Forthcoming articles


Afro-Asian Journal of Finance and Accounting


These articles have been peer-reviewed and accepted for publication in AAJFA, but are pending final changes, are not yet published and may not appear here in their final order of publication until they are assigned to issues. Therefore, the content conforms to our standards but the presentation (e.g. typesetting and proof-reading) is not necessarily up to the Inderscience standard. Additionally, titles, authors, abstracts and keywords may change before publication. Articles will not be published until the final proofs are validated by their authors.


Forthcoming articles must be purchased for personal use only. These articles can be cited using the expression "in press". For example: Smith, J. (in press). Article Title. Journal Title.


Articles marked with this shopping trolley icon are available for purchase click on the icon to send an email request to purchase.


Articles marked with this Open Access icon are freely available and openly accessible to all without any restriction except use for commercial purposes.


Register for our alerting service, which notifies you by email when new issues of AAJFA are published online.


We also offer RSS feeds which provide timely updates of tables of contents, newly published articles and calls for papers.


Afro-Asian J. of Finance and Accounting (9 papers in press)


Regular Issues


  • Equity capital and bank profitability: evidence from the United Arab Emirates   Order a copy of this article
    by Reza Chowdhury 
    Abstract: The objective of this paper is to understand the effect of increasing equity capital in domestic banks of the United Arab Emirates (UAE). The paper also examines whether the relationship differs by bank size, particularly at the time of financial crisis. We apply three different approaches including (i) ordinary least squares, (ii) fixed-effect regression, and (iii) system generalised method of moments to examine the research questions. The results show that increasing equity capital improves bank profitability in the UAE, and thus high equity capital, is a critical value-driver for UAE banks. The evidence also shows that the Dubai debt crisis had an insignificant effect on bank performance. We, however, do not find significant evidence that high equity capital of domestic banks is used as a buffer to absorb financial shock. This finding holds regardless of individual bank sizes.
    Keywords: equity capital, bank profitability, financial crisis, domestic banks, United Arab Emirates
  • Price and volume effects associated with scheduled changes in constituents of index: study of NIFTY index in India   Order a copy of this article
    by Mayank Joshipura, Sundaram Janakiramanan 
    Abstract: This paper examines price and liquidity effects associated with scheduled index reorganisation during days surrounding its announcement and effective days by using event study methodology using changes in NIFTY constituents right from its inception. The results show that there are no significant abnormal positive returns observed associated with index inclusion on or around announcement day. While significant positive abnormal returns are present on effective day on inclusion to NIFTY, such positive price effect does not sustain further. Significant negative price effect was observed just after the announcement day and remained till the end of the announcement window when stocks are excluded. This leads to an interpretation that exclusion from NIFTY is considered as a negative signal. There is a negative price effect observed for stocks near to and on the effective day of exclusion from the index, but it does not sustain after that. No significant and sustainable change in trading volume is associated with index reorganisation. Increase in volume associated with inclusion of securities and exclusion of securities is found on the effective day, which can be attributed to index funds and ETF portfolio rebalancing exercise. Results of this study lend support to the price pressure hypothesis and provide evidence against the liquidity hypothesis. They also support the information content hypothesis but the evidence of information content is only available on exclusion announcement.
    Keywords: market efficiency, event studies, index reorganisation, price effect, volume effect, NIFTY
  • Do rated firms outperform non-Rated peers in the Gulf Co-operation Council region?   Order a copy of this article
    by Etumudon Asien 
    Abstract: This paper examines the financial performance of rated and non-rated listed firms in the Gulf Co-operation Council (GCC) region. It also examines the relationship between financial performance and leverage of rated and non-rated firms. We expect a difference in the financial performance of rated and non-rated firms. The sample consists of 105 rated and an equally-matched sample of non-rated firms in the GCC region. Our parametric t-tests indicate that there are statistically significant differences in leverage and equity multiplier of rated and non-rated firms; but there are no differences in capital intensity, profit margin, earnings per share, and fixed assets intensity of the two groups. Results from multiple cross-sectional panel regression tests indicate that there is a statistically significant relationship between leverage and all the financial performance measures, except for profit margin.
    Keywords: credit rating; credit rating agencies; GCC region; leverage; capital intensity; profit margin; earnings per share; fixed assets intensity; equity multiplier; financial performance.
  • Assessing the efficiency of Malaysian banks: a data envelopment analysis approach   Order a copy of this article
    by Abdelghani Echchabi, Oladokun Nafiu Olaniyi, Abdullah Mohammed Ayedh 
    Abstract: The purposes of this study are of two folded: firstly, to evaluate the efficiency of the Malaysian banks and secondly to examine the factors that influence the efficiency levels of those banks. Accordingly, 23 Malaysian banks covering the period between 2006 and 2010 are considered in this study. The findings of the DEA approach indicate that in general the Malaysian banks are efficient over the studied period. Furthermore, exchange rate, GDP, and inflation rate are found to be significant determinants of Malaysian banks efficiency. As such, the present study contributes to the existing literature on banks' efficiency. The finding might be useful to the regulators as well as the practitioners.
    Keywords: efficiency, Bank, DEA, Malaysia
  • Does accounting conservatism measure what it is required to measure? An empirical study of construct validity perspective   Order a copy of this article
    by Saif Khan, Azlan Ali, Misbah Sadiq 
    Abstract: The accounting conservatism principle plays an important role in producing fair view of financial statements and has appeared as one of the most prominent research topics over the last 15 years. This mechanism relies significantly on conservatism proxies, but there remain considerable differences of opinion regarding their ability to accurately measure the degree of conservatism. To address this issue, the current study uses a sample of Malaysian listed firms for the period 2002 to 2011. Findings indicate that three of the seven conservatism proxies exhibit higher degrees of construct validity. This in itself is an important conclusion that three alternative proxies can be considered substitutes among themselves.
    Keywords: accounting conservatism; conservatism proxies; construct validity; Malaysian corporate sector.
  • Volatility forecasting and risk management in some MENA stock markets: a nonlinear framework   Order a copy of this article
    by Chaker Aloui 
    Abstract: In this paper, we estimate the value-at-risk (VaR) for some Middle East and North African emerging stock markets (Egypt, Israel, Turkey and Morocco) for the short and long trading positions. We check whether considering for LM, asymmetries, and fat-tails in the stock returns behaviour offers more accurate VaR forecasts. We compute the VaR for two ARCH/GARCH-type models including FIGARCH, and FIAPARCH under two density functions: Student and skewed Student. The obtained results point out that that accounting for long dependence in return and volatility, fat-tails and asymmetry provides better one-day-ahead VaR forecasts. Furthermore, the FIAPARCH model out-performs the other models in the VaR forecasts. Finally, the FIAPARCH model provides for all the stock market indexes the lowest number of violations under the Basel II rules, given a risk exposure at the 99% confidence level. Our results offer potential implications for MENA stock markets risk quantifications, policy regulations and hedging strategies.
    Keywords: value-at-risk; expected shortfall, dual long memory, GARCH-type models; MENA stock markets
  • The day of the week effect: evidence from India   Order a copy of this article
    by Tariq Aziz, Valeed Ansari 
    Abstract: The day of the week effect is a well-documented calendar anomaly. This study investigates the presence of this effect in the Indian stock market during 1990-2013, using the GARCH framework with three distribution assumptions. The results indicate that the traditional Monday effect is non-existent in the two leading market indices. In contrast, a positive Monday effect in Sensex and a positive Wednesday effect in Nifty are present in the entire sample period. The results remain robust to the distribution assumptions and sub-periods.
    Keywords: day of the week effect, Monday effect, calendar anomalies
  • Liquidity and bank profitability in WAEMU zone: a panel data analysis   Order a copy of this article
    by T. Guy Crescent Mebounou, Mehmet Baha Karan, Hodonou Dannon 
    Abstract: This paper examines the impact of liquid assets on bank profitability by using panel data regression through an eleven year period (2001-2011) for 38 banks in WAEMU. Bank profitability was assessed by both ROE and ROA while liquidity was rated by the share of liquid assets in total assets. Our findings revealed a concave parabolic functional form regarding the relationship between profitability and liquidity by confirming the nonlinear relationship and the assumption that both excess and lack of liquidity may be harmful to banks profitability. The robustness was tested by resorting to control variables such as size, age and gearing. This led to the revelation of the adverse effects leverage can have on profitability as opposed to how favourable size could impact it. However, age does not influence bank profitability in the WAEMU area. The estimated results also showed that the recent financial crisis has not fundamentally impacted the relationship between profitability and liquidity in WAEMU.
    Keywords: liquidity, profitability, return on assets, return on equity.
  • The detection of real earnings management in MENA countries: the case of Tunisia   Order a copy of this article
    by Sarra Elleuch Hamza, Sondos Bannouri 
    Abstract: This paper examines the real earnings management activities of 76 Tunisian public offering firms before and after the implementation of the financial security law, over the ten-year period (2003 to 2012). We measure real earnings management through sales manipulation and sales investments and assets following Rowchowdhury (2006) and Zang (2012). The results show that after the implementation of the Financial System Reform Act in 2005, Tunisian managers started using sales manipulation as tools of real earnings management. The sale of assets or investment has no effect on their behaviour. These results suggest that Tunisian firms tend to use real activities manipulation in a tightened regulatory environment.
    Keywords: real earnings management, Tunisian public offering companies, Financial System Reform Act.