Emerging nations like Indonesia, South Korea, Bangladesh, Egypt, Mexico, Nigeria, Pakistan, Turkey, the Philippines, Iran and Vietnam have developing stock markets which may offer ample opportunities to investors for their portfolio returns. The emerging next ten countries (N-10) in the present paper have been explored for diversification opportunities for investors. The study has incorporated eight years’ (2013-2020) time series data for N-10 countries’ stock market indices. Portfolio diversification strategies between Pakistan and other markets have been indicated as per the findings of Granger causality, Johansen Cointegration techniques, VECM and Wald test. The unidirectional and bidirectional linkages analysis has shown fewer possibilities between Bangladesh and Egypt stock markets with diversification benefits. Thus, investors may utilise the findings of the study in planning their portfolio among these stock markets.
{"title":"Diversification Potential Among the N-10 Countries: An Empirical Investigation","authors":"P. Bhatia, S. Kushwah","doi":"10.4038/ijabf.v9i1.137","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.137","url":null,"abstract":"Emerging nations like Indonesia, South Korea, Bangladesh, Egypt, Mexico, Nigeria, Pakistan, Turkey, the Philippines, Iran and Vietnam have developing stock markets which may offer ample opportunities to investors for their portfolio returns. The emerging next ten countries (N-10) in the present paper have been explored for diversification opportunities for investors. The study has incorporated eight years’ (2013-2020) time series data for N-10 countries’ stock market indices. Portfolio diversification strategies between Pakistan and other markets have been indicated as per the findings of Granger causality, Johansen Cointegration techniques, VECM and Wald test. The unidirectional and bidirectional linkages analysis has shown fewer possibilities between Bangladesh and Egypt stock markets with diversification benefits. Thus, investors may utilise the findings of the study in planning their portfolio among these stock markets.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130656739","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Employing the event study methodology, this research probes the response of share prices to announcements of rights issues and debenture issues within the Colombo Stock Exchange. The market model, a quintessential tool for estimating abnormal returns, was harnessed to scrutinize samples encompassing rights issue announcements (n=85) and debenture issue announcements (n=106). These events transpired within the period spanning 2012 to 2019, providing a context post-Global Financial Crisis and pre-COVID-19 pandemic. The findings evince a notable negative reaction of share prices concurrent with the disclosure of rights issuance on the announcement day. Conversely, a non-significant positive reaction was observed for share prices on the debenture issue announcement date. The examination of the selected sectors' share price responses to both rights issue announcements and debenture issue announcements yielded mixed outcomes. Additionally, the results unveil a discrepancy with the semi-strong form of the market efficiency hypothesis, indicating the Sri Lankan Stock market does not adhere strictly to this theoretical proposition. Consequently, this study furnishes crucial insights into the dynamics of share price reactions in frontier markets like Sri Lanka, thereby contributing to the broader discourse on market efficiency.
{"title":"The Reaction of Share Prices to the Announcements of Right Issues and Debenture Issues: Evidence from a Frontier Market","authors":"M. D. S. Jayarathne, S. Samarakoon, R. P. Pradhan","doi":"10.4038/ijabf.v9i1.139","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.139","url":null,"abstract":"Employing the event study methodology, this research probes the response of share prices to announcements of rights issues and debenture issues within the Colombo Stock Exchange. The market model, a quintessential tool for estimating abnormal returns, was harnessed to scrutinize samples encompassing rights issue announcements (n=85) and debenture issue announcements (n=106). These events transpired within the period spanning 2012 to 2019, providing a context post-Global Financial Crisis and pre-COVID-19 pandemic. The findings evince a notable negative reaction of share prices concurrent with the disclosure of rights issuance on the announcement day. Conversely, a non-significant positive reaction was observed for share prices on the debenture issue announcement date. The examination of the selected sectors' share price responses to both rights issue announcements and debenture issue announcements yielded mixed outcomes. Additionally, the results unveil a discrepancy with the semi-strong form of the market efficiency hypothesis, indicating the Sri Lankan Stock market does not adhere strictly to this theoretical proposition. Consequently, this study furnishes crucial insights into the dynamics of share price reactions in frontier markets like Sri Lanka, thereby contributing to the broader discourse on market efficiency.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"129 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132283299","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines Small and Mid-sized Enterprises (SMEs) through the lens of the financial growth cycle, which emphasizes that an entity’s financing options change as they change in size, age, and informational transparency. For this study, we examined SMEs in the city of Corner Brook, the second largest city in the province of Newfoundland & Labrador, analyzing their sources of capital while specifically focusing on two main attributes, size and age. Utilizing the financial growth cycle model, we examined how efficiently SME financing needs are being met through the various options available to them as they grow in size and age. We discuss in particular, findings related to government assisted financing, concluding that as SMEs grows older, they are increasingly likely to opt for federally funded financing as a source of capital. In this study, we sampled SMEs in one city (Corner Brook) to empirically test the financial growth cycle paradigm. The paper investigates the role that government sponsored financing plays in overcoming the information opacity problem of SMEs at different stages of the growth cycle. The study observes that government sponsored financing appears to play an important role in SME financing. The finding suggests that firms should consider accessing sources of government financing even at an early stage in the financial growth cycle.
{"title":"USE of Government Assisted Financing by SMES: An Empirical Examination of Canadian SMES using the Financial Growth Cycle","authors":"C. Osakwe, S. Dhaliwal, K. Jagoda","doi":"10.4038/ijabf.v9i1.138","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.138","url":null,"abstract":"This study examines Small and Mid-sized Enterprises (SMEs) through the lens of the financial growth cycle, which emphasizes that an entity’s financing options change as they change in size, age, and informational transparency. For this study, we examined SMEs in the city of Corner Brook, the second largest city in the province of Newfoundland & Labrador, analyzing their sources of capital while specifically focusing on two main attributes, size and age. Utilizing the financial growth cycle model, we examined how efficiently SME financing needs are being met through the various options available to them as they grow in size and age. We discuss in particular, findings related to government assisted financing, concluding that as SMEs grows older, they are increasingly likely to opt for federally funded financing as a source of capital. In this study, we sampled SMEs in one city (Corner Brook) to empirically test the financial growth cycle paradigm. The paper investigates the role that government sponsored financing plays in overcoming the information opacity problem of SMEs at different stages of the growth cycle. The study observes that government sponsored financing appears to play an important role in SME financing. The finding suggests that firms should consider accessing sources of government financing even at an early stage in the financial growth cycle.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116448058","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Mergers and acquisitions (M&A) have lately increased in the Indian banking sector with the desire to improve efficiency. It is important to investigate whether the banks are able to gain expected synergies. This study examines the effects of M&A in the banking sector by analyzing M&A transactions between 2014 and 2022. The current paper is built on secondary financial data, whereas outcomes were assessed on three major parameters, i.e. market performance, financial performance, and overall efficiency improvement. The study used different methodologies such as event study, ratio analysis, tabulation, and Wilcoxon rank text to check over different parameters. The findings reveal a significant improvement in market performance and financial performance. No statistically significant improvements were found in profitability, liquidity, and operational efficiency. We conclude that synergy gain cannot be achieved by M&A only. Overall the study gives insight into the value creation through M&A in emerging economies' banking industry and emphasizes the importance of effective integration strategies. The study has implications for the central bank, banks, and policymakers in emerging economies to decide on M&A activities and the development of a robust banking sector.
{"title":"Examining the Synergies Implication of Merger and Acquisition in Banking Sector: Evidence from Emerging Economy","authors":"M. Verma, P. Kalyan, P. Ekka","doi":"10.4038/ijabf.v9i1.136","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.136","url":null,"abstract":"Mergers and acquisitions (M&A) have lately increased in the Indian banking sector with the desire to improve efficiency. It is important to investigate whether the banks are able to gain expected synergies. This study examines the effects of M&A in the banking sector by analyzing M&A transactions between 2014 and 2022. The current paper is built on secondary financial data, whereas outcomes were assessed on three major parameters, i.e. market performance, financial performance, and overall efficiency improvement. The study used different methodologies such as event study, ratio analysis, tabulation, and Wilcoxon rank text to check over different parameters. The findings reveal a significant improvement in market performance and financial performance. No statistically significant improvements were found in profitability, liquidity, and operational efficiency. We conclude that synergy gain cannot be achieved by M&A only. Overall the study gives insight into the value creation through M&A in emerging economies' banking industry and emphasizes the importance of effective integration strategies. The study has implications for the central bank, banks, and policymakers in emerging economies to decide on M&A activities and the development of a robust banking sector.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121147966","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this research is to discover the opinions of the Lebanese banks regarding the relevance of the fair value method. Furthermore, this study will provide an additional insight into the suitability of the fair value measurement in a developing economy like that of Lebanon, and in an absence of an active financial market. For the benefit of this deductive research, a quantitative methodology was solely employed. Using a questionnaire of 14 questions measured with a Likert Scale (pre-coded questions), and a sample of 61 Lebanese Banks, the data was collected through a combination of some self-administered surveys, and some in person questionnaire-style interviews. The collected data was subjected to statistical tests using SPSS software. The main results showed that Lebanese banks consider the fair value measurement under IFRS 13 relevant compared to the traditional historical cost method. Nevertheless, the relevance of fair value in times of financial turbulence differs from its relevance in times of financial stability. Bearing in mind the limitedness of research on this topic in Lebanon, this paper offers a significant contribution to the field. Upcoming studies will build on this analysis with the help of a larger sample. In addition, Lebanese banks will become more aware about the importance of the switch to the fair value method compared to the historical cost, and will seek to enhance their maturity level in this vein and to imitate international banks’ financial disclosures.
{"title":"Suitability and Relevance of the Fair Value Measurement Under IFRS 13 Vs Historical Cost: Application to the Lebanese Banking Sector","authors":"K. Feghali, R. M. Jreije, N. Bahnan","doi":"10.4038/ijabf.v9i1.131","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.131","url":null,"abstract":"The aim of this research is to discover the opinions of the Lebanese banks regarding the relevance of the fair value method. Furthermore, this study will provide an additional insight into the suitability of the fair value measurement in a developing economy like that of Lebanon, and in an absence of an active financial market. For the benefit of this deductive research, a quantitative methodology was solely employed. Using a questionnaire of 14 questions measured with a Likert Scale (pre-coded questions), and a sample of 61 Lebanese Banks, the data was collected through a combination of some self-administered surveys, and some in person questionnaire-style interviews. The collected data was subjected to statistical tests using SPSS software. The main results showed that Lebanese banks consider the fair value measurement under IFRS 13 relevant compared to the traditional historical cost method. Nevertheless, the relevance of fair value in times of financial turbulence differs from its relevance in times of financial stability. Bearing in mind the limitedness of research on this topic in Lebanon, this paper offers a significant contribution to the field. Upcoming studies will build on this analysis with the help of a larger sample. In addition, Lebanese banks will become more aware about the importance of the switch to the fair value method compared to the historical cost, and will seek to enhance their maturity level in this vein and to imitate international banks’ financial disclosures.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124002485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides new empirical evidence with respect to the influence of banks´ long- and short-term credit ratings and their volatility performance in the emerging market of Pakistan covering 10-year analysis and a unique and comprehensive data set derived from a sample of Islamic and conventional banks with Islamic windows. The purpose of this paper is to examine the nature of the relationship between Islamic banks´ performance and banks´ credit rating focusing on the emerging market of Pakistan over the period of 2010-2019. To achieve the describing goal, researchers use various quantitative approaches, namely the ordinary least square (OLS) and the Granger causality test. Sample consists of nine conventional banks with Islamic windows and three fully-fledged Islamic banks listed on the Karachi Stock Exchange with credit ratings assigned by the PACRA. Results reveal that banks with higher financial performance have higher long- and short-term ratings, higher GDP growth rates, lower equity to assets ratio, and are smaller in size. Results also array the existence of bidirectional Granger causality between short- and long-term ratings and ROE and a unidirectional Granger causality between trend ROE and trend short- and long-term ratings, respectively.
{"title":"An Empirical Study on the Relationship Between Credit Rating and Banks´ Performance: Evidence from an Emerging Market","authors":"Abu-Alkheil, G. Khartabiel, Riaz, A., A-Khan","doi":"10.4038/ijabf.v9i1.135","DOIUrl":"https://doi.org/10.4038/ijabf.v9i1.135","url":null,"abstract":"This paper provides new empirical evidence with respect to the influence of banks´ long- and short-term credit ratings and their volatility performance in the emerging market of Pakistan covering 10-year analysis and a unique and comprehensive data set derived from a sample of Islamic and conventional banks with Islamic windows. The purpose of this paper is to examine the nature of the relationship between Islamic banks´ performance and banks´ credit rating focusing on the emerging market of Pakistan over the period of 2010-2019. To achieve the describing goal, researchers use various quantitative approaches, namely the ordinary least square (OLS) and the Granger causality test. Sample consists of nine conventional banks with Islamic windows and three fully-fledged Islamic banks listed on the Karachi Stock Exchange with credit ratings assigned by the PACRA. Results reveal that banks with higher financial performance have higher long- and short-term ratings, higher GDP growth rates, lower equity to assets ratio, and are smaller in size. Results also array the existence of bidirectional Granger causality between short- and long-term ratings and ROE and a unidirectional Granger causality between trend ROE and trend short- and long-term ratings, respectively.","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116668301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Effect of Covid -19 Pandemic on the Performance of Sri Lankan Banks","authors":"K. R. K. Harshana, M. Wanniarachchige","doi":"10.4038/ijabf.v8i2.128","DOIUrl":"https://doi.org/10.4038/ijabf.v8i2.128","url":null,"abstract":"","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132798999","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Impact of Contextual Determinants Towards the Disposition Bias of Individual Investors in the Sri Lankan Stock Market","authors":"H. Buddhika, T. Ediriwickrama","doi":"10.4038/ijabf.v8i2.125","DOIUrl":"https://doi.org/10.4038/ijabf.v8i2.125","url":null,"abstract":"","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"167 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121626747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Effect of Ownership Diversity on Financial Distress: Evidence from Colombo Stock Exchange","authors":"M. Bogamuwa, K. Perera","doi":"10.4038/ijabf.v8i2.126","DOIUrl":"https://doi.org/10.4038/ijabf.v8i2.126","url":null,"abstract":"","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131686363","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Adoption of Internet Based Technologies in Accounting: Banking Professionals’ Perception","authors":"A. W. J. C. Abeygunasekera","doi":"10.4038/ijabf.v8i2.122","DOIUrl":"https://doi.org/10.4038/ijabf.v8i2.122","url":null,"abstract":"","PeriodicalId":198654,"journal":{"name":"International Journal of Accounting and Business Finance","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121121676","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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