Template-Type: ReDIF-Article 1.0
Author-Name: Ahmad Sahyouni
Author-X-Name-First: Ahmad
Author-X-Name-Last: Sahyouni
Author-Name: Man Wang
Author-X-Name-First: Man
Author-X-Name-Last: Wang
Title: Bank capital and liquidity creation: evidence from Islamic and conventional MENA banks
Abstract:
This paper estimates the amount of liquidity created by MENA banks over the period 2011-2016, and further investigates the impact of bank capital on liquidity creation, controlling for a set of bank-level and macro variables. The findings reveal that banks created 5.281 trillion US dollars of liquidity, which equals 28.4% of their total assets and conventional banks create more liquidity than Islamic banks, as do large banks compared to medium and small banks. But, the Islamic banks are the best in terms of liquidity creation per asset. The regression results also show a negative relationship between equity capital and liquidity creation, which support the financial fragility crowding-out hypothesis, but only for conventional banks and for large and small size banks. Finally, the study contains some implications for decision makers and regulators in the region.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 291-311
Issue: 3
Volume: 12
Year: 2022
Keywords: liquidity creation; bank capital; Islamic banks; conventional banks; MENA.
File-URL: http://www.inderscience.com/link.php?id=124247
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:291-311
Template-Type: ReDIF-Article 1.0
Author-Name: Gee Jung Kwon
Author-X-Name-First: Gee Jung
Author-X-Name-Last: Kwon
Title: The value relevance of research and development expenditures: a comparative analysis of Korean, Japanese, Chinese, and US manufacturers
Abstract:
Research and development (R%D) expenditures are generally thought to increase a firm's market value. This study examines the nonlinear value relevance of R%D expenditures from 2006 to 2015 for manufacturers listed on capital markets in Korea, the USA, Japan, and China. In this regard, the study uses a nonlinear validation method based on an analytical model that adds R%D investment variables to a corporate valuation model. The results indicate that Korean and Japanese firms experience an increase in corporate value when they make R%D expenditures but if the firms exceed their R%D expenditure limits, corporate value falls. In US and Chinese firms, R%D expenditures prompt a dramatic rise in corporate value when such expenditures are initially set to exceed certain limits, although R%D activities reduce corporate value in their early stages. Such findings have practical relevance for international investment decisions.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 378-398
Issue: 3
Volume: 12
Year: 2022
Keywords: research and development; accounting information; corporate value; value relevance; nonlinear value relevance; manufacturer.
File-URL: http://www.inderscience.com/link.php?id=124248
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:378-398
Template-Type: ReDIF-Article 1.0
Author-Name: Josua Tarigan
Author-X-Name-First: Josua
Author-X-Name-Last: Tarigan
Author-Name: Jacqueline Evania
Author-X-Name-First: Jacqueline
Author-X-Name-Last: Evania
Author-Name: Devie Devie
Author-X-Name-First: Devie
Author-X-Name-Last: Devie
Author-Name: Saarce Elsye Hatane
Author-X-Name-First: Saarce Elsye
Author-X-Name-Last: Hatane
Title: The long-term performance of post-merger and acquisition: evidence from Indonesia's stock market
Abstract:
This study evaluates the long-term share performance of firms over three years after they underwent merger and acquisition (M%A). This is happening since researchers failed to find answers in the short-term analysis and began looking for answers through long-term analysis. Most previous studies have been done either in big capital markets (US and the UK) or smaller capital markets such as Greece and Malaysia but not Indonesia. The share performance was measured through cumulative market adjusted abnormal return (CMAR) and buy and hold abnormal return (BHAR). The result of this study provides evidence of the presence of negative abnormal returns of the merged and acquiring firms. Moreover, the results show that cash payments are preferable in comparison to the share settlement. The results also reveal that the firms which are owned by families tend to outperform the firms which are not owned by families.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 399-412
Issue: 3
Volume: 12
Year: 2022
Keywords: merger and acquisition; share performance; Indonesia; cumulative market adjusted abnormal return; CMAR; buy and hold abnormal return; BHAR.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:399-412
Template-Type: ReDIF-Article 1.0
Author-Name: Haksoon Kim
Author-X-Name-First: Haksoon
Author-X-Name-Last: Kim
Title: Owner risk and firm valuation: evidence from Korean business group
Abstract:
Since Berle and Means (1932) and Jensen and Meckling (1976), numerous empirical studies have been done on corporate governance regarding ownership structure, board characteristics, and monitoring mechanisms. However, there is little empirical evidence of the relationship between owner risk and firm valuation. We investigate the relationship using the unique owner risk index score data of Korean business groups. A high score means low owner risk. We find that there is a positive relationship between owner risk index score and firm valuation for Korean business groups. Specifically, the positive relationship is statistically significant in the professionalism and quality or ethical management without group dummy. The positive relationship is statistically significant in the transparency and accountability or ethical management with group dummy. The results suggest that owner risk is an important governance factor in affecting firm valuation.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 366-377
Issue: 3
Volume: 12
Year: 2022
Keywords: owner risk; firm valuation; corporate governance; business group.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:366-377
Template-Type: ReDIF-Article 1.0
Author-Name: Hazem Marashdeh
Author-X-Name-First: Hazem
Author-X-Name-Last: Marashdeh
Author-Name: Sania Ashraf
Author-X-Name-First: Sania
Author-X-Name-Last: Ashraf
Title: Martingale effect of conventional vs. Islamic stock indices: evidence from the UAE
Abstract:
This study aims to identify the martingale effect of conventional and Shariah equity markets in the United Arab Emirates. The study employs the runs test for randomness, and the Breusch-Godfrey LM test and the variance ratio test using daily returns for the period January 1, 2008 to August 31, 2017. The empirical results indicate that the UAE's conventional equity market operated efficiently, while the Shariah equity market lacked randomness during the study period. The existence of stock-market efficiency in the conventional stock price index is considered an essential factor for attracting foreign portfolio investment. Nevertheless, the inefficiency of the Shariah market offers opportunities for well-informed investors to achieve abnormal levels of returns. However, having an inefficient Islamic market index points to the need for Shariah boards to make the market more transparent and ensure information flows are instantaneous. The findings of the study have useful implications not only for investors but also for regulators and policy makers in terms of the need to reduce economic distortions through more effective resource allocation.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 279-290
Issue: 3
Volume: 12
Year: 2022
Keywords: martingale; heteroscedasticity; informational efficiency; variance ratio test; Breusch-Godfrey LM test; UAE.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:279-290
Template-Type: ReDIF-Article 1.0
Author-Name: Mostafa Kamal Hassan
Author-X-Name-First: Mostafa Kamal
Author-X-Name-Last: Hassan
Author-Name: Cristina Florio
Author-X-Name-First: Cristina
Author-X-Name-Last: Florio
Author-Name: Bassam Abu Abbas
Author-X-Name-First: Bassam Abu
Author-X-Name-Last: Abbas
Title: Corporate governance, transparency and performance: empirical evidence from UAE
Abstract:
The paper uses both the agency theory and the legitimacy theory to provide a complementary framework that links different patterns of disclosures (i.e., transparency) to corporate performance for a sample of 116 United Arab Emirates (UAE) listed firms between years 2008-2016. It investigates the relationship between corporate disclosures (i.e., transparency), organisational commitment to law, a set of governance mechanisms (namely, board size, CEO decision-making power, and foreign ownership) and corporate performance while controlling for corporate specific characteristics such as size, type, age and leverage. The empirical results show that transparency indices have a puzzling pattern across different performance measures - namely return on assets, asset turnover and organisational growth. The paper is one of very few studies that examine the association between corporate transparency and corporate performance in an emerging market economy such as the UAE.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 312-344
Issue: 3
Volume: 12
Year: 2022
Keywords: transparency; governance; performance; disclosure indexes; emerging economies; UAE.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:312-344
Template-Type: ReDIF-Article 1.0
Author-Name: Buthiena Kharabsheh
Author-X-Name-First: Buthiena
Author-X-Name-Last: Kharabsheh
Author-Name: Mohammad Al-Gharaibeh
Author-X-Name-First: Mohammad
Author-X-Name-Last: Al-Gharaibeh
Title: Herding behaviours and trading volume: evidence from Amman Stock Exchange
Abstract:
The purpose of this paper is to examine the presence of herding behaviour in Amman Stock Exchange (ASE). Specifically, it aims to provide empirical evidence on the relationship between herding behaviour, trading volume and market liquidity levels. Using a free float share index consisting of 100 companies, the present study employs the approach developed by Chang et al. (2000). It presents an analysis of herding in relation to trading volume and liquidity relationships performed by OLS, VAR estimation and Granger causality tests. Results of daily data analysis for the period 2006 to 2017 indicate strong evidence of herding behaviour in ASE, particularly during the crisis period. The results also proved that there is a strong correlation between herding and trading volume in both directions, and intensification of herding in periods of medium or high market liquidity, but no evidence of herding at low liquidity levels.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 345-365
Issue: 3
Volume: 12
Year: 2022
Keywords: herding; behaviour al finance; trading volume; liquidity; Jordan; financial crisis; Granger causality tests; Amman Stock Exchange; ASE; free float index.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:3:p:345-365
Template-Type: ReDIF-Article 1.0
Author-Name: Nam Hoai Tran
Author-X-Name-First: Nam Hoai
Author-X-Name-Last: Tran
Author-Name: Chi Dat Le
Author-X-Name-First: Chi Dat
Author-X-Name-Last: Le
Title: Ownership concentration and firm valuation in a typical frontier market
Abstract:
This study investigates the valuation effect of concentrated ownership in a typical frontier market. Using an extensive sample of Vietnamese publicly listed firms, we find that the valuation effect is inconclusive before combined equity holdings reach a certain threshold beyond which market valuation increases exponentially with ownership. The latter <i>log-linear</i> effect can be interpreted as a more profound dominance of the monitoring incentives of large shareholders over the potential expropriation of minority shareholders at higher levels of concentration. Our finding reconciles the seemingly conflicting results of previous studies and contributes to understanding corporate governance practices in frontier markets.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 427-454
Issue: 4
Volume: 12
Year: 2022
Keywords: ownership concentration; market valuation; piecewise linear regression; frontier markets; Vietnam.
File-URL: http://www.inderscience.com/link.php?id=125058
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:427-454
Template-Type: ReDIF-Article 1.0
Author-Name: Xuan Vinh Vo
Author-X-Name-First: Xuan Vinh
Author-X-Name-Last: Vo
Author-Name: Thi Tuan Anh Tran
Author-X-Name-First: Thi Tuan Anh
Author-X-Name-Last: Tran
Title: Investigation of stock return volatility using Shannon entropy - evidence from ASEAN stock markets
Abstract:
This study assesses stock market volatility in ASEAN countries. We use Shannon entropy as an alternative measure to traditional measure of stock return volatility. We utilise daily stock price data of national stock market indices of ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) for the period from August 2001 to December 2016. The results show that the stock returns of Vietnam (VNINDEX) is the most volatile stock index, followed by that of Indonesia, Singapore, Malaysia, Thailand and the Philippines. The study also suggests that entropy is an important alternative to the traditional measure of stock return volatility. The study offers important implication for risk management and portfolio theory.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 479-490
Issue: 4
Volume: 12
Year: 2022
Keywords: volatility of stock returns; standard deviation; entropy; entropy Shannon; probability density function.
File-URL: http://www.inderscience.com/link.php?id=125059
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:479-490
Template-Type: ReDIF-Article 1.0
Author-Name: Asad Ali
Author-X-Name-First: Asad
Author-X-Name-Last: Ali
Author-Name: Saqib Sharif
Author-X-Name-First: Saqib
Author-X-Name-Last: Sharif
Title: Stock market efficiency: the Pakistan Stock Exchange merger
Abstract:
This study examines the valuation, liquidity, volatility, and efficiency before and after the integration of Islamabad Stock Exchange (ISE) and Lahore Stock Exchange (LSE) with Karachi Stock Exchange (KSE) to form the Pakistan Stock Exchange (PSX). The firm level daily data is analysed to determine the effects of regulatory change. Based on regression analyses, results indicate mixed evidence for different market measures following the integration of domestic bourses. However, the post-integration period in Pakistan is fraught with political turmoil and weak economic indicators. Thus, any improvement that is hypothesised following the merger is offset by poor economic and political factors.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 455-478
Issue: 4
Volume: 12
Year: 2022
Keywords: stock exchange merger; valuation; liquidity; volatility; market efficiency; financial regulation; demutualisation; Pakistan Stock Exchange; PSX.
File-URL: http://www.inderscience.com/link.php?id=125060
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:455-478
Template-Type: ReDIF-Article 1.0
Author-Name: Cosmas Ikechukwu Asogwa
Author-X-Name-First: Cosmas Ikechukwu
Author-X-Name-Last: Asogwa
Author-Name: Nonye Azih
Author-X-Name-First: Nonye
Author-X-Name-Last: Azih
Author-Name: Godwin Keres Okoro Okereke
Author-X-Name-First: Godwin Keres Okoro
Author-X-Name-Last: Okereke
Author-Name: Hyginus Osita Omeje
Author-X-Name-First: Hyginus Osita
Author-X-Name-Last: Omeje
Author-Name: Christiana Ukamaka Nwachukwu
Author-X-Name-First: Christiana Ukamaka
Author-X-Name-Last: Nwachukwu
Author-Name: Joseph Ndozianyichukwu Chukwuma
Author-X-Name-First: Joseph Ndozianyichukwu
Author-X-Name-Last: Chukwuma
Author-Name: Honesta Chidiebere Anorue
Author-X-Name-First: Honesta Chidiebere
Author-X-Name-Last: Anorue
Author-Name: Favour Amarachi Moghalu
Author-X-Name-First: Favour Amarachi
Author-X-Name-Last: Moghalu
Author-Name: Godwin Emeka Eze
Author-X-Name-First: Godwin Emeka
Author-X-Name-Last: Eze
Author-Name: Anthonia Uju Uzuagu
Author-X-Name-First: Anthonia Uju
Author-X-Name-Last: Uzuagu
Title: Bank growth, competition, and small business financing in Nigeria
Abstract:
This study used ex post-facto design to examine how competition among high-growth banks has affected the banks' provision of assets to small business borrowers in Nigeria following several regulations. The study used a bi-sample structure through a judgmental technique that examined 126 and 96 firm-years between 2001 and 2017, which enabled us to test both pre- and post-bank growth-competition Boone model effects. We found evidence that in both the pre- and post-bank-growth eras, competition significantly increased small business loans consistent with 'competition-stability' hypothesis. A unit increase in the Boone-competition indicator resulted in a 3.8% credit supply. However, when we used concentration ratio (CR6), we found that pre-mega structure competition yields negative effects but that the post-growth effect on credit supply remains positive. Controlled macroeconomic factors yield a very significant effect on credit supply. Thus, policymakers should not ignore the variables in competition-monetary transmission policies in Nigeria.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 526-550
Issue: 4
Volume: 12
Year: 2022
Keywords: bank competition; small business; competition; lending; growth; MegaBank; Boone competition indicator.
File-URL: http://www.inderscience.com/link.php?id=125061
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:526-550
Template-Type: ReDIF-Article 1.0
Author-Name: Thi Ngan Nguyen
Author-X-Name-First: Thi Ngan
Author-X-Name-Last: Nguyen
Author-Name: Thi Kieu Hoa Phan
Author-X-Name-First: Thi Kieu Hoa
Author-X-Name-Last: Phan
Author-Name: Nirav Parikh
Author-X-Name-First: Nirav
Author-X-Name-Last: Parikh
Title: The equity market returns and volatility spillover from the US and Japanese markets to Asian frontier markets
Abstract:
This paper examines the magnitude of return and volatility spillovers from the USA and Japan to Asian frontier equity markets (Sri Lanka and Vietnam). The US and Japan shocks are exogenous variables in ARMA-GARCH-M model. The study indicates that the day effect occurs in Sri Lanka at pre and post-crisis (2008). Secondly, the return contagion from Japan impacts Vietnam pre, in and post-crisis. This contagion from the USA influences Vietnam in crisis and post-crisis with higher magnitudes, compared to Japan. Thirdly, the return spillover from the USA impacts Sri Lanka before and during the crisis, while this spillover from Japan to Sri Lanka occurs after the crisis. Finally, the volatility spillover from the USA and Japan does not impact the Vietnamese market during the three periods. The volatility contagion from Japan influences Sri Lanka in the crisis, no volatility spillover from the USA to Sri Lanka through three periods.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 491-508
Issue: 4
Volume: 12
Year: 2022
Keywords: return spillover; volatility spillovers; frontier markets; contagion effects; ARMA-GARCH-M.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:491-508
Template-Type: ReDIF-Article 1.0
Author-Name: Rajesh Pathak
Author-X-Name-First: Rajesh
Author-X-Name-Last: Pathak
Author-Name: Ranajee Ranajee
Author-X-Name-First: Ranajee
Author-X-Name-Last: Ranajee
Author-Name: Ranjan Das Gupta
Author-X-Name-First: Ranjan Das
Author-X-Name-Last: Gupta
Title: Does accounting quality predict corporate cash holdings?
Abstract:
This study empirically examines the role of better accounting quality as a substitute for corporate cash holdings. It uses data for Indian firms during 2006-2016 and employs a host of panel models to test the studied relationship amid a set of idiosyncratic controls and robustness tests. It reports that firms with high discretionary accruals hold high levels of cash, implying poor earnings quality leading to cash accumulation. Results are highly consistent for alternative measures of accounting quality and cash holdings, and are robust to controls of cash holdings antecedents and endogeneity issues. Furthermore, analysis of group-affiliated firms reveals that while group affiliates suffer from poor earnings quality compared to non-affiliates, this does not have bearing on their cash holdings. The results imply that managers of Indian firms should focus on maintaining better accounting quality to alleviate the need to accumulate cash as a means of avoiding fundraising constraints when needed.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 509-525
Issue: 4
Volume: 12
Year: 2022
Keywords: accounting quality; cash holdings; accruals; business-groups.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:509-525
Template-Type: ReDIF-Article 1.0
Author-Name: Shame Mugova
Author-X-Name-First: Shame
Author-X-Name-Last: Mugova
Author-Name: Nicola Cucari
Author-X-Name-First: Nicola
Author-X-Name-Last: Cucari
Title: Trade credit forecasting: empirical analysis using a ratio targeting approach
Abstract:
This study employs a panel data model that uses trade credit's own recent history to predict trade credit levels. A predictive model of trade credit is developed to predict the levels of trade payables and receivables. Previous forecasting techniques do not incorporate the targeting aspect and long period historical data. A target ratio should be set for trade payables and trade receivables to total assets. Trade credit is debt finance which is maintained at a certain ratio to total assets. In this paper, we make use of panel data from 230 non-financial South African listed firms from 2001 to 2013. Firms use trade credit targeting to pursue growth opportunities and their size affects their access to capital. Trade credit's recent history can be used to predict target trade credit levels. The paper makes an original contribution by developing a model to predict the level of trade credit.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 413-426
Issue: 4
Volume: 12
Year: 2022
Keywords: trade credit; forecasting; historical data; South Africa.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:4:p:413-426
Template-Type: ReDIF-Article 1.0
Author-Name: Rihanat I. Abdulkadir
Author-X-Name-First: Rihanat I.
Author-X-Name-Last: Abdulkadir
Title: Home bias and return chasing by foreign portfolio investors: evidence from selected Sub-Saharan African markets
Abstract:
This paper examines home bias and return chasing by foreign investors in selected Sub-Saharan African markets. Using pooled mean group estimation on data drawn from five countries, the study did not find conclusive evidence to suggest that foreign investors exhibit home bias in the long run when they adjust their investment in line with past flows. Return chasing is not seen as the first order of business and is prioritised only in the long run, after foreign investors have gained knowledge of the market. Results show that foreign investors value countries with stable economies and invest more in the sampled markets with higher returns from industrialised markets. Policy makers should intensify efforts to make these markets more attractive for foreign investors, maintain good economic conditions and monitor developments in industrialised markets. This will assist them in reacting to variations or reversals in portfolio flows resulting from occurrences in such markets.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 129-142
Issue: 1
Volume: 12
Year: 2022
Keywords: home bias; return chasing; foreign portfolio investment; pooled mean group; stock market.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:129-142
Template-Type: ReDIF-Article 1.0
Author-Name: Mahdi Salehi
Author-X-Name-First: Mahdi
Author-X-Name-Last: Salehi
Author-Name: Horta Azimi
Author-X-Name-First: Horta
Author-X-Name-Last: Azimi
Title: The effect of cash flow information asymmetry criteria on conservatism in Iran
Abstract:
The current study aims to investigate the effect of cash flow information asymmetry on conditional and unconditional accounting conservatism of the listed companies on Tehran Stock Exchange. Furthermore, we attempt to explore the determinant factors on these associations. The financial information of 143 firms listed on the Tehran Stock Exchange for the period of 2012 to 2016 was gathered. In order to assess conditional conservatism Basu's (1997) model has been used, and to evaluate the relationship between conditional asymmetry and cash flow information asymmetry control variables of lifecycle have been added to Basu model. The results indicate that there is no relationship between conditional conservatism and cash flow information asymmetry as well as firm lifecycle variables, which is used to assess unconditional conservatism, and cash flow information asymmetry. Furthermore, we find no allocative factor on the relationship between accounting conservatism and cash flow information asymmetry. This is the first investigation that is dealt with cash flow asymmetry and both types of accounting conservatism separately in emerging economies.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 105-128
Issue: 1
Volume: 12
Year: 2022
Keywords: conditional conservatism; unconditional conservatism; firm lifecycle; information asymmetry; Iran.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:105-128
Template-Type: ReDIF-Article 1.0
Author-Name: Ben Kwame Agyei-Mensah
Author-X-Name-First: Ben Kwame
Author-X-Name-Last: Agyei-Mensah
Title: Impact of audit committee attributes on financial reporting quality and timeliness: an empirical study
Abstract:
This paper investigates impact of audit committee attributes on financial reporting quality and timeliness of listed firms in Ghana. The study uses 90 firm-year observations for the period 2013-2015 for firms listed on the Ghana Stock Exchange. A descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis. The descriptive statistics indicate that over the four years, the mean value of financial reporting quality is 42% and timeliness of financial reporting is 86 days. The regression analysis results indicate that: financial reporting quality has a statistically positive relationship with audit committee financial expertise and size; audit report lag has a statistically negative relationship with audit committee financial expertise and audit committee independence. This study is one of the few to measure the influence of audit committee characteristics on financial reporting quality and timeliness in Sub-Saharan Africa.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 82-104
Issue: 1
Volume: 12
Year: 2022
Keywords: corporate governance; audit committee; Ghana; financial reporting quality; timeliness of reporting.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:82-104
Template-Type: ReDIF-Article 1.0
Author-Name: K.C. Arora
Author-X-Name-First: K.C.
Author-X-Name-Last: Arora
Author-Name: L. Ramani
Author-X-Name-First: L.
Author-X-Name-Last: Ramani
Title: Modelling the recovery of Indian banks under prompt corrective action framework: TOPSIS methodology
Abstract:
The current study empirically investigates the comparative financial health of each of the 12 Indian banks under prompt corrective action (PCA) framework considering multiple triggers of PCA framework collectively. A model for predicting the recovery of these banks from PCA has been proposed based on three different multi-criteria decision-making methods (MCDM), one being the technique for order of preference by similarity to the ideal solution (TOPSIS) proposed by Hwang and Yoon (1981) to rank the set of alternatives. It has been hypothesised that higher the rank, faster could be the recovery of a bank based on multiple trigger values of these banks for three to four years from the date of revised PCA framework. The results have been amply validated with the action of the Indian banking regulator, the Reserve Bank of India, to declare some of the banks out of PCA framework in January and February 2019.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 1-27
Issue: 1
Volume: 12
Year: 2022
Keywords: prompt corrective action; PCA; Reserve Bank of India; RBI; CRAR; CET1; NNPA; leverage ratio; weighted average deviation index; TOPSIS methodology; modelling PCA banks' recovery.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:1-27
Template-Type: ReDIF-Article 1.0
Author-Name: Quynh Trang Phan
Author-X-Name-First: Quynh Trang
Author-X-Name-Last: Phan
Author-Name: Poomthan Rangkakulnuwat
Author-X-Name-First: Poomthan
Author-X-Name-Last: Rangkakulnuwat
Title: How price informativeness affects the sensitivity of investment-to-stock price in Vietnamese listed firms
Abstract:
This study investigates the relationship between the stock market and firm investment from a price informativeness perspective. Using an unbalanced panel dataset of Vietnamese listed firms from 2007 to 2017, the results show that stock market valuation is positively related to firm investment in both static and dynamic models. Moreover, the investment of firms with a higher level of price informativeness is likely less sensitive to their stock prices than that of firms with a lower level of price informativeness. In addition, the development of financial markets plays an important role in determining investment and investment-to-stock-price sensitivity. The regression results also show that the role of price informativeness in the investment-to-stock price relationship is not much different among groups of firms with high and low-quality auditors, as well as those with small and large firms.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 28-61
Issue: 1
Volume: 12
Year: 2022
Keywords: firm investment; stock market valuation; price informativeness; emerging markets.
File-URL: http://www.inderscience.com/link.php?id=121767
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:28-61
Template-Type: ReDIF-Article 1.0
Author-Name: Aditya Sharma
Author-X-Name-First: Aditya
Author-X-Name-Last: Sharma
Author-Name: Arya Kumar
Author-X-Name-First: Arya
Author-X-Name-Last: Kumar
Author-Name: Arun Kumar Vaish
Author-X-Name-First: Arun Kumar
Author-X-Name-Last: Vaish
Title: Market anomalies and investor behaviour
Abstract:
Market anomalies hint at inefficiency of stock markets. The research on the root cause of market anomalies points from time to time towards investor behaviour. The paper contributes to the research through investigation of the existence and probable source of three key anomalies in Indian stock markets, namely: momentum, size and value anomaly. The paper adopts Jegadeesh and Titman's methodology for finding the existence and Du and Watkin's decomposition technique for exploration of sources. The paper develops different strategies in order to calculate excess returns utilising these anomalies and decomposes the obtained profit to test for the sources. The results obtained point towards multiple sources indicating the role of investor behaviour along with the risk factors as the underlying cause. The overall contribution of the paper is highlighting the inefficiency in Indian stock markets while also pointing towards a certain influence of investor behaviour in Indian equity markets.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 62-81
Issue: 1
Volume: 12
Year: 2022
Keywords: stock price movement; momentum effect; under and overreaction; investor behaviour.
File-URL: http://www.inderscience.com/link.php?id=121768
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:1:p:62-81
Template-Type: ReDIF-Article 1.0
Author-Name: Gee Jung Kwon
Author-X-Name-First: Gee Jung
Author-X-Name-Last: Kwon
Title: The role of assets components in firm valuation
Abstract:
This study investigates the impact of the asset components on firm value in listed Korean stock markets during the period of 2000-2015. This paper extends conventional studies on a firm valuation by including asset components in an Ohlson (1995) model. Analytical results show that all asset components have a significantly positive impact on firm value. However, performance variables are negatively associated with business value. The results of this study show that the asset component on the balance sheet has a more positive effect on the increase in corporate value than the profitability and performance variables on the income statement and the cash flow statement. The empirical evidence of this study suggests that asset components should be regarded as major corporate value related variables in the Korean stock market. This study also suggests that intangible assets are the most important factors that should be considered in firm value.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 730-760
Issue: 6
Volume: 12
Year: 2022
Keywords: firm valuation; assets components; current assets; non-current assets; quick current assets; inventory assets; tangible assets; intangible assets; investment assets; other non-current assets.
File-URL: http://www.inderscience.com/link.php?id=127913
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:730-760
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Author-Name: Tariq H. Ismail
Author-X-Name-First: Tariq H.
Author-X-Name-Last: Ismail
Author-Name: Mohamed Samy El-Deeb
Author-X-Name-First: Mohamed Samy
Author-X-Name-Last: El-Deeb
Title: The effect of corporate governance, dividend policy and informativeness of risk disclosure on the firm value: Egyptian evidence
Abstract:
This paper aims at investigating the effect of corporate governance mechanisms, dividend policy and the risk disclosure level on firm value in Egypt using a sample of annual reports of listed companies (EGX30) of the years 2013-2019. The findings suggest that: 1) the CEO duality shows a significant positive effect on the firm value, while the board independence and board size have an insignificant effect on the firm value; 2) risk disclosure level allows investors to better predict future earnings growth. Furthermore, dividend policy and risk disclosure informativeness are significantly affecting the firm's ability to raise money and its value in a positive direction. This paper sheds lights on the main obstacles and benefits that can face the Egyptian listed companies in complying with the Egyptian code of the corporate governance and the disclosure requirements raised by the Egyptian Financial Regulatory Authority, and its magnitude on the firm value.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 761-789
Issue: 6
Volume: 12
Year: 2022
Keywords: corporate governance; dividend policy; risk disclosure level; firm value; EGX30; Egypt.
File-URL: http://www.inderscience.com/link.php?id=127914
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:761-789
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad Ali
Author-X-Name-First: Muhammad
Author-X-Name-Last: Ali
Author-Name: Chin Hong Puah
Author-X-Name-First: Chin Hong
Author-X-Name-Last: Puah
Title: Are banks profitable and efficient? A case of Pakistan
Abstract:
The aim of this study is to investigate the impact of bank-specific factors and macroeconomic environment on bank profitability and management efficiency in Pakistan. The sample data comprised of 24 banks over a sample period of 2007-2015. The panel least squares regression with fixed effect model suggests that bank profitability is significantly affected by bank size, credit risk and bank stability. On the other side, bank efficiency was significantly predicted by liquidity risk, credit risk and funding risk. The robustness of results was also confirmed in the presence of the macroeconomic environment. Overall, this research provides a new insight into bank profitability and efficiency literature. Additionally, prior studies have neglected the management efficiency as the dependent variable. Therefore, we consider this article as superior, which has laid a foundation for future studies.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 254-277
Issue: 2
Volume: 12
Year: 2022
Keywords: banking sector; finance; profitability; management efficiency; macroeconomics; Pakistan.
File-URL: http://www.inderscience.com/link.php?id=123051
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:254-277
Template-Type: ReDIF-Article 1.0
Author-Name: Juniarti
Author-X-Name-First:
Author-X-Name-Last: Juniarti
Author-Name: Fany
Author-X-Name-First:
Author-X-Name-Last: Fany
Author-Name: Devie
Author-X-Name-First:
Author-X-Name-Last: Devie
Title: The effect of audit committee on audit opinion through earnings management as mediation variable
Abstract:
This study aims to examine the mediating effect of earnings management on the influence of the audit committee on audit opinion. The research samples are listed companies in the IDX in the sectors of infrastructure, utilities, and transportation for 2011-2017. This selection of industrial sectors due to these sectors obtains many qualified audit opinions in the study period compared to other sectors. This study adds control variables, namely firm size and leverage. We measure audit committee using two approaches, the first is the total score of each component of audit committees including size, independence, expertise, and meeting and the second is the partial score of each attribute of the audit committee. The results show that the audit committee influences the audit opinion and there is a negative significant influence of earning management and audit opinion, but, this study fails to prove the mediating effect of earning management in the relationship of the audit committee and audit opinion.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 790-803
Issue: 6
Volume: 12
Year: 2022
Keywords: audit committee; earning management; audit opinion.
File-URL: http://www.inderscience.com/link.php?id=127915
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:790-803
Template-Type: ReDIF-Article 1.0
Author-Name: Yomna Abdulla
Author-X-Name-First: Yomna
Author-X-Name-Last: Abdulla
Title: Trade credit in an emerging market: evidence from Kuwaiti firms
Abstract:
We investigate the trade credit policy in Kuwaiti firms during the period 2011-2016. Specifically, we examine the impact of the decline in oil prices on the level of trade credit and on the relationship between trade credit and firms' profitability. The findings show that the decline in oil prices had no significant impact on the level of trade credit or the relationship between trade credit and profitability. We find that cashflow, cash holdings, current assets, short-term debt and size are the main determinants of trade credit. The results also show that the level of trade credit has a negative impact on a firm's profitability and is more pronounced in financially unconstrained firms.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 216-231
Issue: 2
Volume: 12
Year: 2022
Keywords: trade credit; emerging markets; profitability; accounts payable; working capital management; oil prices; Gulf Cooperation Council; GCC; corporate finance; financial constraints; crisis.
File-URL: http://www.inderscience.com/link.php?id=123052
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:216-231
Template-Type: ReDIF-Article 1.0
Author-Name: Ruchika Kaura
Author-X-Name-First: Ruchika
Author-X-Name-Last: Kaura
Author-Name: Nawal Kishor
Author-X-Name-First: Nawal
Author-X-Name-Last: Kishor
Author-Name: Namita Rajput
Author-X-Name-First: Namita
Author-X-Name-Last: Rajput
Title: Causal relation and dynamic volatility spillover between commodity market and stock market: empirical evidence from India
Abstract:
The study aims to investigate the causal relationship and dynamic volatility spillover across commodity market and stock market in India. The study is based on Nifty index of NSE and commodity market indices of MCX. The findings highlight the existence of strong linkages between commodity market indices and stock market index, Nifty. Results of VAR model indicate that causal relationship is present from commodity market indices towards Nifty. The results of DCC-GARCH model show that dynamic volatility spillover between the conditional variances of all commodity market indices and Nifty is significant implying that any disturbance in one market leads the other market to become more volatile. The findings of this study can be useful for portfolio managers, policy makers and regulators to devise substitution and risk management strategies and to understand the macroeconomic implications of one market shocks on the other market.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 232-253
Issue: 2
Volume: 12
Year: 2022
Keywords: vector autoregressive; VAR; DCC-GARCH; causality; dynamic volatility spillover; commodity market; stock market; Nifty; India.
File-URL: http://www.inderscience.com/link.php?id=123053
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:232-253
Template-Type: ReDIF-Article 1.0
Author-Name: Woradee Jongadsayakul
Author-X-Name-First: Woradee
Author-X-Name-Last: Jongadsayakul
Title: Determinants of gold futures trading volume: a study of Thailand futures exchange
Abstract:
This research shows a positive impact of one day lagged volume of 50 Baht gold futures on current volumes of gold futures. There is an evidence of bi-directional causality between 50 Baht and 10 Baht gold futures trading volumes. The 50 Baht and 10 Baht gold futures trading volumes are useful in forecasting gold online futures trading volume. The response of gold futures trading volume to its own shock and 50 Baht gold futures trading volume shock vanishes within 5 days. The variability of gold futures volume is caused not only by its own innovations but also by 50 Baht gold futures trading volume shock. Therefore, it is significant to promote trading activity in 50 Baht gold futures market. Moreover, special care should be taken when there is a negative exogeneous shock to 50 Baht gold futures trading volume due to its contribution to the variability in trading volume of each gold derivatives contract.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 679-690
Issue: 6
Volume: 12
Year: 2022
Keywords: derivatives market; gold; risk management; Thailand futures exchange; trading volume; Thailand.
File-URL: http://www.inderscience.com/link.php?id=127917
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:679-690
Template-Type: ReDIF-Article 1.0
Author-Name: Saed Ahmed Sulub
Author-X-Name-First: Saed Ahmed
Author-X-Name-Last: Sulub
Author-Name: Zalailah Salleh
Author-X-Name-First: Zalailah
Author-X-Name-Last: Salleh
Author-Name: Hafiza Aishah Hashim
Author-X-Name-First: Hafiza Aishah
Author-X-Name-Last: Hashim
Title: Determinants of corporate governance disclosures of Islamic banks in Sudan: implications for Shariah governance
Abstract:
The paper examines the association between the effectiveness of governance bodies in Islamic banks and corporate governance disclosure (CGD) in a sample of Sudanese banks. We analysed the content of annual reports and employed ordinary least squares (OLS) regression model with pooled effects. Consistent with previous studies in Islamic banks, the findings of this paper revealed low levels of CGD in Islamic banks of Sudan, which is only 39%, on average. The findings showed that Islamic banks with SSB members who hold advanced qualifications provided more information on CGD than their counterparts. However, we found that banks with SSB members who sit on more than one board tend to have lower CGD. In addition, we found that Islamic banks that have an established audit committee (AC), internal audit function (IAF) and low levels of governmental ownership have higher CGD levels. These results are robust to alternative empirical models. Our study adds to the ongoing debate of <i>Shariah</i> governance in Islamic banks. In particular, while we support that IAF may play a significant role in <i>Shariah</i> governance as recommended by the regulators of Islamic banking industry, our evidence shows that SSB multiple directorships, ceteris paribus, are not advantageous for Islamic banks.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 178-201
Issue: 2
Volume: 12
Year: 2022
Keywords: corporate governance; disclosure; Islamic banks; Shariah governance; Sudan.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:178-201
Template-Type: ReDIF-Article 1.0
Author-Name: Nevi Danila
Author-X-Name-First: Nevi
Author-X-Name-Last: Danila
Author-Name: Yousef Shahwan
Author-X-Name-First: Yousef
Author-X-Name-Last: Shahwan
Author-Name: Adeastri Aulia
Author-X-Name-First: Adeastri
Author-X-Name-Last: Aulia
Title: Performance of conventional banks vs. Islamic banks: evidence from Indonesia
Abstract:
A sound banking system is crucial for the stability of the economy. This paper investigates the determinants of bank performance from the bank-specific and macroeconomic perspective. A fixed-effects model is used to analyse panel data on conventional and Islamic banks from 2010 to 2016. The data reveals that of the top ten private and non-government owned banks, an Islamic bank ranks as the number one performing bank. Macroeconomic variables are the only variables to have an impact on bank performance for both conventional and Islamic banks. While bank-specific variables do not influence performance, operating efficiency was shown to have an impact on Islamic banks.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 202-215
Issue: 2
Volume: 12
Year: 2022
Keywords: Islamic banks; CAMEL; Indonesia; financial performance index; PFI.
File-URL: http://www.inderscience.com/link.php?id=123056
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:202-215
Template-Type: ReDIF-Article 1.0
Author-Name: Vijyapu Prasanna Kumar
Author-X-Name-First: Vijyapu Prasanna
Author-X-Name-Last: Kumar
Author-Name: Sujata Kar
Author-X-Name-First: Sujata
Author-X-Name-Last: Kar
Title: Financial reporting quality of private and public banks in India
Abstract:
The present study compares the earnings management practices amongst the Indian private and public sector banks using the second digit test, one of the primary Benford law tests. The sample consists of data on five variables: interest income, other income, interest expenses, deposits, and loans and advances from 14 private and 17 public sector banks for Q1 2005-Q4 2018. Deposit turns out to be the most misreported financial figure for the private banks while public sector banks misrepresented loans and advances the most. Overall, the public sector banks seem to be more into rounding up behaviour as compared to the private banks. We also explored possible linkages between financial manipulations and a CEO's tenure approaching its completion and observed evidence in support of this argument.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 712-729
Issue: 6
Volume: 12
Year: 2022
Keywords: rounding up behaviour; Benford's law; earnings management; second digit test; mean absolute deviation; MAD; India.
File-URL: http://www.inderscience.com/link.php?id=127924
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:712-729
Template-Type: ReDIF-Article 1.0
Author-Name: Duy Thanh Nguyen
Author-X-Name-First: Duy Thanh
Author-X-Name-Last: Nguyen
Author-Name: Thanh Hai Huyen Truong
Author-X-Name-First: Thanh Hai Huyen
Author-X-Name-Last: Truong
Title: The mitigation of agency problem by using corporate governance in emerging markets: evidence from Vietnam
Abstract:
The paper examines the impact of ownership structure and board characteristics on firm performance in Vietnam. Obtaining a sample of 300 non-financial companies listed on Ho Chi Minh Stock Exchange (HOSE) and Ha Noi Stock Exchange (HNX) from 2014-2018, the paper reveals the positive impact of foreign and CEO ownership on firm performance, while state ownership, board independence, board gender diversity, and CEO duality yield negative impact due to various institutional factors. This paper also addresses some limitations in term of statistical models in the previous papers, providing more valid and reliable findings. Consequently, several implications have been proposed for company management and regulatory authorities.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 143-164
Issue: 2
Volume: 12
Year: 2022
Keywords: board composition; ownership structure; firm performance; agency problem; emerging markets.
File-URL: http://www.inderscience.com/link.php?id=123070
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:143-164
Template-Type: ReDIF-Article 1.0
Author-Name: Upendra Nath Shukla
Author-X-Name-First: Upendra Nath
Author-X-Name-Last: Shukla
Author-Name: Neelam Tandon
Author-X-Name-First: Neelam
Author-X-Name-Last: Tandon
Author-Name: Deepak Tandon
Author-X-Name-First: Deepak
Author-X-Name-Last: Tandon
Author-Name: Hemendra Gupta
Author-X-Name-First: Hemendra
Author-X-Name-Last: Gupta
Title: Cointegration of 'MIBOR' with rupee-dollar and rupee-yen exchange rates: estimating volatility spill-overs and asymmetry
Abstract:
Mumbai Interbank Offer Rate (MIBOR) plays a significant role in the Indian interbank market and its role would be more imperative in India as LIBOR is expected to be ceased by 2021. This paper has a purpose to understand the movement and volatility of MIBOR by exploring any cointegration of MIBOR with exchange rates of major currencies like - US dollar, Japanese yen, euro and pound sterling, to derive a model gauging volatility spill-overs and asymmetry of MIBOR. Based on the daily data from 01.01.19 to 21.01.21 VECM and E-Garch model is applied. MIBOR is found to be cointegrated with exchange rates of dollar and yen with error correction being done by the rupee-yen exchange rates. Volatility spill-overs were significant with previous error lag with no asymmetry due to any negative news. Findings have great implications to manage interest rates and liquidity in Indian interbank and money markets.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 691-711
Issue: 6
Volume: 12
Year: 2022
Keywords: MIBOR; cointegration; exchange rates; interest rates; volatility; symmetry; money market; capital market; India.
File-URL: http://www.inderscience.com/link.php?id=127942
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:6:p:691-711
Template-Type: ReDIF-Article 1.0
Author-Name: Mohammed Hassan Makhlouf
Author-X-Name-First: Mohammed Hassan
Author-X-Name-Last: Makhlouf
Author-Name: Mohammed Zakaria Soda
Author-X-Name-First: Mohammed Zakaria
Author-X-Name-Last: Soda
Author-Name: Yazan Oroud
Author-X-Name-First: Yazan
Author-X-Name-Last: Oroud
Author-Name: Abdulhadi H. Ramadan
Author-X-Name-First: Abdulhadi H.
Author-X-Name-Last: Ramadan
Title: The moderating effect of audit quality on the relationship between information asymmetry and earnings management: evidence from Jordan
Abstract:
This study examined how the relationship between information asymmetry and earnings management was affected by audit quality as an example of emerging markets using a sample of Jordanian industrial firms listed on the Amman stock exchange from 2015 to 2019. Fixed effect model is used to examine study hypotheses. The findings indicate that information asymmetry positively affected earnings management. Moreover, the results revealed that audit quality negatively affected the relationship between information asymmetry and earnings management, meaning that audit quality can reduce the level of information asymmetry and mitigate earnings management. This study will contribute to corporate governance and auditing literature among Jordanian firms by providing beneficial information for regulators, investors and other stakeholders about how audit quality can restrict information asymmetry and reduce earnings management. This study will be of value to firms seeking to reduce earnings management and enhance financial reporting quality by decreasing information asymmetry.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 165-177
Issue: 2
Volume: 12
Year: 2022
Keywords: audit quality; earnings management; information asymmetry; Jordan.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:2:p:165-177
Template-Type: ReDIF-Article 1.0
Author-Name: Ben K.F. Wong
Author-X-Name-First: Ben K.F.
Author-X-Name-Last: Wong
Author-Name: Raymond Wong
Author-X-Name-First: Raymond
Author-X-Name-Last: Wong
Author-Name: Annie Ko
Author-X-Name-First: Annie
Author-X-Name-Last: Ko
Author-Name: Raymond Kwong
Author-X-Name-First: Raymond
Author-X-Name-Last: Kwong
Title: Directors' interests, family control and firm performance: evidence from Hong Kong listed firms
Abstract:
Impact of the 2005 revision of corporate governance (CG) guidelines on firm performance in Hong Kong is examined through multiple regression models. A comprehensive corporate governance index (CGI) is used for measuring performance in the post-2005 period. Findings suggest CGI has a significantly positive relationship with firm performance. Family ownership (<=23%) or directors' interests (<=18.4%) also have a significantly positive relationship with firm performance. High proportion of outside directors on the board and larger boards also impact performance significantly. Family control has a stronger impact on performance in case of younger firms. Also, when family members draw relatively smaller salaries that too affects performance significantly. Most Hong Kong listed companies are family controlled and need to improve their governance to earn confidence of overseas investors. Besides, international investors and regulators can refer to results of sample firms which have ADRs listed in the USA.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 551-573
Issue: 5
Volume: 12
Year: 2022
Keywords: corporate governance; corporate governance index; CGI; family control; directors' interests; firm performance; Hong Kong.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:551-573
Template-Type: ReDIF-Article 1.0
Author-Name: Seyed Ehsan Hosseinidoust
Author-X-Name-First: Seyed Ehsan
Author-X-Name-Last: Hosseinidoust
Author-Name: Armin Saatian
Author-X-Name-First: Armin
Author-X-Name-Last: Saatian
Title: The effect of financial repression policy on bank liquidity risk (evidence from Central Bank of Iran)
Abstract:
This study investigates the long-run effect of financial repression policies on liquidity risk in the Iranian banking sector during 2006 and 2018. As a method of econometrics, the autoregressive distributed lag (ARDL) approach is applied. Financial repression policies, in other words, the central bank's interventionist monetary policies have been assessed based on the endogenous money view using four indicators: the real interest rate, the legal reserve ratio, the unofficial exchange rate, as well as the bank credit to GDP ratio which can show the financial depth of an economy. The empirical results revealed that a rapid financial liberalisation policy could make the banking system riskier. Although the financial repression policies in the Iranian banking system have generally reduced the liquidity risk, the bank losses have been passed on through hidden taxes to depositors and domestic money holders, which illustrates the need for structural reforms in the Iranian banking system.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 574-593
Issue: 5
Volume: 12
Year: 2022
Keywords: financial repression; liquidity risk; endogenous money; real interest rate; credit to GDP ratio; exchange rate; legal reserve ratio; financial liberalisation; monetary policies; financial depth.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:574-593
Template-Type: ReDIF-Article 1.0
Author-Name: Saidatunur Fauzi Saidin
Author-X-Name-First: Saidatunur Fauzi
Author-X-Name-Last: Saidin
Author-Name: Mazrah Malek
Author-X-Name-First: Mazrah
Author-X-Name-Last: Malek
Author-Name: Phua Lian Kee
Author-X-Name-First: Phua Lian
Author-X-Name-Last: Kee
Title: Earnings deviation of interim and annual accounts: pre and post-MASB 26
Abstract:
This study is to examine whether the use of discrete method may enhance the quality of interim financial accounts. It examines whether the magnitude and occurrence of earnings deviation post-MASB 26 is significantly lower than pre-MASB 26. Data is based on listed companies on Bursa Malaysia for two years before and after the introduction of MASB 26 in 2002. The t-test shows that the magnitude of earnings deviation pre-MASB 26 is significantly higher as compared to post-MASB 26. Sub-sample analyses also showed that the magnitude of both overstated and understated companies is significantly higher pre-MASB 26. However, Pearson chi-square shows that the occurrence of earnings deviation has increased post-MASB 26 which was contributed to by the increase in occurrence of understated quarterly earnings. This study provides evidence that the use of discrete method might enhance the quality of interim reporting. Whilst, alternative methods of accounting provide different benefits and drawbacks, this study highlighted the need for regulators to consider the objective of financial reporting in formulating the accounting standards.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 594-606
Issue: 5
Volume: 12
Year: 2022
Keywords: earnings quality; interim reporting; quarterly accounts; integral method; discrete method.
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:594-606
Template-Type: ReDIF-Article 1.0
Author-Name: Kapil Choudhary
Author-X-Name-First: Kapil
Author-X-Name-Last: Choudhary
Author-Name: Parveen Kumar
Author-X-Name-First: Parveen
Author-X-Name-Last: Kumar
Author-Name: Sakshi Mehta
Author-X-Name-First: Sakshi
Author-X-Name-Last: Mehta
Title: Asset pricing models: evidence from the Indian equity market
Abstract:
The asset pricing model has been a core area of research in finance due to its applicability in corporate finance and security analysis. The present study attempted to evaluate the three popular asset pricing models viz., the capital asset pricing model, the Fama-French three-factor model, and the Fama-French five-factor model in the Indian equity market for the period of January 2009 to November 2018. The study also examined the role of the size, profitability, value, investment, and market factors in explaining the average equity returns in the Indian equity market. The empirical results reveal the inferior performance of a single market factor in describing the variations in average stock returns in comparison with the Fama-French three-factor model and the Fama-French five-factor model. Further, the size and value factors added to CAPM yield a vital melioration in explaining the variation in average returns of sample stocks.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 607-625
Issue: 5
Volume: 12
Year: 2022
Keywords: capital asset pricing model; CAPM; Fama-French three-factor model; FF3FM; Fama-French five-factor model; FF5FM; value effect; size effect.
File-URL: http://www.inderscience.com/link.php?id=126963
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:607-625
Template-Type: ReDIF-Article 1.0
Author-Name: Kornchai Phornlaphatrachakorn
Author-X-Name-First: Kornchai
Author-X-Name-Last: Phornlaphatrachakorn
Author-Name: Khajit Na Kalasindhu
Author-X-Name-First: Khajit Na
Author-X-Name-Last: Kalasindhu
Title: Audit review and audit outcome of tax auditors in Thailand: moderating effects of professional skepticism and audit experience
Abstract:
This study aims at examining the relationships between audit review and audit outcome of tax auditors in Thailand through moderating effects of professional skepticism and audit experience. In this study, 195 tax auditors in Thailand are the samples of the study. Both structural equation modelling and multiple regression analysis are applied to test the research relationships. The results indicate that audit review positively affects audit efficiency and audit effectiveness, but it has no effect on audit quality and audit outcome. Both audit efficiency and audit effectiveness have a positive influence on audit quality and audit outcome, but audit quality does not relate to audit outcome. Also, professional skepticism is a moderator of the audit review-audit efficiency relationships and audit experience has a moderating effect on the audit efficiency-audit outcome relationships and the audit effectiveness-audit outcome relationships. Thus, audit review plays an important role in directly determining both audit efficiency and audit effectiveness and in indirectly explaining audit outcome. Accordingly, auditors should pay attention to studying, understanding and learning characteristics, qualifications and applications of audit review and utilise it as an excellent audit practice to increase audit efficiency, audit effectiveness, and audit outcome.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 626-647
Issue: 5
Volume: 12
Year: 2022
Keywords: audit review; audit efficiency; audit effectiveness; audit quality; audit outcome; professional skepticism; audit experience; tax auditor.
File-URL: http://www.inderscience.com/link.php?id=126964
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:626-647
Template-Type: ReDIF-Article 1.0
Author-Name: Manoj Panda
Author-X-Name-First: Manoj
Author-X-Name-Last: Panda
Author-Name: Mayank Joshipura
Author-X-Name-First: Mayank
Author-X-Name-Last: Joshipura
Title: Impact of cross-border mergers and acquisitions on short-term gain to shareholders of target firms in India – effect of the mode of payment and industry relatedness
Abstract:
We examine the effect of announcements of cross-border mergers and acquisitions on short-term gain to shareholders of target firms in India. Using event study, we analyse 137 listed target firms taken from Bloomberg in post-financial crisis era from 2009 to 2019. Our analysis does shows short-term gains on acquisition of Indian firms, with the gains being high in and around the event day. Moreover, the return is positive both for pre- and post-event day windows, though the pre-event day window return is higher as compared to post-event day window. Notably, the return for the shareholders on an acquisition announcement is higher for cash payment, as compared to other payment modes. Further, the wealth effect for acquisitions in the related industry is higher compared to the acquisitions in unrelated industries. We have done multivariate analysis with the cumulative average abnormal return as the dependent variable, and mode of payment and industry relatedness as independent variables. The analysis shows a higher return for acquisitions in the related industry with cash payment. The findings of this research by and large concur with earlier studies, and are useful for foreign investors to appreciate the market behaviour in acquisitions of Indian firms post 2009.
Journal: Afro-Asian J. of Finance and Accounting
Pages: 648-677
Issue: 5
Volume: 12
Year: 2022
Keywords: cross-border; mergers and acquisitions; event study; market efficiency.
File-URL: http://www.inderscience.com/link.php?id=126965
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Handle: RePEc:ids:afasfa:v:12:y:2022:i:5:p:648-677