Pub Date : 2023-11-02DOI: 10.21511/imfi.20(4).2023.14
Ricardo de Moraes e Soares, Pedro Pinheiro, Paula Heliodoro
The adoption of a single VAT rate system in the EU is a complex and controversial issue, since the current model includes several differentiated rates and is intended to reflect sectoral needs and ensure greater fairness in the taxation of consumption. This study aims to analyse which of the general consumption tax models (differentiated rates or a single rate) is more efficient in terms of revenue collection. The study uses official statistics available on the official website of the Tax and Customs Authority for the period 1996–2022. VAT revenue is measured by applying the formula of the EU’s common VAT model with the necessary adaptations to the flat rate model. Quantitative methods are applied to verify which of the tax models is more efficient in terms of collection. For this purpose, two scenarios were defined (17% and 21%). The results suggest that the estimated revenues for the proposed flat rate models are higher than the amounts actually collected through the differentiated rates. They also suggest that the 21% flat rate is preferable to the 17% rate, although the latter has the capacity to maintain current revenue levels and increase the amount collected compared to the current system. The conclusions suggest that the single VAT rate model is technically more preferable and notably more efficient than the current common consumption tax model adopted by the European Union. The study concludes that the refusal to adopt the single-rate model is not due to technical reasons but to political ones.
{"title":"Indirect taxation on VAT consumption. A possible study of alternative tax rate models in Portugal","authors":"Ricardo de Moraes e Soares, Pedro Pinheiro, Paula Heliodoro","doi":"10.21511/imfi.20(4).2023.14","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.14","url":null,"abstract":"The adoption of a single VAT rate system in the EU is a complex and controversial issue, since the current model includes several differentiated rates and is intended to reflect sectoral needs and ensure greater fairness in the taxation of consumption. This study aims to analyse which of the general consumption tax models (differentiated rates or a single rate) is more efficient in terms of revenue collection. The study uses official statistics available on the official website of the Tax and Customs Authority for the period 1996–2022. VAT revenue is measured by applying the formula of the EU’s common VAT model with the necessary adaptations to the flat rate model. Quantitative methods are applied to verify which of the tax models is more efficient in terms of collection. For this purpose, two scenarios were defined (17% and 21%). The results suggest that the estimated revenues for the proposed flat rate models are higher than the amounts actually collected through the differentiated rates. They also suggest that the 21% flat rate is preferable to the 17% rate, although the latter has the capacity to maintain current revenue levels and increase the amount collected compared to the current system. The conclusions suggest that the single VAT rate model is technically more preferable and notably more efficient than the current common consumption tax model adopted by the European Union. The study concludes that the refusal to adopt the single-rate model is not due to technical reasons but to political ones.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"71 11","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135934050","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}
In the last decade, gender diversity on boards or women in the boardroom has gained the attention of academics and practitioners. This paper aims to explore how women directors affect corporate cash holdings in Indonesia. This study utilizes data on Kompas 100 index firms for 2014–2021. A fixed-effect estimator is used to analyze data. The study reveals that female directors positively influence cash holdings. This finding remains robust when employing an alternative proxy for female directors and excluding observations during the COVID-19 period. Additionally, the findings indicate notable variations in cash holdings between companies with and without female directors. Regarding control variables, a firm’s cash holdings are negatively influenced by board size, leverage, company size, and net working capital. Firm profitability and growth opportunities positively influence cash holdings. This paper also documents that institutional ownership weakens the nexus between female directors and cash holding. The findings highlight that female directors hold higher amounts of cash because of their increased risk aversion. This study enriches the discussion on female directors and cash-holding levels in a developing country with a two-tiered board system. AcknowledgmentsThis study is not funded by any funding agency.
{"title":"The nexus between female directors and corporate cash holdings: Evidence from Indonesia","authors":"Bambang Sutrisno, Jaharuddin Jaharuddin, Nur Asni Gani, Medo Maulianza, Nurul Sriminarti","doi":"10.21511/imfi.20(4).2023.13","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.13","url":null,"abstract":"In the last decade, gender diversity on boards or women in the boardroom has gained the attention of academics and practitioners. This paper aims to explore how women directors affect corporate cash holdings in Indonesia. This study utilizes data on Kompas 100 index firms for 2014–2021. A fixed-effect estimator is used to analyze data. The study reveals that female directors positively influence cash holdings. This finding remains robust when employing an alternative proxy for female directors and excluding observations during the COVID-19 period. Additionally, the findings indicate notable variations in cash holdings between companies with and without female directors. Regarding control variables, a firm’s cash holdings are negatively influenced by board size, leverage, company size, and net working capital. Firm profitability and growth opportunities positively influence cash holdings. This paper also documents that institutional ownership weakens the nexus between female directors and cash holding. The findings highlight that female directors hold higher amounts of cash because of their increased risk aversion. This study enriches the discussion on female directors and cash-holding levels in a developing country with a two-tiered board system. AcknowledgmentsThis study is not funded by any funding agency.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"100 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135870520","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 : 2023-10-26DOI: 10.21511/imfi.20(4).2023.12
Alex Plastun, Liudmyla Slіusareva, Dmytro Sliusarev, Valentyna Smachylo, Lyudmila Khomutenko
This paper investigates the persistence in the cryptocurrency market, focusing on five distinct groups categorized by their market capitalization during the sample period from 2020 to 2023. The study aims to test two hypotheses: (H1) The degree of persistence in the cryptocurrency market is contingent on market capitalization, and (H2) The efficiency of the cryptocurrency market has increased in recent years. The methodology employed for this examination is R/S analysis. The results indicate that the cryptocurrency market maintains its inefficiency, and no significant variations in persistence are discerned among different cryptocurrency groups, leading to the rejection of H1. Outcomes related to H2 present a nuanced scenario. Specifically, Litecoin and Ripple exhibit supportive evidence for the Adaptive Market Hypothesis, suggesting an improvement in the efficiency of the cryptocurrency market in recent years. A noteworthy revelation pertains to the anomaly observed in Bitcoin. Despite being the most capitalized and liquid cryptocurrency, it demonstrates inefficiency akin to levels observed five years ago. The implications of this study contribute to the comprehension of cryptocurrency market efficiency. The findings challenge the assumptions of the Efficient Market Hypothesis, favoring instead the Adaptive Market Hypothesis. For practitioners, the results hold significance, providing evidence of price predictability, particularly in the case of Bitcoin. This suggests that trend trading strategies remain viable for generating abnormal profits in the cryptocurrency market. Acknowledgments Alex Plastun gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0121U100473).
{"title":"Persistence in the cryptocurrency market: does size matter?","authors":"Alex Plastun, Liudmyla Slіusareva, Dmytro Sliusarev, Valentyna Smachylo, Lyudmila Khomutenko","doi":"10.21511/imfi.20(4).2023.12","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.12","url":null,"abstract":"This paper investigates the persistence in the cryptocurrency market, focusing on five distinct groups categorized by their market capitalization during the sample period from 2020 to 2023. The study aims to test two hypotheses: (H1) The degree of persistence in the cryptocurrency market is contingent on market capitalization, and (H2) The efficiency of the cryptocurrency market has increased in recent years. The methodology employed for this examination is R/S analysis. The results indicate that the cryptocurrency market maintains its inefficiency, and no significant variations in persistence are discerned among different cryptocurrency groups, leading to the rejection of H1. Outcomes related to H2 present a nuanced scenario. Specifically, Litecoin and Ripple exhibit supportive evidence for the Adaptive Market Hypothesis, suggesting an improvement in the efficiency of the cryptocurrency market in recent years. A noteworthy revelation pertains to the anomaly observed in Bitcoin. Despite being the most capitalized and liquid cryptocurrency, it demonstrates inefficiency akin to levels observed five years ago. The implications of this study contribute to the comprehension of cryptocurrency market efficiency. The findings challenge the assumptions of the Efficient Market Hypothesis, favoring instead the Adaptive Market Hypothesis. For practitioners, the results hold significance, providing evidence of price predictability, particularly in the case of Bitcoin. This suggests that trend trading strategies remain viable for generating abnormal profits in the cryptocurrency market. Acknowledgments Alex Plastun gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0121U100473).","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"5 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134909177","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}
In today’s financial world, the pursuit of sustainable development has evolved from an ethical imperative to a strategic necessity. It has spurred corporations to enhance transparency regarding their non-financial and responsible or ESG practices. This paper aims to formalize the strategic dependencies between sustainability disclosure, SDG achievement, and the financial and information efficiency of the financial market. The research methods are normality tests, canonical correlation analysis, and multivariate multiple and univariate regression analysis. The object of the study is 137 countries. The time period is 2022. The results confirmed that a positive strong correlation was found between sustainability disclosure and the achievement of the SDGs on the one hand and financial and information efficiency of the financial market on the other. Identifying the direction of the relationship also confirmed two-way positive dependencies between the indicators, in particular, the SDG Index will have the most significant impact on the growth of GDP per capita, the change in the Economic Sustainability Competitiveness Index on the growth of the United Nations Global Compact participants. The specified connection can be used as the basis for the formation of the concept of ensuring transparency and leveling information asymmetry in the activities of enterprises.
{"title":"Transparency and information asymmetry in the financial market: Strategic dependencies between sustainability disclosure, SDG achievement and financial and information efficiency","authors":"Inna Makarenko, Viktoriia Gryn, Nelia Proskurina, lryna Pushkar, Valentina Goncharova","doi":"10.21511/imfi.20(4).2023.11","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.11","url":null,"abstract":"In today’s financial world, the pursuit of sustainable development has evolved from an ethical imperative to a strategic necessity. It has spurred corporations to enhance transparency regarding their non-financial and responsible or ESG practices. This paper aims to formalize the strategic dependencies between sustainability disclosure, SDG achievement, and the financial and information efficiency of the financial market. The research methods are normality tests, canonical correlation analysis, and multivariate multiple and univariate regression analysis. The object of the study is 137 countries. The time period is 2022. The results confirmed that a positive strong correlation was found between sustainability disclosure and the achievement of the SDGs on the one hand and financial and information efficiency of the financial market on the other. Identifying the direction of the relationship also confirmed two-way positive dependencies between the indicators, in particular, the SDG Index will have the most significant impact on the growth of GDP per capita, the change in the Economic Sustainability Competitiveness Index on the growth of the United Nations Global Compact participants. The specified connection can be used as the basis for the formation of the concept of ensuring transparency and leveling information asymmetry in the activities of enterprises.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"BME-32 12","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135169430","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 : 2023-10-24DOI: 10.21511/imfi.20(4).2023.10
Felisitas Defung, Michael Hadjaat, Rizky Yudaruddin
This study analyzes the impact of the COVID-19 pandemic on the performance of 944 Leisure, Arts, and Hospitality companies from 59 countries listed on global stock exchanges between 2018 and 2022. Using Ordinary Least Squares with robust standard errors, the study reveals a consistent and statistically significant negative impact of COVID-19 on the performance of firms. The results highlight the difficulties faced by companies in this industry during the pandemic. In addition, the study investigates the relationship between firm characteristics and company performance during the COVID-19 pandemic, revealing that company size, liquidity, and leverage play crucial roles in influencing firm performance across industries. Larger corporations exhibit greater resiliency, while greater liquidity facilitates better navigation of pandemic-induced obstacles. In contrast, companies with greater leverage experience more pronounced negative effects on their performance, highlighting the significance of debt management during a crisis. Based on these findings, policymakers are strongly urged to provide targeted assistance to Leisure, Arts, and Hospitality industries to address the challenges the pandemic poses effectively. Regulators should encourage the resiliency of larger firms and stress the importance of maintaining higher liquidity levels for financial stability. It is recommended that managers should prudently manage debt to limit pandemic repercussions and boost performance in the face of extraordinary challenges.
{"title":"COVID-19 pandemic and firm performance in leisure, arts, and hospitality industries: international evidence","authors":"Felisitas Defung, Michael Hadjaat, Rizky Yudaruddin","doi":"10.21511/imfi.20(4).2023.10","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.10","url":null,"abstract":"This study analyzes the impact of the COVID-19 pandemic on the performance of 944 Leisure, Arts, and Hospitality companies from 59 countries listed on global stock exchanges between 2018 and 2022. Using Ordinary Least Squares with robust standard errors, the study reveals a consistent and statistically significant negative impact of COVID-19 on the performance of firms. The results highlight the difficulties faced by companies in this industry during the pandemic. In addition, the study investigates the relationship between firm characteristics and company performance during the COVID-19 pandemic, revealing that company size, liquidity, and leverage play crucial roles in influencing firm performance across industries. Larger corporations exhibit greater resiliency, while greater liquidity facilitates better navigation of pandemic-induced obstacles. In contrast, companies with greater leverage experience more pronounced negative effects on their performance, highlighting the significance of debt management during a crisis. Based on these findings, policymakers are strongly urged to provide targeted assistance to Leisure, Arts, and Hospitality industries to address the challenges the pandemic poses effectively. Regulators should encourage the resiliency of larger firms and stress the importance of maintaining higher liquidity levels for financial stability. It is recommended that managers should prudently manage debt to limit pandemic repercussions and boost performance in the face of extraordinary challenges.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"22 6","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135273413","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 : 2023-10-23DOI: 10.21511/imfi.20(4).2023.09
Nupur Gupta, Pradip Mitra, Bharath Supra
This paper uses Markowitz’s mean-variance model to construct an investment portfolio incorporating multiple assets – BRICS equity indices, Gold, crude oil, bonds, and cryptocurrencies. The optimally created risky portfolios outperform alternative portfolio optimization methods – the naive portfolio and the equal risk contribution portfolio; and established indices – the S&P 500 and the MSCI Emerging Equity Index in terms of metrics – adjusted Sharpe ratio, modified Sharpe ratio, and the modified Value at Risk. The findings are validated across different periods, including the COVID-19 period and the Russian invasion of Ukraine, including various in and out of sample periods. The findings highlight the benefits of portfolio diversity, mainly using BRICS indices, Gold, and Brent Crude oil, and challenge the notion of limited diversification benefits in BRICS indices found in previous studies. This paper further suggests the potential of emerging market bonds ETF as a diversification option during turbulent economic periods and highlights the limitations of cryptocurrencies in optimizing multi asset portfolios. By adopting the recommended multi asset portfolios, investors can enhance their risk-return trade-offs and achieve superior performance compared to the S&P500 and MSCI emerging indices. Lastly, the paper recommends future research opportunities in measuring portfolio performance and hedging strategies considering risk-adjusted return measurements, transaction expenses, and dynamic rebalancing techniques.
{"title":"Enhancing portfolio resilience during crisis periods: Lessons from BRICS indices and multi asset strategies","authors":"Nupur Gupta, Pradip Mitra, Bharath Supra","doi":"10.21511/imfi.20(4).2023.09","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.09","url":null,"abstract":"This paper uses Markowitz’s mean-variance model to construct an investment portfolio incorporating multiple assets – BRICS equity indices, Gold, crude oil, bonds, and cryptocurrencies. The optimally created risky portfolios outperform alternative portfolio optimization methods – the naive portfolio and the equal risk contribution portfolio; and established indices – the S&P 500 and the MSCI Emerging Equity Index in terms of metrics – adjusted Sharpe ratio, modified Sharpe ratio, and the modified Value at Risk. The findings are validated across different periods, including the COVID-19 period and the Russian invasion of Ukraine, including various in and out of sample periods. The findings highlight the benefits of portfolio diversity, mainly using BRICS indices, Gold, and Brent Crude oil, and challenge the notion of limited diversification benefits in BRICS indices found in previous studies. This paper further suggests the potential of emerging market bonds ETF as a diversification option during turbulent economic periods and highlights the limitations of cryptocurrencies in optimizing multi asset portfolios. By adopting the recommended multi asset portfolios, investors can enhance their risk-return trade-offs and achieve superior performance compared to the S&P500 and MSCI emerging indices. Lastly, the paper recommends future research opportunities in measuring portfolio performance and hedging strategies considering risk-adjusted return measurements, transaction expenses, and dynamic rebalancing techniques.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"1 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135366325","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}
Financial resilience is the basis of economic development as it determines the ability of the financial system to efficiently perform its functions and ensure optimal resource allocation and the normal course of economic processes under the impact of macroeconomic shocks and endogenous risks. The article aims to assess financial resilience as a systemic component of ensuring the economic development of Ukrainian regions. The research methods include systemic and structural analysis (building an information and analytical model for studying financial resilience), clustering (grouping regions by the criterion of economic development), and risk theory and analysis of variance (identifying potential zones of financial resilience and its components). Data from the regions (oblasts) of Ukraine for 2015–2021 serve as the information and analytical basis of the study. The article reveals that in 2021 regions with better financial resilience (Zhytomyrska, Dnipropetrovska, Kyivska, Lvivska, Odeska, Kharkivska, Cherkaska, and Volynska oblasts) take leading positions in terms of economic development and more efficient use of exogenous and endogenous financial resources than the regions with low financial resilience (Chernivetska, Vinnytska, Khmelnytska, Donetska, Ternopilska, and Ivano-Frankivska oblasts). The study proves that enhancing financial resilience is a trigger and foundation for ensuring economic growth in the regions, especially amid macroeconomic shocks. Balancing the need to use financial resources to restore the economy (growth of production, consumption, and employment) while reducing the dependence of regional economies on external financial sources should become the main vector of policy to ensure the financial resilience of Ukrainian regions. AcknowledgmentsThe study was conducted within the framework of the “Financial Determinants of Ensuring Economic Growth of Regions and Territorial Communities based on Behavioral Economics” project (No. 2020.02/0215) funded by the National Research Foundation of Ukraine (Competition “Support for Research of Leading and Young Scientists”).
{"title":"Financial determinants of ensuring the resilience of Ukrainian regions","authors":"Halyna Voznyak, Olha Mulska, Halyna Kaplenko, Danylo Sorokovyi, Khrystyna Patytska","doi":"10.21511/imfi.20(4).2023.08","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.08","url":null,"abstract":"Financial resilience is the basis of economic development as it determines the ability of the financial system to efficiently perform its functions and ensure optimal resource allocation and the normal course of economic processes under the impact of macroeconomic shocks and endogenous risks. The article aims to assess financial resilience as a systemic component of ensuring the economic development of Ukrainian regions. The research methods include systemic and structural analysis (building an information and analytical model for studying financial resilience), clustering (grouping regions by the criterion of economic development), and risk theory and analysis of variance (identifying potential zones of financial resilience and its components). Data from the regions (oblasts) of Ukraine for 2015–2021 serve as the information and analytical basis of the study. The article reveals that in 2021 regions with better financial resilience (Zhytomyrska, Dnipropetrovska, Kyivska, Lvivska, Odeska, Kharkivska, Cherkaska, and Volynska oblasts) take leading positions in terms of economic development and more efficient use of exogenous and endogenous financial resources than the regions with low financial resilience (Chernivetska, Vinnytska, Khmelnytska, Donetska, Ternopilska, and Ivano-Frankivska oblasts). The study proves that enhancing financial resilience is a trigger and foundation for ensuring economic growth in the regions, especially amid macroeconomic shocks. Balancing the need to use financial resources to restore the economy (growth of production, consumption, and employment) while reducing the dependence of regional economies on external financial sources should become the main vector of policy to ensure the financial resilience of Ukrainian regions. AcknowledgmentsThe study was conducted within the framework of the “Financial Determinants of Ensuring Economic Growth of Regions and Territorial Communities based on Behavioral Economics” project (No. 2020.02/0215) funded by the National Research Foundation of Ukraine (Competition “Support for Research of Leading and Young Scientists”).","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135617191","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 Indonesian stock market is a growing financial industry that plays a strategic role in the growth of the country’s economy. Its development is affected by various factors. This study examined the impact of the exchange rate, gross domestic product (GDP), interest rates, inflation, foreign portfolio investment (FPI), and domestic political stability on stock market capitalization. Quarterly data between 2000:Q1 and 2020:Q4 are used. The autoregressive distributed lag (ARDL) method is applied to identify long-run relationships between variables. To understand how fast the system reaches equilibrium after a shock, the model also examines short-run relationships using an error correction model (ECM). The findings show that the impact of exchange rate, interest rate, and inflation on stock market capitalization is negative in the long run. While the GDP, FPI, and political stability are positive. Increment in the US Dollar against the Indonesian Rupiah, interest rate, and inflation by 1% respectively, caused stock market capitalization to fall by 1.31%, 0.06%, and 0.04%. A rise in GDP, FPI, and political stability by 1% respectively, increases the stock market’s value by 1.17%, 1.08%, and 1.28%. In the short run, the coefficient of ECM indicates the speed of adjustment of the system: the occurrence of the shock to reach long-run equilibrium is quick enough, at 63.8% each quarter. The study recommends governments evaluate the impact of these factors when formulating monetary policies, promote economic growth, and continuously implement good governance, thus supporting stock market development.
{"title":"Determinants of Indonesian stock market development: Implementation of an ARDL bound testing approach","authors":"Elmira Siska, Oyyappan Duraipandi, Purwanto Widodo","doi":"10.21511/imfi.20(4).2023.07","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.07","url":null,"abstract":"The Indonesian stock market is a growing financial industry that plays a strategic role in the growth of the country’s economy. Its development is affected by various factors. This study examined the impact of the exchange rate, gross domestic product (GDP), interest rates, inflation, foreign portfolio investment (FPI), and domestic political stability on stock market capitalization. Quarterly data between 2000:Q1 and 2020:Q4 are used. The autoregressive distributed lag (ARDL) method is applied to identify long-run relationships between variables. To understand how fast the system reaches equilibrium after a shock, the model also examines short-run relationships using an error correction model (ECM). The findings show that the impact of exchange rate, interest rate, and inflation on stock market capitalization is negative in the long run. While the GDP, FPI, and political stability are positive. Increment in the US Dollar against the Indonesian Rupiah, interest rate, and inflation by 1% respectively, caused stock market capitalization to fall by 1.31%, 0.06%, and 0.04%. A rise in GDP, FPI, and political stability by 1% respectively, increases the stock market’s value by 1.17%, 1.08%, and 1.28%. In the short run, the coefficient of ECM indicates the speed of adjustment of the system: the occurrence of the shock to reach long-run equilibrium is quick enough, at 63.8% each quarter. The study recommends governments evaluate the impact of these factors when formulating monetary policies, promote economic growth, and continuously implement good governance, thus supporting stock market development.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135732329","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 : 2023-10-18DOI: 10.21511/imfi.20(4).2023.06
Nahed Habis Alrawashedh
Management accounting plays a critical role in decision making since it supplies accounting information that would be helpful to managers in making critical decisions for an organization. In light of this assertion, the aim of the study was to determine how the listed Jordanian industrial organizations used management accounting techniques to make financial decisions. The study employed the descriptive research design and used primary data to collect the information on the related objectives of the study. The target population for this study was the employees of industrial enterprises in Jordan. Specifically, the employees forming the part of the sample were the managers and non-managers (excluding lower-level staff) working in industrial companies of Jordan. The industrial firms from where the employees were chosen included the industrial firms listed on the Amman Stock Exchange. The sample size for the study has been 371 employees, selected based on the Krejcie and Morgan rule. The study’s findings supported the notion that budgeting, financial ratio analysis and activity-based costing are the most widely used management accounting techniques in these organizations. The results show that employees differ in their perception on the role of management accounting techniques in financial decision making. Specifically, the results of the study confirm the significant p-value (0.000) for t-statistics and f-value, thereby confirming that employees differ in their perception regarding the role of management accounting in financial decision making based on gender, type of job and years of experience.
{"title":"Management accounting methods for financial decisions: Case of industrial companies in Jordan","authors":"Nahed Habis Alrawashedh","doi":"10.21511/imfi.20(4).2023.06","DOIUrl":"https://doi.org/10.21511/imfi.20(4).2023.06","url":null,"abstract":"Management accounting plays a critical role in decision making since it supplies accounting information that would be helpful to managers in making critical decisions for an organization. In light of this assertion, the aim of the study was to determine how the listed Jordanian industrial organizations used management accounting techniques to make financial decisions. The study employed the descriptive research design and used primary data to collect the information on the related objectives of the study. The target population for this study was the employees of industrial enterprises in Jordan. Specifically, the employees forming the part of the sample were the managers and non-managers (excluding lower-level staff) working in industrial companies of Jordan. The industrial firms from where the employees were chosen included the industrial firms listed on the Amman Stock Exchange. The sample size for the study has been 371 employees, selected based on the Krejcie and Morgan rule. The study’s findings supported the notion that budgeting, financial ratio analysis and activity-based costing are the most widely used management accounting techniques in these organizations. The results show that employees differ in their perception on the role of management accounting techniques in financial decision making. Specifically, the results of the study confirm the significant p-value (0.000) for t-statistics and f-value, thereby confirming that employees differ in their perception regarding the role of management accounting in financial decision making based on gender, type of job and years of experience.","PeriodicalId":39060,"journal":{"name":"Investment Management and Financial Innovations","volume":"241 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135883159","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 : 2023-10-11DOI: 10.21511/imfi.20(4).2023.04
Vikas Pandey
Commodities and commodity futures are expected to benefit stock and bond portfolio diversification because traditional asset types like equities and bonds have low correlations with commodities. During periods when stocks and bonds may underperform, commodities may provide a hedge against inflation and other economic uncertainties. This study investigates the diversification benefits of adding commodities to a traditional portfolio of stock and bonds from the perspective of an Indian investor. It employs several commonly used asset allocation strategies such as mean-variance, equal risk contribution, most diversified portfolio, and equal weight portfolio on different commodity derivative groups. The performance of various portfolios indicates that not all commodity groups provide substantial diversification benefits to a traditional portfolio. Agricultural commodities enhance performance (with an Omega ratio of 1.654), whereas metal and energy-related commodities do not diversify the traditional portfolio significantly (Omega ratio of 1.087 and 0.945, respectively). Gold and different equity sectors also provide some diversification benefits. This study also supports the hypothesis that the behavior of different commodity groups is quite different. AcknowledgmentThe infrastructural support provided by the FORE School of Management, New Delhi, in completing this paper is gratefully acknowledged.
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