Pub Date : 2024-01-13DOI: 10.1186/s40854-023-00558-3
João B. G. Brito, Guilherme B. Bucco, Rodrigo Heldt, João L. Becker, Cleo S. Silveira, Fernando B. Luce, Michel J. Anzanello
Managing customer retention is critical to a company’s profitability and firm value. However, predicting customer churn is challenging. The extant research on the topic mainly focuses on the type of model developed to predict churn, devoting little or no effort to data preparation methods. These methods directly impact the identification of patterns, increasing the model’s predictive performance. We addressed this problem by (1) employing feature engineering methods to generate a set of potential predictor features suitable for the banking industry and (2) preprocessing the majority and minority classes to improve the learning of the classification model pattern. The framework encompasses state-of-the-art data preprocessing methods: (1) feature engineering with recency, frequency, and monetary value concepts to address the imbalanced dataset issue, (2) oversampling using the adaptive synthetic sampling algorithm, and (3) undersampling using NEASMISS algorithm. After data preprocessing, we use XGBoost and elastic net methods for churn prediction. We validated the proposed framework with a dataset of more than 3 million customers and about 170 million transactions. The framework outperformed alternative methods reported in the literature in terms of precision-recall area under curve, accuracy, recall, and specificity. From a practical perspective, the framework provides managers with valuable information to predict customer churn and develop strategies for customer retention in the banking industry.
{"title":"A framework to improve churn prediction performance in retail banking","authors":"João B. G. Brito, Guilherme B. Bucco, Rodrigo Heldt, João L. Becker, Cleo S. Silveira, Fernando B. Luce, Michel J. Anzanello","doi":"10.1186/s40854-023-00558-3","DOIUrl":"https://doi.org/10.1186/s40854-023-00558-3","url":null,"abstract":"Managing customer retention is critical to a company’s profitability and firm value. However, predicting customer churn is challenging. The extant research on the topic mainly focuses on the type of model developed to predict churn, devoting little or no effort to data preparation methods. These methods directly impact the identification of patterns, increasing the model’s predictive performance. We addressed this problem by (1) employing feature engineering methods to generate a set of potential predictor features suitable for the banking industry and (2) preprocessing the majority and minority classes to improve the learning of the classification model pattern. The framework encompasses state-of-the-art data preprocessing methods: (1) feature engineering with recency, frequency, and monetary value concepts to address the imbalanced dataset issue, (2) oversampling using the adaptive synthetic sampling algorithm, and (3) undersampling using NEASMISS algorithm. After data preprocessing, we use XGBoost and elastic net methods for churn prediction. We validated the proposed framework with a dataset of more than 3 million customers and about 170 million transactions. The framework outperformed alternative methods reported in the literature in terms of precision-recall area under curve, accuracy, recall, and specificity. From a practical perspective, the framework provides managers with valuable information to predict customer churn and develop strategies for customer retention in the banking industry.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"12 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139465214","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the role of financial literacy (FL), perceived access to finance (PAF), information communication technology (ICT) usage, and digitization in alleviating the level of credit constraint that micro, small, and medium enterprises (MSMEs) face in an emerging market. We draw on the economic research theories of human capital, knowledge-based view, and lifecycle hypothesis to explain the relationship between the variables. Using survey data collected from 333 MSME importers in Qatar—a country with heavy reliance on foreign goods—we find strong evidence that FL, PAF, ICT usage, and digitization are key determinants of Qatari MSME access to credit. In particular, PAF and FL are significant and have their expected signs in almost all the Probit regressions. For ICT usage and digitization, although they are key determinants of credit constraints, the findings are more sensitive and dependent on the type of financing and the resulting type of credit constraint.
{"title":"Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: evidence from Qatari MSME importers","authors":"Lanouar Charfeddine, Mohamed Ismail Umlai, Mazen El-Masri","doi":"10.1186/s40854-023-00557-4","DOIUrl":"https://doi.org/10.1186/s40854-023-00557-4","url":null,"abstract":"This study investigates the role of financial literacy (FL), perceived access to finance (PAF), information communication technology (ICT) usage, and digitization in alleviating the level of credit constraint that micro, small, and medium enterprises (MSMEs) face in an emerging market. We draw on the economic research theories of human capital, knowledge-based view, and lifecycle hypothesis to explain the relationship between the variables. Using survey data collected from 333 MSME importers in Qatar—a country with heavy reliance on foreign goods—we find strong evidence that FL, PAF, ICT usage, and digitization are key determinants of Qatari MSME access to credit. In particular, PAF and FL are significant and have their expected signs in almost all the Probit regressions. For ICT usage and digitization, although they are key determinants of credit constraints, the findings are more sensitive and dependent on the type of financing and the resulting type of credit constraint.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"42 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139464725","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-09DOI: 10.1186/s40854-023-00555-6
Fouad Jamaani, Manal Alidarous
This study aims to determine whether the involvement of prestigious attorneys in issuing companies affects withdrawals in the initial public offering (IPO) market. There is little evidence on how the involvement of famous lawyers affects IPO withdrawal. The study considers a large dataset consisting of 24,312 IPOs that were either successful or withdrawn from 22 distinct IPO marketplaces between January 1995 and December 2019. We find that IPO issuers may benefit from engaging with reputed attorneys by leveraging exceptional legal or negotiating abilities as quality certification signals to reduce IPO investors’ ex-ante uncertainty. Here, the objective is to protect their IPOs from withdrawal of at least by 22%. Multiple robustness tests validate the reliability of the results of this study. These findings have significant implications for researchers, legislators, investors, and issuers.
{"title":"The impact of prestigious attorneys on IPO withdrawal in the global primary market","authors":"Fouad Jamaani, Manal Alidarous","doi":"10.1186/s40854-023-00555-6","DOIUrl":"https://doi.org/10.1186/s40854-023-00555-6","url":null,"abstract":"This study aims to determine whether the involvement of prestigious attorneys in issuing companies affects withdrawals in the initial public offering (IPO) market. There is little evidence on how the involvement of famous lawyers affects IPO withdrawal. The study considers a large dataset consisting of 24,312 IPOs that were either successful or withdrawn from 22 distinct IPO marketplaces between January 1995 and December 2019. We find that IPO issuers may benefit from engaging with reputed attorneys by leveraging exceptional legal or negotiating abilities as quality certification signals to reduce IPO investors’ ex-ante uncertainty. Here, the objective is to protect their IPOs from withdrawal of at least by 22%. Multiple robustness tests validate the reliability of the results of this study. These findings have significant implications for researchers, legislators, investors, and issuers.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"81 1 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139415275","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-08DOI: 10.1186/s40854-023-00554-7
Juncal Cunado, David Gabauer, Rangan Gupta
This paper analyzes the degree of dynamic connectedness between energy and metal commodity prices in the pre and post-COVID-19 era, using the time-varying parameter vector autoregressive connectedness approach of Antonakakis et al. (J Risk Financ Manag 13(4):84, 2020). The results suggest that market interconnectedness increased slightly following the outbreak of COVID-19, although this increase was lower and less persistent than that observed after the Global Financial Crisis of 2008. Furthermore, we find that crude oil was the main net transmitter of shocks before COVID-19 while heating oil, gold, and silver were the main net transmitters of shocks during the COVID-19 pandemic. In contrast, natural gas and palladium were the main net receivers of shocks during the entire sample period, making these two commodities attractive hedging and safe haven options for investors during the pandemic. Overall, our results suggest that hedging and diversification opportunities decrease during crises. Furthermore, they indicate that accurate forecasts of the volatility of several commodities, such as natural gas and different metals, can be obtained by exploiting the information content of crude oil. However, they also reveal that crude oil lost its leading position as a net shock transmitter during the COVID-19 pandemic.
{"title":"Realized volatility spillovers between energy and metal markets: a time-varying connectedness approach","authors":"Juncal Cunado, David Gabauer, Rangan Gupta","doi":"10.1186/s40854-023-00554-7","DOIUrl":"https://doi.org/10.1186/s40854-023-00554-7","url":null,"abstract":"This paper analyzes the degree of dynamic connectedness between energy and metal commodity prices in the pre and post-COVID-19 era, using the time-varying parameter vector autoregressive connectedness approach of Antonakakis et al. (J Risk Financ Manag 13(4):84, 2020). The results suggest that market interconnectedness increased slightly following the outbreak of COVID-19, although this increase was lower and less persistent than that observed after the Global Financial Crisis of 2008. Furthermore, we find that crude oil was the main net transmitter of shocks before COVID-19 while heating oil, gold, and silver were the main net transmitters of shocks during the COVID-19 pandemic. In contrast, natural gas and palladium were the main net receivers of shocks during the entire sample period, making these two commodities attractive hedging and safe haven options for investors during the pandemic. Overall, our results suggest that hedging and diversification opportunities decrease during crises. Furthermore, they indicate that accurate forecasts of the volatility of several commodities, such as natural gas and different metals, can be obtained by exploiting the information content of crude oil. However, they also reveal that crude oil lost its leading position as a net shock transmitter during the COVID-19 pandemic.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"110 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139396671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-08DOI: 10.1186/s40854-023-00566-3
Khaled Mokni, Ghassen El Montasser, A. Ajmi, Elie Bouri
{"title":"On the efficiency and its drivers in the cryptocurrency market: the case of Bitcoin and Ethereum","authors":"Khaled Mokni, Ghassen El Montasser, A. Ajmi, Elie Bouri","doi":"10.1186/s40854-023-00566-3","DOIUrl":"https://doi.org/10.1186/s40854-023-00566-3","url":null,"abstract":"","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"30 3","pages":"1-25"},"PeriodicalIF":8.4,"publicationDate":"2024-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139379886","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-07DOI: 10.1186/s40854-023-00564-5
Jianzhou Wang, Shuai Wang, Mengzheng Lv, He Jiang
{"title":"Forecasting VaR and ES by using deep quantile regression, GANs-based scenario generation, and heterogeneous market hypothesis","authors":"Jianzhou Wang, Shuai Wang, Mengzheng Lv, He Jiang","doi":"10.1186/s40854-023-00564-5","DOIUrl":"https://doi.org/10.1186/s40854-023-00564-5","url":null,"abstract":"","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"2 5","pages":"1-35"},"PeriodicalIF":8.4,"publicationDate":"2024-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139380240","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-06DOI: 10.1186/s40854-023-00530-1
Irfan Ahmed, Khadija Mehrez, Claudio Socci, Stefano Deriu, Naif M. Mathkur, Ian P. Casasr
The role of the construction industry in economic growth has been widely discussed in the extant literature, but existing studies have not investigated the disaggregated impact of construction investments on the production and social sectors. This study examines the disaggregated effect of construction investments on the Saudi economy. The study uses a social accounting matrix of Saudi Arabia and constructs a dynamic computable general equilibrium model. The findings reveal that construction investments significantly boosted GDP and aggregate investments in the first two periods; however, the growth declined in the following three periods. This finding underlines the importance of long-term investments in the construction sector and calls for continuous monitoring and updating of the investment policy for sustainable development. This study also presents the disaggregated impact of investments on the value-added by each sector of the economy. The ranking of sectors exhibits that mining and quarry activities underwent a high increase in value-added, second to construction activities. Other economic activities also experienced growth in value-added and some of them changed their ranks within the five years.
{"title":"Disaggregated effect of construction investments on the Saudi economy: a dynamic computable general equilibrium model of Saudi Arabia","authors":"Irfan Ahmed, Khadija Mehrez, Claudio Socci, Stefano Deriu, Naif M. Mathkur, Ian P. Casasr","doi":"10.1186/s40854-023-00530-1","DOIUrl":"https://doi.org/10.1186/s40854-023-00530-1","url":null,"abstract":"The role of the construction industry in economic growth has been widely discussed in the extant literature, but existing studies have not investigated the disaggregated impact of construction investments on the production and social sectors. This study examines the disaggregated effect of construction investments on the Saudi economy. The study uses a social accounting matrix of Saudi Arabia and constructs a dynamic computable general equilibrium model. The findings reveal that construction investments significantly boosted GDP and aggregate investments in the first two periods; however, the growth declined in the following three periods. This finding underlines the importance of long-term investments in the construction sector and calls for continuous monitoring and updating of the investment policy for sustainable development. This study also presents the disaggregated impact of investments on the value-added by each sector of the economy. The ranking of sectors exhibits that mining and quarry activities underwent a high increase in value-added, second to construction activities. Other economic activities also experienced growth in value-added and some of them changed their ranks within the five years.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"25 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139375295","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-06DOI: 10.1186/s40854-023-00553-8
Simplice A. Asongu, Peter Agyemang-Mintah, Joseph Nnanna, Yolande E. Ngoungou
This study assesses the role of mobile money innovations on income inequality and gender inclusion in 42 sub-Saharan African countries from 1980 to 2019 using interactive quantile regressions. It finds that, first, income inequality unconditionally reduces the involvement of women in business and politics. Second, mobile money innovations interact with income inequality to have a positive impact on women in business and politics. Third, the net effects of mobile money innovations on gender inclusion through income inequality are consistently negative. Fourth, as the positive conditional or interactive effects and negative net effects are consistent across the conditional distribution of gender inclusion, thresholds at which mobile money innovations can completely dampen the negative effect of income inequality on gender inclusion are provided. Therefore, policymakers should work toward improving conditions for mobile money innovations. They should also be aware that reducing both income inequality and enhancing mobile money innovations simultaneously leads to more inclusive outcomes in terms of gender inclusion.
{"title":"Mobile money innovations, income inequality and gender inclusion in sub-Saharan Africa","authors":"Simplice A. Asongu, Peter Agyemang-Mintah, Joseph Nnanna, Yolande E. Ngoungou","doi":"10.1186/s40854-023-00553-8","DOIUrl":"https://doi.org/10.1186/s40854-023-00553-8","url":null,"abstract":"This study assesses the role of mobile money innovations on income inequality and gender inclusion in 42 sub-Saharan African countries from 1980 to 2019 using interactive quantile regressions. It finds that, first, income inequality unconditionally reduces the involvement of women in business and politics. Second, mobile money innovations interact with income inequality to have a positive impact on women in business and politics. Third, the net effects of mobile money innovations on gender inclusion through income inequality are consistently negative. Fourth, as the positive conditional or interactive effects and negative net effects are consistent across the conditional distribution of gender inclusion, thresholds at which mobile money innovations can completely dampen the negative effect of income inequality on gender inclusion are provided. Therefore, policymakers should work toward improving conditions for mobile money innovations. They should also be aware that reducing both income inequality and enhancing mobile money innovations simultaneously leads to more inclusive outcomes in terms of gender inclusion.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"30 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139375257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-05DOI: 10.1186/s40854-023-00552-9
Yubo Xiao, Muxi Lin, Lu Wang
{"title":"Impact of green digital finance on sustainable development: evidence from China’s pilot zones","authors":"Yubo Xiao, Muxi Lin, Lu Wang","doi":"10.1186/s40854-023-00552-9","DOIUrl":"https://doi.org/10.1186/s40854-023-00552-9","url":null,"abstract":"","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"9 2","pages":"1-32"},"PeriodicalIF":8.4,"publicationDate":"2024-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139381307","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-01-05DOI: 10.1186/s40854-023-00551-w
Mahmoud Qadan, Gil Cohen
The yield on the 10-year U.S. Treasury Note is among the most cited interest rates by investors, policymakers, and financial institutions. We show that the 10-year Treasury yield’s forward-looking volatility, a VIX-style measure that is a proxy for uncertainty about future interest rates, is a useful state variable capable of predicting the returns and volatility of crude oil prices over the near term. Using monthly data from 2003 to 2020, we document that higher implied volatility in the 10-year U.S. Treasury derivatives market predicts declining oil prices and higher forward-looking volatility in those prices. Our results are robust to different subsamples and various empirical designs.
{"title":"Uncertainty about interest rates and crude oil prices","authors":"Mahmoud Qadan, Gil Cohen","doi":"10.1186/s40854-023-00551-w","DOIUrl":"https://doi.org/10.1186/s40854-023-00551-w","url":null,"abstract":"The yield on the 10-year U.S. Treasury Note is among the most cited interest rates by investors, policymakers, and financial institutions. We show that the 10-year Treasury yield’s forward-looking volatility, a VIX-style measure that is a proxy for uncertainty about future interest rates, is a useful state variable capable of predicting the returns and volatility of crude oil prices over the near term. Using monthly data from 2003 to 2020, we document that higher implied volatility in the 10-year U.S. Treasury derivatives market predicts declining oil prices and higher forward-looking volatility in those prices. Our results are robust to different subsamples and various empirical designs.","PeriodicalId":37175,"journal":{"name":"Financial Innovation","volume":"24 1","pages":""},"PeriodicalIF":8.4,"publicationDate":"2024-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139375022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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