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Global Trends and Challenges in Economics and Finance

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A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: closed (1 October 2023) | Viewed by 20368

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Special Issue Editors

Prof. Dr. Apostolos G. Christopoulos

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Guest Editor

Business Administration, University of the Aegean, 82132 Island of Chios, Greece
Interests: risk management; corporate failure; corporate governance and banking
Special Issues, Collections and Topics in MDPI journals

Prof. Dr. Dimitris Kenourgios

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Guest Editor

Department of Economics, National and Kapodistrian University of Athens, GR-10559 Athens, Greece
Interests: financial contagion; financial modeling; quantitative easing and capital markets; Islamic finance; Alternative investments; SMEs capital structure

Dr. Ioannis Katsampoxakis

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Guest Editor

Department of Statistics and Actuarial – Financial Mathematics, University of the Aegean, 83200 Island of Samos, Greece
Interests: corporate finance; financial markets; capital market regulation; energy markets; risk management
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

During the last 15 years, the global economy has been affected by unpleasant events (economic crisis, COVID-19 pandemic, climate change, energy crisis and more recently the Ukrainian conflict). Such events have led to a considerable disturbance for every economy worldwide, damaging their public and private sectors and threatening sustainable development, even in developed countries. The negative effects were evident in the competitiveness of their private sector, and novel policies were urgently required. In such an environment, social equality, prosperity and cohesion were also challenged, whereas climate change, energy crisis and the pandemic consequences are worsened by the Ukrainian dispute, delaying further the upcoming economic growth. Undoubtedly, during the last years, we are experiencing a period of combined challenges based on economic–pandemic–energy issues, leading to an even bleaker period after the Ukrainian conflict.

In such an era, it becomes urgent to propose policies to address these complex situations, which threaten to hamper the prospects of the world economy. The academic community must be the spearhead of this attempt, and the present Special Issue aims to contribute in this direction. The findings of the negative effects since 2007 and the relative implications have an increasing importance a period of uncertainty.

The scope of this Special Issue is to host research works from the areas of economics, banking, finance, energy, corporate governance, engineering, sustainability and other related areas. Researchers who are interested in contributing in this direction are expected to address sophisticated econometric models and to propose policies to tackle market imbalances and distortions during the complex and unforeseen coming years.

Prof. Dr. Apostolos G. Christopoulos
Prof. Dr. Dimitris Kenourgios
Dr. Ioannis Katsampoxakis
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

financial markets
renewable energy
climate change
financial engineering
corporate governance
fintech
cryptocurrencies
sustainability

Published Papers (11 papers)

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Research

23 pages, 284 KiB

Open AccessArticle

Compliance with the Requirements of the Greek Legislation for Reporting on ESG Issues: The Case of the Paper Processing Sector

by Evangelos Soras and Apostolos G. Christopoulos

J. Risk Financial Manag. 2024, 17(1), 14; https://doi.org/10.3390/jrfm17010014 - 27 Dec 2023

Viewed by 1281

Abstract

We examined the extent to which companies in the paper processing sector, operating in printing, packaging, labeling, and paper bagging, comply with the requirements of Greek legislation for reporting information on ESG issues. The overall average compliance rating of the sector, which is 45.86% for the year 2021 and 46.20% for the year 2020, is below 50% (baseline), which means that the sector should improve in reporting on ESG issues. It should also be noted that there has been a deterioration in the average compliance rating between the two years. There is a very high statistically significant correlation between the compliance rating average and the average total assets (r² = 0.897) and the average number of employees (r² = 0.922), a high correlation, though not statistically significant, between the compliance rating average and the average results (r² = 0.648), and a moderate statistically significant correlation between the compliance rating average and the average revenues (r² = 0.570). There is an obvious positive relationship between holding ISO certificates and external auditor involvement and the average compliance rating of companies; these are both qualitative features favorable to effective governance. The companies that are active in paper bagging and cardboard box (food packaging) usage have also developed a greater environmentally friendly culture, which results in a higher average compliance rating in comparison with the other two activities of the sector. The companies in the region of Attica have a higher compliance rating than the companies in other regions because they operate in an environment that is much more polluted than the rest of Greece, due to its high concentration of people and companies; thus, they have become more sensitive to ESG issues. The companies that have been operating longer have also achieved a higher average compliance rating because younger companies are trying to gain market share and are not devoting their time and resources to ESG issues. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

24 pages, 602 KiB

Open AccessArticle

The Effect of Religion in European Financial Statement Disclosures: A Real Earnings’ Management Case

by Kanellos S. Toudas and Jinxiu Zhu

J. Risk Financial Manag. 2023, 16(11), 464; https://doi.org/10.3390/jrfm16110464 - 24 Oct 2023

Viewed by 1334

Abstract

Prior research has extensively examined the relationship between religion and accrual-based earnings management. However, there is currently little research on the relationship between religion and real (non-accrual) earnings management, especially in Europe. This paper aims to fill this research gap and examines whether and how the effect of religion could be linked with firms’ real earnings management activities. Four hypotheses are developed and tested, with our results providing indications that the degree of overall religiosity is negatively and significantly associated with real earnings management. Furthermore, when investigating the effects of different religions in Europe, Christianity and Islam have the opposite impact on firms’ real earnings management activities. Overall, our paper indicates that in European countries, the religious environment can mitigate firms’ manipulations on earnings. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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23 pages, 464 KiB

Open AccessArticle

Earnings Management and Status of Corporate Governance under Different Levels of Corruption—An Empirical Analysis in European Countries

by Ioannis Dokas

J. Risk Financial Manag. 2023, 16(10), 458; https://doi.org/10.3390/jrfm16100458 - 22 Oct 2023

Viewed by 1461

Abstract

This study investigates the effect of the characteristics of the board of directors on the accrual and real earnings management level, focusing on the role of the corruption level. The employed dataset consists of 469 European-listed firms from 2011 to 2019. Using a fixed-effect panel data regression model, the results documented that larger boards lack coordination and communication in less corrupt economies, facilitating earnings manipulation through accruals and sales. In highly corrupt countries, oversized boards are associated with increased manipulation of production costs and discretionary expenses. Board meetings are positively related to accrual and sales manipulation in low-corruption countries, and board independence leads to reducing discretionary expenses regardless of corruption level. Board tenure negatively affects accruals and discretionary expenses but tends to increase manipulation through production costs in low-corruption contexts. Additionally, when the CEO serves as the board chairman, it encourages the manipulation of discretionary expenses while reducing real earnings manipulation through sales and production costs. In aggregate, the level of corruption can influence a board’s effectiveness under specific conditions. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

17 pages, 327 KiB

Open AccessArticle

Assessing the Maturity of Sustainable Business Model and Strategy Reporting under the CSRD Shadow

by Niki Glaveli, Maria Alexiou, Apostolos Maragos, Anastasia Daskalopoulou and Viktoria Voulgari

J. Risk Financial Manag. 2023, 16(10), 445; https://doi.org/10.3390/jrfm16100445 - 16 Oct 2023

Viewed by 1933

Abstract

The present work is amongst the few that attempt to critically assess the maturity of Business Model (BM) and strategy disclosures of listed firms under the shadow of the new EU reporting directive, the Corporate Sustainability Reporting Directive (CSRD). The novel Practices Evaluation Approach (PEA), developed recently by the Project Task Force on Reporting of Non-Financial Risks and Opportunities (PTF-RNFRO), offers the evaluation framework for this assessment. The PEA delineates and evaluates the maturity of BM and strategy disclosures against qualitative characteristics and content elements drawn from well-accepted, financial and non-financial, reporting frameworks, standards and directives (including the CSRD). Therefore, the PEA provides the advantage of a contemporary and integrated/holistic assessment tool. Specifically, the following seven evaluation criteria are used for the assessment: clarity and comprehensiveness of the overall BM, strategy disclosure, disclosure of the BM’s potential across-time horizons and its dependencies, impacts on sustainability issues, material sustainability issues that are likely to affect the company’s performance, the BM’s exposure to sustainability risks and sustainability opportunities, and sustainability strategy, targets, KPIs and their monitoring and progress. The analysis covered 30 CSR/sustainability reports and connected documents of listed companies operating in 6 key sectors of the Greek economy, i.e., information technology, construction, tourism and transportation, cosmetics, banking and energy. The results of our analysis offer evidence that BM reporting is not holistically developed (i.e., critical components are missing), and the level of development varies across the examined sectors. Moreover, sustainability risks are more stressed, in relevance to opportunities, whilst positive (rather than negative) impacts are mainly disclosed. Also, the quantification of sustainability risks and opportunities does not appear frequently, whilst the interconnections between sustainability strategy and companies’ financial objectives is relatively restricted. The paper concludes by pointing out some critical hints useful for enhancing the maturity of BM and strategy disclosures. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

26 pages, 1634 KiB

Open AccessArticle

On the Direction of Causality between Business and Financial Cycles

by Ilias Tsiakas and Haibin Zhang

J. Risk Financial Manag. 2023, 16(10), 430; https://doi.org/10.3390/jrfm16100430 - 28 Sep 2023

Cited by 2 | Viewed by 986

Abstract

This paper investigates whether business cycles cause financial cycles or vice versa. We also assess whether the US plays a leading role in causing the domestic business and financial cycles of other countries. The literature has established that business and financial cycles are linked through several channels such as credit constraints, the real effects of financial information and the reversal of overoptimistic expectations. Our analysis evaluates the direction of Granger causality using a novel approach based on the mixed-frequency vector autoregression model for the G7 countries. Our approach exploits the fact that real economic activity measured by industrial production is observed at a higher frequency than aggregate credit. We find strong evidence of bidirectional causality between the business and financial cycles, especially in recessions. Furthermore, the US is a global leader since the US business cycle significantly affects other countries’ business cycles, especially in terms of expansions. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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23 pages, 385 KiB

Open AccessArticle

Production Efficiency and Income Distribution with Competition Induced by Antitrust Measures

by Peter Josef Stauvermann and Ronald Ravinesh Kumar

J. Risk Financial Manag. 2023, 16(9), 399; https://doi.org/10.3390/jrfm16090399 - 06 Sep 2023

Viewed by 956

Abstract

We use a three-sector overlapping generations model to examine the efficiency characteristics and income distribution in the long-run steady-state equilibrium. Assuming two sectors produce intermediate goods within an oligopolistic competition, we explore the implications for production efficiency and income distribution, given an increase in competition induced by antitrust measures. Our analysis presents the possibility of steady-state welfare under imperfect competition surpassing that of perfect competition when declining competition leads to a redistribution of income from older to younger generations. Nevertheless, greater competition (within oligopoly competition) consistently results in a more equitable income distribution. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

14 pages, 915 KiB

Open AccessArticle

Predicting the REIT Corporate Life Cycle Phase on a Financial Accounting Basis

by Panagiotis Petris

J. Risk Financial Manag. 2023, 16(6), 290; https://doi.org/10.3390/jrfm16060290 - 31 May 2023

Viewed by 895

Abstract

This study investigates the effect of financial–accounting variables on a firm’s distinct life cycle phase. The study concentrates on the real estate sector and uses data of publicly listed REITs which are traded in the European market. To assess the empirical argument, a multinomial panel logit model is employed. The empirical results show that leverage, dividend distribution, the size and the sales variable have significant predictive power over the corporate life cycle classification of an REIT. Higher leverage is associated with an elevated probability of the REIT being classified in the early stage of its corporate life cycle, as opposed to the maturity stage. Positive leverage variation is also a significant predictor of the REIT being categorized in the shake–out stage, while lower dividend distribution, negative sales and size variation are all associated with an increased probability of the REIT being classified in the decline stage, rather than in the maturity phase. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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20 pages, 599 KiB

Open AccessArticle

The Effect of ECB Unconventional Monetary Policy on Firms’ Performance during the Global Financial Crisis

by Charalampos Basdekis, Apostolos Christopoulos, Evgenios Gakias and Ioannis Katsampoxakis

J. Risk Financial Manag. 2023, 16(5), 258; https://doi.org/10.3390/jrfm16050258 - 27 Apr 2023

Cited by 1 | Viewed by 1566

Abstract

This study aims to analyse and investigate the most important factors affecting the performance of listed firms in the Athens Stock Exchange, emphasising capital structure, size and sovereign debt rate as a proxy for firms’ borrowing rate. Yet, the most remarkable factor taken into consideration to affect firms’ profitability is the delta of ECB assets as a proxy of the ECB’s strategy during the financial crisis. Indeed, the examination of the ECB’s delta is innovative for such analysis and differentiates this study from previous ones. The survey was conducted for the period 2005–2019, and the sample consisted of 49 firms from all sectors of the economic activity, except for the financial sector, as its companies’ capital structure is subject to supervisory restrictions. Thus, the financial sector’s inclusion in the sample would affect its homogeneity. The sample is divided into two sub periods, based on the statement of ECB’s president Mario Draghi “Whatever it takes,” in 2012, expressing the ECB’s strategy for backing and boosting the Eurozone economy. The empirical approach of our analysis is based on a panel data analysis, which allows the combination of both cross-section and time series data. In addition, we develop, test and analyse four specifications of our main model, each one with a different dependent variable as a proxy for profitability. These variables are EPS (earnings per share), ROE (return on equity), ROA (return on assets) and TOBIN’s Q. Our findings lead to some very interesting conclusions, which in most cases are consistent for the specification of all the examined models. More specifically, the results show a negative influence of debt-to-equity ratio and 10-year Greek yield bond on firms’ profitability regardless of the proxy used (EPS, ROE or TOBIN’s Q), while there is a positive impact of firms’ size and the delta of ECB’s total assets on firms’ profitability. However, the soundest outcome of this study shows that the expansion of the ECB’s balance sheet and the unconventional policy does contribute to the improvement of firms’ performance and economic stability. The findings become even more impressive, considering the turning of ECB’s strategy after the implementation of the unconventional policy in 2012. Our findings are useful for policymakers of international institutions and government authorities as we propose strategies favouring economic stability and economic activity but also for managers and stakeholders who can identify the factors which determine firms’ performance in order to apply the best policies for financing, investments and growth. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

19 pages, 1069 KiB

Open AccessArticle

International Trade in the Post-Soviet Space: Trends, Threats, and Prospects for the Internal Trade within the Eurasian Economic Union

by Vera Kot, Arina Barsukova, Wadim Strielkowski, Mikhail Krivko and Luboš Smutka

J. Risk Financial Manag. 2023, 16(1), 16; https://doi.org/10.3390/jrfm16010016 - 27 Dec 2022

Cited by 3 | Viewed by 2798

Abstract

This paper discusses the dynamics of foreign trade in the post-Soviet space within the Eurasian Economic Union (EAEU) during the period from 2015 to 2021. Additionally, the paper analyzes export indicators in foreign and mutual trade of the EAEU member countries and diversification of the commodity structure as well as its dynamics based on the commodity concentration index for each member country. Our paper identifies the strengths and weaknesses of the EAEU, analyzes the opportunities and threats of development, and focuses on the trends and prospects. The main strengths include the institutional and legal structure of the EAEU single market, the historical, cultural, and economic proximity of the EAEU member countries, the transit potential of the territory, the high level of domestic trade, and the increasing share of ruble transactions in the trade turnover. The most significant weaknesses are the low efficiency of the institutional structure, the gap in the socio-economic level of development of the participating countries, unstable geopolitical situations in some member countries, the low level of recognition of the EAEU in the world market, economic and political conflicts of interests of the member countries, and the dependence on Western technologies in some key industries. Strategically important opportunities can be found in the creation and implementation of a long-term development strategy, diversification of trade with the Middle East and Asian countries, expansion in terms of the territorial composition, development of the institutional and legal structure as well as cooperation ties, as well as the cooperation in the field of technological innovation and financial security. Among the most significant threats were identified the outpacing growth in the share of EAEU members’ trade with China, the expansion of economic and political contradictions between the EAEU member countries, and the strengthening of the positions of alternative currencies in foreign trade. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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16 pages, 1311 KiB

Open AccessArticle

Bubble in Carbon Credits during COVID-19: Financial Instability or Positive Impact (“Minsky” or “Social”)?

by Bikramaditya Ghosh, Spyros Papathanasiou, Vandita Dar and Konstantinos Gravas

J. Risk Financial Manag. 2022, 15(8), 367; https://doi.org/10.3390/jrfm15080367 - 17 Aug 2022

Cited by 6 | Viewed by 3464

Abstract

Incentivizing businesses to lower carbon emissions and trade back excess carbon allowances paved the way for rapid growth in carbon credit ETFs. The use of carbon allowances as a hedging alternative fueled this rally further, causing a shift to speculation and forming repetitive bubbles. Speculative bubbles are born from euphoria, yet, they are relatively predictable, provided their pattern matches the log periodic power law (LPPL) with specific stylized facts. A “Minsky moment” identifies a clear speculative bubble as a signal of financial system instability, while a “Social bubble” is regarded as relatively positive, increasing in the long run, infrastructure spending and development. The aim of this paper is to investigate whether various carbon credit bubbles during the pandemic period caused financial instability or had a positive impact (“Minsky” or “Social”). Particularly, we investigate the carbon credit bubble behavior in the ETF prices of KRBN, GRN (Global Carbon Credit tracking ETFs), and the SOLCARBT index during the COVID-19 pandemic period by adopting the log-periodic power law model (LPPL) methodology, which has been widely used, over the past decade, for detecting bubbles and crashes in various markets. In conclusion, these bubbles are social and propelled by the newfound interest in carbon credit trading, for obvious reasons. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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12 pages, 2479 KiB

Open AccessArticle

Impact of Negative Tweets on Diverse Assets during Stressful Events: An Investigation through Time-Varying Connectedness

by N. L. Balasudarsun, Bikramaditya Ghosh and Sathish Mahendran

J. Risk Financial Manag. 2022, 15(6), 260; https://doi.org/10.3390/jrfm15060260 - 09 Jun 2022

Cited by 3 | Viewed by 2206

Abstract

Tweets seem to impact diverse assets, especially during stressful periods. However, their interrelations during stressful events may change. Cryptos are apparently more sensitive to the sentiment spread by tweets. Therefore, a construct could be formed to study such complex interrelation during stressful events. This study found an interesting outcome while investigating three major asset classes (namely, Equity, Gold and Bond) alongside negative sentiment (derived from tweets of Elon Musk) and Dogecoin (an emerging asset class) from 1 June 2015 to 20 February 2022. Negative sentiment emerged as the significant risk transmitter, while Gold emerged as the significant net recipient of shocks (risk). Interestingly, Dogecoin was found to be less impacted and not impactful (not transmitting shock and receiving tiny shocks) at the same time. In fact, the interconnectedness between negative sentiment (percolated through Twitter) and Dogecoin prices was found to be rather feeble. Further, the study showed that the COVID-19 breakout and Brexit referendum in 2016 were less stressful events compared to the Greek debt crisis back in 2015. Full article

(This article belongs to the Special Issue Global Trends and Challenges in Economics and Finance)

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