Rubens Moura de Carvalho, Helena Coelho Inácio, Rui Pedro Marques
This research investigates the relationship between stablecoin usage and tax evasion. We present a model that includes variables related to transactions such as intensity, frequency, environment on-chain (P2P) vs. off-chain (IntraVasp), and company characteristics such as age, sector, and size. Our model was empirically tested using a logistic regression based on data from the Brazilian Federal Revenue Service (Receita Federal do Brasil (RFB)) in 2021. This novel approach aims to understand the tax behaviours associated with stablecoin use in corporate financial practices. Our results indicate that the intensity, frequency, environment of transactions (specifically IntraVasp and P2P transactions), age, sector, and size are factors significantly associated with tax evasion behaviour. However, we found no evidence to suggest that firms engaging in only P2P transactions have a higher propensity for tax evasion than those engaging only in IntraVasp transactions. Our findings reveal that younger and medium-sized companies with intensive use of stablecoin, with high stablecoin transaction frequency, engaging in IntraVasp and P2P transactions, and belonging to the service sector are more likely to evade tax. Therefore, our research provides a detailed understanding of how digital financial practices with crypto assets (blockchain-based technology) intersect with corporate tax strategies, which can offer valuable insights for regulators, industry practitioners, and policymakers.
本研究调查了稳定币的使用与逃税之间的关系。我们提出了一个模型，其中包括与交易相关的变量，如强度、频率、链上（P2P）与链下（IntraVasp）的环境，以及公司特征，如年龄、行业和规模。我们根据巴西联邦税务局（Receita Federal do Brasil，RFB）2021 年的数据，使用逻辑回归对模型进行了实证检验。这种新方法旨在了解企业财务实践中与稳定币使用相关的税收行为。我们的研究结果表明，交易强度、频率、环境（特别是 IntraVasp 和 P2P 交易）、年龄、行业和规模是与逃税行为显著相关的因素。然而，我们没有发现任何证据表明，只从事 P2P 交易的公司比只从事 IntraVasp 交易的公司有更高的逃税倾向。我们的研究结果表明，密集使用稳定币、稳定币交易频率高、从事 IntraVasp 和 P2P 交易以及属于服务行业的年轻和中型企业更有可能逃税。因此，我们的研究让人们详细了解了使用加密资产（基于区块链的技术）的数字金融实践如何与企业税收策略产生交集，这可以为监管机构、行业从业者和政策制定者提供有价值的见解。
{"title":"An Empirical Analysis of Tax Evasion among Companies Engaged in Stablecoin Transactions","authors":"Rubens Moura de Carvalho, Helena Coelho Inácio, Rui Pedro Marques","doi":"10.3390/jrfm17090400","DOIUrl":"https://doi.org/10.3390/jrfm17090400","url":null,"abstract":"This research investigates the relationship between stablecoin usage and tax evasion. We present a model that includes variables related to transactions such as intensity, frequency, environment on-chain (P2P) vs. off-chain (IntraVasp), and company characteristics such as age, sector, and size. Our model was empirically tested using a logistic regression based on data from the Brazilian Federal Revenue Service (Receita Federal do Brasil (RFB)) in 2021. This novel approach aims to understand the tax behaviours associated with stablecoin use in corporate financial practices. Our results indicate that the intensity, frequency, environment of transactions (specifically IntraVasp and P2P transactions), age, sector, and size are factors significantly associated with tax evasion behaviour. However, we found no evidence to suggest that firms engaging in only P2P transactions have a higher propensity for tax evasion than those engaging only in IntraVasp transactions. Our findings reveal that younger and medium-sized companies with intensive use of stablecoin, with high stablecoin transaction frequency, engaging in IntraVasp and P2P transactions, and belonging to the service sector are more likely to evade tax. Therefore, our research provides a detailed understanding of how digital financial practices with crypto assets (blockchain-based technology) intersect with corporate tax strategies, which can offer valuable insights for regulators, industry practitioners, and policymakers.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221341","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}
Countries are confronting climate change using climate-related regulations that require firms and investors to disclose their green strategies and activities. Using the Meta-Analysis Structural Equation Modeling (MASEM) technique, this study evaluates the relationship between climate-related regulations and financial markets. The meta-regression analysis is conducted based on the outcomes of 52 empirical studies screened from 143 relevant articles. The results show the predictive power of the climate-related disclosure (CRD) laws and environmental regulations (ERs) on financial performance across all studies. ERs create mixed impacts on the equity market and support the debt market. Firm value is affected by ERs either negatively or positively. Methodologies and risk-related factors (market, industry, and firm risks) are important in explaining the relationships between ER/CRD and financial performance. The more developed the market, the less the impact of ERs and CRD on the equity market. Considering industry risk is recommended because different industries are exposed to changes in policies differently. The ER/CRD–firm value relationship is affected by all market, industry, and firm risks. The downside effect of mandatory CRD on the equity market suggests that policy makers, firms, and investors should be cautious in passing a new CRD regulation for transformation towards a sustainable economy.
{"title":"Climate-Related Regulations and Financial Markets: A Meta-Analytic Literature Review","authors":"Linh Tu Ho, Christopher Gan, Zhenzhen Zhao","doi":"10.3390/jrfm17090398","DOIUrl":"https://doi.org/10.3390/jrfm17090398","url":null,"abstract":"Countries are confronting climate change using climate-related regulations that require firms and investors to disclose their green strategies and activities. Using the Meta-Analysis Structural Equation Modeling (MASEM) technique, this study evaluates the relationship between climate-related regulations and financial markets. The meta-regression analysis is conducted based on the outcomes of 52 empirical studies screened from 143 relevant articles. The results show the predictive power of the climate-related disclosure (CRD) laws and environmental regulations (ERs) on financial performance across all studies. ERs create mixed impacts on the equity market and support the debt market. Firm value is affected by ERs either negatively or positively. Methodologies and risk-related factors (market, industry, and firm risks) are important in explaining the relationships between ER/CRD and financial performance. The more developed the market, the less the impact of ERs and CRD on the equity market. Considering industry risk is recommended because different industries are exposed to changes in policies differently. The ER/CRD–firm value relationship is affected by all market, industry, and firm risks. The downside effect of mandatory CRD on the equity market suggests that policy makers, firms, and investors should be cautious in passing a new CRD regulation for transformation towards a sustainable economy.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"183 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221170","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}
Using daily returns of Bitcoin, Litecoin, Ripple and Stellar, we introduce a novel risk measure for quantitative-risk management in the cryptomarket that accounts for the significant co-movements between cryptocurrencies. We find that our model has a lower error margin when forecasting the extent of future losses than traditional risk measures, such as Value-at-Risk and Expected Shortfall. Most notably, we observe this in Litecoin’s results, where Expected Shortfall, on average, overestimates the potential fall in the price of Litecoin by 8.61% and underestimates it by 3.92% more than our model. This research shows that traditional risk measures, while not necessarily inappropriate, are imperfect and incomplete representations of risk when it comes to the cryptomarket. Our model provides a suitable alternative for risk managers, who prioritize lower error margins over failure rates, and highlights the value in exploring how risk measures that incorporate the unique characteristics of cryptocurrencies can be used to supplement and complement traditional risk measures.
{"title":"Capturing Tail Risks in Cryptomarkets: A New Systemic Risk Approach","authors":"Itai Barkai, Elroi Hadad, Tomer Shushi, Rami Yosef","doi":"10.3390/jrfm17090397","DOIUrl":"https://doi.org/10.3390/jrfm17090397","url":null,"abstract":"Using daily returns of Bitcoin, Litecoin, Ripple and Stellar, we introduce a novel risk measure for quantitative-risk management in the cryptomarket that accounts for the significant co-movements between cryptocurrencies. We find that our model has a lower error margin when forecasting the extent of future losses than traditional risk measures, such as Value-at-Risk and Expected Shortfall. Most notably, we observe this in Litecoin’s results, where Expected Shortfall, on average, overestimates the potential fall in the price of Litecoin by 8.61% and underestimates it by 3.92% more than our model. This research shows that traditional risk measures, while not necessarily inappropriate, are imperfect and incomplete representations of risk when it comes to the cryptomarket. Our model provides a suitable alternative for risk managers, who prioritize lower error margins over failure rates, and highlights the value in exploring how risk measures that incorporate the unique characteristics of cryptocurrencies can be used to supplement and complement traditional risk measures.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"24 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates the relationship between corporate ethics and the information intermediation element of public companies’ information environment. Drawing on the well-established virtue, deontological, and consequential ethical theories, we predict that higher corporate ethics standards have a positive effect on financial analysts’ behavior and earnings forecasts. Using a sample of 5276 firm-year observations from 780 publicly listed US companies, multivariate regression analyses document a significant positive association between company’s level of ethical commitment and analyst coverage and forecast accuracy. Furthermore, the results show that firms with fewer incidents of ethical misconduct are associated with higher analyst consensus. These findings hold across a battery of robustness tests and indicate that a firm’s ethical commitment enhances its corporate information environment and allows financial analysts to play a more effective intermediary role in capital markets.
{"title":"Do Corporate Ethics Enhance Financial Analysts’ Behavior and Performance?","authors":"Sana Ben Hassine, Claude Francoeur","doi":"10.3390/jrfm17090396","DOIUrl":"https://doi.org/10.3390/jrfm17090396","url":null,"abstract":"This study investigates the relationship between corporate ethics and the information intermediation element of public companies’ information environment. Drawing on the well-established virtue, deontological, and consequential ethical theories, we predict that higher corporate ethics standards have a positive effect on financial analysts’ behavior and earnings forecasts. Using a sample of 5276 firm-year observations from 780 publicly listed US companies, multivariate regression analyses document a significant positive association between company’s level of ethical commitment and analyst coverage and forecast accuracy. Furthermore, the results show that firms with fewer incidents of ethical misconduct are associated with higher analyst consensus. These findings hold across a battery of robustness tests and indicate that a firm’s ethical commitment enhances its corporate information environment and allows financial analysts to play a more effective intermediary role in capital markets.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"17 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This research aims to explore market mavericks by redefining sales velocity and profit surge in today’s dynamic business environment in emerging economies. The study focuses on the interplay between Sales Excellence (SE), Sales Capability (SC), Market Alignment (MA), Strategic Responsiveness (SR), and Dynamic Sales Management (DSM). Data from 180 companies (2021–2023), provided by financial leaders, were analyzed using SPSS (23.0) and AMOS (23.0) software. The analysis employed exploratory factor analysis (EFA), reliability analysis, and confirmatory factor analysis (CFA). The results highlight the critical role of these factors in shaping market mavericks and their significant impact on sales and profits in emerging economies. Specifically, SE enhances sales and profits when supported by effective strategies, SC drives organizational change by aligning service quality with SE, and MA drives sales velocity and profit surges through accurate forecasting. SR positively influences sales results by aligning sales with corporate strategy, while DSM is critical for motivating salespeople and shows strong links to SC and SR for successful adaptation in a dynamic business environment. The study reveals the interdependence of these factors and emphasizes the need for seamless integration and coordination to drive effective organizational change. These findings have significant implications for corporations seeking to improve their sales strategies and achieve sustainable growth in a rapidly evolving marketplace in emerging economies. This research explores market mavericks, redefines sales velocity and profit surge, and provides valuable insights into the critical factors shaping market mavericks and their impact on sales and profits. It offers guidance for organizations seeking sustainable growth.
本研究旨在通过重新定义当今新兴经济体动态商业环境中的销售速度和利润激增，探索市场特立独行者。研究重点是卓越销售（SE）、销售能力（SC）、市场对准（MA）、战略响应（SR）和动态销售管理（DSM）之间的相互作用。我们使用 SPSS（23.0）和 AMOS（23.0）软件分析了由财务领导人提供的 180 家公司（2021-2023 年）的数据。分析采用了探索性因子分析（EFA）、可靠性分析和确认性因子分析（CFA）。结果凸显了这些因素在塑造市场特立独行者方面的关键作用，以及它们对新兴经济体销售和利润的重大影响。具体来说，SE 在有效战略的支持下提高销售额和利润，SC 通过将服务质量与 SE 相结合推动组织变革，MA 通过准确预测推动销售速度和利润激增。SR 通过使销售与企业战略保持一致，对销售业绩产生积极影响，而 DSM 对激励销售人员至关重要，并与 SC 和 SR 密切相关，有助于成功适应动态的商业环境。研究揭示了这些因素之间的相互依存关系，并强调了无缝整合和协调以推动有效组织变革的必要性。这些发现对企业在新兴经济体快速发展的市场中改进销售策略和实现可持续增长具有重要意义。这项研究探讨了市场特立独行者，重新定义了销售速度和利润激增，并就塑造市场特立独行者的关键因素及其对销售和利润的影响提供了宝贵的见解。它为寻求可持续增长的组织提供了指导。
{"title":"Market Mavericks in Emerging Economies: Redefining Sales Velocity and Profit Surge in Today’s Dynamic Business Environment","authors":"Enkeleda Lulaj, Blerta Dragusha, Donjeta Lulaj","doi":"10.3390/jrfm17090395","DOIUrl":"https://doi.org/10.3390/jrfm17090395","url":null,"abstract":"This research aims to explore market mavericks by redefining sales velocity and profit surge in today’s dynamic business environment in emerging economies. The study focuses on the interplay between Sales Excellence (SE), Sales Capability (SC), Market Alignment (MA), Strategic Responsiveness (SR), and Dynamic Sales Management (DSM). Data from 180 companies (2021–2023), provided by financial leaders, were analyzed using SPSS (23.0) and AMOS (23.0) software. The analysis employed exploratory factor analysis (EFA), reliability analysis, and confirmatory factor analysis (CFA). The results highlight the critical role of these factors in shaping market mavericks and their significant impact on sales and profits in emerging economies. Specifically, SE enhances sales and profits when supported by effective strategies, SC drives organizational change by aligning service quality with SE, and MA drives sales velocity and profit surges through accurate forecasting. SR positively influences sales results by aligning sales with corporate strategy, while DSM is critical for motivating salespeople and shows strong links to SC and SR for successful adaptation in a dynamic business environment. The study reveals the interdependence of these factors and emphasizes the need for seamless integration and coordination to drive effective organizational change. These findings have significant implications for corporations seeking to improve their sales strategies and achieve sustainable growth in a rapidly evolving marketplace in emerging economies. This research explores market mavericks, redefines sales velocity and profit surge, and provides valuable insights into the critical factors shaping market mavericks and their impact on sales and profits. It offers guidance for organizations seeking sustainable growth.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"29 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221345","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}
Iordanis Karavasilis, Vasiliki Vrana, George Karavasilis
The wide use of telecommunications, computers and the internet, especially over the last four decades, has formed a new economic phenomenon, the “Digital Economy”. As a matter of facts, the development of digitalization has raised questions about its contribution to official economic indicators. This research examines the evolution of the information and communication industry (ICI) and its contribution to the national Gross Domestic Product (GDP) of six European entities. Time series and auto-ARIMA models are employed to process the data. Moreover, this study forecasts the development of the ICI in the future. The results demonstrate a clear stable growth in the variable under examination over time, showing an increasingly greater contribution of the ICI to the national GDP in most cases with the exception of Greece, which has a high provisional risk.
电信、计算机和互联网的广泛应用，尤其是在过去的四十年里，形成了一种新的经济现象--"数字经济"。事实上，数字化的发展引发了关于其对官方经济指标贡献的质疑。本研究探讨了信息和通信产业（ICI）的演变及其对六个欧洲实体国家国内生产总值（GDP）的贡献。在处理数据时采用了时间序列模型和自动-ARIMA 模型。此外，本研究还对 ICI 的未来发展进行了预测。研究结果表明，随着时间的推移，所研究变量的增长明显趋于稳定，在大多数情况下， ICI 对国家 GDP 的贡献越来越大，但希腊除外，因为希腊的临时风险较高。
{"title":"Forecasting the Evolution of the Digital Economy in the Industry of the European Union","authors":"Iordanis Karavasilis, Vasiliki Vrana, George Karavasilis","doi":"10.3390/jrfm17090393","DOIUrl":"https://doi.org/10.3390/jrfm17090393","url":null,"abstract":"The wide use of telecommunications, computers and the internet, especially over the last four decades, has formed a new economic phenomenon, the “Digital Economy”. As a matter of facts, the development of digitalization has raised questions about its contribution to official economic indicators. This research examines the evolution of the information and communication industry (ICI) and its contribution to the national Gross Domestic Product (GDP) of six European entities. Time series and auto-ARIMA models are employed to process the data. Moreover, this study forecasts the development of the ICI in the future. The results demonstrate a clear stable growth in the variable under examination over time, showing an increasingly greater contribution of the ICI to the national GDP in most cases with the exception of Greece, which has a high provisional risk.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221342","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}
Understanding liquidity and liquidity risk is essential for effective risk management. We investigate liquidity spillover effects among ETFs that track the S&P sectors. In particular, using COVID-related news shocks as a natural experiment, we estimate the direction and magnitude of two-way net spillovers and their asymmetry across good and bad news regimes, where liquidity is measured by the daily quoted bid–ask spread and the Amihud illiquidity ratio. Our results confirm the liquidity links amongst ETFs and suggest that liquidity spillovers are more pronounced during bad news periods compared to good news periods. In addition, we document the variations in the results obtained using the bid–ask spread and the Amihud ratio, which provide insights into different dimensions of liquidity and liquidity risk, including volatility and trading volume.
{"title":"Liquidity Spillover between Exchange-Traded Funds: Variations across News Regimes","authors":"Yang Liu, Yongchen Zhao","doi":"10.3390/jrfm17090391","DOIUrl":"https://doi.org/10.3390/jrfm17090391","url":null,"abstract":"Understanding liquidity and liquidity risk is essential for effective risk management. We investigate liquidity spillover effects among ETFs that track the S&P sectors. In particular, using COVID-related news shocks as a natural experiment, we estimate the direction and magnitude of two-way net spillovers and their asymmetry across good and bad news regimes, where liquidity is measured by the daily quoted bid–ask spread and the Amihud illiquidity ratio. Our results confirm the liquidity links amongst ETFs and suggest that liquidity spillovers are more pronounced during bad news periods compared to good news periods. In addition, we document the variations in the results obtained using the bid–ask spread and the Amihud ratio, which provide insights into different dimensions of liquidity and liquidity risk, including volatility and trading volume.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"7 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221338","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}
Zakeya Sanad, Hidaya Al Lawati, Abdalmuttaleb Al-Sartawi
The purpose of this study was to examine the relationship between corporate social responsibility (CSR) and earnings management in Gulf Cooperation Council (GCC)-listed companies. It specifically addresses the question of whether companies that practice greater corporate social responsibility are less likely to engage in earnings management practices. The study sample consisted of 300 firms listed between 2015 and 2021 on GCC bourses (Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Oman, and Kuwait). In this study, we developed multiple linear regression models and collected data from the Bloomberg database, Refinitiv, annual reports, official firms’ websites, and the GCC’s bourse websites for the period from 2015 to 2021. In the pre-pandemic period, firms that engaged in corporate social responsibility activities were more likely to have fewer classification-shifting practices. During the pandemic era, however, this relationship became significantly positive, suggesting that firms’ corporate social responsibility practices may be used to hide their opportunistic classification-shifting practices during difficult times, such as a pandemic. This paper presents a thorough investigation of how businesses may alter their behavior toward increasingly applied but understudied earnings management strategies and CSR practices during a difficult period such as a pandemic.
{"title":"Corporate Social Responsibility and the Misclassification of Income Statement Items during the Coronavirus Pandemic","authors":"Zakeya Sanad, Hidaya Al Lawati, Abdalmuttaleb Al-Sartawi","doi":"10.3390/jrfm17090392","DOIUrl":"https://doi.org/10.3390/jrfm17090392","url":null,"abstract":"The purpose of this study was to examine the relationship between corporate social responsibility (CSR) and earnings management in Gulf Cooperation Council (GCC)-listed companies. It specifically addresses the question of whether companies that practice greater corporate social responsibility are less likely to engage in earnings management practices. The study sample consisted of 300 firms listed between 2015 and 2021 on GCC bourses (Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Oman, and Kuwait). In this study, we developed multiple linear regression models and collected data from the Bloomberg database, Refinitiv, annual reports, official firms’ websites, and the GCC’s bourse websites for the period from 2015 to 2021. In the pre-pandemic period, firms that engaged in corporate social responsibility activities were more likely to have fewer classification-shifting practices. During the pandemic era, however, this relationship became significantly positive, suggesting that firms’ corporate social responsibility practices may be used to hide their opportunistic classification-shifting practices during difficult times, such as a pandemic. This paper presents a thorough investigation of how businesses may alter their behavior toward increasingly applied but understudied earnings management strategies and CSR practices during a difficult period such as a pandemic.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"285 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the impact of twin agency problems (political corruption and minority shareholders’ expropriation) on corporate debt management policies across a large number of countries. Our results show that in more corrupt countries, managers are more likely to shield liquid assets from potential political extraction by maintaining a higher level of leverage. This effect is magnified by the protection of shareholders’ rights. We further show that twin agency problems influence not only the level of debt in capital structures but also other aspects of debt management, including debt maturity, deviation from optimal leverage, capital structure stability, and the leverage speed of adjustments. The findings are robust due to their inclusion of different measures of corruption and a wide range of firm-level and country-level characteristics. Our study has implications for policymakers, as we show that the improvement of the country-level institutional environment and, particularly, addressing corruption can lead to more effective debt management by firms, ultimately resulting in higher firm values.
{"title":"Twin Agency Problems and Debt Management around the World","authors":"Tatiana Salikhova, Svetlana V. Orlova, Li Sun","doi":"10.3390/jrfm17090394","DOIUrl":"https://doi.org/10.3390/jrfm17090394","url":null,"abstract":"This study examines the impact of twin agency problems (political corruption and minority shareholders’ expropriation) on corporate debt management policies across a large number of countries. Our results show that in more corrupt countries, managers are more likely to shield liquid assets from potential political extraction by maintaining a higher level of leverage. This effect is magnified by the protection of shareholders’ rights. We further show that twin agency problems influence not only the level of debt in capital structures but also other aspects of debt management, including debt maturity, deviation from optimal leverage, capital structure stability, and the leverage speed of adjustments. The findings are robust due to their inclusion of different measures of corruption and a wide range of firm-level and country-level characteristics. Our study has implications for policymakers, as we show that the improvement of the country-level institutional environment and, particularly, addressing corruption can lead to more effective debt management by firms, ultimately resulting in higher firm values.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221343","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}
Estimating the impact of volatility in financial markets is challenging due to complex dynamics, including random fluctuations involving white noise and trend components involving brown noise. In this study, we explore the potential of leveraging the chaotic properties of time series data for improved accuracy. Specifically, we introduce a novel trading strategy based on a technical indicator, Moving Hurst (MH). MH utilizes the Hurst exponent which characterizes the chaotic properties of time series. We hypothesize and then prove empirically that MH outperforms traditional indicators like Moving Averages (MA) in analyzing Indian equity indices and capturing profitable trading opportunities while mitigating the impact of volatility.
{"title":"Patterns in the Chaos: The Moving Hurst Indicator and Its Role in Indian Market Volatility","authors":"Param Shah, Ankush Raje, Jigarkumar Shah","doi":"10.3390/jrfm17090390","DOIUrl":"https://doi.org/10.3390/jrfm17090390","url":null,"abstract":"Estimating the impact of volatility in financial markets is challenging due to complex dynamics, including random fluctuations involving white noise and trend components involving brown noise. In this study, we explore the potential of leveraging the chaotic properties of time series data for improved accuracy. Specifically, we introduce a novel trading strategy based on a technical indicator, Moving Hurst (MH). MH utilizes the Hurst exponent which characterizes the chaotic properties of time series. We hypothesize and then prove empirically that MH outperforms traditional indicators like Moving Averages (MA) in analyzing Indian equity indices and capturing profitable trading opportunities while mitigating the impact of volatility.","PeriodicalId":47226,"journal":{"name":"Journal of Risk and Financial Management","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142221169","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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