Afro-Asian J. of Finance and Accounting (49 papers in press)

Regular Issues

• Default risk modelling for small-to-medium enterprises in the context of stressed conditions in an undeveloped economy  
  by Frank Ranganai Matenda, Mabutho Sibanda 
  Abstract: This paper designs stepwise logit models to predict the default probability for small-to-medium enterprises (SMEs) under downturn conditions in an undeveloped economy. The primary focus of this study is to recognize and interpret the determinants of default probability for SMEs. We apply an empirical data set of Zimbabwean defaulted and non-defaulted SMEs for applicability and effectiveness motives. Our experimental results indicate that the ratio of (current assets-current liabilities)/total assets, the earnings before interest and tax/total assets ratio, the book value of total assets, the real GDP growth rate, the inflation rate, the ratio of net sales/net sales last year, the age of the firm and the ratio of bank debt/total assets are all robust determinants of default probability for Zimbabwean SMEs. The implication here is that firm and loan features, accounting ratios and macroeconomic factors should be incorporated when forecasting default probability for SMEs in the context of stressed conditions.
  Keywords: default risk; downturn conditions; small-to-medium enterprises; developing country; covariates; stepwise logit models.
  
  
• Do volatility spillover effects vary across stock market crashes? An empirical analysis  
  by Lamia Kalai 
  Abstract: The aim of this paper is to compare volatility of nine developed and emerging stock markets, with the US market during the 20052021 period. We use the ICSS algorithm to detect a change point of a stationary structure in a time series and we consider a dynamic conditional correlation specification to model the time-varying feature of volatility. Our findings make two interesting contributions to the relevant literature: first, we show significant bidirectional volatility spillover between the USA and equity markets during crises. Second, the study of dynamic relationships between stock markets shows contagion effects only in periods of high volatility: the impact of shocks from the US market is more substantial during the post-crisis period. Finally, the empirical analysis shows evidence of transmission effects of volatility shocks. Market adjustment processes require regulatory and supervisory government measures that can prevent a systemic crisis.
  Keywords: market crashes; ICSS algorithm; breakpoints analysis; multivariate GARCH; conditional correlation; volatility spillover.
  DOI: 10.1504/AAJFA.2023.10059802
   
  
• Challenging the efficient market hypothesis: an investigation of the overconfidence bias betwenn developed and developing African markets  
  by Ouael El Jebari, Abdelati Hakmaoui 
  Abstract: This article tests the presence of the overconfidence bias in the financial markets of the USA, Germany, France, Turkey, South Africa and Morocco. It broadens previous studies by implementing an ARMA(p,q)-FIEGARCH(1,d,k,1) parameterisation capable of simultaneously measuring the presence of overconfidence bias and accounting for long memory processes in the volatility series. The data used in this article consists of daily closing prices along with daily trading volumes of S&P 500, DAX, CAC 40, BIST 100, FTSE JSE, ATW, BCP, BMCE and IAM. The results of the study confirm the existence of an overconfidence bias in the data of DAX, CAC 40, FTSE JSE, ATW, BCP and. Similarly, the results also suggest that all of the series in the sample have their volatilities governed by long memory processes, for which the intensity differs from one index to another.
  Keywords: overconfidence; anomalies; Financial markets; FIEGARCH; long memory.
  
  
• The effect of audit opinion on debt characteristics: the moderating effect of the type of auditor and the Tunisian Revolution  
  by Hanen Moalla 
  Abstract: The aim of this research is to investigate the impact of the audit opinion on debt characteristics (i.e., debt amount, maturity structure, and cost of debt) and analyze the moderating effect of both the type of auditor and the Tunisian Revolution. We were interested in the going-concern opinion and the qualified opinion. We analyzed 573 year-firms observations and pre-and post-revolution periods (respectively 2008-2010 and 2011-2017). The sample is composed of companies audited either by Big 4 or non-Big 4 auditors. The main results underline the importance of the effect of the going-concern opinion on debt characteristics. The influence of the qualified audit opinion and especially the going-concern opinion issued by a Big 4 auditor on the characteristics of the debt is important. These modified opinions expressed by a reputable auditor are associated with unfavorable debt conditions. A negative impact of the going-concern opinion after the Tunisian Revolution is highlighted.
  Keywords: going-concern opinion; qualified audit opinion; debt characteristics; debt amount; debt maturity structure; cost of debt; Big 4/non-Big 4; Tunisian Revolution.
  
  
• Mediating role of research and development and financial leverage on the relationship between corporate board characteristics and dividend payout policy  
  by Md. Harun Ur Rashid 
  Abstract: The study investigates the mediating effect of research and development (R&D) and financial leverage on the relationship between corporate board characteristics (diversity, size, tenure) and dividend payout. The study uses structural equation modeling to analyze data collected from 203 non-financial firms listed on the Bursa Malaysia between 2005 and 2018. The findings revealed a serial partial arbitration effect of R&D and financial leverage on the relationship between board characteristics (board size and board diversity) and dividend payout. Though the outcomes show that financial leverage partially mediates the association between the board of directors tenure and dividend, R&D fully mediates between board tenure, board diversity, and financial leverage. The findings imply that board characteristics influence the declaration of a sound payout policy which attracts more investment to the stock exchange. The study also offers the policymakers of developing countries valuable insights into how creditors pressure and investment in R&D influence the board attribute toward dividend payout policy.
  Keywords: dividend payout; corporate board characteristics; Bursa Malaysia; financial leverage.
  
  
• Investment and leverage: the moderating effect of financial constraints  
  by Quynh Trang Phan 
  Abstract: This study investigates how financial constraints affect the linkage between investment and leverage. Using the panel dataset of Vietnamese listed firms from 2007 to 2021, we found that the increase in firm investment is associated with the increase in debt use. It implies that an abundant supply of external debt will encourage firms to boost their investments. In addition, financial constraints weaken the relationship between financial leverage and firm investment. In other words, financial constraints hinder firms from increasing investment by reducing their debt levels and being more careful in selecting investment projects. The different techniques and proxies of financial constraints are employed to challenge these results.
  Keywords: corporate investment; financial leverage; financial constraints; emerging market.
  DOI: 10.1504/AAJFA.2023.10061573
   
  
• Do corporate ownership attributes impact timely financial reporting? Empirical evidence from Nigeria  
  by Edosa Aronmwan, Osariemen Asiriuwa, Alex Adegboye, Adeyemi Sam Sopekan 
  Abstract: This study assesses the impact of ownership attributes on the timeliness of financial reporting by corporate entities in Nigeria. It uses a quantitative research methodology and data from 50 financial service companies listed on the Nigerian Stock Exchange (NGX) for the period 2012 to 2018. The findings of the study provide evidence in line with the convergence of interest hypothesis to support a nonlinear significant relationship between managerial ownership and timely financial reporting. Government ownership was also found to have a statistically significant positive association with the timely release of financial statements. Overall, the study has implications for policy formulation as it provides evidence that indicates the timely release of financial reports in Nigeria is driven by the type of ownership structure ceteris paribus. Our findings contribute to the literature on the nexus between ownership attributes and timely reporting within the context of an emerging African country with a less developed exchange market. The study recommends that those charged with governance should subscribe to well-designed equity-based compensation for executives of not more than 20% holdings as this would increase managerial ownership and align the interests of managers and owners as regards timely reporting.
  Keywords: timeliness; corporate reporting; government ownership; institutional ownership; managerial ownership; convergence of interest; Nigeria.
  DOI: 10.1504/AAJFA.2023.10061720
   
  
• An analysis of the effect of asset securitization on the credit risk of Chinese commercial banks  
  by Nizar Baklouti 
  Abstract: As a tool of financial innovation, securitisation of credit assets affects the credit risk level of banks. In the context of the increasing scale of securitisation activities, this paper selects annual data from 27 listed Chinese commercial banks from 2012 to 2022 by applying the system generalised method of moments (SYS-GMM) by dynamic panel to analyse the impact of credit asset securitisation activities on the credit risk of Chinese commercial banks. The study shows that the leverage ratio of commercial banks is positively correlated with credit risk. Asset securitisation can reduce risk-weighted assets by moving high-risk assets off the balance sheet to improve the capital adequacy ratio, inhibit liquidity creation, and reduce unsecured interbank borrowing based on capital.
  Keywords: asset securitisation; banks; credit risk; dynamic panel; capital adequacy.
  DOI: 10.1504/AAJFA.2024.10062637
   
  
• Corporate governance and bank performance in Vietnam: the role of the board of directors  
  by Nam Hai Pham, Le Ha Diem Chi 
  Abstract: This study examines the impact of board characteristics on 30 Vietnamese commercial banks’ performance from 2012 to 2020. Variables representing the characteristics of the board of directors include state shareholders, the board size, independent members, the duality of the CEO, and female members of the board of directors. The variables that represent the performance of commercial banks are ROA and ROE By regression of balanced panel data according to the SGMM method, research results show that independent and female members of the board of directors positively impact the performance of Vietnamese commercial banks. In contrast, state shareholders, board size, and CEO duality have a negative impact on bank performance.
  Keywords: board characteristics; bank performance; commercial bank.
  DOI: 10.1504/AAJFA.2024.10062778
   
  
• Bank-specific determinants of deposit banks profitability in a highly dollarised economy: evidence from Turkey  
  by Haşmet Sarıgül 
  Abstract: The purpose of this study is to explore banks profitability determinants in highly dollarised Turkish economy. A panel autoregressive distributed lag model with quarterly data on Turkish deposit banks for the period 2005Q12021Q4 is used to analyse long- and short-run relationships between the variables. All the dollarisation-related variables in the estimation model deposit dollarisation, foreign currency open position, and foreign currency financial derivatives appear to be statistically significant factors that adversely impact the profitability of Turkish deposit banks in the long-run. The estimation model also includes a set of other bank specific variables, among which the off-balance engagements, overhead rate, market share, and capital-to-asset ratio are significantly associated with the profitability of Turkish deposit banks. The changes in the net total loans/assets, loan loss provisions/loans, and loan loss provisions/assets variables have insignificant impacts on the profitability.
  Keywords: dollarisation; profitability; deposit banks; panel data.
  DOI: 10.1504/AAJFA.2024.10062835
   
  
• Do CEO characteristics influence Indian Banks performance and vice versa?  
  by Rekha Handa, Priyanka Mahajan 
  Abstract: The purpose of this study is to analyse the impact of chief executive officer (CEO) traits on bank performance The analysis is based on second-hand data collected from 36 banks during a fifteen-year period, from 2005 to 2019 On the final sample, which consists of 540 observations, panel regressions model technique is run to examine the association between CEO (demographic and professional) traits on market valuation and financial performance of banks The results, in particular, demonstrate that CEO-Chairman duality and the CEO's remuneration have a beneficial impact on bank performance Moreover, the study discover that CEO age has a negative relationship with Tobin’s Q of the firm While CEO ownership and CEO Tenure seem to be positively correlated with firm performance It's interesting to note that a CEO or chairperson having regular attendance at board meeting enhanced firm performance measured by Tobin's Q.
  Keywords: bank performance; public sector bank; private sector bank; CEO characteristics; CEO duality; CEO traits ; CEO tenure; Tobin’s Q.
  DOI: 10.1504/AAJFA.2024.10063104
   
  
• Examining a moderated-mediation model of the impact of contextual factors on costing system design: new insights from the Saudi manufacturing sector  
  by Abdulrahman Aljabr 
  Abstract: An optimal costing system design (CSD), which aligns with business and production environments, contributes towards achieving optimal performance levels and enhancing sustainability. Prior research adopted contingency theory to understand the impacts on optimal CSD, yet produced inconsistent findings, possibly due to the employment of simple models. Hence, this paper aims to examine a moderated-mediation model that combines mediation and moderation analysis to investigate the effect of key contingency factors on CSD. Using questionnaire data collected from 200 Saudi manufacturing business units and analysed using partial least squares structural equation modelling (PLS-SEM), this paper provides interesting direct, mediation, moderation, and moderated-mediation effects of contingency factors on CSD. It contributes towards lessening the inconsistencies found in the prior literature regarding the effect of the level of competition (COMP), production complexity (PC), and indirect costs (INDIRECT-COSTS) on CSD.
  Keywords: costing system design; costing system complexity; CSC; activity-based costing; ABC; contingency factors; moderated-mediation; partial least squares.
  DOI: 10.1504/AAJFA.2024.10063222
   
  
• Unveiling key factors influencing corporate ESG reporting adoption: a TISM and MICMAC analysis  
  by Paridhi -, Ritika Aneja 
  Abstract: Environmental, social, and governance (ESG) reporting, which goes beyond a mere compliance tool, can potentially become an effective instrument for driving sustainable business practices. This study explores the factors and their complexities utilising the total interpretive structural modelling (TISM) systematic method. It constructs an empirical model revealing hierarchical interrelatedness among critical factors. Further, Matrice dImpacts Crois
  Keywords: corporate ESG reporting adoption; sustainability reporting; ESG disclosures; total interpretative structural modelling; TISM; MICMAC analysis; corporate sustainable practices.
  DOI: 10.1504/AAJFA.2024.10063449
   
  
• Whistleblowing framework and financial statement fraud: empirical evidence from Nigeria  
  by Olayinka Erin, Oluwafunmilayo Ajibola, Olajide Dahunsi 
  Abstract: Whistleblowing activities have increased globally due to corporate fraud in recent times. The study examined the impact of whistleblowing framework on financial statement fraud of listed firms in Nigeria. We adopted the following to measure whistleblowing framework: size of audit committee, independence of audit committee, risk committee independence, size of external audit, international ownership and firm size. In the same vein, financial statement fraud was measured through Beneish M-score Model, taking into consideration the eight (8) parameters of the model. We analyzed the data using Weighted Exogenous Sample Maximum Likelihood (WESML), content analysis and Fixed Effect Regression Model. The findings reveal that most Nigerian listed firms have increased the pace toward transparent disclosure of whistleblowing practices which has significant effect on financial statement fraud. These empirical findings place a new direction for inclusive corporate disclosure of whistleblowing in Nigeria, and also for best practices in emerging economies.
  Keywords: Beneish M-score; financial statement fraud; legitimacy theory; Nigerian listed firms; whistleblowing framework; whistleblowing index.
  DOI: 10.1504/AAJFA.2024.10069566
   
  
• Momentum explains the growth effect: the case of the Vietnamese stock market  
  by Le Quy Duong 
  Abstract: While there is empirical evidence of the value effect in various developed stock markets, the growth effect has been documented in Vietnam. The CAPM and Fama-French models cannot capture Vietnamese growth and value stock returns. Three of the four mimic factors do not contain incremental information on expected returns. However, a three-factor model with a momentum factor provides an appropriate explanation of the growth effect. Both robustness tests demonstrate the explanatory power of the three-factor model. Furthermore, delayed overreaction is likely to be a key source of momentum in Vietnam. Taken together, the superior return on the growth portfolio arises from the momentum effect, whereby investors tend to overreact to information about past returns. This is consistent with behavioural explanations.
  Keywords: value and growth stocks; momentum; overreaction; asset-pricing models.
  DOI: 10.1504/AAJFA.2024.10063839
   
  
• Impact of financial reporting quality on labour investment efficiency for Indian firms  
  by Leela Joshi, Soma Dey 
  Abstract: This paper discusses the potential role of financial reporting quality (FRQ) in affecting investments in labour, an important factor of production that has been largely overlooked in the literature, especially for Indian firms. Using a dataset consisting of 366 non-financial Indian companies listed on the BSE500 Index, we find that higher FRQ is associated with higher labour investment efficiency (LIE). Further, we find that FRQ is strongly associated with overinvestment by firms, which suggests that FRQ mitigates moral hazard problems arising from information asymmetries. On the other hand, FRQ is found to have no significant effect on underinvestment for firms facing financing constraints. We also find that high-quality financial reporting mitigates abnormal net hiring by smaller firms while the effect is insignificant for larger firms. The results indicate that FRQ can play a significant role in mitigating investment inefficiencies arising out of informational asymmetry for emerging markets like India.
  Keywords: financial reporting quality; FRQ; labour investment efficiency; LIE; information asymmetry; overinvestment; underinvestment.
  DOI: 10.1504/AAJFA.2024.10064186
   
  
• ESG and Pakistan: the good and the bad  
  by Olan Naz, Muhammad Zubair Mumtaz 
  Abstract: The world is more susceptible to extreme natural disasters and environmental issues; therefore, the business landscape in Pakistan must evolve while remaining environmentally conscious. Firms must incorporate sustainability strategies into their planning and instil actions that make them more economically and environmentally resilient. This study aims to conduct a sector-wise analysis of the environmental, social, and governance (ESG) measures and their effect on the stock performance of 101 firms listed on the Pakistan Stock Exchange from 2009 to 2019. For this purpose, the study constructs an ESG index and employs the GMM technique to examine the effect of ESG factors on the firm's stock performance. Using profitability measures, ESG combined and separate scores with a period lag show a positive but weak significant coefficient. Considering the firm value, the ESG combined and separate scores with a period lag positively influence Tobin's Q, except for environmental factors. Considering the weighted average cost of capital (WACC) and ESG linkages, the ESG combined and separate scores with a period lag influence WACC negatively except for social factors. The study's findings are consistent with the previous literature, which supports the catalyst effect of ESG compliance on the performance of firms.
  Keywords: sustainability; environmental; social and governance measures; ESG; Tobin's Q; GHG emissions; Pakistan.
  DOI: 10.1504/AAJFA.2024.10064552
   
  
• Portfolio diversification opportunities in Indian stock and commodity markets using TVP VAR extended joint connectedness approach  
  by Ishwar Sharma, Meera Bamba, Bhawana Verma, Bharti Verma 
  Abstract: The study investigates the connectedness in stock and commodity markets of India and its implication for portfolio diversification using the TVP-VAR extended joint connectedness approach. According to the study’s findings, there is low spillover between the stock and commodity markets, suggesting that diversification benefits can be taken by building a stock-commodity portfolio. The study discovers a time-varying relationship between stocks and the commodity market. Total connectedness was high during covid and Russia-Ukraine war, but the connectedness during the Russia-Ukraine war was lower than the covid. Most of the time, however, all commodities are negatively connected with stocks. Still, because the magnitude of the negative connectedness of gold and crude oil with stock is substantial, it can be concluded that a portfolio of stocks with gold and crude oil may provide better diversification benefits than other commodities. This research provides valuable information for portfolio managers, investors, financial advisors, policymakers and regulators.
  Keywords: stock market; commodity market; time-varying parameters vector autoregression; TVP VAR extended joint connectedness approach; portfolio diversification; Nifty; MCX.
  DOI: 10.1504/AAJFA.2024.10064637
   
  
• Effect of merger announcements on stock prices: evidence from Indian public sector banks  
  by Kajal Mittal, Sandeep Singh Virdi, Inu Kumari 
  Abstract: This study examined the stock market reactions of acquirer public sector banks in India to merger announcements. All merger deals announced related to public sector banks from January 2016 to December 2022 were covered in the study. Stock prices were collected from the Bombay Stock Exchange website. The analysis observed positive returns on announcement day for all the acquirer banks except for Canara Bank. It can be noted from the upward and downward movement of AAR surrounding the event day that the market reacted quickly to the merger announcements in the Indian banking sector. The cumulative average abnormal returns results reported negative returns through the entire 21 days event window except for one day. These findings indicated that merger announcements created market turbulence and generated lower wealth for acquirer banks in India. These results may help bank managers and investors to formulate investment policies and strategies accordingly.
  Keywords: merger announcements; public sector banks; acquirer banks; stock prices; event study.
  DOI: 10.1504/AAJFA.2024.10065010
   
  
• The impact of COVID-19 pandemic on the stock market volatility in Pakistan; evidence from sectoral indices analysis.  
  by Muhammad Niaz Khan 
  Abstract: This paper aims to investigate the volatility and asymmetric behaviour across 13 sectors of the Pakistani economy during the COVID-19 pandemic. Using asymmetric GARCH models, including EGARCH and TGARCH, the study analysed daily time series returns data from 1 January 2016 to 30 December 2021. The sample period was divided into pre-COVID-19 and during COVID-19 sub-periods. The empirical findings revealed the presence of volatility clustering, leverage effect, and fat-tailed phenomena across all sectors, with increased asymmetric volatility during the pandemic compared to the pre-pandemic period. Negative returns dominated during the COVID-19 health crisis, indicating significant asymmetric transmissions. Both models confirmed high volatility persistence and asymmetric effects across all sectors during the pandemic. Consumer services, food and beverages, and telecom sectors emerged as key risk transmitters, while energy, financial, and consumer staples sectors acted as net recipients of volatility. Sectors with limited connections offer potential diversification benefits. The TGARCH model demonstrated superior fit over the EGARCH model. These findings provide valuable insights for investors, aiding in asset allocation decisions during market turbulence. Directional volatility patterns among sectors offer essential information for effective trading strategies, benefiting both investors and policymakers in portfolio construction and risk management amid potential crises in the Pakistani market.
  Keywords: COVID-19; Pakistan; asymmetric volatility; GARCH models; portfolio diversification.
  DOI: 10.1504/AAJFA.2024.10065021
   
  
• Financial implications of fintech acquisitions in India: a study on shareholder returns and acquisition dynamics  
  by Manoj Panda, Pankaj Sharma, Dipasha Sharma 
  Abstract: While there has been a rapid growth in acquisitions of fintech firms in India, limited studies have explored the impact of these acquisitions for investors. Therefore, this research examines the impact of fintech acquisition on short-term gain to shareholders of acquiring firms in India. The study employs event study method using a sample of 155 listed acquiring firms taken from Bloomberg for the period 2010 to 2023.The research findings reveals that while there is a marginal gain on the event day, the cumulative return is predominantly negative throughout event window. The multivariate analysis shows favourable return for 61 days event window, with cash payment in acquisition of domestic unlisted firms. These findings offer valuable insights for stakeholders involved in acquisition decisions, emphasising the need for thorough evaluation and strategic planning to maximise shareholder value. Despite providing valuable insights, the ever-evolving nature of fintech acquisitions in India and the constraints imposed by the sample size may limit the study’s broader applicability.
  Keywords: fintech; mergers and acquisitions; M&A; event study; market efficiency; India.
  DOI: 10.1504/AAJFA.2024.10065542
   
  
• Unravelling the return and volatility interdependencies between Indian equity ETFs and benchmark indices  
  by Marvin Sabu, Rajani Bhat 
  Abstract: This study investigates the time-varying volatility interconnectedness between Indian equity exchange traded funds (ETFs) and their underlying benchmark indices. Using Diebold and Yilmaz’s generalised VAR model and the benchmark bivariate GARCH-BEKK model, it consistently finds bidirectional return and volatility spillovers among most equity ETFs, indicating market efficiency. Notably, sectoral ETFs exhibit higher sensitivity to benchmark index shocks than broad index ETFs. A 200-day rolling window analysis reveals an increased volatility spillover effect between ETFs and their underlying indices during the initial phase of the COVID-19 crisis in India. The key implication is that the equity ETF market is largely efficient. Investors may face difficulties consistently achieving abnormal returns since authorised participants (APs) help correct temporary mispricing through the creation/redemption process. Additionally, some equity ETFs exhibit tracking inefficiency, prompting caution among investors when selecting ETFs, considering volatility as a key factor affecting tracking efficiency.
  Keywords: exchange traded funds; ETFs; volatility spillover effect; COVID-19; tracking error; Indian equity ETF market; market efficiency.
  DOI: 10.1504/AAJFA.2024.10066321
   
  
• External factors of going public in the Casablanca Stock Exchange  
  by Zakaria Salhi, Hicham Ouakil 
  Abstract: This study examines the effect of external factors on initial public offerings (IPOs) activity within the Moroccan stock market from 1994 to 2022. Applying a nonlinear autoregressive distributed lag model (NARDL) to the macroeconomic variables (GDP growth rate, stock market index return, Treasury bill rate, turnover ratio). Our findings reveal asymmetric long and short-run models, indicating that all four variables affect the number of IPOs. Remarkably, the market liquidity, stock market index return and the Treasury bill rates exhibit a significant effect on both long and short-run models, while GDP positively influences the number of IPOs in the short run. To ensure the robustness of our results, we conducted a quantile ARDL model, confirming the asymmetry of these variables. The findings highlight the role of macroeconomic factors in shaping the Moroccan financial market’s development and their impact on companies’ decisions to go public. Therefore, policymakers, managers, and investors should pay greater attention to stock market performance and liquidity, given their significant influence on the timing of IPO activities.
  Keywords: initial public offerings; IPOs; macroeconomic determinants; Casablanca Stock Exchange; NARDL; quantile ARDL.
  DOI: 10.1504/AAJFA.2024.10066372
   
  
• Inter-relationship between stock market and commodities returns: an empirical analysis  
  by Hemant Bhanawat 
  Abstract: Although the commodities and stock markets are different, both these markets attract large pool of investors. The study implemented Bai-Perron test to identify structural breaks and examine the impact of commodities returns on stock market returns. The results indicated strong positive impact of commodities returns on Nifty50 Index returns. The models developed were found to be stable using CUSUM test. The present study supports the argument of existence of interrelationship between commodities and stock market in India. The results of the present study will contribute to the existing literature relating to commodities and stock markets. The results will be useful for indices pertaining to stock market and commodities market to examine such interrelationship. Finally, the study will immensely help investors to understand interrelationship between commodities and stock market and there by frame necessary strategies to safeguard against price uncertainties and get rewards from investment.
  Keywords: stock market returns; commodities market returns; Bai-Perron test.
  DOI: 10.1504/AAJFA.2024.10066487
   
  
• Modelling the lead-lag relationship between leading cryptocurrencies using BEKK-MGARCH model  
  by Maimoona Sadiq, Hamid Ullah, Fayaz Ali Shah, Amjad Hameed Khattak 
  Abstract: This study examines the lead-lag relationships among leading cryptocurrencies, i.e., Bitcoin, Ethereum, BNB, and Tether. The study analyses cryptocurrency daily prices from August 7, 2015, to July 31, 2022. The Granger Causality test indicated a one-way causal relationship between BNB and Ethereum. Bitcoin is bi-directionally related with BNB and Ethereum. However, Tether did not correlate with Bitcoin, BNB or Ethereum. In addition, the GARCH and BEKK-MGARCH models showed two-way shock transmission effects and volatility linkages among these cryptocurrencies. This research deepens the understanding of financial markets and provides investors, regulators, and policymakers with valuable insights. Moreover, this research facilitates stakeholders in achieving optimal portfolio returns by analysing the price relationship and evaluating the capacity of cryptocurrencies to serve as price leaders to one another.
  Keywords: cryptocurrency; lead-lag; causality; GARCH; BEKK-MGARCH.
  DOI: 10.1504/AAJFA.2024.10066488
   
  
• Assessing the impact of macroeconomic variables on stock market: the case of India  
  by Annu Kumari 
  Abstract: Understanding the intricate relationship between macroeconomic variables and the stock market is crucial for navigating the complexities of the financial landscape. To gauge the influence of chosen macroeconomic variables on the Indian stock market, this study employed a multifaceted approach, including descriptive statistics, stationary tests, ARDL bound cointegration technique, diagnostic tests, and variance decomposition analysis. The study spans the period from 1980 to 2021. In the long run, money supply, gross fiscal deficit, and foreign exchange reserves show significant relationships with changes in stock market prices. Conversely, in the short run, the examined independent variables showcase an insignificant relationship with stock prices. This temporal aspect suggests that while certain factors wield considerable influence over extended periods, their effects might not manifest prominently in shorter time frames. Additionally, the variance decomposition analysis reveals that a substantial portion, specifically 60.9%, of changes in stock prices can be attributed to innovative shocks. This emphasises the role of unexpected and novel factors in driving fluctuations in the stock market, showcasing its inherent dynamism.
  Keywords: ARDL cointegration test; foreign exchange reserves; macroeconomic variables; stock market; variance decomposition analysis.
  DOI: 10.1504/AAJFA.2024.10066740
   
  
• Audit of less-complex entities: challenges and opportunities in increasing good corporate Governance in Indonesian SMEs  
  by Jaswadi Jaswadi, Hari Purnomo, Sumiadji Sumiadji, Anin Dyah Luthfiani 
  Abstract: This study aims to explore the readiness of public accountants' resources, especially in terms of SMEs (Micro, Small and Medium Enterprises) audits, on the adoption of ISA for LCEs (International Standard on Auditing for Less Complex Entities). This research was conducted at Public Accounting Firms (PAFs) throughout Indonesia, which consisted of 85 auditors registered as members of the Public Accounting Firms. These findings provide a new research direction regarding the opportunities and challenges in preparing for the adoption of ISAs for LCE through empirical evidence and documentary studies. The regression results show that the availability of intellectual capital resources, financial resources, and organizational resources simultaneously affect the governance of SMEs in Indonesia and the implementation of the ISA for LCEs. This is important because the complexity of the industry can affect the process of adopting new audit standards, both theoretically and empirically. This paper is, to the best of the authors’ knowledge, the first to examine the readiness of auditors in developing countries in implementing new auditing standards.
  Keywords: corporate governance; ISA-LCE; SME.
  DOI: 10.1504/AAJFA.2024.10067191
   
  
• The moderating role of overlapping audit committee on the relationship between firm profitability and accounting conservatism in Jordan  
  by Laith Alsheyab, Mohd Rizuan Abdul Kadir, Khairul Kamarudin, Raedah Sapingi 
  Abstract: This research investigated how firm profitability influences conservatism in accounting and how audit committee overlap and its chair overlap can impact this relationship. The study was conducted on Jordanian companies listed on the Amman Stock Exchange from 2018 to 2022. This research discovered a positive impact of profitability related to accounting conservatism in Jordanian companies. The study found a moderating role of audit committee overlap and its chair overlap on the association between firm profitability and accounting conservatism. The study findings hold significant relevance for decision-making and regulatory entities in Jordan and neighbouring nations regarding the development of corporate governance, particularly in relation to the overlapping audit committees. The novelty of this study lies in that it is the only study that examines the moderating role of audit committee overlap and its chair overlap on the association between firm profitability and accounting conservatism.
  Keywords: accounting conservatism; firm profitability; overlapping audit committee; audit committee chair; Jordanian companies.
  DOI: 10.1504/AAJFA.2024.10067818
   
  
• Short-term impact of merger and acquisition on shareholders’ return in Indian financial service sector: The role of deal type and percentage of ownership acquired  
  by Kajal Mittal, Sandeep Singh Virdi, Inu Kumari 
  Abstract: This study analyses the short-run impact of merger and acquisition (M&A) announcements on the stock returns of acquirer companies in the Indian financial service sector. Further, disaggregated analysis is also conducted to assess the impact of deal-specific factors such as the deal type (domestic vs. cross-border) and percentage of ownership acquired (minority vs. majority) on stock prices. The sample of the study comprised 338 completed M&A deals in the Indian financial service sector from 1st January 2001 to 31st December 2023. The results of the event study methodology showed the positive impact of M&A announcements on shareholders’ returns as the stock market experienced 0.51% positive and significant abnormal gains on the event day. The disaggregated analysis indicated that domestic M&A generated higher shareholders’ returns than cross-border deals. The Indian acquirer firms in the financial service sector yielded greater stock returns in the case of majority vis-
  Keywords: mergers and acquisitions; financial service sector; shareholders’ return; ownership acquired; event study; India.
  DOI: 10.1504/AAJFA.2024.10068043
   
  
• An empirical evidence of holiday effect on the Indian stock market  
  by Gaurav Kumar, Bhartendu Singh 
  Abstract: The holiday effect is a major calendar anomaly in the financial market which describes the tendency of abnormal returns either before or after holidays. This study examines the holiday effect in the Indian stock market during 1st November 2012 and 31st October 2022 by considering exchange holidays. This paper investigated select indices of the BSE viz, Sensex, FMCG, Oil and Gas, Bankex, IT, BSE 500, BSE large cap, mid cap, and small cap indices by adopting the non-parametric Mann-Whitney U-test, and Kruskal-Wallis test. Additionally, a robustness test was conducted using the parametric independent sample T-test to enhance the reliability of the findings. The present study has found statistically significant abnormally high mean returns before holidays in most samples. The empirical results confirm the presence of the pre-holiday effects in stock returns. However, this study does not find a post-holiday effect for any of the samples, except for the IT index.
  Keywords: stock market anomalies; holiday effect; pre-holiday effect; calendar anomalies; abnormal returns; efficient market hypothesis; EMH; India.
  DOI: 10.1504/AAJFA.2024.10068299
   
  
• Did the mandatory adoption of International Financial Reporting Standards affect earnings quality in Sub-Saharan Africa?  
  by Musah Mohammed Saeed, Manisha Kumari, Obeng Hollack 
  Abstract: Our study investigates the effects of mandatory IFRS adoption on earnings quality in Sub-Saharan Africa, with a focus on Ghana and Kenya. Given the agency conflict, a high level of IFRS compliance is anticipated to enhance transparency and disclosure, leading to improved earnings quality in the post-adoption period. Employing an explanatory research design and random OLS techniques, we analysed data from 495 firm-year observations from listed non-financial firms on the Nairobi Stock Exchange and Ghana Stock Exchange for the period 20102020. The results indicate a strong correlation between IFRS adoption and earnings quality, supporting predictions about future earnings. Based on these findings, the study recommends that policymakers strengthen the corporate reporting environment by promoting the widespread adoption of high-quality international reporting standards, such as IFRS for SMEs and IPSAS, across various sectors. This research contributes to the existing literature by informing listed firms in Ghana and Kenya of the post-IFRS adoption impact on their earnings quality, which can help guide policymaking on borrowing and earnings management practices. This study serves as a foundation for future research aiming for a broader investigation across Sub-Saharan Africa.
  Keywords: IFRS adoption; earnings quality; financial reporting; International Accounting Standards; IFRS; agency theory; Sub-Saharan Africa; Ghana; Kenya.
  DOI: 10.1504/AAJFA.2024.10068410
   
  
• Determinants of digital finance inclusion and services in Bangladesh  
  by Mohammad Abdul Matin Chowdhury, Mahadi Hasan Miraz 
  Abstract: The availability of comprehensive financial services, including savings, loans, and insurance through established financial institutions remains limited in many developing countries. As a result, a significant portion of the population cannot access these fundamental financial tools due to factors such as gender stereotypes, age differences, limited education, income instability, workplace participation, and urbanization. This study aims to investigate the influence of socio-economic factors on digital financial inclusion and services in Bangladesh. Tobit and logistic regression techniques were applied to the survey data gathered from the Global Findex database. The findings unveiled that socio-economic factors such as gender, education, income, employment status, and urbanization are pivotal in shaping individuals' digital financial inclusion and services. The findings indicate a pressing requirement for specific interventions and policies that address the multifaceted socio-economic characters of individuals encounter when attempting to gain access to and make use of digital financial services.
  Keywords: digital finance; digital finance index; digital financial services; socioeconomic factors; gender gap; digital Bangladesh.
  DOI: 10.1504/AAJFA.2024.10068490
   
  
• Empirical analysis of lead-lag relationship in the Indian stock market amid the Covid-19 pandemic  
  by R.L. Manogna, Aditya Anil Singh 
  Abstract: The markets often need to be more efficient during significant events, which enables investors to earn atypical returns. This study seeks to determine whether there was a lead or lag relationship between the Sensex and the Nifty from 2012 to 2023, including the COVID-19 pandemic period. This study uses the Granger causality test and two-step regression process to determine the existence and direction of causality along with cross-residual impact between Nifty and Sensex during the announcement of lockdowns and unlocks. We examine the responses of the indexes in the presence of an exogenous information shock (the lockdown and unlock announcement). The two-step regression model results show a cross-residual impact from Sensex to Nifty, suggesting that Sensex has a leading relationship with Nifty. Thus, Nifty and Sensex were inefficient during the pandemic. The findings provide evidence against the efficient market hypothesis and establish a lead-lag relationship between Nifty and Sensex.
  Keywords: efficient market hypothesis; E.M.H.; causality; cross-residual impact; two-step regression; Nifty; Sensex; India.
  DOI: 10.1504/AAJFA.2024.10068550
   
  
• The effect of board gender diversity on firm sustainable performance in the MENA region: the moderating effect of ownership concentration  
  by Hebatallah Badawy, Toshitsugu Otake, Ahmed Yehia Ebeid 
  Abstract: Firm sustainable performance is receiving great attention worldwide. Companies are targeting sustainability by focusing on their environmental, social and governance (ESG) activities to meet the expectations of different stakeholders. The objective of this research is to provide empirical evidence on the effect of female presence on boards on the firm sustainable performance, which is a long-term concern, measured by ESG performance in the MENA region and on the moderating effect of ownership concentration. Using a sample of 571 firm-year observations during the period from 2013 to 2022 from Eikon Thomson Reuters database, the current research resulted in evidence, that is; female presence on boards contributes towards enhancing the firm’s sustainable performance in the MENA region. Ownership concentration is proven to have a moderating effect on the relationship between board gender diversity and firm sustainable performance in general and firm social performance in particular.
  Keywords: board gender diversity; sustainable performance; ownership concentration; MENA.
  DOI: 10.1504/AAJFA.2024.10068584
   
  
• Deciphering risk and behavioural biases in investment decision-making  
  by Anushree Ganguly 
  Abstract: Behaviour distinctly shapes individuals' risk tolerance and these biases influence perceptions of risk and drive decision-making in financial contexts investigate the impact of behavioural biases on risk tolerance, focusing on cognitive and emotional biases such as overconfidence, regret aversion, representativeness, anchoring, herding, loss aversion, and mental accounting. The research aims to develop a comprehensive model that captures the complex relationships between prominent biases and risk tolerance, accounting for the interdependencies and interactions among these variables. The research design is descriptive and exploratory, aiming to understand risk and investment patterns driven by biases. Data was collected through structured questionnaire from 365 individuals, and a structural equation was used to analyze the relationship between biases and risk tolerance. Confirmatory factor analysis (CFA) was used to validate measurement models of behavioral biases and risk tolerance, while Structural Equation Modeling (SEM) was used to analyse the relationship between behavioral biases and risk tolerance.
  Keywords: anchoring; adjustment; behavioural finance; bias; herding; invest; loss aversion; mental accounting; overconfidence; regret aversion; representativeness; risk tolerance.
  DOI: 10.1504/AAJFA.2024.10068605
   
  
• The effect of liquidity hoarding and credit risk on the performance of Syrian private banks  
  by Haidar Haidar 
  Abstract: The aim of the study is to analyse the impact of liquidity hoarding and increased counterparty credit risk on the performance of Syrian private banks, which have significantly increased their liquidity hoarding and decreased their lending activities in response to the prevailing economic conditions. To fulfil the purpose of the study, data were collected from the published annual financial reports of listed Syrian private banks from 2010 to 2022. Pooled regression with White's corrected error terms was employed to model the effects of liquidity hoarding and credit risk on return on assets (ROA) and return on equity (ROE), after controlling for size, operating efficiency, and capital adequacy. The results demonstrate a negative and significant effect of credit risk on banks' performance, while no significant effect could be detected for liquidity hoarding or the interaction between liquidity hoarding and credit risk.
  Keywords: liquidity hoarding; credit risk; performance; return on assets; crisis period; Syrian banks.
  DOI: 10.1504/AAJFA.2024.10068777
   
  
• Analysis of sustainability reporting and SDG disclosures using NLP evidence from the Indian pharmaceutical sector  
  by Jyoti Singh, Meena Bhatia 
  Abstract: With sustainability reporting gaining momentum globally, the pressure on companies to enhance their sustainability disclosures has been ever-increasing from regulators and investors. The aim of this research paper is to analyse the evolving sustainability disclosures by pharmaceutical companies in India with a focus on the balance of positive and negative sentiments; and thematic trends, based on the United Nations Sustainable Development Goals (SDGs) 2030. Sustainability disclosures in the annual reports of NIFTY 20 Pharma Companies has been done using natural language processing method from 20152022. Analysis shows that the breadth and depth of sustainability disclosures are increasing across the companies included in the study. Thematic analysis revealed that emphasis on environmental aspects is growing as compared to social and governance factors. The results corroborate that companies use sustainability disclosure to signal positive sentiments, as there is a significant degree of voluntarism in narrative disclosures. This study would assist stakeholders in comprehending the topics of sustainability disclosures.
  Keywords: sustainability reporting; environmental; social and governance; ESG; India; sentiment analysis; natural language processing; pharmaceutical; sustainable development goals; SDGs; narrative disclosures.
  DOI: 10.1504/AAJFA.2024.10068869
   
  
• COVID-19 pandemic, government interventions and day-of-the-week anomaly: evidence from Bursa Malaysia sectors  
  by Lay Mei Ng, Y.E.E. Peng Chow 
  Abstract: This paper analyses whether the day-of-the-week effect occurs in the Kuala Lumpur Composite Index (KLCI) and Bursa Malaysia sectoral indices during the COVID-19 pandemic and the impact of government interventions on this association for the study period from January 29, 2020 to March 31, 2021 and four sub-periods, i.e., pre-government intervention, Movement Control Order (MCO), Conditional Movement Control Order (CMCO) and Recovery Movement Control Order (RMCO) phases. The findings reveal the occurrence of day-of-the-week effect in the KLCI and all sectoral indices, except for construction, for the whole study period. During the pre-MCO period, this effect happens in the KLCI and five sectors only. Interestingly, this calendar anomaly can only be detected in the KLCI during the MCO period. During the CMCO period, this effect occurs in the KLCI and all sectors except for plantation. Lastly, the KLCI and four sectors recorded this effect during the RMCO period.
  Keywords: Bursa Malaysia; COVID-19; day-of-the-week effect; government interventions; market anomaly; sectoral indices.
  DOI: 10.1504/AAJFA.2024.10068879
   
  
• Corporate tax competition and foreign direct investment: evidence from G20 countries  
  by Mukesh Babu Gupta, Anup Kumar Roy, Kunal Sinha 
  Abstract: This paper investigates the impact of tax competition among the G20 countries, particularly the effect of tax rate reduction on foreign direct investment inflows. In addition to the tax rate, the study also considered several key economic variables. The analysis of the study was based on two regression models, each consisting of eight variables, to investigate the impact of Corporate Tax Rate (CTR) on the flow of FDI. Our findings revealed that corporate tax rate, size, growth, trade openness, secured internet connection, and time required to start a business (TRSB) had a negative impact, while inflation and Political Stability and No Violence (PSNV) had a positive impact on FDI inflow.
  Keywords: corporate tax rate; FDI; foreign direct investment; G20; trade openness.
  DOI: 10.1504/AAJFA.2024.10069047
   
  
• A comparative study of IFRS 17 implementation on Islamic and conventional insurance companies in the UAE emerging market  
  by Mahmoud Osama, Mahmoud Azmi, Mohammad Salem, Mohammad Sheriff Hamid Kamara, Walaa Wahid ElKelish 
  Abstract: This paper investigates the impact and determinants of IFRS17 on Islamic and conventional insurance companies’ operations in the emerging market of the United Arab Emirates (UAE). Data is collected using a survey instrument distributed to active insurance companies in the UAE. The results indicate that the transparency ranking of insurance companies is the most important concern for implementing IFRS 17, while technology investment is the most important challenge. In addition, results indicate that Islamic insurance companies have more worries than conventional insurance companies regarding IFRS 17 data reconciliation time, market valuation accuracy, and challenges, including information management systems, reporting systems, and technology investment. Insurance company size has a vital influence on IFRS 17 implementation. Respondents’ characteristics, such as job title and nationality, are the most important determinants of IFRS 17 implementation. This paper has several practical implications for corporate managers and regulators.
  Keywords: IFRS17; insurance contracts; comparative study; emerging market.
  DOI: 10.1504/AAJFA.2024.10069179
   
  
• Nonlinear effect of corporate income tax on FDI in developing countries  
  by Thi Kim Chi Nguyen, Minh Hang Nguyen, My Hai Duyen Le, Kim Quoc Trung NGUYEN 
  Abstract: This study aims to investigate the nonlinear relationship between corporate income tax rates and foreign direct investment (FDI) inflows in developing countries from 20122022, grounded in the Theory of FDI (marginal return theory, the eclectic theory of international production) and tax competition theory. Using a generalised least squares (GLS) model and the instrumental variables estimator (2SLS) for robustness checks, the study incorporates tax rate, squared, and cubed terms to explore nonlinear effects, particularly focusing on the cubic value of tax rates. The findings reveal a nonlinear effect, identifying a threshold corporate tax rate of 24.08%, at which FDI inflows increase alongside government revenues. This suggests that while lowering tax rates can attract FDI, excessively low rates diminish revenue and are not always beneficial. Therefore, developing countries should avoid engaging in a race to the bottom for tax rates. This studys originality lies in quantifying the threshold beyond which corporate tax rates positively influence FDI, offering practical implications for policy makers in developing nations considering tax reforms. Future research should explore this relationship in countries facing political and economic challenges, such as Ukraine.
  Keywords: corporate income tax; statutory tax rate; effective tax rate; Foreign direct investment.
  DOI: 10.1504/AAJFA.2025.10069952
   
  
• Bridging ESG and financial performance: financial risk as mediator in the MENA region  
  by Rola Shawat, Ahmed Zamel, Toshitsugu Otake, Sara H. Sabry, Hebatallah Badawy 
  Abstract: This paper aims to investigate how ESG performance affects the financial performance of non-financial firms in the MENA region and to analyse the mediating role of financial risk in this relationship. OLS regression models were developed using a panel dataset of 522 firm-year observations during 20132022. The results showed that ESG has a significant impact on the financial performance of firms. Additionally, the results revealed a competitive partial mediation of financial risk in the ESG-FP nexus. Additional path analysis and robustness checks were performed. This research contributes to the existing literature using data retrieved from the Thomson Reuters database and examining the mediating role of financial risk in the hypothesised nexus in the MENA region context. Our results imply that firms must consider the possibility of bankruptcy before commencing any sustainable initiatives as it will in turn affect their financial performance.
  Keywords: financial risk; environmental; social and governance; ESG; financial performance; MENA region.
  DOI: 10.1504/AAJFA.2025.10070064
   
  
• Harmonising new financial reporting system and financial reports readability: evidence from top Indian companies  
  by Chanchal Chatterje, Debdas Rakshit, Ananya Paul 
  Abstract: The study analyses whether the readability of annual reports has enhanced or reduced after the adoption of IndAS in India. Additionally, the moderating influence of audit quality on annual report readability is explored following IndAS implementation. The study uses Fog and Smog indexes as readability measures and considers auditing by a Big Four auditor as a proxy for audit quality. Using panel regression analysis, results disclosed that the readability of annual reports has decreased following IndAS implementation in India. Also, length analysis as a robustness check showed that the length of annual reports has increased after IndAS adoption, resulting in longer disclosures and information overload, thereby making annual reports less readable. However, yearly reports' readability has enhanced for companies appointing a Big Four auditor following IndAS adoption. The results have significant implications for regulating and standard-setting bodies.
  Keywords: annual reports; audit quality; Big Four auditor; IndAS; readability.
  DOI: 10.1504/AAJFA.2025.10070571
   
  
• The impact of an emerging market's microstructure legislations on market efficiency: evidence from Iran  
  by Alireza Rahrovi Dastjerdi, Eman Momeni 
  Abstract: The role and significance of legislation in emerging capital markets have changed over time, considering the characteristics of such markets. The changing circumstances in these markets have prompted legislators to change or update several microstructures in the form of trading regulations. This study aims to investigate how these changes can affect the market efficiency. In this study, data from selected companies listed on the Tehran Stock Exchange (TSE) were generated for a period influenced by four different legislative microstructures: tick size, lot size, the minimum value per order, and base volume. The main market variables and market efficiency were compared between the two six-month regimes, before and after enactment. The data were statistically analysed using correlation analysis, parametric and non-parametric tests, trend analysis, and regression analysis. Results showed the positive effects of changes in microstructures on the efficiency of pricing process.
  Keywords: legislation; trading rules; market microstructure; market efficiency; emerging markets; Iran.
  DOI: 10.1504/AAJFA.2023.10063816
   
  
• Loan repayment and female borrowers in African microfinance institutions  
  by Imen Khanchel, Dorsaf Bentaleb, Cyrine Khiari 
  Abstract: The purpose of this study is to investigate whether female borrowers exhibit higher loan repayment in African microfinance institutions (MFIs). The empirical study uses unbalanced panel data of 120 MFIs from 2006 to 2019. The results reveal that female borrowers have a positive impact on repayment performance. The presence of women reduces the portfolio at risk and the probability of default payment. We conclude that targeting female clients, who are generally risk-averse, improves the repayment performance of MFIs. We conclude that microfinance can lead to the feminisation of debt, as women are reliable in repayment.
  Keywords: microfinance institutions; MFIs; repayment performance; women borrowers; Africa.
  DOI: 10.1504/AAJFA.2025.10070589
   
  
• Existence of lead-lag relationship among sectoral indices: evidence from the Indian capital market  
  by Satyaban Sahoo, Sanjay Kumar 
  Abstract: The study examines the lead-lag relationship among six sectoral indices of the Indian capital market. The Granger causality test reveals that unidirectional causality originates from oil and gas sector index to the auto, IT, financial service, and bank sector indices; similarly, the FMCG sector index causes variation in the auto, financial services and banking sector indices. The IRF and VDC analysis also confirm these findings of the Granger causality test. Among all six sectoral indices, oil and gas index is leading, and the financial services index is lagging in the Indian capital market. Investors should study the behaviour of the oil and gas index to maximise return and decrease risk, as it is dominating the other indices. The evident lead-lag relationship among the sectoral indices would assist the investors in portfolio diversification considering different sectors.
  Keywords: Granger causality test; impulse response function; IRF; lead-lag relationship; sectoral index; variance decomposition; VDC.
  DOI: 10.1504/AAJFA.2025.10070590
   
  
• The value relevance of goodwill: evidence from South Africa  
  by Elmarie Louw, John H. Hall, Leon M. Brümmer 
  Abstract: The value relevance of goodwill is a topic of ongoing debate in the financial literature, because of numerous changes in the accounting treatment of this asset class over the years. The aim of this paper is to determine the value relevance of goodwill after the introduction of IFRS 3 in a specific setting, namely South Africa, using firms listed on the Johannesburg Stock Exchange as a sample for the period from 2006 to 2017. The modified Ohlson (1995) model, a well-known accounting-based valuation model, was applied to 1272 firm years to determine the value relevance of goodwill. The study contributes to the existing literature by presenting evidence that goodwill is indeed value relevant in the South African setting after the introduction of IFRS 3, and it confirms that the goodwill impairment model is associated with firm value.
  Keywords: goodwill; goodwill impairment; IFRS 3; South African firms; value relevance; South Africa.
  DOI: 10.1504/AAJFA.2025.10070591
   
  
• The symmetric and asymmetric effect of foreign currency reserves, and money supply on inflation in The Gambia, a linear and nonlinear ARDL perspective  
  by Mohammad O.J. Rashdan, Abed Allah Abu Wahdan, Foday Joof 
  Abstract: This paper investigated the symmetric and asymmetric impact of international reserves (FCR) and money supply (M2) on inflation in The Gambia. The paper employed the Nonlinear-ARDL (NARDL) for the asymmetric and the ARDL for the symmetric effect, using monthly data (2005M1-2019M12). The NARDL revealed that a positive shock in foreign reserves is detrimental to inflation, while a negative shock promotes price stability. Similarly, an increase in money supply triggers price instability, while a decline in M2 was found to have a neutral effect. The ARDL results showed that FCR positively affects inflation in the long term but negatively in the short run. However, M2 has a positive relationship with inflation both in the short and long run. The findings indicate that policymakers in The Gambia are faced with a trade-off of either accumulating reserves to protect the economy against external shocks or maintaining price stability.
  Keywords: foreign currency reserve; money supply; inflation; the Gambia; linear; nonlinear ARDL.
  DOI: 10.1504/AAJFA.2023.10058793
   
  
• Determinants of interest rate spreads in the banking industry: an empirical study in an emerging country  
  by Xuan Ngo, Huong Le, Linh Bui 
  Abstract: This study explores the factors affecting the interest rate spread (IRS) using a secondary data set collected from 27 Vietnamese commercial banks' audited financial statements. The findings indicate that the return on average assets (ROAA), operating expenses on total assets (OPERAT), and market concentration (HHI) variables all contribute significantly to the development of the IRS as assessed by IRS1 and IRS2. Specifically, ROAA and OPERAT positively correlate with both IRS1 and IRS2 at the 5% and 1% significance levels, respectively. However, an increased HHI is associated with a decreased IRS1 but an increased IRS2. Additionally, the capital on total assets (CAP) and bank size (SIZE) variables are essential only for IRS1. By contrast, the non-interest income ratio (NII) and the liquidity ratio (LIQ) have a considerably negative effect on IRS2. Regarding macroeconomic variables, GDP growth rate and inflation have a statistically significant positive effect on IRS1 but no significant effect on IRS2.
  Keywords: commercial bank; banking system; interest rate spread; IRS; emerging country.
  DOI: 10.1504/AAJFA.2023.10063091