This paper investigates equity issuances through Dividend Reinvestment and Stock Purchase Plans (DRSPPs). Using a unique sample collected from security registration filings, we show that firms can issue new shares through DRSPPs without using underwriters and consequently, save a large part of direct costs. This economical form of equity offering helps firms, especially those paying high dividends (i.e., Real Estate Investment Trusts), retain a substantial amount of cash flow from operations. The alternative source of capital is crucial for some financially constrained firms to maintain growth. The determinants of equity issuance via DRSPPs are different between REITs and industrial firms. Moreover, unlike seasoned equity offerings, equity offerings via DRSPPs can avoid negative stock market reactions around the issuance date. Overall, our findings expand upon an existing discovery of innovative strategic practices for equity financing and provide direct evidence showing that the Pecking Order still drives firms’ financing.
{"title":"Homemade equity offerings via dividend reinvestment and stock purchase plans","authors":"Shaun A. Bond, Y. Pai, Suyan Zheng","doi":"10.1002/rfe.1172","DOIUrl":"https://doi.org/10.1002/rfe.1172","url":null,"abstract":"This paper investigates equity issuances through Dividend Reinvestment and Stock Purchase Plans (DRSPPs). Using a unique sample collected from security registration filings, we show that firms can issue new shares through DRSPPs without using underwriters and consequently, save a large part of direct costs. This economical form of equity offering helps firms, especially those paying high dividends (i.e., Real Estate Investment Trusts), retain a substantial amount of cash flow from operations. The alternative source of capital is crucial for some financially constrained firms to maintain growth. The determinants of equity issuance via DRSPPs are different between REITs and industrial firms. Moreover, unlike seasoned equity offerings, equity offerings via DRSPPs can avoid negative stock market reactions around the issuance date. Overall, our findings expand upon an existing discovery of innovative strategic practices for equity financing and provide direct evidence showing that the Pecking Order still drives firms’ financing.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48556054","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}
M. K. Hassan, M. Rabbani, J. Brodmann, Abu Bashar, Himani Grewal
{"title":"Bibliometric and Scientometric analysis on CSR practices in the banking sector","authors":"M. K. Hassan, M. Rabbani, J. Brodmann, Abu Bashar, Himani Grewal","doi":"10.1002/rfe.1171","DOIUrl":"https://doi.org/10.1002/rfe.1171","url":null,"abstract":"","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42384759","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Betting against sentiment? Seemingly unrelated anomalies and the low‐risk effect","authors":"Maik Dierkes, Sebastian Schroen","doi":"10.1002/rfe.1170","DOIUrl":"https://doi.org/10.1002/rfe.1170","url":null,"abstract":"","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47291793","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}
Edib Smolo, Rashed Jahangir, R. Nagayev, Christo S. C. Tarazi
This study investigates the dynamic linkages and spillover effect between emerging economies (BRICS and Turkey), focusing on global crises, notably the COVID-19 pandemic. The study uses daily frequency data covering the period from 2002M5 to 2021M03. For the methodology, the paper employs Wavelet Coherence for multiresolution time-frequency analysis in addition to the frameworks of Diebold-Yilmaz Connectedness Index (DY12) and Barunik-Krehlik Frequency Connectedness Index (BK18). The empirical results reveal that the stock market comovements among sample markets are non-monotonous and depend on the time and frequency of returns. Significant correlations among the sample countries and a spike in overall spillover are also evident at the outbreak of the COVID-19 pandemic or the Global Health Crisis (GHC). China, Brazil, Russia, and Turkey with all the other markets, experienced the weakest links during the GHC. Brazil, Russia, and South Africa act consistently (across different horizons) as net transmitters, whereas India, China, and Turkey perform as net receivers. Islamic equities are more likely to ?give? and less prone to ?receive? than conventional equities. Compared to the Global Financial Crisis (GFC), the GHC effect is more severe but short-lived. The findings of this study are helpful to policymakers and diverse investors when making portfolio diversification decisions.
{"title":"Performances of Islamic and conventional equities during the global health crisis: Time‐frequency analysis of BRICS+T markets","authors":"Edib Smolo, Rashed Jahangir, R. Nagayev, Christo S. C. Tarazi","doi":"10.1002/rfe.1152","DOIUrl":"https://doi.org/10.1002/rfe.1152","url":null,"abstract":"This study investigates the dynamic linkages and spillover effect between emerging economies (BRICS and Turkey), focusing on global crises, notably the COVID-19 pandemic. The study uses daily frequency data covering the period from 2002M5 to 2021M03. For the methodology, the paper employs Wavelet Coherence for multiresolution time-frequency analysis in addition to the frameworks of Diebold-Yilmaz Connectedness Index (DY12) and Barunik-Krehlik Frequency Connectedness Index (BK18). The empirical results reveal that the stock market comovements among sample markets are non-monotonous and depend on the time and frequency of returns. Significant correlations among the sample countries and a spike in overall spillover are also evident at the outbreak of the COVID-19 pandemic or the Global Health Crisis (GHC). China, Brazil, Russia, and Turkey with all the other markets, experienced the weakest links during the GHC. Brazil, Russia, and South Africa act consistently (across different horizons) as net transmitters, whereas India, China, and Turkey perform as net receivers. Islamic equities are more likely to ?give? and less prone to ?receive? than conventional equities. Compared to the Global Financial Crisis (GFC), the GHC effect is more severe but short-lived. The findings of this study are helpful to policymakers and diverse investors when making portfolio diversification decisions.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47656906","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}
Abstract This paper investigates the effects of the COVID‐19 crisis on the performance of 49 listed banks in the Gulf Cooperation Council (GCC) countries, during the period from the first quarter of 2017 through the third quarter of 2020. The findings reveal that GCC banks were negatively affected by the pandemic. However, Islamic banks have performed better than conventional banks. The results also show that the banks in Saudi Arabia and UAE were affected more than the banks in other GCC countries. We also show that Islamic banks which are government‐linked, those that are large and those with high loan ratios were more affected by the pandemic. Overall, we argue that Islamic banks can play a significant role in the recovery of GCC countries from the consequences of the pandemic.
{"title":"Effect of COVID‐19 on the performance of Islamic and conventional GCC banks","authors":"Yomna Abdulla, Yousif Ebrahim","doi":"10.1002/rfe.1151","DOIUrl":"https://doi.org/10.1002/rfe.1151","url":null,"abstract":"Abstract This paper investigates the effects of the COVID‐19 crisis on the performance of 49 listed banks in the Gulf Cooperation Council (GCC) countries, during the period from the first quarter of 2017 through the third quarter of 2020. The findings reveal that GCC banks were negatively affected by the pandemic. However, Islamic banks have performed better than conventional banks. The results also show that the banks in Saudi Arabia and UAE were affected more than the banks in other GCC countries. We also show that Islamic banks which are government‐linked, those that are large and those with high loan ratios were more affected by the pandemic. Overall, we argue that Islamic banks can play a significant role in the recovery of GCC countries from the consequences of the pandemic.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49262335","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}
Abstract This paper studies the time–frequency co‐movement among Islamic bond (Sukuk) prices, the recent spread of COVID‐19, oil prices, economic policy uncertainty, global financial uncertainty, and global financial distress. The Dow Jones Sukuk Index (hereafter DJSI) is used as a proxy of the global Sukuk market. The Malaysian Sovereign Sukuk index is also used for comparison purposes because Malaysia maintains a leading position as the strongest global player in Islamic finance. The effect of global risk and uncertainty factors on Sukuk prices is controlled for using partial wavelet coherency. The empirical results indicate that the co‐movements between the Sukuk prices (both global and Malaysian Sukuk) and global economic and financial risk factors are time and frequency varying. We also find that global and Malaysian Sukuk markets behave differently with global risk factors throughout the COVID‐19 pandemic period. Furthermore, we find that the co‐movement between Sukuk prices (both global and Malaysian Sukuk) and COVID‐19‐infected cases is stronger only in the short term.
{"title":"How COVID‐19 pandemic, global risk factors, and oil prices affect Islamic bonds (Sukuk) prices? New insights from time‐frequency analysis","authors":"Nader Naifar, A. Tiwari, Mohammed G. Alhashim","doi":"10.1002/rfe.1158","DOIUrl":"https://doi.org/10.1002/rfe.1158","url":null,"abstract":"Abstract This paper studies the time–frequency co‐movement among Islamic bond (Sukuk) prices, the recent spread of COVID‐19, oil prices, economic policy uncertainty, global financial uncertainty, and global financial distress. The Dow Jones Sukuk Index (hereafter DJSI) is used as a proxy of the global Sukuk market. The Malaysian Sovereign Sukuk index is also used for comparison purposes because Malaysia maintains a leading position as the strongest global player in Islamic finance. The effect of global risk and uncertainty factors on Sukuk prices is controlled for using partial wavelet coherency. The empirical results indicate that the co‐movements between the Sukuk prices (both global and Malaysian Sukuk) and global economic and financial risk factors are time and frequency varying. We also find that global and Malaysian Sukuk markets behave differently with global risk factors throughout the COVID‐19 pandemic period. Furthermore, we find that the co‐movement between Sukuk prices (both global and Malaysian Sukuk) and COVID‐19‐infected cases is stronger only in the short term.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42376383","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 recent coronavirus pandemic, several researchers have focused on the drivers of cryptocurrency behavior. In particular, this study provides insights into what can drive Islamic cryptocurrency markets and how do they react during the COVID-19 pandemic. We explore the cryptocurrency volatility and the connectedness between the Islamic, conventional, and COVID-19 confirmed cases and deaths using the wavelet approaches. The preliminary results show that faith-based cryptocurrencies have reduced risk exposure than their conventional counterparts, in the long run, making them more appealing for investment, particularly for investors seeking low-risk and Shariah-compliant assets. Furthermore, the empirical results indicate that both Islamic and conventional cryptocurrencies are more sensitive to the death toll than the newly confirmed cases. We also observe significant positive co-movements between Bitcoin and Islamic cryptocurrencies. Besides, Bitcoin exhibits a substantial response during various time scales while compared with Islamic cryptocurrencies. This study contributes to the literature by investigating the sensitivity and the vulnerability of a new category of cryptocurrencies backed by tangible assets to pandemic shocks. To the extent of the author's knowledge, this study is the first attempt that examines the co-movement between Islamic and conventional cryptocurrencies using the wavelet approach. A viable, ethical, and alternative investment route for faith-based investors can be provided by the Shariah-Compliant cryptocurrencies as they are risk-reduced and less sensitive to the pandemic than conventional benchmarks. Besides, this study creates opportunities in portfolio diversification for investors.
{"title":"The co‐movements of faith‐based cryptocurrencies in periods of pandemics","authors":"Emna Mnif, Khaireddine Mouakhar, Anis Jarboui","doi":"10.1002/rfe.1154","DOIUrl":"https://doi.org/10.1002/rfe.1154","url":null,"abstract":"In the recent coronavirus pandemic, several researchers have focused on the drivers of cryptocurrency behavior. In particular, this study provides insights into what can drive Islamic cryptocurrency markets and how do they react during the COVID-19 pandemic. We explore the cryptocurrency volatility and the connectedness between the Islamic, conventional, and COVID-19 confirmed cases and deaths using the wavelet approaches. The preliminary results show that faith-based cryptocurrencies have reduced risk exposure than their conventional counterparts, in the long run, making them more appealing for investment, particularly for investors seeking low-risk and Shariah-compliant assets. Furthermore, the empirical results indicate that both Islamic and conventional cryptocurrencies are more sensitive to the death toll than the newly confirmed cases. We also observe significant positive co-movements between Bitcoin and Islamic cryptocurrencies. Besides, Bitcoin exhibits a substantial response during various time scales while compared with Islamic cryptocurrencies. This study contributes to the literature by investigating the sensitivity and the vulnerability of a new category of cryptocurrencies backed by tangible assets to pandemic shocks. To the extent of the author's knowledge, this study is the first attempt that examines the co-movement between Islamic and conventional cryptocurrencies using the wavelet approach. A viable, ethical, and alternative investment route for faith-based investors can be provided by the Shariah-Compliant cryptocurrencies as they are risk-reduced and less sensitive to the pandemic than conventional benchmarks. Besides, this study creates opportunities in portfolio diversification for investors.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44053791","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}
Ashraf Khan, Stefano Piserà, L. Chiaramonte, Alberto Dreassi, A. Paltrinieri
Abstract While looking for safe‐haven assets, the literature obtained mixed and varying results, changing from one period to the next, or one geographical area to another. Recently, this field of research grew even more, motivated by the changing environment resulting from the global financial crisis and the current COVID‐19 pandemic. We compare five Islamic and five conventional leading financial indexes for the period 2004–2020, covering both global and regional data (Asia‐Pacific, Europe, GCC, and the United States). By employing DCC GARCH and extended GARCH (1,1) models, we find a lower volatility and higher persistence in Islamic indexes when compared to their conventional alternatives, holding also when traditional safe‐haven assets are included in comparative terms and across geographical areas. We therefore provide robust evidence on the consistent behavior of Islamic assets: Their defensive properties remain and are even stronger in the current unprecedented and ongoing crisis.
{"title":"Are Islamic investments still safe assets during the COVID‐19 pandemic?","authors":"Ashraf Khan, Stefano Piserà, L. Chiaramonte, Alberto Dreassi, A. Paltrinieri","doi":"10.1002/rfe.1153","DOIUrl":"https://doi.org/10.1002/rfe.1153","url":null,"abstract":"Abstract While looking for safe‐haven assets, the literature obtained mixed and varying results, changing from one period to the next, or one geographical area to another. Recently, this field of research grew even more, motivated by the changing environment resulting from the global financial crisis and the current COVID‐19 pandemic. We compare five Islamic and five conventional leading financial indexes for the period 2004–2020, covering both global and regional data (Asia‐Pacific, Europe, GCC, and the United States). By employing DCC GARCH and extended GARCH (1,1) models, we find a lower volatility and higher persistence in Islamic indexes when compared to their conventional alternatives, holding also when traditional safe‐haven assets are included in comparative terms and across geographical areas. We therefore provide robust evidence on the consistent behavior of Islamic assets: Their defensive properties remain and are even stronger in the current unprecedented and ongoing crisis.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43337705","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}
Though the Covid19 pandemic began as a health crisis, its tentacles have touched almost every aspect of our lives, generating research interest in, among other things, how financial markets and institutions across the world are coping with its impacts. The Special Issue presents papers that examine the effects of the pandemic with a particular reference to the global Islamic financial system. Islamic financial markets and institutions are different from conventional financial markets and institutions in that the former adheres to the rule of Shariah (Islamic law) prohibiting institutions from charging interests on a loan, while a conventional institution relies on interests to survive and grow (Hassan & Muneeza, 2022). There are two types of Islamic finance: Islamic commercial finance and Islamic social finance. The former generates profit in a Shariahcompliant manner, while the latter assists each other without an eye to making a profit (Hassan et al., 2021; 2022). In the next section, I briefly review the papers contained in this special issue and end with concluding remarks.
尽管2019冠状病毒病疫情最初是一场健康危机，但它的触角几乎触及了我们生活的方方面面，引发了人们对世界各地金融市场和机构如何应对其影响的研究兴趣。特刊介绍了研究疫情影响的论文，特别提到了全球伊斯兰金融体系。伊斯兰金融市场和机构与传统金融市场和金融机构的不同之处在于，前者遵守伊斯兰教法规则，禁止机构对贷款收取利息，而传统机构则依靠利息生存和发展（Hassan&Muneeza，2022）。伊斯兰金融有两种类型：伊斯兰商业金融和伊斯兰社会金融。前者以遵守伊斯兰教法的方式产生利润，而后者则在不着眼于盈利的情况下相互帮助（Hassan et al.，2021；2022）。在下一节中，我简要回顾本特刊所载的文件，并以结束语结束。
{"title":"Special issue on the impact of COVID‐19 pandemic on Islamic financial markets and institutions","authors":"M. Hassan","doi":"10.1002/rfe.1163","DOIUrl":"https://doi.org/10.1002/rfe.1163","url":null,"abstract":"Though the Covid19 pandemic began as a health crisis, its tentacles have touched almost every aspect of our lives, generating research interest in, among other things, how financial markets and institutions across the world are coping with its impacts. The Special Issue presents papers that examine the effects of the pandemic with a particular reference to the global Islamic financial system. Islamic financial markets and institutions are different from conventional financial markets and institutions in that the former adheres to the rule of Shariah (Islamic law) prohibiting institutions from charging interests on a loan, while a conventional institution relies on interests to survive and grow (Hassan & Muneeza, 2022). There are two types of Islamic finance: Islamic commercial finance and Islamic social finance. The former generates profit in a Shariahcompliant manner, while the latter assists each other without an eye to making a profit (Hassan et al., 2021; 2022). In the next section, I briefly review the papers contained in this special issue and end with concluding remarks.","PeriodicalId":51691,"journal":{"name":"Review of Financial Economics","volume":null,"pages":null},"PeriodicalIF":1.2,"publicationDate":"2022-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47558155","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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