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 Articles will not be published until the final proofs are validated by their authors.


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Afro-Asian J. of Finance and Accounting (13 papers in press)


Regular Issues


  • 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.
  • Foreign ownership and stock market liquidity: evidence from Vietnam   Order a copy of this article
    by Xuan Vinh Vo 
    Abstract: This paper investigates the relationship between the level of foreign ownership in a firm and the liquidity of the firm stock in the Vietnam stock markets. We employ a rich and detailed dataset representing foreign portfolio investment, liquidity and other firm attributes in the Vietnamese context. Our dataset ranges from 2006 to 2012, covering most of non-financial firms listed on Ho Chi Minh City stock exchange. Using a wide number of econometric techniques for panel data analysis, the results from our analysis indicate that increased foreign investment in firms is not associated with higher liquidity. The results also confirm the long-term buy and hold strategy of foreign investors in Vietnam stock market.
    Keywords: foreign ownership, liquidity, Vietnam stock market
  • Does family group affiliation matter in CSR reporting? Evidence from Yemen   Order a copy of this article
    by Nahg Abdul Majid Alawi, Azhar Abdul Rahman, Azlan Amran, Mehran Nejati 
    Abstract: While earlier studies have shown the role of family affiliation on increased social responsibility of firms, there is a dearth of literature on how family group affiliation moderates the link between companys characteristics and social responsibility disclosure. This study aimed to investigate this moderating effect through performing a moderated multiple regression analysis on empirical data gathered from the 73 most active shareholding companies in Yemen. Findings from the study indicated that family group affiliation has a significant moderating effect on the relationships between a companys characteristics and corporate social responsibility disclosure: the relationship was found to be stronger for family group affiliated companies compared with the non-family group affiliated ones. The study has bridged the literature gaps by offering empirical evidence and new insights on the significant moderating effects of family group affiliation in the relationships between a companys characteristics and corporate social responsibility disclosure using the Yemeni samples.
    Keywords: family group affiliation, corporate social responsibility disclosure, company characteristics, CSR, Yemen
  • Quality of corporate reporting: case studies from an emerging capital market   Order a copy of this article
    by Nelson Waweru, George Riro, Enrico Uliana 
    Abstract: The main objective of this study was to establish the quality of information reported by Kenyan listed companies from a financial analysts perspective. In addition, the study sought to investigate the main sources of information for financial analysts, whether a reporting gap existed, and the challenges encountered by financial analysts when seeking information. The research design used multiple case studies to investigate the analysts perceptions, and face-to-face interviews and questionnaires were used in data collection. This study concluded that the quality of information reported by Kenyan listed companies is high, and a reporting gap existed. Furthermore, that the information reported was considered to be more comparable was attributed to the adoption of the International Financial Reporting Standards. This study is significant to investors who rely on accounting information to make investment decisions.
    Keywords: financial analysts, quality of reporting, reporting gap, emerging markets, Kenya
  • Demand-following or supply-leading: an examination of the finance-growth nexus in selected Sub-Sahara African countries   Order a copy of this article
    by Mohamed Jalloh 
    Abstract: This study assesses the extent to which economic growth has been influenced by financial sector development in Sub-Sahara Africa. In order to empirically determine the flow of causation between financial sector development and economic growth, country-specific time series data on key financial development indicators was used to implement various tests for causality. The results from causality tests reveal that, whilst causation flows purely from growth to financial development for Benin, Congo, Nigeria and Zambia, the reverse holds for Chad, Cote dIvoire, Mauritania and Kenya. The study also reveals bilateral causation between financial sector development and growth for countries such as Burkina Faso, Cameroon, Malawi, Mali, Sierra Leone and South Africa; however, it fails to establish significant causal effects between financial development and growth for Ghana, The Gambia, Senegal, Swaziland and Uganda.
    Keywords: financial sector, development, economic growth, causality, bilateral, Sub-Sahara Africa
  • Earnings attributes and the cost of equity capital: the case of Tunisian companies   Order a copy of this article
    by Sebai Saber, Messai Mohamed, Jouini Fathi 
    Abstract: This paper explores the relationship between the cost of equity capital and the earnings attributes in the Tunisian context. We measured the cost of equity using the CAPM and then studied the relationship between the cost of equity and earning attributes (which are accrual quality, smoothness, conservatism, value relevance, timeliness and persistence). For this purpose, we used 26 non-financial companies listed on the Tunisian Stock Exchange from 2008 to 2012. Tunisian companies are characterised by high levels of earnings management and conservatism. In fact, firms are more likely to rely on bank financing rather than on capital market, and most are family-run businesses. This could explain our results, which shows that information quality affects negatively the cost of equity capital. Analysis also reveals that accrual quality and conservatism are the attributes that have the most significant effect on the cost of equity capital. We contribute to the accounting literature by being the first study to examine the relationship between the cost of equity capital and earnings attributes in Tunisia for different stakeholders.
    Keywords: cost of equity capital; information quality; earnings attributes.
  • Debt maturity, financial crisis and corporate performance in GCC countries: a dynamic-GMM approach   Order a copy of this article
    by Rami Zeitun, Munshi Masudul Haq 
    Abstract: This study investigates the effect of debt financing and debt maturity on corporate performance, using evidence from Gulf Cooperation Council (GCC) countries: Qatar, Oman, Kuwait, Kingdom of Saudi Arabia, United Arab Emirates, and Bahrain. The study uses a dynamic GMM approach for an unbalanced sample of 400 firms for the period 20042012. The study also investigates the effects of the financial crisis on the significance of long-term and short-term debt financing as determinants of firms performance. Our findings indicate that the long-term and short-term debt financing affect firms performance negatively. The results also show that the economic importance of short-term debt increases as a determinant of firms performance ROA after the crisis, while the effect of long-term debt decreases.
    Keywords: debt structure, debt maturity, firm performance, financial crisis, GMM
  • Islamic versus conventional banks: a comparative analysis on capital structure   Order a copy of this article
    by Amel Belanès 
    Abstract: This study highlights differences across Islamic and conventional banks, with a particular focus on the determinants of their capital structure. Islamic finance surely forbids debt-based funding but it is an open question whether Islamic banks prefer internal funds or external resources. The study provides empirical support for the fact that Islamic banks, in contrast to their conventional peers, rely more on their own equity rather than on external finance, including loss-profit-sharing deposits. The analysis also puts in evidence that Islamic and conventional banks can be differentiated on the basis of assets tangibility and dividend payout and not in terms of profitability, asset liquidity and credit default. Among these factors, only profitability and size influence the equity-to-asset ratio in both kinds of bank.
    Keywords: capital structure; Islamic banks; conventional banks; agency theory; signalling theory; pecking order theory; trade-off theory.
  • Is there a shift in accounting values in Egypt towards optimism transparency and professionalism?   Order a copy of this article
    by Ahmed Abousamak, Hany Kamel 
    Abstract: This paper aims to examine the persistence of the historically assumed accounting values of the Egyptian environment in terms of conservatism, secrecy and statutory control after the adoption of the latest versions of the Egyptian Accounting Standards (EASs). Using information provided in the annual reports of 87 Egyptian listed companies in the year 2009, the results indicate that Egyptian accountants do not require a higher degree of verification to recognise good news than bad news in financial statements. Therefore, it can be argued that Egyptian accounting practices have departed from the accounting value of conservatism and moved towards its opposite value, optimism. In addition, the results demonstrate that there has been a noticeable improvement in the level of transparency in the Egyptian accounting environment and this level is much better than that reported in many other emerging economies. Unexpectedly, however, the documented level of transparency was found to have a negative impact on the shareholders wealth. Finally, our results illustrate that there has been a statistically significant improvement in the level of professionalism in recent years and this level is significantly positively associated with the companies share returns performance.
    Keywords: conservatism; transparency; professionalism; Egyptian financial reporting.

Special Issue on: "Recent Financial Developments in Vietnam,"

  • Key determinants of inflation and monetary policy in the emerging markets: evidence from Vietnam   Order a copy of this article
    by Mohammed Elgammal, Mohamed Eissa 
    Abstract: The study explores the key determinants of inflation in Vietnam for a period of ten year (2000-2011) using the explanatory variables: past inflation, real income, money supply, exchange rate, interest rate and world oil price. This study uses the vector error correction model to investigate the relationship among inflation and the above variables. We found a significant relationship among inflation and three variables, past inflation, real income and exchange rate. Moreover, the past inflation variable plays the most important role in explaining the current inflation in Vietnam. The exchange rate passthrough is found to have a remarkable influence on inflation in the short run; in particular, a reduction in exchange rate will lead to higher prices. Real income has a negative and small impact relationship with inflation, while the other explanatory variables have insignificant impact on inflation.
    Keywords: inflation; Vietnam; emerging markets; vector error correction model; monetary policy