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1 – 3 of 3Edmond Berisha, Rangan Gupta and Orkideh Gharehgozli
The primary focus of this study is to examine the distributional consequences of the widespread increase in prices. The fundamental question the study aims to address is whether…
Abstract
Purpose
The primary focus of this study is to examine the distributional consequences of the widespread increase in prices. The fundamental question the study aims to address is whether the dynamics of income distribution due to higher inflation differ in the short term compared to the long run.
Design/methodology/approach
The authors estimated a panel-data model (fixed effects) using inequality and inflation data available at a high frequency, i.e. on a quarterly basis for over 30 years, and found evidence that inflation causes rapid swings in income distribution.
Findings
The authors’ contribution to the literature lies in providing evidence that inflation rapidly causes swings in income distribution, even after controlling for the state of the economy. The authors also demonstrate that the magnitude and direction of the effect of inflation on income inequality depend on whether the initial inflation rate is below or above the Federal Reserve’s target of 2%.
Originality/value
To the best of the authors’ knowledge, the authors are the first to emphasize that the targets set by central banks can drive the strength and direction of the relationship between inflation and income inequality.
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Bahati Sanga and Meshach Aziakpono
Lack of access to finance is a major constraint to the growth of small and medium-sized enterprises (SMEs) and entrepreneurship in developing countries. The recent proliferation…
Abstract
Purpose
Lack of access to finance is a major constraint to the growth of small and medium-sized enterprises (SMEs) and entrepreneurship in developing countries. The recent proliferation of mobile phone services, access to the internet and emerging technologies has led to a surge in the use of FinTech in Africa and is transforming the financial sector. This paper aims to examine whether FinTech developments heterogeneously contribute to the growth of digital finance for SMEs and entrepreneurship in 47 African countries from 2013 to 2020.
Design/methodology/approach
The paper uses a novel method of moments quantile regression, which deals with heterogeneity and endogeneity in diverse conditions for asymmetric and nonlinear models.
Findings
The empirical results reveal that the rise of FinTech companies offering services in Africa heterogeneously increases digital finance for SMEs and entrepreneurship in their different stages of growth. FinTech developments have a strong and positive impact in countries with higher levels of digital finance than those with lower levels. FinTech developments and digital finance positively and significantly influence entrepreneurship in Africa, particularly in the nascent and transitional development stages of entrepreneurship. Institutional quality has a considerable positive moderating effect when used as a control rather than an interaction variable.
Practical implications
The results suggest the need to promote FinTech developments in Africa: to provide a wide range of alternative digital finance schemes to SMEs and to promote entrepreneurship, especially in countries where entrepreneurship is in the nascent and transitional development stages. The results also underscore the need to promote FinTech development through supportive regulations and institutional quality to reduce risks related to FinTech and digital financing schemes.
Originality/value
To the best of the authors’ knowledge, this paper is one of the first attempts to account for the often overlooked heterogeneity effects and show that the influence of FinTech developments is not homogenous across the varying development stages of digital finance and entrepreneurship.
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Fuad Fuad, Abdul Rohman, Etna Nur Afri Yuyetta and Zulaikha Zulaikha
This study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism.
Abstract
Purpose
This study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism.
Design/methodology/approach
This study uses panel regression models with year and industry-fixed effects. It uses financial and market data from the communication and energy sectors of 24 countries, encompassing 1,946 firms and 5,838 firm-year observations.
Findings
The study reveals that conservatism is a rational response to risk. However, in the presence of higher ambiguity where uncertainty exceeds firm control and outcomes become unpredictable, management reduces conservative accounting practices. Robustness tests support the validity of these findings across different institutional frameworks, agency risks, sample selection and heterogeneity.
Research limitations/implications
This study contributes to the existing literature by exploring the contrasting effects of risk and ambiguity on accounting conservatism. It enhances the understanding of how various institutional factors influence the asymmetric recognition of bad news compared to good news under conditions of uncertainty.
Practical implications
By understanding the role of accounting conservatism in responding to uncertainties, regulators can develop more informed and effective policies that align with the dynamic nature of business environments.
Originality/value
This research provides novel and original ideas suggesting that the change in accounting conservatism is contingent upon the firms’ ambiguity or risk.
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