furthermore, the study identifies a negative impact of board size on financial performance, with low-income diversity positively influencing it and board ethnic diversity exerting a negative and statistically significant influence.
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Determinants of UK companies’ dividend policy
Munther Momany , Khaled Bataineh , Omar Al-Bataineh doi: http://dx.doi.org/10.21511/imfi.21(1).2024.29Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 386-396
Views: 301 Downloads: 90 TO CITE АНОТАЦІЯThis study examines the major factors influencing UK companies listed on the Financial Times Stock Exchange (FTSE) 100 stock market's dividend policy (as determined by the dividend payout ratio) over 32 years, from 1990 to 2022. The dividend premium and free cash flow components make up the catering dividend. The outcomes of a wide range of panel data analysis regressions, such as Generalized Method of Moments (GMM) and Two-Stage Least Squares (2SLS) regressions, clearly show that the catering dividend significantly impacts UK firms' dividend policy. On the other hand, the dividend policy benefits from the dividend premium, which increases it by 12% to 17% on average. Free cash flow, on the other hand, has a negligible negative impact on the dividend policy by just 5%. It is crucial to mention that this outcome varies depending on the models and regression techniques used. Furthermore, this study emphasizes how important it is for a firm's size and profitability to play a key role in determining how it will implement its dividend policy. Financial leverage also becomes important since a company's dividend payment ratio decreases when it relies more heavily on debt in its capital structure. By using GMM and 2SLS regressions, this study carefully tackles the endogeneity issue, and the results hold up even when the endogeneity effect is reduced. Ultimately, this study emphasizes how important dividend catering components are in guiding UK companies' dividend policies, arguing that CEOs and legislators should pay more attention to this.
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Impact of internal control system managers’ education on financial reporting: Focusing on manager-auditor disagreement
Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 397-406
Views: 190 Downloads: 62 TO CITE АНОТАЦІЯThe purpose of this study is to explore the correlation between internal control system (ICS) managers and the quality of financial reporting, assessed through the disagreements observed between managers and auditors. Using the regression model, an analysis of 5,007 firms from 2018 to 2021 shows a negative relationship. This suggests that as the education level of ICS managers increases, their proficiency in preparing initial financial statements improves, resulting in fewer errors and more accurate application of accounting policies. Consequently, a higher level of alignment between managers and auditors is anticipated, contributing to an overall enhancement in the quality of financial reporting. Additionally, this study thoroughly examines the correlation within firms operating in environments characterized by increased complexity and a heightened susceptibility to financial statement vulnerabilities. This evaluation is predicated upon the engagement in research and development (R&D) investments. The result suggests that higher education levels of ICS managers mitigate the disagreement between managers and auditors, even within intricate business environments.
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The impact of audit committee dimensions on financial reporting efficiency of limited partnership companies listed on the Amman Stock exchange
Qasim Ahmad Alawaqleh , Mahmoud Aleqab , Ruba Bsoul , Saqer AL-Tahat doi: http://dx.doi.org/10.21511/imfi.21(1).2024.31Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 407-416
Views: 283 Downloads: 78 TO CITE АНОТАЦІЯCurrently, the Jordanian economy needs more investment due to the growing financial deficit facing the Jordanian state. Therefore, this study came to increase investors' trust in financial reports issued by Jordanian companies to attract more investments. Based on that, this study will investigate the impact of audit committee dimensions on the efficiency of financial reports of limited partnership companies listed on the Amman Stock Exchange. The data were collected from financial reports issued by 52 limited partnership companies for the year 2021. The study used multiple regression to test the hypotheses. Based on the findings, audit committee dimensions explained the variation in financial reports' efficiency which reached 0.629. The audit committee members' size does not significantly affect the financial reports' efficiency. The significance reached 0.287. However, the knowledge of financial management has a significant positive effect on financial report efficiency; the significance reached 0.000 and the effect volume arrived at 0.699. Also, the findings showed that audit committee meetings have a greater effect on financial reporting efficiency than financial management knowledge. The impact was significantly positive, arriving at 0.790, while the significance reached 0.000. The main research conclusion is that limited partnership companies listed on the Amman Stock Exchange adopt corporate governance to achieve control effectiveness of audit committees to increase financial reporting efficiency to achieve more investments.
Acknowledgment
The publication of this research has been supported by the Deanship of Scientific Research and Graduate Studies at Philadelphia University – Jordan. -
Enhancing the public value of mobile fintech services through cybersecurity awareness antecedents: A novel framework in Jordan
Hasan Alhanatleh , Amineh Khaddam , Farah Abudabaseh , Mahmoud Alghizzawi , Amro Alzghoul doi: http://dx.doi.org/10.21511/imfi.21(1).2024.32Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 417-430
Views: 386 Downloads: 50 TO CITE АНОТАЦІЯThe study aimed to link cybersecurity awareness and its antecedents to discover the level of public value of using mobile financial services from the perspective of ‘citizens in the government context in Jordan. The quantitative approach was customized to serve the purposes of this study. A convenience sampling method was used based on 550 e-survey Jordanians from whom data were collected. A total of 449 responses were used in the analysis process. A structural equation model was specified to evaluate the developed research model. The results revealed that all hypotheses are accepted at less than P<0.001, cybersecurity awareness and predictions of financial services systems play a significant role in determining the use of financial services systems and generating the value of using financial services. Moreover, combining cybersecurity awareness with public value theory is an important approach to measure the performance of government institutions, especially in the financial services industry. Therefore, these results can be used to develop financial services and meet Jordanians’ requirements. Therefore, providing well-understood dimensions that influence the value of microfinance service use among Jordanians is a necessary process that probably ensures long-term sustainability of microfinance services. Finally, future efforts can explore the benefits and challenges of adopting digital transformation technologies in the public sector and financial services. Furthermore, the term government resilience is likely provided new insights to enhance public administration performance based on technology trends. Digital transformation, integrating government flexibility with the existing research model may influence the overall value of Mobile Fintech Services in Jordan.
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Examining the bonus mechanisms’ role in real earnings management dynamics in an Indonesian manufacturing company
Taufiq Akbar , Ridarmelli , Inung Wijayanti , Septo Pramesworo , Hedwigis Esti Riwayati doi: http://dx.doi.org/10.21511/imfi.21(1).2024.33Investment Management and Financial Innovations Volume 21, 2024 Issue #1 pp. 431-443
Views: 264 Downloads: 83 TO CITE АНОТАЦІЯReal Earnings Management (REM) and financial success may have different relationships depending on how managers act. Bonus mechanisms are a significant factor that influences management behavior. The study seeks to examine the impact of bonus systems on the correlation between financial performance and REM practices in manufacturing companies in Indonesia. Moderated Regression Analysis (MRA) is employed to evaluate the influence of bonus mechanisms in moderating the association of financial performance on REM. The technique of purposive sampling was used to pick the sample. The study utilized data from manufacturing firms listed on the Indonesian Stock Exchange from 2017 to 2021, including a total of 400 observed data points. The research findings demonstrate that sales growth is the sole factor that significantly influences REM in manufacturing organizations, as indicated by a p-value below 10%. Other financial performance factors, on the other hand, with p-values for each variable above 10%, have not been shown to have a significant impact on REM. These factors include ROA, leverage, operating cash flow, and cash. The findings also demonstrate that, with a p-value for each variable above 10%, the bonus mechanism is a variable that modifies the effect of all financial performance variables on REM.