Pub Date : 2023-07-27DOI: 10.1108/raf-03-2023-0092
Aref Mahdavi Ardekani
Purpose While previous literature has emphasized the causal relationship from liquidity to capital, the impact of interbank network characteristics on this relationship remains unclear. By applying the interbank network simulation, this paper aims to examine whether the causal relationship between capital and liquidity is influenced by bank positions in the interbank network. Design/methodology/approach Using the sample of 506 commercial banks established in 28 European countries from 2001 to 2013, the author adopts the generalized method of moments simultaneous equations approach to investigate whether interbank network characteristics influence the causal relationship between bank capital and liquidity. Findings Drawing on a sample of commercial banks from 28 European countries, this study suggests that the interconnectedness of banks within interbank loan and deposit networks shapes their decisions to establish higher or lower regulatory capital ratios in the face of increased illiquidity. These findings support the implementation of minimum liquidity ratios alongside capital ratios, as advocated by the Basel Committee on Banking Regulation and Supervision. In addition, the paper underscores the importance of regulatory authorities considering the network characteristics of banks in their oversight and decision-making processes. Originality/value This paper makes a valuable contribution to the current body of research by examining the influence of interbank network characteristics on the relationship between a bank’s capital and liquidity. The findings provide insights that add to the ongoing discourse on regulatory frameworks and emphasize the necessity of customized approaches that consider the varied interbank network positions of banks.
{"title":"Liquidity, interbank network topology and bank capital","authors":"Aref Mahdavi Ardekani","doi":"10.1108/raf-03-2023-0092","DOIUrl":"https://doi.org/10.1108/raf-03-2023-0092","url":null,"abstract":"\u0000Purpose\u0000While previous literature has emphasized the causal relationship from liquidity to capital, the impact of interbank network characteristics on this relationship remains unclear. By applying the interbank network simulation, this paper aims to examine whether the causal relationship between capital and liquidity is influenced by bank positions in the interbank network.\u0000\u0000\u0000Design/methodology/approach\u0000Using the sample of 506 commercial banks established in 28 European countries from 2001 to 2013, the author adopts the generalized method of moments simultaneous equations approach to investigate whether interbank network characteristics influence the causal relationship between bank capital and liquidity.\u0000\u0000\u0000Findings\u0000Drawing on a sample of commercial banks from 28 European countries, this study suggests that the interconnectedness of banks within interbank loan and deposit networks shapes their decisions to establish higher or lower regulatory capital ratios in the face of increased illiquidity. These findings support the implementation of minimum liquidity ratios alongside capital ratios, as advocated by the Basel Committee on Banking Regulation and Supervision. In addition, the paper underscores the importance of regulatory authorities considering the network characteristics of banks in their oversight and decision-making processes.\u0000\u0000\u0000Originality/value\u0000This paper makes a valuable contribution to the current body of research by examining the influence of interbank network characteristics on the relationship between a bank’s capital and liquidity. The findings provide insights that add to the ongoing discourse on regulatory frameworks and emphasize the necessity of customized approaches that consider the varied interbank network positions of banks.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42687704","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}
Pub Date : 2023-07-24DOI: 10.1108/raf-05-2023-0163
M. H. Shahrour, Mohamed Arouri, R. Lemand
Purpose This study aims to address gaps and limitations in the literature regarding firms’ exposure to climate risks. It reviews existing research, proposes new theoretical frameworks and provides directions for future studies. Design/methodology/approach A bibliometric and systematic approach is used to review the literature on firms’ climate risk exposure. The study examines current theoretical frameworks and suggests additional ones to enhance understanding. Findings This study contributes to the climate finance literature by offering a comprehensive overview of firms’ climate risk exposure and used theories. It emphasizes the urgent need to tackle climate change and the crucial role of firms in climate risk management. The study supports the advancement of sustainability policies and highlights the importance of understanding firms' climate risk exposure. Practical implications This study informs the development of climate risk management strategies within firms and supports the implementation of effective sustainability policies. Social implications Addressing climate risks can contribute to a more sustainable and resilient future for society as a whole. Originality/value This study provides a roadmap for future research by identifying gaps and limitations in the literature. It introduces new perspectives and theoretical frameworks, adding original insights to the field of study.
{"title":"On the foundations of firm climate risk exposure","authors":"M. H. Shahrour, Mohamed Arouri, R. Lemand","doi":"10.1108/raf-05-2023-0163","DOIUrl":"https://doi.org/10.1108/raf-05-2023-0163","url":null,"abstract":"\u0000Purpose\u0000This study aims to address gaps and limitations in the literature regarding firms’ exposure to climate risks. It reviews existing research, proposes new theoretical frameworks and provides directions for future studies.\u0000\u0000\u0000Design/methodology/approach\u0000A bibliometric and systematic approach is used to review the literature on firms’ climate risk exposure. The study examines current theoretical frameworks and suggests additional ones to enhance understanding.\u0000\u0000\u0000Findings\u0000This study contributes to the climate finance literature by offering a comprehensive overview of firms’ climate risk exposure and used theories. It emphasizes the urgent need to tackle climate change and the crucial role of firms in climate risk management. The study supports the advancement of sustainability policies and highlights the importance of understanding firms' climate risk exposure.\u0000\u0000\u0000Practical implications\u0000This study informs the development of climate risk management strategies within firms and supports the implementation of effective sustainability policies.\u0000\u0000\u0000Social implications\u0000Addressing climate risks can contribute to a more sustainable and resilient future for society as a whole.\u0000\u0000\u0000Originality/value\u0000This study provides a roadmap for future research by identifying gaps and limitations in the literature. It introduces new perspectives and theoretical frameworks, adding original insights to the field of study.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48912086","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}
Pub Date : 2023-07-24DOI: 10.1108/raf-10-2022-0299
Hardjo Koerniadi
Purpose This paper aims to examine whether firms engage in earnings management immediately after experiencing a downgrade in their credit rating. Design/methodology/approach This paper uses fixed-effects regression models to examine real- and accrual-based earnings management after firms experience a downgrade in their credit rating. Findings Inconsistent with prior studies where firms are reported to opportunistically increase their earnings prior to a credit rating event, this paper finds that firms use income-decreasing earnings management after their ratings are downgraded. This paper also finds that firms downgraded to below the investment grade rating not only significantly reduce both abnormal cash flows and discretionary accruals but also report larger asset impairments, suggesting that these firms exploit the rating downgrade to employ a big bath accounting. Practical implications The results of this paper have practical implications for investors fixating on firm earnings after a credit rating downgrade, for shareholders of downgraded firms and regulators such as credit rating agencies. Originality/value The findings of this study contribute to the thin literature on earnings management after changes in credit rating by shedding lights on earnings management after a rating downgrade and complement the literature on the accounting choice of financially distressed firms. The empirical evidence documented in this study suggests that the occurrence of income-decreasing earnings management is not limited to only after a sovereign country rating downgrade as documented in a prior study but also occurs after a rating downgrade not associated with this event.
{"title":"Do firms manage earnings after a downgrade in their credit rating?","authors":"Hardjo Koerniadi","doi":"10.1108/raf-10-2022-0299","DOIUrl":"https://doi.org/10.1108/raf-10-2022-0299","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine whether firms engage in earnings management immediately after experiencing a downgrade in their credit rating.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses fixed-effects regression models to examine real- and accrual-based earnings management after firms experience a downgrade in their credit rating.\u0000\u0000\u0000Findings\u0000Inconsistent with prior studies where firms are reported to opportunistically increase their earnings prior to a credit rating event, this paper finds that firms use income-decreasing earnings management after their ratings are downgraded. This paper also finds that firms downgraded to below the investment grade rating not only significantly reduce both abnormal cash flows and discretionary accruals but also report larger asset impairments, suggesting that these firms exploit the rating downgrade to employ a big bath accounting.\u0000\u0000\u0000Practical implications\u0000The results of this paper have practical implications for investors fixating on firm earnings after a credit rating downgrade, for shareholders of downgraded firms and regulators such as credit rating agencies.\u0000\u0000\u0000Originality/value\u0000The findings of this study contribute to the thin literature on earnings management after changes in credit rating by shedding lights on earnings management after a rating downgrade and complement the literature on the accounting choice of financially distressed firms. The empirical evidence documented in this study suggests that the occurrence of income-decreasing earnings management is not limited to only after a sovereign country rating downgrade as documented in a prior study but also occurs after a rating downgrade not associated with this event.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43276548","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}
Pub Date : 2023-07-20DOI: 10.1108/raf-10-2022-0292
Yen Nguyen, Cuong Thanh Dang, H. Trinh
Purpose This study aims to evaluate the impact of board characteristics on bank performance at the commercial bank in Vietnam. Design/methodology/approach By running the pool OLS, fixed-effect and random-effect models with a panel data set of 294 observations from 2008 to 2021, the authors have examined determinants of bank performance. Findings The research results show that bank size, governance efficiency, capital adequacy ratio and economic growth have a positive effect while credit risk has a negative relationship with the commercial bank’s performance. Originality/value In particular, the result shows the relationship between chief executive officers’ (CEOs) gender and bank performance. Commercial banks led by female CEOs have lower bank performance than that led by male CEOs. However, this impact magnitude is not significant. The research results are the basis to propose recommendations to improve the Vietnamese commercial bank’s performance.
{"title":"The impact of feminism on bank performance: the case of Vietnam","authors":"Yen Nguyen, Cuong Thanh Dang, H. Trinh","doi":"10.1108/raf-10-2022-0292","DOIUrl":"https://doi.org/10.1108/raf-10-2022-0292","url":null,"abstract":"\u0000Purpose\u0000This study aims to evaluate the impact of board characteristics on bank performance at the commercial bank in Vietnam.\u0000\u0000\u0000Design/methodology/approach\u0000By running the pool OLS, fixed-effect and random-effect models with a panel data set of 294 observations from 2008 to 2021, the authors have examined determinants of bank performance.\u0000\u0000\u0000Findings\u0000The research results show that bank size, governance efficiency, capital adequacy ratio and economic growth have a positive effect while credit risk has a negative relationship with the commercial bank’s performance.\u0000\u0000\u0000Originality/value\u0000In particular, the result shows the relationship between chief executive officers’ (CEOs) gender and bank performance. Commercial banks led by female CEOs have lower bank performance than that led by male CEOs. However, this impact magnitude is not significant. The research results are the basis to propose recommendations to improve the Vietnamese commercial bank’s performance.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49054568","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}
Pub Date : 2023-07-18DOI: 10.1108/raf-06-2022-0166
Linda H. Chen, Leslie Eldenburg, Theodore H. Goodman
Purpose
The purpose of this study is to investigate how two types of drivers, namely, executive compensation and market competition, can affect hospital quality in the USA. Recently, patients, insurers and regulators have increasingly focused on hospital quality. Understanding the interplay of incentives in this industry is important because in 2019, hospital treatment contributed $1.161bn to health-care costs in the USA. This study answers the call for more studies in the so-called “mixed” industry, where ownership differences can affect organizational objectives and operating constraints.
Design/methodology/approach
This study explores the roles of hospital executive compensation and industry competition as determinants of health-care quality. Specifically, the study probes the heterogeneity in the factors that influence quality across hospital types in the USA.
Findings
Using California hospital data from 2006 through 2020, the findings show that the effects of compensation and competition on hospital quality differ by ownership type. Executive compensation is positively associated with quality in for-profit hospitals but is not associated with that of nonprofit hospitals, suggesting for-profit hospitals are more likely to use higher levels of compensation to attract managers with higher ability, whereas the utility function for nonprofit managers may be multidimensional. Within the nonprofit hospital group, competition is more positively associated with quality for religious nonprofits relative to secular nonprofits, suggesting that competition provides more monitoring for religious hospitals.
Originality/value
Taken together, the findings provide evidence that the drivers of quality vary across hospitals in ways consistent with differences in constraints and objectives across ownership types. The findings are important for regulators seeking to incentivize higher quality. For example, Medicare in the USA has incorporated quality measures into its new hospital reimbursement scheme (value-based purchasing) to incentivize quality. This study proposes that regulators should consider differences across ownership types when evaluating the best ways to incentivize hospital quality.
{"title":"Does the influence of competition and compensation on hospital quality vary with ownership type?","authors":"Linda H. Chen, Leslie Eldenburg, Theodore H. Goodman","doi":"10.1108/raf-06-2022-0166","DOIUrl":"https://doi.org/10.1108/raf-06-2022-0166","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The purpose of this study is to investigate how two types of drivers, namely, executive compensation and market competition, can affect hospital quality in the USA. Recently, patients, insurers and regulators have increasingly focused on hospital quality. Understanding the interplay of incentives in this industry is important because in 2019, hospital treatment contributed $1.161bn to health-care costs in the USA. This study answers the call for more studies in the so-called “mixed” industry, where ownership differences can affect organizational objectives and operating constraints.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study explores the roles of hospital executive compensation and industry competition as determinants of health-care quality. Specifically, the study probes the heterogeneity in the factors that influence quality across hospital types in the USA.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Using California hospital data from 2006 through 2020, the findings show that the effects of compensation and competition on hospital quality differ by ownership type. Executive compensation is positively associated with quality in for-profit hospitals but is not associated with that of nonprofit hospitals, suggesting for-profit hospitals are more likely to use higher levels of compensation to attract managers with higher ability, whereas the utility function for nonprofit managers may be multidimensional. Within the nonprofit hospital group, competition is more positively associated with quality for religious nonprofits relative to secular nonprofits, suggesting that competition provides more monitoring for religious hospitals.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Taken together, the findings provide evidence that the drivers of quality vary across hospitals in ways consistent with differences in constraints and objectives across ownership types. The findings are important for regulators seeking to incentivize higher quality. For example, Medicare in the USA has incorporated quality measures into its new hospital reimbursement scheme (value-based purchasing) to incentivize quality. This study proposes that regulators should consider differences across ownership types when evaluating the best ways to incentivize hospital quality.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"19 1","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138515812","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}
Pub Date : 2023-07-10DOI: 10.1108/raf-01-2023-0009
D. Ramdhony, Mohamed Omran, K. Hussainey
Purpose This paper aims to answer whether board attributes affect corporate social responsibility disclosure quality (CSRDQ) and whether these findings are sensitive to CSRDQ measurement. Design/methodology/approach The authors use the content analysis method to measure CSRDQ in annual report narratives of 41 Mauritian-listed companies for 2008–2019. System-generalized method of moments is used to test research hypotheses. Findings The analysis shows that board attributes affect CSRDQ. It also shows that the impact of CSRDQ is sensitive to CSRDQ measurement. Practical implications This study informs stakeholders on the drivers of CSRDQ. Mauritius authorities could revise the corporate governance code to enhance CSRDQ, and the Stock Exchange of Mauritius could also provide regulations/guidance to listed companies to improve their CSRDQ. Originality/value This study brings new insights by viewing CSRDQ based on verifiability, as verifiable CSR reporting improves the fairness of information disclosed by management.
{"title":"Board attributes and corporate social responsibility disclosure quality based on information typology","authors":"D. Ramdhony, Mohamed Omran, K. Hussainey","doi":"10.1108/raf-01-2023-0009","DOIUrl":"https://doi.org/10.1108/raf-01-2023-0009","url":null,"abstract":"\u0000Purpose\u0000This paper aims to answer whether board attributes affect corporate social responsibility disclosure quality (CSRDQ) and whether these findings are sensitive to CSRDQ measurement.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use the content analysis method to measure CSRDQ in annual report narratives of 41 Mauritian-listed companies for 2008–2019. System-generalized method of moments is used to test research hypotheses.\u0000\u0000\u0000Findings\u0000The analysis shows that board attributes affect CSRDQ. It also shows that the impact of CSRDQ is sensitive to CSRDQ measurement.\u0000\u0000\u0000Practical implications\u0000This study informs stakeholders on the drivers of CSRDQ. Mauritius authorities could revise the corporate governance code to enhance CSRDQ, and the Stock Exchange of Mauritius could also provide regulations/guidance to listed companies to improve their CSRDQ.\u0000\u0000\u0000Originality/value\u0000This study brings new insights by viewing CSRDQ based on verifiability, as verifiable CSR reporting improves the fairness of information disclosed by management.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47713801","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}
Pub Date : 2023-07-07DOI: 10.1108/raf-02-2023-0046
Mohamed M. Eldyasty, Ahmed A. Elamer
Purpose This paper aims to examine the link between audit(or) type and restatements in Egypt, a complex and multifaceted auditing market. The usual big 4 versus non-big 4 comparison is insufficient as Egypt has a unique mix of private audit firms, one governmental agency (Accountability State Authority) and mandatory/nonmandatory audit services, including single, joint and dual audits. Design/methodology/approach The study uses a sample of listed companies in Egypt and analyzes the impact of auditor type and audit type on explicit, implicit and total restatements. The study uses logistic regression model to examine the underlying relationship. Findings Results show no relationship between auditor type and audit quality, positive association between non-big foreign CPA firms and total/implicit restatements and mixed results for the impact of dual audits on audit quality. The study found no link between auditor type and audit quality in Egypt. Egyptian audit firms linked to non-big 4 foreign Certified Public Accounting firms were positively linked to total and implicit restatements. Joint audits did not improve audit quality and were directly related to total and explicit restatements. Dual audits showed mixed results, positively associated with implicit restatements but inversely associated with explicit restatements. Originality/value The study provides valuable insights into the complexities of the auditing market in emerging markets and offers valuable insights for stakeholders in the financial statement users, audit firms and governmental agencies.
{"title":"Audit(or) type and audit quality in emerging markets: evidence from explicit vs. implicit restatements","authors":"Mohamed M. Eldyasty, Ahmed A. Elamer","doi":"10.1108/raf-02-2023-0046","DOIUrl":"https://doi.org/10.1108/raf-02-2023-0046","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the link between audit(or) type and restatements in Egypt, a complex and multifaceted auditing market. The usual big 4 versus non-big 4 comparison is insufficient as Egypt has a unique mix of private audit firms, one governmental agency (Accountability State Authority) and mandatory/nonmandatory audit services, including single, joint and dual audits.\u0000\u0000\u0000Design/methodology/approach\u0000The study uses a sample of listed companies in Egypt and analyzes the impact of auditor type and audit type on explicit, implicit and total restatements. The study uses logistic regression model to examine the underlying relationship.\u0000\u0000\u0000Findings\u0000Results show no relationship between auditor type and audit quality, positive association between non-big foreign CPA firms and total/implicit restatements and mixed results for the impact of dual audits on audit quality. The study found no link between auditor type and audit quality in Egypt. Egyptian audit firms linked to non-big 4 foreign Certified Public Accounting firms were positively linked to total and implicit restatements. Joint audits did not improve audit quality and were directly related to total and explicit restatements. Dual audits showed mixed results, positively associated with implicit restatements but inversely associated with explicit restatements.\u0000\u0000\u0000Originality/value\u0000The study provides valuable insights into the complexities of the auditing market in emerging markets and offers valuable insights for stakeholders in the financial statement users, audit firms and governmental agencies.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42879030","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}
Pub Date : 2023-07-04DOI: 10.1108/raf-12-2022-0359
N. Badwan, A. Awad
Purpose This study aims to explore and verify the influence of the corona pandemic on the stock returns of the Palestinian companies listed on the Palestine Exchange during the period 2020–2021. Design/methodology/approach The research makes use of secondary financial data from 52 companies in the industrial, investment, services, banking and insurance sectors. Many financial ratios are calculated to assess stock returns: current ratio, cash ratio and average collection time as liquidity measures; debt-to-equity ratio as an indication of leverage or solvency; and net profit margin as an indicator of profitability. The research examines ratios between the (2020 and 2021) precorona outbreak using the Wilcoxon signed rank test and financial ratio analysis during the corona pandemic. Findings The findings show that liquidity in the investment, banking, insurance and industrial sectors has decreased significantly, whereas liquidity in the service sector has improved. The statistics reveal a considerable growth in debt in the service sector, while it stays unchanged in the other sectors. However, there is no discernible change in profitability during and after the corona outbreak. Research limitations/implications The present research faced many limitations, such as the approach to gathering primary data, which depended heavily on disclosures, financial reports and secondary data, as well as only analyzing one context and one country. Practical implications The findings of this study can guide the Palestinian government and decision-makers to respond to the COVID-19 outbreak and must act quickly because strong short-term policies are more functional than long-term policy measures. In addition, the temporal discrepancy between their policy actions and financial regulations regarding the stage of the outbreak, integrating monetary treatment methods, strengthening their control over exchange rate fluctuations and extending the duration of financial participation measures that ensure stable exchange rates, such as attempting to restrict trade of the monetary system between countries was assessed to reduce the important monetary stimulation policy. Originality/value This study presents important facts and results for regulators and decision-makers regarding the investment, industry, banking, insurance and services sectors as sectors that are most affected by the corona pandemic as a sample for this study from the Palestinian companies listed in Palestine Stock Exchange due to the corona pandemic.
{"title":"The influence of corona pandemic on stock returns of companies listed on the Palestine Stock Exchange","authors":"N. Badwan, A. Awad","doi":"10.1108/raf-12-2022-0359","DOIUrl":"https://doi.org/10.1108/raf-12-2022-0359","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore and verify the influence of the corona pandemic on the stock returns of the Palestinian companies listed on the Palestine Exchange during the period 2020–2021.\u0000\u0000\u0000Design/methodology/approach\u0000The research makes use of secondary financial data from 52 companies in the industrial, investment, services, banking and insurance sectors. Many financial ratios are calculated to assess stock returns: current ratio, cash ratio and average collection time as liquidity measures; debt-to-equity ratio as an indication of leverage or solvency; and net profit margin as an indicator of profitability. The research examines ratios between the (2020 and 2021) precorona outbreak using the Wilcoxon signed rank test and financial ratio analysis during the corona pandemic.\u0000\u0000\u0000Findings\u0000The findings show that liquidity in the investment, banking, insurance and industrial sectors has decreased significantly, whereas liquidity in the service sector has improved. The statistics reveal a considerable growth in debt in the service sector, while it stays unchanged in the other sectors. However, there is no discernible change in profitability during and after the corona outbreak.\u0000\u0000\u0000Research limitations/implications\u0000The present research faced many limitations, such as the approach to gathering primary data, which depended heavily on disclosures, financial reports and secondary data, as well as only analyzing one context and one country.\u0000\u0000\u0000Practical implications\u0000The findings of this study can guide the Palestinian government and decision-makers to respond to the COVID-19 outbreak and must act quickly because strong short-term policies are more functional than long-term policy measures. In addition, the temporal discrepancy between their policy actions and financial regulations regarding the stage of the outbreak, integrating monetary treatment methods, strengthening their control over exchange rate fluctuations and extending the duration of financial participation measures that ensure stable exchange rates, such as attempting to restrict trade of the monetary system between countries was assessed to reduce the important monetary stimulation policy.\u0000\u0000\u0000Originality/value\u0000This study presents important facts and results for regulators and decision-makers regarding the investment, industry, banking, insurance and services sectors as sectors that are most affected by the corona pandemic as a sample for this study from the Palestinian companies listed in Palestine Stock Exchange due to the corona pandemic.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46035172","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}
Pub Date : 2023-06-20DOI: 10.1108/raf-12-2022-0353
R. Raut, N. Shastri, A. Mishra, A. Tiwari
Purpose This study aims to investigate factors that influence the attitudes and intentions of investors towards environmental, social and governance (ESG) stocks in the presence of perceived risk as a moderator. Design/methodology/approach Data was collected through an online survey method from 341 investors with more than three years of investing experience. Smart PLS was used to analyse the data using two-stage structural equation modelling. First, a measurement model was performed for construct reliability and validity, followed by path analysis (structural model) for hypothesis testing and overall model predictability. Findings The findings show that both environmental concern (altruistic value) and economic concern (egoistic value) are crucial for the attitude and intention of investors to invest in ESG-backed stocks; however, environmental concern was found to be a more significant predictor of their behaviour, showing evidence of pro-environmental values in the decision-making of utility-seeking individuals. No significant impact of perceived risk was evident as a moderator of the relationship between attitude and intention towards ESG stocks. Practical implications The study's findings have implications for fund managers, policymakers, and the government. Values as antecedents were found to be influential in shaping investors’ attitudes and intentions towards the environmental cause. Fund managers could include more ESG-compliant companies in their portfolios, and the government can play an important role in encouraging investors by providing financial incentives. Corporates should also take strategic steps to adopt green production processes to secure long-term, sustainable capital funding. Originality/value To the best of the authors’ knowledge, there has been no research done in the field of ESG investing that takes into account the values (both altruistic and egoistic) of investors as potential antecedents of their attitudes and intentions.
{"title":"Investor’s values and investment decision towards ESG stocks","authors":"R. Raut, N. Shastri, A. Mishra, A. Tiwari","doi":"10.1108/raf-12-2022-0353","DOIUrl":"https://doi.org/10.1108/raf-12-2022-0353","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate factors that influence the attitudes and intentions of investors towards environmental, social and governance (ESG) stocks in the presence of perceived risk as a moderator.\u0000\u0000\u0000Design/methodology/approach\u0000Data was collected through an online survey method from 341 investors with more than three years of investing experience. Smart PLS was used to analyse the data using two-stage structural equation modelling. First, a measurement model was performed for construct reliability and validity, followed by path analysis (structural model) for hypothesis testing and overall model predictability.\u0000\u0000\u0000Findings\u0000The findings show that both environmental concern (altruistic value) and economic concern (egoistic value) are crucial for the attitude and intention of investors to invest in ESG-backed stocks; however, environmental concern was found to be a more significant predictor of their behaviour, showing evidence of pro-environmental values in the decision-making of utility-seeking individuals. No significant impact of perceived risk was evident as a moderator of the relationship between attitude and intention towards ESG stocks.\u0000\u0000\u0000Practical implications\u0000The study's findings have implications for fund managers, policymakers, and the government. Values as antecedents were found to be influential in shaping investors’ attitudes and intentions towards the environmental cause. Fund managers could include more ESG-compliant companies in their portfolios, and the government can play an important role in encouraging investors by providing financial incentives. Corporates should also take strategic steps to adopt green production processes to secure long-term, sustainable capital funding.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, there has been no research done in the field of ESG investing that takes into account the values (both altruistic and egoistic) of investors as potential antecedents of their attitudes and intentions.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49238620","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}
Pub Date : 2023-06-13DOI: 10.1108/raf-08-2022-0223
Nozha Merzki, Mouna Ben Rejeb
Purpose This paper aims to investigate the effect of banking activities diversification on earnings management practices and the effect of female directors on this relationship. Design/methodology/approach Based on a sample of 122 banks operating in Middle East and North African countries from 2006 to 2018, we use dynamic panel model estimated with generalized method of moments approach to deal with endogeneity issues surrounding the diversification decision. Findings The results show that diversification increases earnings management and that the presence of female directors on board moderates this relationship. In particular, female managers tend to reduce earnings management practices in diversified banks. Further, diversified conventional banks appear to be more impacted on the earnings management practices than on Islamic banks. Originality/value The study extends previous research by investigating the relationship between earnings management and diversification of banking activities in emerging countries where earnings management cannot be easily detected and diversification strategy is widely used. It, also, explains this relationship via the moderating effect of female directors as a banks’ internal governance mechanism.
{"title":"Bank diversification and earnings management: the moderating effect of female directors","authors":"Nozha Merzki, Mouna Ben Rejeb","doi":"10.1108/raf-08-2022-0223","DOIUrl":"https://doi.org/10.1108/raf-08-2022-0223","url":null,"abstract":"\u0000Purpose\u0000This paper aims to investigate the effect of banking activities diversification on earnings management practices and the effect of female directors on this relationship.\u0000\u0000\u0000Design/methodology/approach\u0000Based on a sample of 122 banks operating in Middle East and North African countries from 2006 to 2018, we use dynamic panel model estimated with generalized method of moments approach to deal with endogeneity issues surrounding the diversification decision.\u0000\u0000\u0000Findings\u0000The results show that diversification increases earnings management and that the presence of female directors on board moderates this relationship. In particular, female managers tend to reduce earnings management practices in diversified banks. Further, diversified conventional banks appear to be more impacted on the earnings management practices than on Islamic banks.\u0000\u0000\u0000Originality/value\u0000The study extends previous research by investigating the relationship between earnings management and diversification of banking activities in emerging countries where earnings management cannot be easily detected and diversification strategy is widely used. It, also, explains this relationship via the moderating effect of female directors as a banks’ internal governance mechanism.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47780845","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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