Global Business and Economics Review (52 papers in press)
The impact of foreign bank presence on domestic banks profit: Evidence from Vietnam
by Phan Dinh Nguyen
Abstract: This paper examines the impact of foreign bank presence on Vietnamese domestic banks profit by employing data of 30 domestic banks and 30 foreign banks operating in Vietnam from 2011 to 2017. Pooled OLS, REM, FIX and GLS are used to estimate but GLS regressed results are employed to explain the impact. We propose two new measurements of foreign bank presence to expand the existing literature. Our findings show that the increased presence of foreign banks enhances profit, improves banking services and the effectiveness of equity, and also increases equity of domestic banks under the competitive pressure.
Keywords: Impact; Foreign Bank Presence; Domestic Bank Profit.
External auditors reliance on the internal audit function and audit fees
by Ibrahim Albawwat
International Standard on Auditing (ISA) 610 (Revised 2013) allows external auditors (EAs) to rely on the internal audit function (IAF) in obtaining audit evidence if the latter meet specific quality criteria. The revisions made to the standard intend to introduce a more robust framework for the quality evaluation of IAF. It also enables the use of IAF to provide direct assistance, in addition to the previously permitted use of work already performed by the IAF. According to the pre-revision ISA 610, previous studies reported low reliance on the IAF by EAs in Jordan with no direct impact on external audit fees. Accordingly, the purpose of this study is to examine the direct and indirect effect on external audit fees in light of the latest revisions made on ISA 610.
A conceptual model is developed based on the related literature and the revised ISA 610. Data are collected using a questionnaire directed to a sample of EAs in Jordan. Data are then analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) techniques. Also, follow-up interviews were conducted to allow more in-depth discussion and obtain more information and understanding of the questionnaires responses.
The paths representing the direct impact of EAs reliance upon the external audit fees were not significant. However, the significant indirect relationship revealed by the structural evaluation indicates a mediating role of external audit work hours. That is, the reliance of EAs on the IAF decreases the external audit work hours, which in turn reduces the external audit fees. The results also show that reliance on work already performed by the IAF contributes to more reduction in external audit fees than reliance by using IAF to provide direct assistance.
This study contributes to the literature on the outcomes of EAs reliance on IAF by providing empirical evidence on how an external audit fee is influenced by the mediating role of external audit work hours while considering the revisions made to the ISA 610. Moreover, this study adds to the literature by introducing a conceptual model to clarify the real sequence by which each type of reliance placed by EAs reduces the external audit fees.
Keywords: External Auditors; Internal Audit Function; Audit Fees; Audit Work Hours; Auditing Standards.
How volatility effect the behaviour of institutional investors in emerging markets
by Purwa Srivastava, Sakshi Varshney
Abstract: The investments done by domestic institutional investors (DII) have turned out to be a dynamic force for the development of Indian stock markets. This situation has motivated me to study the nexus between domestic institutional investors capital flows and stock market volatility. Most studies have taken mutual funds as the proxy for DII. This paper has considered the disintegrated data of DII, which includes mutual funds and insurance companies, banks, and development financial institutions. The study discloses that out of four DII insurance companies increase the market volatility. On the other hand, trading of banks, mutual funds, and development financial institutions are helping to decrease the volatility in stock markets. Thus, they contribute to correct the overreaction in stock markets resulting from noise trading. Moreover, all the DIIs act as informed traders because they take advantage of the volatile markets for investments.
Keywords: Keywords: - Mutual funds; Insurance companies; Development financial institution; Banks; stock market volatility; Vector autoregressive Model.
The policy of dividend variability of companies listed on the West African regional stock exchange: between predictability, retention and stability?
by Pourakin Djarius Dieudonné BAMA
Abstract: We will examine the dividend policy of companies listed on the West African regional stock exchange basing on a panel of 31 companies. Through a regression analysis, we find a mutual and significant influence of past dividends, prices, net earnings and returns on dividend variation. Furthermore, we show that dividend variation is stationary and predictable, as are the stock price, net income and stock return. This leads us to think that managers practice retention policy and dividend stability with an optimum distribution.
Keywords: dividends; predictability of dividends; dividend retention; dividend stability.
Effects of leadership styles and motivational factors on worker engagement: An empirical study on ready-made garments industry in Bangladesh
by Dalowar Hossan, Zuraina Binti Dato' Mansor, Mohammad Abdullah Al Mamun, Abu Naser Mohammad Saif, Amer Hamzah Bin Jantan
Abstract: This study inspects the effects of motivational factors (intrinsic and extrinsic) and leadership styles (transformational and transactional) on worker engagement in the ready-made garments industry of Bangladesh. The paper is based on Herzbergs Motivation-Hygiene theory. The study adopted a quantitative technique and used SPSS to analyze the data assembled from a valid sample of 387 workers in Bangladesh's ready-made garments industry. The findings show that extrinsic motivational factors positively correlate with worker engagement more than intrinsic motivational factors. Consequently, transformational leadership is positively associated with worker engagement more than transactional leadership among the workers in the ready-made garments industry of Bangladesh. In conclusion, it is suggested that the industry should focus more on the transformational leadership style compared to the transactional leadership style and workers have to be motivated to increase productivity in this specific industry.
Keywords: Worker engagement; intrinsic motivational factors; extrinsic motivational factors; transformational leadership; transactional leadership; ready-made garments (RMG); Bangladesh.
ESG Disclosure and The Role of CEO Narcissism on Firm Value: The Case of ASEAN-5
by Laila Jahidatul Falah, Aria Farah Mita
Abstract: This study discusses the current trend regarding company performance which is not only seen from the financial aspect but how the company will sustain by contributing to its stakeholder in terms of its environmental, social, and governance aspects (ESG). CEO Narcissism is a CEO character that encourages the improvement of the Environmental, Social, and Governance (ESG) performance. This study examines the effect of ESG disclosure on firm value and the role of CEO narcissism to moderate the relationship between ESG disclosure and firm value. The ESG score from Thomson Reuters measured ESG disclosure, and the unobtrusive indicators by Chatterjee and Hambrick (2007) measured CEO narcissism. Samples are from non-financial companies in ASEAN Five countries with period cover years from 2014 to 2017. The results show that the ESG disclosure and CEO narcissism increase the firm value. Further, CEO narcissism strengthens the positive influence of ESG disclosure on firm value.
Keywords: ESG disclosure; firm value; Tobin's q; CEO narcissism.
Economic evaluations of diagnostic process and neuropsychological assessment of Dementia: a systematic review.
by Fiorella Pia Salvatore, Michele Milone, Emanuela Resta, Cristina Di Dio, Giancarlo Logroscino
Abstract: Alzheimer disease will have a strong growth rate among the adult population. Today, for healthcare managers, it would be extremely important to consider: the prevalence of the disease, and the demands for healthcare services. Adequate models have not yet been developed for estimating the evaluations of diagnostic tests useful for the decision-making process of healthcare managers. A systematic literature review was performed following the PRISMA checklist. The search retrieved 1,831 references. The highest impact of neuropsychological assessment was in France and Sweden. The lowest was in Spain and Netherlands. As for the total indirect costs, values varied from 630 international dollars (IntD$) in the USA, to IntD$956.25 in France for mild ALD patients. As for the moderate ALD, the lower value was in the USA (IntD$825), the medium in the UK (IntD$972.86), and the higher in Spain (IntD$1,123.33). Future research to better manage healthcare resources is recommended.
Keywords: healthcare management; healthcare expenses; diagnostic cost; Alzheimer disease; ALD; review; PRISMA.
Modified Ratios and the Cyclically-Adjusted Price-Earnings Ratio
by Catherine Georgiou, Ioannis Neokosmidis, Vassilis Polimenis
Abstract: Due to the failure to detect stationarity in the simple dividend-price (dp) and earnings-price (ep) ratios for the US stock market, we propose the use of a modified dp and ep (mdp and mep respectively) which constitute stationary versions of the conventional dp and ep. We retrieve evidence that long-run equilibrium relations among d and p, and e and p exist and proceed on constructing their modified counterparts. The forecasting performance of mep and mdp are tested alongside the classical ep and dp but also the well-known and highly followed cyclically adjusted pe ratio (cape). In-sample forecasting suggests that the modified ratios have improved nominal return fit over the simple ones. When forecasting out-of-sample (oos), mep provides clear oos improvements over the classical ep. Cape does not generalize well oos. Over the 7- and 10-year return horizon, the oos performance gain through mdp is 60% and 69% respectively.
Keywords: price-to-earnings ratio; dividend-price ratio; non-stationary ratios; pe ratio; modified ratios.
Leverage and firm characteristics what matter? Data from the Indonesian stock exchange
by Puji Handayati, Cipto Wardoyo, Lioni Indrayani, Yohanes Indrayono
Abstract: The purpose of this study is to investigate the relations between firm characteristics and financial leverage for Indonesian publicly-held firms. Based on data obtained from 206 firms listed in the Indonesian stock exchange for the periods of 2007-2016, we hypothesize and find that financial leverage is negatively associated with a firm's profitability, and firm size. Furthermore, we predict and find that growth opportunity and median industry leverage is positively associated with financial leverage. Concerning asset tangibility, we did not find a significant relation with financial leverage. The findings of our study provide useful insights into understanding the factors should be used by firm manager to make their financing decisions especially in Indonesian publicly-held firms.
Keywords: leverage; assets-tangibility; profitability; firm-size; market-to-book-ratio; median industry leverage; Indonesian publicly-held firms.
HOW FAR PRODUCTIVITY IS RELEVANT IN EXPLAINING FINANCIAL INCLUSION ACROSS THE STATES OF INDIA AN EMPIRICAL INVESTIGATION
by Shantanu Ghosh, Tarak Nath Sahu
Abstract: The article exhibits inter-state evidence that an increase in productivity can promote financial inclusion, using data on 27 states and five union territories of India over the period 2002 to 2019. After controlling the effects of population, inflation and expenditure by governments on health and education; the study reports a contemporaneous association along with a unidirectional positive impact of productivity on per capita savings account. Applying the panel data econometrics aligned with some post-analytical checks for robustness the study finds a significant impact of per capita net state domestic product on holding of per capita savings accounts. Propositions by Robinson and Lucas across the Indian provinces might be correct.
Keywords: economic development; financial inclusion; productivity; India.
Effect of Consumers Perceived Risk and Relationship Marketing for M-Shopping in India: The moderated mediation role of Demonetisation
by Ishfaq Bhat, Shilpi Gupta
Abstract: The development of digital technologies has paved the way for digital revolution in India. The customers have shifted to various digital platforms for fulfilling their shopping requirements in this digital era. Mobile phones have become one of the most strategic channels for the retailers to attract, satisfy and retain customers to maximise their revenue. The all-time accessible mobile app services encourage the users to connect to different online shopping platforms to satisfy their shopping needs. With demonetisation the digital platforms for shopping have been encouraged thus paving the way for m-shoppers to shop at their place of convenience. Inspite of all the benefits offered to m-shoppers, they perceive certain risks while shopping through their mobile phones. Therefore, the present study examines the impact of various behavioural constructs like perceived risk, trust, commitment and purchase intention on m-shopping. The study also attempts to analyse the moderating impact of demonetisation on these behavioural constructs under study. An adapted online questionnaire was used to collect the data from 442 customers who use various mobile app services to shop online. Purposive sampling technique was used to choose a representative sample. The collected data was subject to various statistical tools. The findings of the study reveal that perceived risk has an inverse relationship with m-shopping behaviour whereas trust and commitment positively impact the purchase decision of m-shoppers. Also, perceived risk and commitment parallelly mediate the relationship between trust and purchase intention. The moderated mediation analysis also indicates a positive impact of demonetisation on overall m-shopping behaviour. The study contributes to the m-shopping literature and recommends the academicians, policy makers and retailers to gauge the quantum of various risks perceived by the customers in m-shopping. This would help in reducing these risks and increase the overall sales of the various m-shopping platforms.
Keywords: Perceived risk; Demonetisation; Trust; Commitment; Purchase intention.
Economical and psychosocial effects of COVID-19: Evidence from the GCC economies
by Talla Aldeehani, Moid Ahmad
Abstract: Pandemics like COVID-19 are expected to make a dent on the pockets and the psychological state of individuals. Not just the residents of a country, the industry is also under stress and expects some support from the government to negotiate and manage the effects of such pandemics. The primary objective of the research is to understand the relationship between economic impact, stress and the governments support during the COVID-19 crisis. Additionally, it was intended to study the expectation and impact of the economic relief and support as announced by the respective governments of the GCC countries. The study was conducted during October to December (2020) and is based on survey data as collected from GCC residents. It uses the moderation-mediation techniques and other analytical tools to draw conclusions. One of the significant findings of the research is that the stress levels of individuals during the times of pandemics can be reduced by increasing the governments support. Additionally, the economic impact of a pandemic on earnings is one of the significant reasons for increase in stress levels of individuals.
Keywords: COVID-19; economic impact; stress; Gulf Cooperation Council; GCC; government support.
A Study of the Tweets of Successful Investors in order to identify their Personality
by Ramprakash R, C. J.O.E. ARUN
Abstract: The thrust of the study is to determine the dominant personality traits of successful investors by studying their tweets in Twitter and subsequently demonstrate how these traits influence the behaviour and performance of such investors in investment related realms and in financial management. Given the importance of tweets in indicating personality traits of individuals, this study selected 25 successful investors and performed a linguistic analysis of their tweets using linguistic inquiry and word count (LIWC) software. The results of the study show that successful investors predominantly exhibit two personality traits, namely, emotional stability and openness. Nevertheless, the study found that conscientiousness has been the fundamental trait among all the investors, across the clusters. Interestingly, the study also found that successful investors have low agreeableness and do not exhibit extraversion.
Keywords: investor personality; tweets; linguistic inquiry and word count; LIWC; big five traits; behavioural finance; successful investors.
The trajectory of the SRI fund industry in Brazil
by Jessica Barroso, Elaine Araújo
Abstract: This article utilizes data collected from the platforms Quantum Axis, Morningstar, and Central System from Comissao de Valores Mobiliarios (CVM) to present a descriptive analysis of the Brazilian Socially Responsible Investment (SRI) funds. It was noted that, overall, the Brazilian SRI funds adopt in their policies the third generation SRI approach (positive screen), and no fund with negative screen was found. From 2001 to December 2017, the Brazilian SRI funds industry had a total of 64 funds with sustainable characteristics in its name, which represents a negligible percentage compared to the total of the Brazilian funds industry.
Keywords: Investment funds; SRI; Socially Responsible Investments.
Evaluating the effects of formal and informal institutional on MNE's working in Saudi Arabia.
by Nasser Alshareef
Abstract: Foreign direct investment is unique in that it offers the investor the opportunity to invest in a host country in multiple ways and welcome by the host country. Formal and informal institutions play significant roles in attracting foreign direct investment made by multinational enterprises. Current work aims to explore the influence of formal and informal institutional avoidance, adaption, and co-evolution factors for the inflow of FDI as perceived by the MNEs working in KSA as an evolutionary approach to international business. The data was collected from the British MNEs working in KSA and analysed with logistic regression. The study results suggest the formal institutional avoidance and adaptation factors significantly influence the inflow of FDI as perceived by the MNEs working in KSA. While the formal institutional co-evolution factors insignificantly influence the FDI in KSA. For the informal institutional factors, only informal avoidance significantly influences the FDI in KSA.
Keywords: foreign direct investment; FDI; institutions; multinationals; formal; informal; multinational enterprises; MNEs; capital.
Financial Analyst Coverage and Tax Avoidance: Evidence from the UK
by Mohammed Almaharmeh, Ali Shehadeh, Mohammad Aladwan
Abstract: This paper examines the impact of analyst coverage on corporate tax avoidance strategies. Previous literature suggests different views about the possible relationships linking these phenomena. After examining 3,475 firm-year observations collected from the UK market for the period 2011 to 2018 the findings suggest that high intensity in analyst coverage leads to increased tax avoidance activities. This result is in line with the pressure view which posits that managers may be more incentivised to reach or exceed earnings expectations to evade the unfavourable consequences of missing analysts earnings benchmarks. Our results are robust after applying pooled OLS and fixed-effects panel regressions.
Keywords: corporate tax avoidance; corporate tax aggressiveness; financial analyst coverage; earnings management; corporate governance; market pressure; analyst following; UK.
Household Saving Culture and Financial Literacy in case of Wolaita Zone, Ethiopia
by Mulat Goshu Gebeyehu
Abstract: This study investigates the impact of financial literacy on household saving outcomes in the Wolaita Zone of Ethiopia. A sample of 217 households has used to collect the data. The findings evident that the majority of respondents have overrepresented in informal saving mechanisms. Around 8.75% of households saved through formal means, including banks and microfinance institutions. Approximately 38.25% of respondents saved money through informal mechanisms such as saving association (Iqub and Iddir), at home, with relatives, lending, and purchasing fixed assets. Around 25.81% of respondents save in both formal and informal ways. The instrumental variable (IV) estimation method estimates the impact of financial literacy on household saving outcomes. Mean financial literacy at the district level and participation in financial training are used as financial literacy instruments. According to the findings, financial literacy has a positive and substantial impact on household saving outcomes. Furthermore, financial literacy increases formal savings but has little effect on informal savings. This result highlights the importance of financial literacy policy interventions in improving household saving outcomes and attracting people to formal saving modes.
Keywords: household saving; financial literacy; IV estimation; Wolaita Zone; Ethiopia.
Does financial deepening matter for economic growth in Asian economies: Fresh evidence from panel threshold analysis
by Suman Dahiya
Abstract: Considering the importance of a developed financial system in the development of a nation, the present study explores the link of economic growth with financial deepening in the context of Asian economies with annual data over the period 1999 to 2018. This study is using a new index of financial development proposed by the International Monetary Fund (IMF) in the year 2016. It also examines the nonlinearity of the relationship using panel threshold regression. Estimation results find a single threshold (0.1456) effect in the financial deepening-growth nexus. The results reveal that financial deepening enhances growth in those countries where it is above the threshold value, whereas the role of financial deepening in the growth vanishes in countries where this value is below the threshold. It shows that the financial system can contribute to the growth of an economy once it exceeds the threshold level of deepening. Therefore, policymakers in the below threshold region should design and implement policies that will deepen their financial system to boost economic growth.
Keywords: financial deepening; economic growth; Asian region; two-stage least square; 2SLS; panel threshold regression.
CHANGES OF WORKING CAPITAL MANAGEMENT AND FIRM VALUE IN THAILAND AND SINGAPORE
by M.A. Zariyawati, Mohammad Reyad Hossain
Abstract: Efficient working capital management ensures a firm can run the day-to-day operation smoothly to sustain in a longer period. Hence, the firm should be more careful on changes of working capital management. The study explores the impact of changes of working capital management on firm value using 200 listed non-financial firms from Thailand and Singapore from 2009 to 2018. By employing static panel data regressions, the study demonstrates that shareholders in Thailand perceive an extra working capital investment is significantly less worth than an extra Thai baht of cash investment. Conversely, shareholders in Singapore perceive that extra Singapore dollar of cash investment and extra working capital investment reduces firm value. These different results from both countries are expected due to the different levels of market development.
Keywords: changes of working capital management; firm value; Thailand; Singapore.
Impact of Corporate Governance on Working Capital Management: An Empirical Investigation from India
by Najib Hamood, Faozi Almaqtari, Mamdouh Abdulaziz Saleh Al-Faryan, Mosab Tabash
Abstract: The current study examined the effects of corporate governance on the effectiveness of working capital management among Indian pharmaceutical companies. The study extracted data for ten years from 2008 to 2017 and the empirical analysis conducted was based on a large sample of 82 companies. The results of the current study revealed the number of directors on a board of directors negatively and significantly affects payables deferral period and receivables collection period, while composition of the board does not have a significant impact on the efficiency of working capital management. The current research is believed to be among the first to investigate the influence of corporate governance on the effectiveness of working capital management in an emerging economy, India. The study data should be beneficial for policymakers, investors, finance managers, and others concerned with the efficiency of working capital management.
Keywords: working capital management; WCM; corporate governance; pharmaceutical industry; India; independent directors; dependent directors; board of directors size; emerging economy.
The Impact Of Expectations On The Co-integration Relationship Between The Stock and REIT Markets
by Umit Erol, Aydin Yuksel, Asli Yuksel, Hakki Ozturk
Abstract: This paper examines if expectations have a significant impact on the co-integration relationship between stock and real estate investment trust markets. We use two widely followed expectation indicators which are the US yield spread and the expected US stock market volatility (VIX) to test this hypothesis. The US yield spread is decomposed into two components which are the expected short-term interest rate (EF) and a variable term premium (TP) using Hamilton-Kim algorithm. A dataset covering ten developed markets is used. Using co-integration score analysis our findings indicate that expected US short-term interest rates and expected US stock market volatility have a statistically significant and positive impact on the global co-integrations of different countries. This effect is especially valid in the post-global financial crisis period. The expectation based indicators EF and VIX, however, do not seem to have a significant impact on co-integration at regional and local levels.
Keywords: global; regional co-integration; the US yield spread; expected US short-term interest rates; variable term premium; international diversification.
CROSS MARKET HERDING IN CHINESE, US AND CRUDE OIL MARKETS? QUANTILE REGRESSION ANALYSIS
by O.O.I. K.O.K. LOANG
Abstract: This study examines cross-market herding in Chinese and US markets from 2015 to 2020. It seeks to explore the impact of the crude oil market on Chinese and US. This study adopts cross-sectional absolute deviation to detect herding. This study employs quantile regression rather than OLS method to examine herding in different quantiles. The result shows that NYSE and NASDAQ are herded with each other. For Chinese markets, the bidirectional herding between Shanghai and Shenzhen tends to appear in median (Τ= 50%) and upper quantiles (Τ= 75% and 95%). The herding tendency of Shenzhen is higher than Shanghai and Nasdaq is higher than NYSE. The crude oil market can cause herding in US and Shanghai. The originality of this study contributes to academicians and practitioners in understanding the existence and tendency of cross-market herding. Investors shall aware that herding can be caused by the performance of other markets.
Keywords: herding; stock market; Chinese market; US market; globalisation.
Exploring Whistle-blowing Intentions of Employees Working in the Indian Banking Sector
by Narendra Singh Chaudhary, Kriti Priya Gupta
Abstract: The present study has explored the impact of organisational commitment and perceived organisational support on the internal and external whistle-blowing intentions of employees in the Indian Banking sector in this article. The purposive sampling technique has been employed to select a sample of 660 employees working in various banks in the National Capital Region (NCR) of Delhi. The primary data collected has been analysed through exploratory factor analysis (EFA) and multiple regression analysis. The results indicate that organisational support has a significant positive impact on both internal and external whistle-blowing intentions. With regards to organisational commitment, affective commitment and normative commitment have a significant positive impact on internal and external intentions of whistle-blowing. However, the relationship between continuance commitment and internal whistle-blowing intention is insignificant, whereas the impact of CC on external whistle-blowing intention has been significantly positive.
Keywords: organisational commitment; internal whistle-blowing intentions; external whistle-blowing intentions; wrongdoings; banking sector; perceived organisational support.
Corporate Governance Mechanisms and Banking Performance
by Meriem Jouirou, Fathi Jouini
Abstract: Our study focuses on the impact of corporate governance mechanisms on the performance of banks. Our basic idea is that several determinants of the board of directors could impact the profitability of banks. We conducted an econometric study using an estimate by panel data from a sample of 66 French banks observed over the period 2015-2019. Thus our research aims to see more closely the nature of the relationship between these banks governance mechanisms and banking performance. The results demonstrated a positive and significant relationship between gender diversity and profitability. In addition, we found a positive impact of the independence of directors on profitability while the impact of the duality of the CEO has negative and significant effects on the profitability of the bank. We also use the Newey-West estimator and the method of Weighted Last Square to confirm the relationship between corporate governance and banking profitability.
Keywords: governance; gender diversity; duality ; banking performance.
The Effect Of Capital Structure On Banking Performance:A Meta Analytical Approach
by Houda BenMabrouk, Ikbel BenAbdessalem
Abstract: This paper studies the relationship between banking capital and performance through a systematic review. We perform the meta-analysis technique on 66 papers for a 57-year period that spans from 1958 to 2015. Using the random effect model and the Hedges g measure, the results show that the capital structure does not affect banking performance, which confirms the Modigliani and Miller (1958) findings. However, the meta-regression indicates that the relationship between banking capital structure and performance is significantly associated to the proxy of capital structure, the performance indicator, the banking type (conventional versus Islamic) and the context of the study (developed versus emerging). Finally, the results indicate that Islamic banks' performance is not affected by capital structure.
Keywords: Banking performance; capital structure; meta-analysis.
COVID-19 Pandemic: Revisiting the Safe Haven Assets
by DASAUKI C. MUSA, Oluwalaiye Olusola, Jerry Kwarbai, Jesudara M. Oyesiji
Abstract: Different assets behave differently during different economic situations and Investors are constantly searching for safe assets to hold and avoid volatile assets to hedge against risk. The study considered 13 safe haven assets across the worlds largest economies during the COVID-19 pandemic. The GARCH (1,1) and the threshold GARCH models were applied. The results obtained from the model estimation test showed that COVID-19 and Oil price had a negative effect on some safe haven assets. International stock has less volatility. The result also revealed that crypto currencies (bitcoin, tether, Etherium), stocks (Shanghai stock exchange), currencies (US dollars, Swiss franc, and pounds), precious metal (silver) and government securities (T-bond and T-bill) were less volatile but COVID-19 pandemic triggered higher volatility on precious metal (gold) and stocks (S&P500, CAC40).
Keywords: asymmetry; cryptocurrency; metals; stock; volatility.
Institutional and geopolitical aspects of bond spreads impacts on corporate capital structure in emerging markets
by Sylvia Gottschalk, Bertrand Ndang
Abstract: This paper investigates the impacts of institutional, geographical, and political determinants of corporate capital structure of non-financial companies in a large panel of emerging economies, whilst controlling for macro-economic and firm-level factors, particularly corporate bond spreads. There is extensive literature showing that spreads are a measure of corporate riskiniess and that they affect a firm's ability to raise external funding via the issuance of equity or bonds. More recently, it has been established in development finance literature that a country's financial and legal systems have significant impacts on the capacity of its private sector to raise external investment funding. In particular, there is evidence that Common Law systems and market-based economies are more favourable to private investment and external financing owing to their stronger investor protection. Our results show that, when macroeconomic and firm-level factors are controlled for, most institutional variables have no significant impact on capital structure, with the exception of regulatory quality. The type of financial system, namely, "market-based" or "bank-based", and the legal framework (Common vs French law) have hardly any impact on capital structure. Our results also address the endogeneity issue between corporate bond spreads and capital structure, and show that both variables interact significantly with each other. Firm-specific variables such as profitability, tangibility and macroeconomic performance were found to be the common determinants of both leverage and bond spread.
Keywords: Capital structure; corporate bond spread; emerging markets; bank-based vs market-based economies; governance indicators; financial systems; economic and political institutions; simultaneous equations models.
The Relation between Innovation and Earnings Management: Evidence for the UK
by Yahya Marei, Mohammad Al Bahloul, ADEL ALMASARWAH, Ashraful Alam
Abstract: The purpose of this paper is to investigate whether the executives of innovative firms in the UK economy. This study uses discretionary accruals and abnormal activities as proxies for earnings management and research and development as a proxy for innovation. This study finds dissimilar results for the discretionary accrual and abnormal activity models, it conducts additional analysis that accounts for the innovation to beat the earnings group, and refers to this group as the downward group; another analysis accounts for the innovation to reduce earnings, and refers to this group as the upward group. The results suggest that there is a negative association between discretionary accruals and downward innovation and finds a similar relationship in abnormal activities and the downward group, which indicates the referential value of beating earnings over innovation. This study also documented that innovative firms engage more in manipulation than non-innovative firms.
Keywords: innovation; real and accruals earnings management; incentives; manipulation; UK.
Imposing Zakat on Cryptocurrency (Bitcoin): A Shariah Appraisal
by Muhammad Ikhlas Rosele, Abdul Muneem, Azizi Bin Che Seman, Luqman Haji Abdullah, Noor Naemah Binti Abdul Rahman, Mohd Edil Abd Sukor, Abdul Karim Ali
Abstract: This research aims to study whether zakat is due on cryptocurrency (Bitcoin) and to address the issues related to imposing zakat upon it. This study is conducted based on the qualitative research method following the inductive method and explanatory research approach. The findings show that Bitcoin is recognised as a digital asset in many countries and the tax is imposed accordingly. As such, Bitcoin is among the zakatable assets since it meets the conditions of zakat on assets. Moreover, Bitcoin as a digital currency would also be zakatable if a country recognises it as currency, as would any regulated digital currency issued by a government. Imposing zakat on Bitcoin would boost the total amount of zakat collectible, which would be beneficial for needy people. Further research is recommended to provide the zakat model for Bitcoin and other cryptocurrencies.
Keywords: cryptocurrency; Bitcoin; digital asset; zakat; Shariah.
Macroeconomic uncertainty and stock price crash risk: the moderating roles of operating performance and investor sentiment
by P.E.I. Y.I.N. WONG, Y.E.E. PENG CHOW
Abstract: This paper investigates the association between macroeconomic uncertainty and stock price crash risk and the two potential mechanisms through which the former may affect the latter, namely firms operating performance and firm-specific investor sentiment, based on a sample of listed firms from six Asia-Pacific countries (Japan, Singapore, South Korea, Malaysia, China and Indonesia) for the period 2009 to 2019. Sub-sample analyses are also conducted, where the sample firms are segregated into developed and developing countries. The empirical results show that macroeconomic uncertainty has a significant positive relationship with stock price crash risk for the full sample and firms in both the developed and developing countries. Subsequent analyses reveal that good operating performance strengthens the positive relationship between these variables for the full sample but the opposite holds true for firms in the developing countries. Furthermore, we find that higher firm-specific investor sentiment strengthens the positive association between these variables for the full sample and firms in the developing countries.
Keywords: Asia-Pacific; investor sentiment; macroeconomic uncertainty; operating performance; stock price crash risk.
Is There a Relation between Stock Markets and Climate Change?
by Myeong Hwan Kim, Yongseung Han
Abstract: While economic growth has resulted in a secular upward trend in the performance of the stock market, the associated rise in economic activity has been responsible for the increase in carbon dioxide (CO2) emissions. The rise in emission levels has contributed to the phenomenon of global warming or climate change. Conversely, climate change may affect equity markets by the uncertainty which it produces. What is hypothesised in this study is that there should be an observable long-term secular trend in the US equity markets, and there should also be the seasonal variations described by other researchers. Taking this one step further, the increased CO2 emissions, if correlated with increased private productivity, should result in higher values for the underlying equities, than would be captured by a time linear time trend. Thus, this paper empirically examines the two-way relationship of variations in temperatures with the variations in equity market indices. The results provide evidence that there is a strong causal relationship from the changes in equity market indices to the changes in temperature levels, but there is no causal relationship in the opposite direction.
Keywords: stock market; CO2; global warming; cointegration; causality test.
FDI, Gender Spillovers and Firm Productivity: The Namibian Case
by Reem El Sherif, Charles Adjasi, Michael Graham
Abstract: The benefits of FDI to domestic firms encompass technology and knowledge diffusion, known as spillovers. Knowledge transmission from MNCs can largely differ between total and female labour, yet this critical distinction remains a void in the literature. Using data from the World Bank Enterprises Survey and a new measure of spillovers to capture the gender dimension, this study provides empirical evidence on the impact of FDI spillovers on domestic firm productivity in both Namibias manufacturing and services sectors. The study finds a general negative effect of gender spillovers on domestic services firms productivity, and none in the manufacturing sector. However, the productivity effects of gender spillovers are positive when conditioned on managers years of experience in both sectors as well as on technology in the manufacturing sector. These findings provide important policy implications on how technology and managerial expertise can be used to tap into the potential of female employees to absorb their productivity benefits.
Keywords: MNC; productivity; gender; spillovers; services; Namibia.
Dividend Policy Under the Influence of Corporate Governance Quality: An Empirical Analysis from Asian Emerging Markets
by Um-E-Roman Fayyaz, Michelina Venditti, Raja Nabeel-Ud-Din Jalal
Abstract: In the present study, we investigate the influence of corporate governance quality on the dividend policy of Asian emerging markets. First, we assess the level of corporate governance quality through a comprehensive index comprised of the combined board governance attributes (board of directors, ownership status, and progressive practices) and firm fundamentals through attributes of financial ratios. Then, using a sample of non-financial firms from the stock exchanges of the respective emerging markets (China, India, and Pakistan), our results depict firms corporate governance quality as a relevant factor for dividend pay-out.
Keywords: corporate governance quality; firm fundamentals; dividend policy; dividend pay-outs; emerging markets; Asia.
Determinants of Security Design in Venture Capital Investment: A study on Indian Start ups
by Sarita Mishra, Suresh Sahoo
Abstract: An imperfect competitive financial market has few underlying problems such as adverse selection and information asymmetry problem which is same in case of a venture capital (VC) investment deal. In these context VC investors designs their mode of financing to minimise the effect of above issues. This study encompasses various venture capital funds and their investment with Indian entrepreneurial firms to identify different factors contributing decision on security design of VC investor for the specific deal. Three categories of factors affect security choice by VC investors to invest in India: 1) firm characteristics including age of the firm, stage of the firm and type of industry; 2) VC characteristic include industry experience, total investment experience and past success experienced by the investors; 3) deal characteristics include size of investment, stage funding in round, syndication, control stake hold by VC, revenue generated in previous investment. The statistical significance of these factors is accessed through multinomial logistic regression analysis across different categories of security choice undertaken by venture capitalist in Indian start-ups.
Keywords: venture capital investment; security choice; multinomial logistic regression.
A Closer Look at Industry-Associated Value Premium: Evidence from India
by Bhumiswor Sharma, Srikanth P, Mareena Mathew
Abstract: This paper examines whether the academic literature-promised value premium has any industry association in the Indian equity market and the relationship between stock returns, value, and size within and across industries. We examine all listed firms trading at BSE India between 1999 to 2020, using CAPM and Fama-French three-factor models on each firm-levels and industry-level portfolio. The positive and significant value effect was found to exist in 17 out of 21 industry groups. Both industry and firm-level value effects are identified; however, the firm-level effect seems more prominent. Furthermore, the value effect is most substantial in small-cap value stocks of value-and-growth-oriented industries, large-cap value stocks of value-oriented industry groups, then small-cap growth stocks of value-and growth-oriented industries and large-cap growth stocks of value-and growth-oriented industries. We also show evidence confirming the claim that value premium results from investors challenging higher returns from firms and industries operating in higher risk and distressing constraints.
Keywords: value premium; firm size; regulated industry groups; risk measures; portfolio management; financial market; CAPM; Fama-French three-factor model; value effect.
Systematic Review on Performance and Growth Drivers of SMEs
by Mokhalles Mehdi, Tridib Ranjan Sarma
Abstract: The small and medium enterprises (SMEs) sector is an influential driver in the growth of any economy in the world. Albeit scholars have conducted SME research on performance and growth factors for over two decades, our understanding of this particular type of research is still limited. The study is an attempt to explore the determinants of SMEs performance and systematically reviewed 78 relevant literatures. It concluded that SMEs characteristics, managerial characteristics, internal and external factors influenced the growth and performance of SMEs. The study proposed a framework integrating the past approach and literature. Through the systematic review, we noticed inconsistencies in paradigms that allowed us to offer suggestions for future research. Among the opportunities for future research in the area of SME performance is in-depth qualitative research in the diverse SME sector to understand the performance followed by a focus on methodological trends in SMEs research that need further attention.
Keywords: entrepreneurship; small and medium enterprises; SMEs; performance; financial; non-financial; systematic literature review.
Assessing the Internal Auditors Readiness for Digital Transformation
by Nadta Saengsith, Phassawan Suntraruk
Abstract: The purpose of this study is to investigate the factors that affect the internal auditors readiness for ongoing digital transformation. The questionnaire was designed and distributed to a total of 350 internal auditors who are the member of the Institute of Internal Auditors of Thailand (IIAT). Using multiple regression analysis, the findings indicate that factors relating to know-how including IT-based knowledge, cognition, and competency positively influence the internal auditors readiness for digital transformation. A positive attitude and a willingness to accept change on the part of internal auditors are also essential factors affecting their readiness. Moreover, support from organisations, including professional organisations, are key factors creating a positive working environment to drive the competency of the internal auditors to adapt themselves to cope with the advancement of technology.
Keywords: digital transformation; information technology; internal auditors; readiness; Thailand.
The impact of Facebook and Instagram on the growth of Egyptian MSMEs
by Hadia FakhrElDin, Mahitab Shahin, Rania Miniesy
Abstract: This study examines the impact of using Facebook and Instagram on the growth of micro, small and medium enterprises (MSMEs) in Egypt. It uses both the social exchange theory and the task-technology fit theory to capture the different relationships and effects between the use of these two social media tools and the growth of MSMEs in Egypt. Growth is divided into financial growth (measured through the increase in sales) and non-financial growth (measured through customer engagement and brand performance). Linear regression and t-tests are conducted to identify and compare the effects of the use of social media platforms. Findings indicate that the use of social media has a positive effect on both financial and non-financial growth. Specifically, the use of Facebook has a greater impact on financial growth and brand performance, while the use of Facebook and Instagram combined has a higher effect on customer engagement.
Keywords: brand performance; customer engagement; Egypt; Facebook; financial growth; Instagram; micro; small and medium enterprises; MSMEs; social media.
Financial Performance and Corporate Risk Disclosure: The moderating impact of Board Structure
by Ridhima Saggar, Nischay Arora, Balwinder Singh
Abstract: The study aims to unravel the moderating impact of board attributes, i.e., board size, board independence and gender diversity on the relationship between firms financial performance and corporate risk disclosure in the annual reports of Indian listed non-financial firms. For achieving the objective, the study deploys hierarchical moderated regression on a sample of S&P BSE-100 index pertaining to financial year 2018-19. In addition, automated content analysis has been employed to operationalise the dependent variable, i.e., risk disclosure. The main findings unveil that board size and board independence positively moderate the relationship between firm performance and risk disclosure; suggesting that larger the board size and higher the proportion of independent directors; higher the performance impacts risk disclosure. Contrarily, proportion of women directors negatively moderates the relationship between firm performance and risk disclosure emphasising on the importance of women directors in disclosing risk in low profitable firms.
Keywords: board size; gender diversity; board structure; profitability; risk disclosure.
Corporate Social Responsibility Disclosure: A Study on NIFTY 100 Companies
by Ritika Gupta, Pankaj Kumar
Abstract: Financial and social performances are strong pillars of sustainable corporate development. Presently, companies in India are showing a genuine and legitimate concern for the upliftment of stakeholders by giving corporate social responsibility (CSR) a place in their growth strategies. Therefore, the present study seeks to examine the CSR disclosures of companies constituting the NIFTY 100 index from 2015 to 2019 by preparing a CSR disclosure measurement index. The analysis reveals an average CSR disclosure of 62.13%. Further, the results indicate a significant difference in CSR disclosures on various themes, with environmental activities being the most preferred theme for disclosures followed by human resource, product and customer relation, community development, development of rural areas, and fair business. Likewise, retirement fund benefit plans and providing and promoting education are the most disclosed CSR items. The analysis also shows significant variations in CSR disclosures of sectors, with the cement and cement products sector at the top position and media and entertainment sector at the bottom-most position.
Keywords: corporate social responsibility; CSR; India; disclosure; NIFTY 100.
Stock Price Synchronicity and Stock Liquidity in an Emerging Market
by Pankaj Chaudhary
Abstract: This study examines whether the stock price synchronicity (SYNCH) can influence the stock liquidity in an emerging market. The paper also assesses the impact of demonetisation on stock liquidity. This paper applies the fixed effect and random effect panel data methods to estimate the regression model. Further, the article uses the two-step dynamic panel data technique to address the possible endogeneity problem. The paper finds that the stock price synchronicity has a positive and significant association with stock liquidity. It is noticed that the higher the SYNCH, the more is the stock liquidity by using two measures of liquidity. It is also found that stock liquidity is significantly increased post demonetisation. This study attributes this phenomenon to the well-developed online banking system in India. The paper suggests that the regulators should ensure that more firm-specific information is reflected in the stock prices.
Keywords: stock price synchronicity; stock liquidity; stock illiquidity; demonetisation; emerging market.
Relationship between Investor Sentiment and Stock Returns: A Bibliometric Analysis using SCOPUS database
by Ajit Yadav, Anindita Chakraborty
Abstract: This paper provides a comprehensive bibliometric analysis of the literature on the relationship between investor sentiment and stock returns. It identifies the key authors, publications, journals, publication countries, and reoccurring keywords using VOSviewer. It analyses 983 publications (procured through the SCOPUS database) using four bibliometric techniques: co-citation analysis, citation analysis, co-occurrence analysis, and bibliographic coupling. The results of the co-citation analysis of references and author reveal that investor sentiment and the cross-section of stock returns by Baker and Wurgler (2006) is the most cited article, and M. Baker is the top-cited author. The bibliographic coupling of sources suggests that Finance Research Letters leads in publications, co-occurrence analysis of author keywords reveals that behavioural finance, asset pricing, and volatility are the most occurring keywords. Further, the citation analysis of countries shows that the USA leads in terms of the number of publications, substantially growing globally since 2000.
Keywords: investor sentiment; stock returns; bibliometric analysis; VOSviewer; SCOPUS database.
Coffee shops visiting during the pandemic: Moderating effects of process and physical evidence
by Hiroko Oe, Yasuyuki Yamaoka, Krittin Buasin
Abstract: This study investigated the factors influencing consumers decision to purchase coffee products during the COVID-19 pandemic. Coffee retailers are faced with the impact of the pandemic and need to provide a safe and hygienic in-store environment. A quantitative method was applied to a dataset of 428 dataset collected from an online survey in Thailand. The results suggest that the effects of the key indicators promotion, people and price are accelerated by the moderating effect of process. On the other hand, the moderating effect of physical evidence was found to be influential only via the interaction between people and price. For the moderators, it was shown that process in particular, together with price, has a significant impact on consumer purchase intentions. The moderating effects of process and physical evidence on the sale of coffee products are of important implication that should be reflected in the marketing strategy to sustain the businesses.
Keywords: antecedent factors; moderating effect; process; physical evidence; COVID-pandemic.
Bank Capital and Liquidity Creation: Evidence from Sub Saharan Africa
by Adamu Yahaya, Fauziah Mahat, Mohammad Tukur Saidu, Umar Tijjani Babuga
Abstract: Liquidity creation is among the major function played by banks in advancing economic development within a country. This study seeks to examine the effect of bank capital on liquidity creation among sub-Saharan African banks. Fifty (50) listed banks are drawn across six (6) sub-Saharan African countries consisting of Nigeria, Ghana, South Africa, Zambia, Kenya, and Tanzania, based on their financial market strength within the region. The system-generalized method of moment (GMM) is the analysis technique used for inference in the study due to its ability to address endogeneity bias and provide consistent findings. The findings from the study revealed a significant positive correlation between bank capital and liquidity creation. The study suggests that banks should always comply with regulatory capital guidelines provided by regulatory authorities to maintain their critical role of liquidity creation in the economy.
Keywords: Tier 1 Capital; Cat_Fat; Cat_NonFat; Deposit ratio; Loan Ratio; System GMM.
Women Directors, CEO duality and Board Structure: Case of Indian firms Capital Structure Dynamism
by Pankaj Chaudhary
Abstract: We investigate the impact of women directors, CEO duality, and board structure on capital structure dynamism for Indian firms. We consider top non-financial BSE Group A firms for the time 2010 to 2019. We use dynamic panel data methodology to deal with endogeneity concerns that are prevalent in corporate finance variables. The board independence and women directors are positively related to the SOA. Their presence is associated with the faster adjustments of the firms towards the optimum capital structure. On the other hand, board size and CEO duality are negatively associated with the SOA. We further noticed that the speed of adjustment for the strong governance firms is much faster than the weak governance firms. We conclude that the prospective investors should study the governance system of the companies before investing and place a premium on the firms with a good governance system.
Keywords: capital structure; speed of adjustment; SOA; women director; board of directors; CEO duality.
Investigation of Cointegration and Causal Linkages on Bitcoin Volatility during the COVID-19 Pandemic
by Tiffani -, Ingrid Claudia Calvilus, Shinta Amalina Hazrati Havidz
Abstract: In this study, we focus on a prominent feature in Bitcoin: its volatility. This paper aims to examine the volatility action of Bitcoins price during the COVID-19 pandemic through various angles: COVID-19 fear sentiments, investor fear sentiments, macro-financial factors, and crypto market factors. The study utilises daily data from 11 March 2020 to 31 May 2021. We implemented an ARDL bound testing approach to find cointegration, and the Toda-Yamamoto approach to further examine any existing causal relationships between the variables. The empirical results show that COVID-19 fear increased Bitcoin volatility and a unidirectional causal relation was found between them. Investor fear sentiments revealed that US dollar volatility moved in the same direction as Bitcoin volatility, while VIX was found to be insignificant. Gold, crude oil, and the stock market did not influence the volatility of Bitcoin. Overall, only crypto market factors were cointegrated with Bitcoin volatility in the long run.
Keywords: autoregressive distributed lag; ARDL; Bitcoin; causal linkages; cointegration; COVID-19; crypto market; fear sentiments; macro-financial; Toda-Yamamoto.
Business cycles in Ecuador: an analysis of stylized facts before and after dollarization
by Mercy Orellana, Rodrigo Mendieta, Santiago Pozo-Rodríguez, JOSELIN SEGOVIA, Sofía Vanegas
Abstract: This study examines stylised facts related to the business cycle in Ecuador for the 1990 to 2019 period. To reflect on the dollarisation process that the country went through by the end of 1999, the analysis is conducted for two sub-periods: 1990 to 1999 and 2000 to 2019. The paper invest igates a wide range of macroeconomic variables for Ecuador, including variables regarding demand, the labour market, nominal variables, and variables related to an open economy. The sensitivity of correlations is studied through two detrending techniques: 1) the modified Hodrick-Prescott (MHP) filter; 2) a Hodrick-Prescott filter with a smoothing parameter of 1,600. The results reveal substantial changes in the cyclical behaviour of the Ecuadorian economy under dollarisation. In particular, the country shows greater dependence on the international market and high vulnerability to demand shocks.
Keywords: economic cycle; Ecuador; dollarisation.
Declining Trade Interest in Indian Commodity Derivatives: A survey-based study on Cardamom Futures Contract
by Vijayakumar. A. N.
Abstract: Agri-plantation commodity futures contracts provide an opportunity for transparent price discovery and hedging to market participants in the commodity ecosystem. In this endeavour, the market regulator of derivatives and the government has been taking several measures for improving trade volumes, market efficiency and to protect the interest of trade participants. However, commodity futures contract volumes at the Indian Commodity Exchange has been experiencing a consistent fall in trade. This paper focusing on high-value cardamom futures contracts explored reasons for declining trade interest and falling trade volumes. This study with survey and impact of the event finds revised quality norms for fresh deposits of cardamom at accredited warehouses, higher cost of testing quality, raise in margin rate resulted in declining trading interest amongst market participants. The study also recommends appropriate policy to recognise exchange specific commodity trade norms considering Spices Boards e-auction to benefit market participants. This would facilitate transparent and competitive price discovery and an opportunity for managing price risk through the hedging process.
Keywords: cardamom futures; quality norms; margin money; commodity exchange; trading interest.
COVID-19 and negative oil prices-an empirical analysis comparing importing and exporting countries
by Muhammad Umar, Joaquim António Ferrão, Mário Nuno Mata
Abstract: The coronavirus pandemic has forced lockdown in many countries, reducing the use of vehicles and planes, resulting in a negative oil demand shock. In the USA, West Texas Intermediate (WTI) crude oil FOB spot price was recorded to be negative $36.98 per barrel on April 20, 2020. This would seem to be good news for oil importers and bad news for oil exporters. However, the results of an event study analysis of indices data ranging from July 1, 2019 to May 29, 2020 present a different picture. The incidence of a negative oil price had a negative impact on the stock markets of both major oil importing and exporting countries, although the effects on exporting countries were much more negative. Cumulative average abnormal returns, measured using a historical mean model and in reference to the event day of April 20, were significantly negative for all groups in the first two days, vanishing quickly in the very short term.
Keywords: negative oil price; COVID-19; demand shock; energy markets; oil importing; event study.
Performance of the African stock market amid COVID-19 global health crisis: empirical analysis using four events
by Richard Danquah, Samuel Kortu Nelson, Chiamaka Nneoma Nweze, Peter Davis Sumo, Lydia Osarfo Achaa, Ishmael Arhin
Abstract: The study employs the market model and event study approach with four events to examine the performance of the African stock market amid COVID-19 global health crisis. We use daily stock market data from 14 African countries (as a proxy for the African market) spanning September 2019 to June 2021 and COVID-19 data to estimate average abnormal returns for Africa. The results show significant positive average abnormal returns in Africa when the WHO announced COVID-19 as a global health epidemic. The events of infections and deaths generated significant negative average abnormal returns while the event of vaccination did not generate any significant average abnormal returns in the market. In as much as pandemics are unpredictable, the African market quickly recovers as depicted by COVID-19; therefore, we recommend to investors, speculators, and portfolio managers not to quickly exit the continent during pandemics.
Keywords: COVID-19; Africa; stock market; performance; event study; market model; abnormal returns.
The COVID-19 impact on MSME earnings: evidences from Saudi Arabia
by Ahmad T. Al-Harbi, Moid U. Ahmad
Abstract: Small businesses are more prone to market a movement which gets aggravated in an uncontrollable scenario such as COVID-19. The objective of the study is to understand the impact of COVID-19 and the subsequent government's policy support, on the earnings of MSME firms in Saudi Arabia. Based on a selected study period (MarchMay 2021), a survey of MSME owners and managers was conducted (41% response rate) using a 33 items questionnaire. Linear regression analysis and moderation analysis was used for data interpretation. One of the key findings of the study is that firms size and the governments economic support moderates the relationship of MSME operations with MSME earnings.
Keywords: micro; small and medium enterprises; MSME; earnings; COVID-19; operations; governments support; Saudi Arabia.
Synthesis of effect of investor sentiment on stock returns: a systematic review
by Ajit Yadav, Anindita Chakraborty
Abstract: The effect of investor sentiment on stock returns is a topic of long-standing interest amongst behavioural economists. This paper systematically reviews the literature on the effect of investor sentiment on stock returns. We have systematically reviewed 107 selected studies and analysed them based on the year, journal of publication, country of sample data, study type, techniques employed, and citations. The literature analysis reveals the dearth of literature on the sentiment-return relationship in developing economies. It also highlights that there exists no set consensus on the sentiment-return relationship along with a lack of clear-cut distinction between the effect of components (rational or irrational) of investor sentiment on the stock performance. It also questions whether the investors can hedge against future risk and whether distinct return patterns are based upon the lead-lag variation or is merely the effect of the optimistic exuberance of the investors.
Keywords: investor sentiment; stock returns; stock markets; mispricing; trading behaviour; asset pricing; measuring sentiment.