Citation
Hoque, M. (2015), "Performance and efficiency of specific financial markets and instruments in the USA and emerging markets – presented papers from the Academy of Finance 2013-2014", Managerial Finance, Vol. 41 No. 4. https://doi.org/10.1108/MF-06-2014-0174
Publisher
:Emerald Group Publishing Limited
Performance and efficiency of specific financial markets and instruments in the USA and emerging markets – presented papers from the Academy of Finance 2013-2014
Article Type: Guest editorial From: Managerial Finance, Volume 41, Issue 4.
The current Special Issue of Managerial Finance showcases some of the papers presented at the Annual Meetings of the Academy of Finance[1], Chicago, Illinois, USA in 2013-2014. These papers underwent a standard double blind peer review process where two or more reviews were completed. Further, the Editorial Board of the Journal of Finance Issues conducted a blind review of the short-listed articles and recommended these papers for publication.
The selected papers focus on the performance and efficiency of financial markets and instruments in specific USA and emerging countries. In the opening paper Mustafa Dah, Monzurul Hoque and Song Wang examine the impact of Shariah guidelines on the performance of the Dow Jones Islamic Index (DJIM-US). They find no apparent opportunity cost for Shariah compatible investment in contrast to prediction of conventional portfolio theories. Further, it does not underperform the broader market US benchmarks and nor does it have co-integration with the broader indexes. The authors' approach produces similar evidence in the studies of Islamic mutual funds in Saudi Arabia, Malaysia and Kuwait.
The next two papers analyze the performance and efficiency of Chinese banks and African-American banks, respectively. Haiyan Yin, Jiawen Yang and Jamshid Mehran employed stochastic frontier approach to measure bank efficiency, selection and dynamic effects of public listing. They find strong selection effects for banks that go public compared to those that do not. However, their analysis of the dynamic effects shows no evidence that bank efficiency improves after going public, either in the short or the long run. Additionally, the authors show superior performance of IPO banks using non-parametric analysis but this outperformance disappears immediately after IPO. In the next paper, William Lepley, Robert Nagy and Mussie Teclezion find similar performance and efficiency results for African-American banks compared to the benchmark minority banks. Particularly, employing data both before and after the recessionary period of 2008-2009, they find significant performance differences between minority ownership categories. However, like previous paper, this competitive advantage was somewhat offset by relatively weak loan portfolios and failure to contain costs. The authors conclude that the 2008 crisis worsened the “negatives” of African-American banks wiped out their “positives.”
John Robinson pays attention to the executive compensation performance metrics stated in their proxy statements by corporations. Using these statements from a sample of US firms from 1996 to 2005, he constructs an accounting-based metric index to conclude that mature firms rely more heavily on accounting-based evaluation of executives when their stock market valuation is low. Our final paper by Jin Park and Jonghyun Park explores the efficiency and performance effect of implementation of Enterprise Resource Planning (ERP) on Korean property and casualty insurers. Employing nonparametric approach the paper finds a strong positive association between ERP implementation and the insurers' efficiency and profitability. The authors find no such association between 2007 and 2010 and speculate that the efficiency and performance benefit from ERP implementation may have essentially disappeared during the financial crisis.
Dr Monzurul Hoquea - Department of Economics and Finance, Saint Xavier University, Chicago, Illinois, USA
Note
1. The Academy of Finance was formed in 1987 under the administrative umbrella of the Midwest Business Administration Association. Over the years, the Academy has grown and prospered, attracting authors from 45 states and over 15 different countries. The Journal of Finance Issues (JFI) is a peer-reviewed Cabell and Ulrichsweb listed journal of the Academy.