Emerald Group Publishing Limited
Article Type: Editorial From: Qualitative Research in Financial Markets, Volume 6, Issue 2
Welcome to the second issue of Qualitative Research in Financial Markets (QRFM) in 2014. I am delighted to say that as the journal’s reputation has grown and the quality and quantity of submissions has increased, we have taken the decision to move from three to four issues each year, beginning in 2015. This reflects the hard work of many individuals including the team at Emerald, editorial advisory board members, authors, reviewers and readers, and I would again like to express my gratitude to all of those involved. As mentioned previously, QRFM’s success has led to the setting up of the Centre for Qualitative Research in Finance at the University of Dundee, the launch of which is reported later in this issue.
In terms of the current issue, five papers are included which cover a range of topical issues that lend themselves strongly to research of a qualitative nature, with contributions provided on both the empirical and methodological fronts. The first article, “Profiling German-speaking socially responsible investors” by Gregor Dorfleitner and Sebastian Utz, presents evidence regarding attitudes to the social aspects of investment, based on a survey of asset managers, institutional investors and private investors. The evidence suggests that a demographic effect (with gender, wealth and educational factors all identifiable) exists, but decisions to invest in socially responsible assets remain, ultimately, related most strongly to factors such as the risk-return-liquidity relation and time horizon. The paper also points to a potential supply and demand problem, as evidenced by those investors most openly concerned about social criteria tending to include fewer socially responsible stocks in their portfolios.
The second paper, “Value-based assessment of sovereign risk” by Eva-Maria Kalteier, Stephan Molt, Tristan Nguyen and Peter N. Posch, provides a timely review and discussion of the risk attached to Government-issued debt, focusing on the accuracy of measures of the exposures involved. The analysis suggests that a methodology to evaluate the instruments concerned can be developed, and on this basis, it becomes evident that illiquid instruments in particular carry non-trivial mispricing risk. Global financial markets as a whole are shown to be subject to trend-following/fashion behaviour with the resultant implication that value orientations dominate those based solely on price.
The third article in the issue, “Working capital management: a literature review and research agenda” by Harsh Pratap Singh and Satish Kumar, employs Tranfield et al.’s systematic literature method to generate a detailed review of the nature of the literature on working capital management. The study, based on a review of > 100 articles, reports that while the number of research papers in the area is increasing, a similar trend in quality is not identifiable. The literature, which focuses primarily on the relationship between working capital management and firm profitability, is characterised by a reluctance to adopt case studies and primary surveys; the authors argue that future research should “break the monotony” in this regard to deepen the contribution made.
The fourth study, “Shari’ah issues in Islamic banking: a qualitative survey in Malaysia” by Abdelghani Echchabi and Hassanuddeen Abd. Aziz, demonstrates the potential use of qualitative methodologies in emerging markets by providing the first such evidence regarding bank customer viewpoints in Malaysia. The evidence from a series of ten semi-structured interviews indicates widespread awareness of the criticisms levelled at attempts by Malaysian banks to apply Shari’ah principles in their dealings with the public. The article reveals optimism about the potential for improvements in this regard – provided regulators take note of the current issues – although the complex nature of the concepts involved, particularly Darurah (or necessity), requires careful consideration.
The fifth and final piece in this issue, “Flooding and UK commercial property investment – what is the risk?”, sees Gaye Pottinger and Anca Tanton develop earlier (pre-crisis) work in the area by reporting on the results of 20 structured interviews carried out with fund managers, lenders, solicitors, insurers and environmental consultants. The evidence presented suggests that large investors do pay more attention to the need for due diligence relating to flood risk than used to be the case, although more restrictive regulatory and governance regimes appear to be the main driver of this change, rather than the many recent flooding events in the UK. The paper concludes that a “mistaken assumption” of unchanging flood risk in long-standing investments is likely as market conditions continue to improve and that more detailed investigation of the related uncertainties is required – from both resilience and response planning perspectives. Knowledge transfer between independent research and the industry critical is thus suggested as being critical.