Journal of Risk and Financial Management

11 pages, 323 KiB

Open AccessArticle

Public Law Liability of the Financial Market Supervisor

by Michal Janovec and János Kálmán

J. Risk Financial Manag. 2024, 17(6), 232; https://doi.org/10.3390/jrfm17060232 (registering DOI) - 1 Jun 2024

This article deals with the liability of the supervisory authority of the financial market. It could be questioned whether the supervisory authority, as the public authority, is liable for the supervisory performance. If the answer is yes, then the question is what kind [...] Read more.

This article deals with the liability of the supervisory authority of the financial market. It could be questioned whether the supervisory authority, as the public authority, is liable for the supervisory performance. If the answer is yes, then the question is what kind of liability could be found and if any special conditions (prerequisites) are needed. In general, there could be two lines of public liability found. One is systemic liability for the safe financial market—e.g., financial market stability. The other perspective is individual liability for damages caused by unlawful administrative procedure or maladministration, where unlimited strict liability is granted. This kind of liability might be widely questioned, especially when the central bank is the supervisory authority, like in the Czech Republic, Slovakia, Hungary, and other EU member states. This article aims to evaluate the liability of the supervisory authority in the Czech Republic and Hungary concerning the European level of such liability. Full article

(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)

16 pages, 693 KiB

Open AccessArticle

Optimizing Concession Agreement Terms and Conditions: Stakeholder Interest Alignment in the Petrochemical Sector

by Tatyana Ponomarenko, Ilya Gorbatyuk, Sergey Galevskiy and Evgenii Marin

J. Risk Financial Manag. 2024, 17(6), 231; https://doi.org/10.3390/jrfm17060231 (registering DOI) - 1 Jun 2024

Abstract

This article is devoted to the examination of models and the selection of optimal parameters for concession agreements pertaining to construction and operation projects within the pipeline infrastructure of the petrochemical sector. Pipelines are underscored as capital-intensive assets crucial for the organization of [...] Read more.

This article is devoted to the examination of models and the selection of optimal parameters for concession agreements pertaining to construction and operation projects within the pipeline infrastructure of the petrochemical sector. Pipelines are underscored as capital-intensive assets crucial for the organization of complex petrochemical production processes. These processes play a vital role in generating added value, tax revenue, employment opportunities, and fostering territorial development while upholding environmental quality standards. This study aims to ascertain the economic parameters of concession agreements, with a focus on achieving a balance of economic interests between the government and businesses. Through a comparative analysis of fundamental economic and mathematical models of concession agreements, the authors model economic parameters to determine the government’s share in investments and concession fees concerning pipeline projects. Subsequently, an oil product pipeline project is discussed as a case study. The results gleaned from this analysis can be harnessed to optimize the parameters of concession agreements and enhance the economic efficiency of project implementation. Economically viable parameters not only facilitate the execution of concession agreements but also foster the generation of added value, social benefits, and environmental oversight, thus aligning with the principles of sustainable development. Full article

(This article belongs to the Special Issue Effective Governance and Financing Models for Public–Private Partnerships)

► Show Figures

Figure 1

16 pages, 589 KiB

Open AccessArticle

Financial Development, Financial Openness, and Policy Effectiveness

by Niraj P. Koirala, Hassan Anjum Butt, Jeffrey Zimmerman and Ahmed Kamara

J. Risk Financial Manag. 2024, 17(6), 230; https://doi.org/10.3390/jrfm17060230 - 29 May 2024

Viewed by 229

Abstract

This study explores how financial development and openness influence the effectiveness of fiscal and monetary policies. An analysis of data from about 100 countries between 1980 and 2018 reveals that both financial openness and development weaken the impact of monetary and fiscal policies. [...] Read more.

This study explores how financial development and openness influence the effectiveness of fiscal and monetary policies. An analysis of data from about 100 countries between 1980 and 2018 reveals that both financial openness and development weaken the impact of monetary and fiscal policies. Our results further show that financial development in a country diminishes policy effectiveness depending on the country’s level of financial development; specifically, the more developed a country, the less effective the policies would be. Additionally, through a detailed examination employing a dynamic panel GMM approach, the study investigates the global repercussions of economic downturns in the US and how financial maturity shapes policy effectiveness during these times. We also discuss some policy implications that show that the positive impacts of monetary policy on output growth are lessened during crisis periods, and policymakers should act accordingly. Full article

(This article belongs to the Special Issue Applied Econometrics and Time Series Analysis (Volume II))

► Show Figures

Figure 1

23 pages, 4797 KiB

Open AccessArticle

An Empirical Examination of Bitcoin’s Halving Effects: Assessing Cryptocurrency Sustainability within the Landscape of Financial Technologies

by Juraj Fabus, Iveta Kremenova, Natalia Stalmasekova and Terezia Kvasnicova-Galovicova

J. Risk Financial Manag. 2024, 17(6), 229; https://doi.org/10.3390/jrfm17060229 - 29 May 2024

Viewed by 181

Abstract

This article explores the significance of Bitcoin halving events within the cryptocurrency ecosystem and their impact on market dynamics. While the existing literature addresses the periods before and after Bitcoin halving, as well as financial bubbles, there is an absence of forecasting regarding [...] Read more.

This article explores the significance of Bitcoin halving events within the cryptocurrency ecosystem and their impact on market dynamics. While the existing literature addresses the periods before and after Bitcoin halving, as well as financial bubbles, there is an absence of forecasting regarding Bitcoin price in the time after halving. To address this gap and provide predictions of Bitcoin price development, we conducted a rigorous analysis of past halving events in 2012, 2016, and 2020, focusing on Bitcoin price behaviour before and after each occurrence. What interests us is not only the change in the price level of Bitcoins (top and bottom), but also when this turn occurs. Through synthesizing data and trends from previous events, this article aims to uncover patterns and insights that illuminate the impact of Bitcoin halving on market dynamics and sustainability, movement of the price level, the peaks reached, and price troughs. Our approach involved employing methods such as RSI, MACD, and regression analysis. We looked for the relationship between the price of Bitcoin (top and bottom) and the number of days after the halving. We have uncovered a mathematical model, according to which the next peak will be reached 19 months (in November 2025) and the trough 31 months after Bitcoin halving 2024 (in November 2026). Looking towards the future, this study estimates predictions and expectations for the upcoming Bitcoin halving. These discoveries significantly enhance our understanding of Bitcoin’s trajectory and its implications for the finance cryptocurrency market. By offering novel insights into cryptocurrency market dynamics, this study contributes to advancing knowledge in the field and provides valuable information for cryptocurrency markets, investors, and stakeholders. Full article

(This article belongs to the Special Issue Stability of Financial Markets and Sustainability Post-COVID-19)

► Show Figures

Figure 1

18 pages, 568 KiB

Open AccessArticle

European Structural and Investment Funds (ESIFs) and Regional Development across the European Union (EU)

by Nikolitsa Spilioti and Athanasios Anastasiou

J. Risk Financial Manag. 2024, 17(6), 228; https://doi.org/10.3390/jrfm17060228 - 29 May 2024

Viewed by 228

Abstract

This scoping review synthesizes the evidence from eleven key studies to assess the impact of European Structural and Investment Funds (ESIFs) on regional development across the European Union (EU), focusing on fund efficiency, regional disparities and convergence, governance quality, economic freedom, and fund [...] Read more.

This scoping review synthesizes the evidence from eleven key studies to assess the impact of European Structural and Investment Funds (ESIFs) on regional development across the European Union (EU), focusing on fund efficiency, regional disparities and convergence, governance quality, economic freedom, and fund management. A systematic search was conducted across multiple databases to identify the relevant literature published up to 2023. Eleven studies were selected based on the date published and their focus on ESIFs’ role in regional development, employing a range of methodological approaches including Data Envelopment Analysis (DEA), spatial econometrics, and multivariate analyses. The thematic analysis identified four main categories: Methodological Approaches in Evaluating Fund Efficiency, Regional Disparities and Convergence, The Interconnection between Governance Quality, Economic Freedom, and the Efficiency of Structural Fund Management, and The Absorption Capacity and Fund Management. The review highlights the importance of sophisticated analytical tools in evaluating fund efficiency, with DEA and spatial econometrics providing critical insights into fund management efficiency. Studies underscored the nuanced efficacy of ESIFs in reducing regional disparities, albeit pointing to the need for more targeted fund allocation. Governance quality and economic freedom emerged as pivotal factors enhancing fund management efficiency, suggesting the potential of governance reforms in optimizing ESIF allocation and utilization. Challenges related to fund absorption and management were illuminated, advocating for enhanced institutional management capabilities and the development of innovative performance indicators. The findings of this scoping review contribute to a deeper understanding of the complexities surrounding ESIFs’ impact on regional development within the EU. They underscore the critical importance of governance quality, economic freedom, methodological rigor, and strategic fund allocation in enhancing the effectiveness of ESIFs. The review calls for tailored policy interventions and the integration of national and European funding strategies to maximize the impact of these programs on regional development and SME support. Future research should continue to refine these methodological approaches and explore the causal effects of funding, to enhance our understanding of ESIFs’ efficiency in promoting regional development and convergence within the European Union. Full article

(This article belongs to the Section Economics and Finance)

► Show Figures

Figure 1

18 pages, 254 KiB

Open AccessArticle

Do CEOs Identified as Value Investors Outperform Those Who Are Not?

by George Athanassakos

J. Risk Financial Manag. 2024, 17(6), 227; https://doi.org/10.3390/jrfm17060227 - 29 May 2024

Viewed by 251

Abstract

The aim of this study is to examine whether good asset allocation by a CEO leads to superior stock returns and, if so, how one might be able to identify CEOs that are good asset allocators. Employing US data from May 2001 to [...] Read more.

The aim of this study is to examine whether good asset allocation by a CEO leads to superior stock returns and, if so, how one might be able to identify CEOs that are good asset allocators. Employing US data from May 2001 to April 2019, we find that CEOs that invest the company’s cash flows according to a value-investing style seem to outperform companies that do not. We find that high goodwill to assets and high operating margin (good asset allocator) companies outperform companies with high or low goodwill to assets and low operating margin (poor asset allocator) companies. The findings are corroborated with out-of-sample (May 2019–April 2023) robustness tests. When buying other businesses, value investor CEOs ensure that their consolidated operating margins remain high, as opposed to other firms managed by poor asset allocator CEOs who buy businesses that bring down operating margins, either because they overpay or due to an inability to materialize expected synergies. Using both summary statistics and regression analysis, the findings of this study help us identify companies that allocate assets like value investors and enable us to anticipate future stock performance. For example, if a company, on average, has a goodwill/assets ratio of 41.03%, and an operating margin of 21.38%, it is likely this firm would be at the top quartile in terms of stock return performance over at least the next three years. At the same time, if a firm has a low average goodwill/assets ratio (i.e., 1.95%), its operating margins, on average, should be 24.46%, if it wants to achieve a similar performance as that of firms with high goodwill/assets. Moreover, the future stock return predictability of high (low) goodwill/assets and high (low) operating margin firms, found in this study, can help an investor develop trading strategies that can lead to superior stock price performance by effectively taking long positions in (shorting) firms that are (not) managed by value investor CEOs. Finally, the paper’s findings can also help investors in another way. For example, investors tend to be skeptical about companies with high goodwill/assets. The rule of thumb is to beware of companies carrying goodwill on their balance sheets that is more than 25% of assets. Based on our findings, this should not be a problem as long as the company’s operating margin has remained high and is rising. Full article

(This article belongs to the Special Issue Featured Papers in Corporate Finance and Governance)

12 pages, 1973 KiB

Open AccessArticle

Goodwill Valuation Enhancement through Capitalization Method and Statistical Impact Analysis

by Shariq Mohammed, Amir Ahmad Dar, Mohammad Shahfaraz Khan, Imran Azad, Gopu Jayaraman and Olayan Albalawi

J. Risk Financial Manag. 2024, 17(6), 226; https://doi.org/10.3390/jrfm17060226 - 28 May 2024

Viewed by 232

Abstract

The valuation of Goodwill (GW) has remained one of the several critical issues in financial analysis. This aspect is particularly important for mergers and acquisitions due to the significance of intangible assets. This study delves into the capitalization method of super profit (CMSP), [...] Read more.

The valuation of Goodwill (GW) has remained one of the several critical issues in financial analysis. This aspect is particularly important for mergers and acquisitions due to the significance of intangible assets. This study delves into the capitalization method of super profit (CMSP), a prominent technique for GW valuation, enhanced by the integration of statistical tools. Assessing a company’s excess profits over its average return on tangible assets is part of the CMSP. Finding the variables that have a significant impact on GW valuation, such as average profit, capital employed, and rate of return, is the main goal of this research. These issues are thoroughly investigated through statistical analysis to give stakeholders useful information for well-informed decision-making. Additionally, the study seeks to identify the external elements influencing this process as well as the internal aspects influencing GW valuation. Regression analysis, correlation matrices, response analysis and ANOVA are used to improve GW assessment and comprehension of the complex relationships between different factors. Full article

(This article belongs to the Section Mathematics and Finance)

► Show Figures

Figure 1

13 pages, 514 KiB

Open AccessArticle

Diversification Is Not a Free Lunch

by Dirk G. Baur

J. Risk Financial Manag. 2024, 17(6), 225; https://doi.org/10.3390/jrfm17060225 - 27 May 2024

Viewed by 285

Abstract

This study analyzed the statement “diversification is a free lunch”. We empirically showed that diversification is only a free lunch under uncertainty or ignorance, confirming Warren Buffett’s “diversification is protection against ignorance”. Using historical returns of the S&P500 constituents illustrated that diversification not [...] Read more.

This study analyzed the statement “diversification is a free lunch”. We empirically showed that diversification is only a free lunch under uncertainty or ignorance, confirming Warren Buffett’s “diversification is protection against ignorance”. Using historical returns of the S&P500 constituents illustrated that diversification not only decreased the risk but also the returns if the expected returns could be estimated. The findings of this study highlight that diversification reduces risk but that the risk reduction is not for free. Full article

(This article belongs to the Section Economics and Finance)

► Show Figures

Figure 1

16 pages, 967 KiB

Open AccessArticle

Revolutionizing Hedge Fund Risk Management: The Power of Deep Learning and LSTM in Hedging Illiquid Assets

by Yige Wang, Leyao Tong and Yueshu Zhao

J. Risk Financial Manag. 2024, 17(6), 224; https://doi.org/10.3390/jrfm17060224 - 26 May 2024

Viewed by 341

Abstract

In the dynamic sphere of financial markets, hedge funds have emerged as a critical force, navigating through volatility with advanced risk management techniques yet grappling with the challenges posed by illiquid assets. This study aims to transcend traditional option pricing models, which struggle [...] Read more.

In the dynamic sphere of financial markets, hedge funds have emerged as a critical force, navigating through volatility with advanced risk management techniques yet grappling with the challenges posed by illiquid assets. This study aims to transcend traditional option pricing models, which struggle under the complexities of hedge fund investments, by exploring the applicability of machine learning in financial risk management. Leveraging Deep Neural Networks (DNNs) and Long Short-Term Memory (LSTM) cells, the research introduces a model-free, data-driven approach for discrete-time hedging problems. Through a comparative analysis of simulated data and the implementation of LSTM architectures, the paper elucidates the potential of these machine learning techniques to enhance the precision of risk assessments and decision-making processes in hedge fund investments. The findings reveal that DNNs and LSTMs offer significant advancements over conventional models, effectively capturing long-term dependencies and complex patterns within financial time series data. Consequently, the study underscores the transformative impact of machine learning on the methodologies employed in financial risk management, proposing a novel paradigm that promises to mitigate the intricacies of hedging illiquid assets. This research not only contributes to the academic discourse but also paves the way for the development of more adaptive and resilient investment strategies in the face of market uncertainties. Full article

(This article belongs to the Section Financial Technology and Innovation)

► Show Figures

Figure 1

13 pages, 255 KiB

Open AccessArticle

Does Debt Structure Explain the Relationship between Agency Cost of Free Cash Flow and Dividend Payment? Evidence from Saudi Arabia

by Moez Dabboussi

J. Risk Financial Manag. 2024, 17(6), 223; https://doi.org/10.3390/jrfm17060223 - 26 May 2024

Viewed by 222

Abstract

This paper investigates the impact of debt financing on dividend payments when they face the agency costs of free cash flow. It focuses on a sample of 120 firms listed on the Saudi Stock Exchange during the period of 2011–2021. The findings from [...] Read more.

This paper investigates the impact of debt financing on dividend payments when they face the agency costs of free cash flow. It focuses on a sample of 120 firms listed on the Saudi Stock Exchange during the period of 2011–2021. The findings from the Generalized Least Squares regression model revealed that the presence of agency costs of free cash flows may limit the funds available for dividend payments. Regarding the moderating effect of debt structure, the research highlights the significant role of long-term debt in making more prudent use of free cash flow. The use of long-term debt becomes more effective and can enhance shareholder wealth when a firm is facing agency costs of free cash flow. More specifically, bondholders primarily focus on affirmative covenants which require the firm to undertake specified actions such as maintaining assets and financial ratios, or paying taxes, but they do not restrict financing activities such as dividend payments. Since interest and debt repayments are fixed obligations, using free cash flow for dividend disbursement is considered a more profitable and beneficial approach for shareholders in the context of Saudi Arabia. This study contributes to our understanding of financial management under different debt structures and improves our scientific knowledge of the culture of Saudi firms regarding the dividend distribution policy. Full article

(This article belongs to the Special Issue Corporate Finance: Financial Management of the Firm)

16 pages, 617 KiB

Open AccessArticle

Effects of Ownership Structure on Intellectual Capital: Evidence from Publicly Listed Banks in Bangladesh

by Syed Zabid Hossain and Md. Sohel Rana

J. Risk Financial Manag. 2024, 17(6), 222; https://doi.org/10.3390/jrfm17060222 - 24 May 2024

Viewed by 465

Abstract

This study explored the impacts of ownership structure (OS) on intellectual capital (IC) and its components. Data were gathered from 31 Dhaka Stock Exchange-listed banks for five years, from 2017 to 2021, consisting of 155 observations as balanced panel data. The study used [...] Read more.

This study explored the impacts of ownership structure (OS) on intellectual capital (IC) and its components. Data were gathered from 31 Dhaka Stock Exchange-listed banks for five years, from 2017 to 2021, consisting of 155 observations as balanced panel data. The study used the modified value-added intellectual coefficient (MVAIC) model to track the IC efficiency. The robust fixed effects model was employed for regression analysis to test the hypotheses. The research found that sponsor director ownership is negatively associated with the MVAIC, human capital efficiency (HCE), and structural capital efficiency (SCE) but positively with relational capital efficiency (RCE). High institutional and public ownership are positively linked with SCE but negatively with RCE. Foreign ownership is only positively associated with banks’ MVAIC and HCE. The regression results showed that high institutional ownership (IO) significantly enhanced the MVAIC and HCE. Foreign and public ownership positively influenced banks’ MVAIC, HCE, and capital employed efficiency (CEE) but negatively impacted RCE. The findings of this study will help banks’ policymakers with ownership mixes for the optimum utilization of banks’ resources. Management may assess IC’s efficiency level for proper supervision and use of knowledge resources to boost bank profitability. Also, the findings will help investors make prudent investment decisions. This is the first study to focus on OS and IC with diverse elements in Southeast Asia, especially Bangladesh, an emerging market. Full article

(This article belongs to the Special Issue Subjective Well-Being and Financial Decision Making)

► Show Figures

Figure 1

30 pages, 2069 KiB

Open AccessArticle

Transmission of Inflation and Exchange Rate Effects: The Markov Switching Vector Autoregressive Methodology

by Heni Boubaker and Ben Saad Zorgati Mouna

J. Risk Financial Manag. 2024, 17(6), 221; https://doi.org/10.3390/jrfm17060221 - 24 May 2024

Viewed by 341

Abstract

The aim of this study is to delve into the intricate the mechanism through which alterations in currency exchange rates give rise to shifts in inflation rates, while taking into careful consideration the country’s economic cycle. In order to accomplish this objective, we [...] Read more.

The aim of this study is to delve into the intricate the mechanism through which alterations in currency exchange rates give rise to shifts in inflation rates, while taking into careful consideration the country’s economic cycle. In order to accomplish this objective, we used a dataset that spanned from 1 January 1999 to 1 July 2023, focusing our analytical lens on three specific geographic areas, namely the Eurozone, the United Kingdom, and Canada. In our pursuit of understanding this complex relationship, we employed the Markov Switching Vector Autoregressive model. Our research outcomes can be succinctly encapsulated as follows: in the initial stages, particularly during phases characterized by robust economic growth, the transmission of exchange rate effects onto inflation levels appeared to exhibit a partial impact across all geographic areas under examination. However, during periods marked by economic downturns, both the United Kingdom and Canada displayed a distinctly more comprehensive transmission of these effects. Moreover, the prevailing projections for the forthcoming time horizon, across all the countries encompassed by our study, strongly indicate the onset of an expansionary phase that is projected to extend over a span of 25 months. Lastly, concerning the implications of unexpected disturbances or shocks, it is noteworthy that the response of exchange rates to inflation induced shocks was neither immediate nor as pronounced as the corresponding reaction of inflation to sudden shifts in exchange rates. Full article

(This article belongs to the Special Issue Financial Econometrics and Quantitative Economic Analysis)

► Show Figures

Figure 1

13 pages, 956 KiB

Open AccessArticle

Investing in US Timberland Companies

by Jack Clark Francis and Ge Zhang

J. Risk Financial Manag. 2024, 17(6), 220; https://doi.org/10.3390/jrfm17060220 - 24 May 2024

Viewed by 349

Abstract

Are common stocks issued by timberland companies a good investment? Portfolios of large US timberland corporations are compared to simultaneous investments in a diversified US common stock index. Over a 20-year sample period it turns out that the US timberland corporations, on average, [...] Read more.

Are common stocks issued by timberland companies a good investment? Portfolios of large US timberland corporations are compared to simultaneous investments in a diversified US common stock index. Over a 20-year sample period it turns out that the US timberland corporations, on average, perform about as well as the highly diversified US stock market index. It is surprising that the timberland companies do not outperform the stock market indexes because, in order to encourage tree planting, the US Congress has almost completely exempted timberland companies from paying federal income taxes. Furthermore, it is scientifically impossible to assess the value of the large amounts of photosynthesis that the timberland companies produce. As a result of these two ambiguities, it is difficult to state decisively that the timberland companies are better investments than a diversified portfolio of common stocks. However, valuing timberland companies is more practical than endeavoring to value the trees directly. Full article

(This article belongs to the Special Issue Recent Advancements in Real Estate Finance and Risk Management)

► Show Figures

Figure 1

15 pages, 405 KiB

Open AccessArticle

Sparked Intuition Power: An Audit Risk Activity

by Michael Barnes, Kathryn Enget and Mitchell Heberer

J. Risk Financial Manag. 2024, 17(6), 219; https://doi.org/10.3390/jrfm17060219 - 24 May 2024

Viewed by 278

Abstract

This case explores the subjective nature of professional judgment related to audit risk through the lens of a fictitious company, Sparked Intuition Power (SIP). SIP has just been accepted as a new audit client by an international accounting firm. Students play the role [...] Read more.

This case explores the subjective nature of professional judgment related to audit risk through the lens of a fictitious company, Sparked Intuition Power (SIP). SIP has just been accepted as a new audit client by an international accounting firm. Students play the role of associates on the audit engagement team. As part of their work on the audit, the students identify potential risks present at SIP as part of the initial risk assessment process. Once these risks have been identified, the students decide how to assess the potential severity of each risk and determine the resulting effect on the overall auditor workload. Through interaction and discussion with their instructors, the students should be better able to navigate the decision-making process related to risk evaluation in an audit engagement. Full article

(This article belongs to the Special Issue Judgment and Decision-Making Research in Auditing)

► Show Figures

Figure 1

26 pages, 671 KiB

Open AccessArticle

Determinants of Bank Profitability—Do Institutions, Globalization, and Global Uncertainty Matter for Banks in Island Economies? The Case of Fiji

by Shasnil Avinesh Chand, Ronald Ravinesh Kumar, Peter Josef Stauvermann and Muhammad Shahbaz

J. Risk Financial Manag. 2024, 17(6), 218; https://doi.org/10.3390/jrfm17060218 - 23 May 2024

Viewed by 325

Abstract

The objective of this study is to examine the influences of institutions, globalization, and world uncertainty on bank profitability in small developing economies. Consequently, we emphasize the significance of both bank-specific and other external factors influencing bank profitability. The empirical estimation is based [...] Read more.

The objective of this study is to examine the influences of institutions, globalization, and world uncertainty on bank profitability in small developing economies. Consequently, we emphasize the significance of both bank-specific and other external factors influencing bank profitability. The empirical estimation is based on seven banks in Fiji—a small island economy—over the period 2000–2021. Together with bank-specific and macro factors, we account for institutions, globalization, and world uncertainty in analyzing the determinants of bank profitability. The study uses the fixed-effect estimation method. From the results, we observe that bank-specific variables, like the net interest margin, non-interest income, bank size, and capital adequacy ratio, are positively associated with bank profitability. Non-performing loans and credit risk are negatively associated with bank profitability. Macro variables, such as real GDP growth and remittances, have positive effects on bank profitability. Institutional factors, such as government effectiveness and voice and accountability, are positively associated with bank profitability. Regarding globalization, we find that it supports bank profitability. Global uncertainty and the Global Financial Crisis (2007–2008) are positively associated with profitability, whereas the global pandemic (COVID-19) is negatively associated. This study underscores the need to analyze the bank performance with factors beyond those reported in financial statements to derive a comprehensive understanding and appreciation of the complex nature of banking operations. Full article

(This article belongs to the Special Issue Financial Markets, Financial Volatility and Beyond (Volume III))

► Show Figures

Figure 1

17 pages, 1496 KiB

Open AccessArticle

Empowering Self-Help Groups: The Impact of Financial Inclusion on Social Well-Being

by Madan Survase and Atmajitsinh Gohil

J. Risk Financial Manag. 2024, 17(6), 217; https://doi.org/10.3390/jrfm17060217 - 22 May 2024

Viewed by 908

Abstract

Financial inclusion (FI) relates to the access and availability of financial services to society, especially in low-income groups. FI is pivotal in achieving 7 of the 17 Sustainable Development Goals (SDGs). This paper explores the level of FI in the rural areas of [...] Read more.

Financial inclusion (FI) relates to the access and availability of financial services to society, especially in low-income groups. FI is pivotal in achieving 7 of the 17 Sustainable Development Goals (SDGs). This paper explores the level of FI in the rural areas of Maharashtra and measures the impact of FI on the social conditions of Self-Help Groups (SHGs) prevalent in these areas. The study is based on a 424 SHGs survey conducted in the Pune, Thane, and Palghar districts of Maharashtra, India. The impact of FI on SHGs is evaluated using a Structural Equation Model (SEM). The results of the study show that physical banking services, Business Facilitators (BFs), and Business Correspondents (BCs) improve the social conditions of rural SHGs. Additionally, BCs and BFs mediate the relationship between physical banking services and social conditions. The study also reveals an insignificant association between BCs and BFs and insurance services. The present study highlights the importance of increasing the awareness of insurance policies through financial literacy programs and making timely availability and accessibility of BCs and BFs to enhance financial inclusion in rural areas. Full article

(This article belongs to the Special Issue Fintech, Business, and Development)

► Show Figures

Figure 1

18 pages, 877 KiB

Open AccessArticle

Investigating the Components of Perceived Risk Factors Affecting Mobile Payment Adoption

by Eugene Bland, Chuleeporn Changchit, Charles Changchit, Robert Cutshall and Long Pham

J. Risk Financial Manag. 2024, 17(6), 216; https://doi.org/10.3390/jrfm17060216 - 21 May 2024

Viewed by 948

Abstract

As smartphone ownership rapidly expands, mobile payment options are gaining popularity due to the portability and convenience they offer. This study examines attitudes towards adopting mobile payment, focusing on the component risk, which consists of multiple dimensions including performance, financial, time, psychological, and [...] Read more.

As smartphone ownership rapidly expands, mobile payment options are gaining popularity due to the portability and convenience they offer. This study examines attitudes towards adopting mobile payment, focusing on the component risk, which consists of multiple dimensions including performance, financial, time, psychological, and social risks. The study uses a quantitative approach, collecting data through a survey distributed to mobile payment users, with 361 respondents in the United States. The survey instrument includes measures of performance and psychological risk, as well as attitudes towards mobile payment acceptance. Data analysis using SPSS 25.0 and AMOS 24.0 reveals that both performance and psychological risk significantly negatively impact attitudes towards mobile payment acceptance, underscoring the importance of mobile payment service providers implementing effective risk management policies to improve users’ positive attitudes towards their platforms. Full article

(This article belongs to the Special Issue Digital Banking and Financial Technology)

► Show Figures

Figure 1

Journal Menu

Journal Browser

J. Risk Financial Manag., Volume 17, Issue 6 (June 2024) – 17 articles

Further Information

Guidelines

MDPI Initiatives

Follow MDPI