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1 – 10 of over 2000Mohd Ziaur Rehman and Karimullah Karimullah
The current study aims to examine the impact of two black swan events on the performance of six stock markets in Gulf Cooperation Council (GCC) economies (Abu Dhabi, Bahrain…
Abstract
Purpose
The current study aims to examine the impact of two black swan events on the performance of six stock markets in Gulf Cooperation Council (GCC) economies (Abu Dhabi, Bahrain, Dubai, Oman, Qatar and Saudi Arabia). The two selected black swan events are the US Mortgage and credit crisis (Global Financial Crisis of 2008) and the COVID-19 pandemic.
Design/methodology/approach
The performance of all the six stock markets are represented by their return and price volatility behavior, which has been measured by applying ARCH/GARCH model. The comparative analysis is done by employing mean difference models. The data is collected from Bloomberg on a daily frequency.
Findings
The response of two black swan events on the GCC stock markets has been heterogenous in nature. During the financial crisis, the impact was heavily felt on most of the stock markets in the GCC countries. It is revealed that the financial crisis had a negative significant impact on four of the six countries. Whereas during the COVID-19 crisis, it is revealed that there is no significant impact on four of the six selected stock markets. The positive significant impact is felt on two stock markets, namely, the Abu Dhabi stock market and the Saudi stock market.
Originality/value
The present investigation attempts to fill the gap in the literature on the intended topic because it is evident from the literature on the chosen subject that no study has been undertaken to evaluate and contrast the impact of the GFC crisis and COVID-19 on the GCC stock markets.
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Ali İhsan Akgün and Ayyüce Memiş Karataş
This study examines investigating the relationship between cash flows, working capital ratios and firm performance during the global financial crisis.
Abstract
Purpose
This study examines investigating the relationship between cash flows, working capital ratios and firm performance during the global financial crisis.
Design/methodology/approach
To examine the relationship between cash flow, working capital ratios and firm performance for EU-28 or Western European Countries (Norway, Turkey and Switzerland) listed firms, both panel and ordinary least squares (OLS) regression model are used to analyze the data obtained from sample.
Findings
The study empirical findings suggest that global financial crisis has negative effect on firm performance for all sample. In addition, our interaction term result shows that cash flows variables such as cash holding level (CHL) × Crisis, cash interactive effect (CIE) × Crisis and gross working capital ratio (GWC) × Crisis not contributed to firm performance for EU-28 listed firms. However, the authors find that net working capital ratio (NWC) × Crisis have statistically significant and positive effects on firm performance with return on assets (ROA).
Practical implications
The findings of the study provide evidence for managers that listed firms have reduced working capital expenditures to increase cash holdings level during the financial crisis. The authors find that cash flow variables with CHL have positive effect on firm performance with return on equity (ROE) in Western European Countries and these results are consistent with Opler et al. (1999)'s empirical results, while CIE have a negative impact on firm performance such as ROE and earnings before interest tax margin (EBITM).
Originality/value
Global financial crisis emphasizes the importance of working capital and liquidity that suggests an efficient cash holdings policy in response to the uncertainty following the crisis.
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Md. Atiqur Rahman, Tanjila Hossain and Kanon Kumar Sen
This study aims to measure impact of several firm-specific factors on alternative measures of leverage. The authors also aim to study impact of the subprime crisis on such…
Abstract
Purpose
This study aims to measure impact of several firm-specific factors on alternative measures of leverage. The authors also aim to study impact of the subprime crisis on such associations.
Design/methodology/approach
The authors utilized an unbalanced panel data of 973 firm-year observations on 47 UK listed non-financial firms for the years 1990–2019. Book-based and market-based long-term and total leverage measures have been used as explained variables. The explanatory variables are profitability, size, two measures of growth, asset tangibility, non-debt tax shields, firm age and product uniqueness. Fixed effect and random effect models with clustered robust standard errors have been utilized for data analysis. To find the effect of subprime crisis, original dataset was split to create pre-crisis and post-crisis datasets.
Findings
The authors find that profitability significantly reduces leverage while firms having more tangible assets use significantly more debt in capital structure. Firm size and non-debt tax shield have statistically insignificant positive impact on leverage. Having more unique products reduces use of external debt, albeit insignificantly. Growth, when measured as market-to-book ratio, has inconsistent impact, whereas capital expenditure insignificantly reduces leverage. Age is found to be an insignificant predictor of leverage. After the subprime crisis, firms started relying more on internal fund instead of external debt, more particularly short-term debt. Having more collateral is gradually becoming more important for availing external debt.
Research limitations/implications
Data limitations restrict generalization of the findings.
Originality/value
This is one of the pioneering attempts to show how subprime crisis altered the theoretical domain of capital structure research in the UK.
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Given the dearth of thorough summaries in the literature, this systematic review and bibliometric analysis attempt to take a meticulous approach meant to present knowledge on the…
Abstract
Purpose
Given the dearth of thorough summaries in the literature, this systematic review and bibliometric analysis attempt to take a meticulous approach meant to present knowledge on the constantly developing subject of stock market volatility during crises. In outline, this study aims to map the extant literature available on stock market volatility during crisis periods.
Design/methodology/approach
The present study reviews 1,283 journal articles from the Scopus database published between 1994 and 2022, using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) 2020 flow diagram. Bibliometric analysis through software like R studio and VOSviewer has been performed, that is, annual publication trend analysis, journal analysis, citation analysis, author influence analysis, analysis of affiliations, analysis of countries and regions, keyword analysis, thematic mapping, co-occurrence analysis, bibliographic coupling, co-citation analysis, Bradford’s law and Lotka’s law, to map the existing literature and identify the gaps.
Findings
The literature on the effects of crises on volatility in financial markets has grown in recent years. It was discovered that volatility intensified during crises. This increased volatility can be linked to COVID-19 and the global financial crisis of 2008, as both had massive effects on the world economy. Moreover, we identify specific patterns and factors contributing to increased volatility, providing valuable insights for further research and decision-making.
Research limitations/implications
The present study is confined to the areas of economics, econometrics and finance, business, management and accounting and social sciences. Future studies could be conducted considering a broader perspective.
Originality/value
Most of the available literature has focused on the impact of some particular crises on the volatility of financial markets. The present study is not limited to some specific crises, and the suggested research directions will serve as a guide for future research.
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R.L. Manogna, Nishil Kulkarni and D. Akshay Krishna
The study endeavors to explore whether the financialization of agricultural commodities, traditionally viewed as a catalyst for price volatility, has any repercussions on food…
Abstract
Purpose
The study endeavors to explore whether the financialization of agricultural commodities, traditionally viewed as a catalyst for price volatility, has any repercussions on food security in BRICS economies.
Design/methodology/approach
The empirical analysis employs the examination of three agricultural commodities, namely wheat, maize and soybean. Utilizing data from the Chicago Board of Trade on futures trading for these commodities, we focus on parameters such as annual trading volume, annual open interest contracts and the ratio of annual trading volume to annual open interest contracts. The study spans the period 2000–2021, encompassing pre- and post-financial crisis analyses and specifically explores the BRICS countries namely the Brazil, Russia, India, China and South Africa. To scrutinize the connections between financialization indicators and food security measures, the analysis employs econometric techniques such as panel data regression analysis and a moderating effects model.
Findings
The results indicate that the financialization of agricultural products contributes to the heightened food price volatility and has adverse effects on food security in emerging economies. Furthermore, the study reveals that the impact of the financialization of agricultural commodities on food security was more pronounced in emerging nations after the global financial crisis of 2008 compared to the pre-crisis period.
Research limitations/implications
This paper seeks to draw increased attention to the financialization of agricultural commodities by presenting empirical evidence of its potential impact on food security in BRICS economies. The findings serve as a valuable guide for policymakers, offering insights to help them safeguard the security and availability of the world’s food supply.
Originality/value
Very few studies have explored the effect of financialization of agricultural commodities on food security covering a sample of developing economies, with sample period from 2000 to 2021, especially at the individual agriculture commodity level. Understanding the evolving effects of financialization is further improved by comparing pre and post-financial crisis times.
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Suzan Dsouza, Narinder Pal Singh and Johnson Ayobami Oliyide
This study analyses the impact of the Covid-19 on stock market performance of BRICS nations together. BRICS countries comprise almost 30% of the global GDP and around 50% of the…
Abstract
Purpose
This study analyses the impact of the Covid-19 on stock market performance of BRICS nations together. BRICS countries comprise almost 30% of the global GDP and around 50% of the world’s economic growth. As BRICS nations have gained the attraction as financial investment destinations, their financial markets have apparently been as potential opportunities for foreign portfolio investors. While there is extensive research on the impact of the Covid-19 pandemic on individual economies and global financial markets, this paper is among the first to systematically investigate the dynamic connectedness of these emerging economies during the pandemic using the Time-Varying Parameter Vector Autoregressions (TVP-VAR) approach.
Design/methodology/approach
We categorise our data into two distinct periods: the pre-Covid period spanning from January 1, 2018, to March 10, 2020, and the Covid crisis period extending from March 11, 2020, to June 4, 2021. To achieve our research objectives, we employ the Time-Varying Parameter Vector Autoregressions (TVP-VAR) approach to assess dynamic connectedness.
Findings
Our findings reveal that among the BRICS nations, Brazil and South Africa serve as net transmitters of shocks, while China and India act as net receivers of shocks during the Covid crisis. However, the total connectedness index (TCI) has exhibited a notable increase throughout this crisis period. This paper makes several notable contributions to the academic literature by offering a unique focus on BRICS economies during the Covid-19 pandemic, providing practical insights for stakeholders, emphasising the importance of risk management and investment strategy, exploring diversification implications and introducing advanced methodology for analysing interconnected financial markets.
Research limitations/implications
The results have important implications for the investors, the hedge funds, portfolio managers and the policymakers in BRICS stock markets. The investors, investment houses, portfolio managers and policymakers can develop investment strategies and policies in the light of the findings of this study to cope up the future pandemic crisis.
Originality/value
This study is one of its kind that examines the dynamic connectedness of BRICS with recently developed TVP-VAR approach across pandemic crisis.
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Miroslav Mateev, Ahmad Sahyouni, Syed Moudud-Ul-Huq and Kiran Nair
This study investigates the role of market concentration and efficiency in banking system stability during the COVID-19 pandemic. We empirically test the hypothesis that market…
Abstract
Purpose
This study investigates the role of market concentration and efficiency in banking system stability during the COVID-19 pandemic. We empirically test the hypothesis that market concentration and efficiency are significant determinants of bank performance and stability during the time of crises, using a sample of 575 banks in 20 countries in the Middle East and North Africa (MENA).
Design/methodology/approach
The main sources of bank data are the BankScope and BankFocus (Bureau van Dijk) databases, World Bank development indicators, and official websites of banks in MENA countries. This study combined descriptive and analytical approaches. We utilize a panel dataset and adopt panel data econometric techniques such as fixed/random effects and the Generalized Method of Moments (GMM) estimator.
Findings
The results reveal that market concentration negatively affects bank profitability, whereas improved efficiency further enhances bank performance and contributes to the banking sector’s overall stability. Furthermore, our analysis indicates that during the COVID-19 pandemic, bank stability strongly depended on the level of market concentration, but not on bank efficiency. However, more efficient banks are more profitable and stable if the banking institutions are Islamic. Similarly, Islamic banks with the same level of efficiency demonstrated better overall financial performance during the pandemic than their conventional peers did.
Research limitations/implications
The main limitation is related to the period of COVID-19 pandemic that was covered in this paper (2020–2021). Therefore, further investigation of the COVID-19 effects on bank profitability and risk will require an extended period of the pandemic crisis, including 2022.
Practical implications
This study provides information that will enable bank managers and policymakers in MENA countries to assess the growing impact of market concentration and efficiency on the banking sector stability. It also helps them in formulating suitable strategies to mitigate the adverse consequences of the COVID-19 pandemic. Our recommendations are useful guides for policymakers and regulators in countries where Islamic and conventional banking systems co-exist and compete, based on different business models and risk management practices.
Originality/value
The authors contribute to the banking stability literature by investigating the role of market concentration and efficiency as the main determinants of bank performance and stability during the COVID-19 pandemic. This study is the first to analyze banking sector stability in the MENA region, using both individual and risk-adjusted aggregated performance measures.
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This paper undertakes an extensive and systematic review of the literature on earnings management (EM) over the past three decades (1992–2022). Furthermore, the study identifies…
Abstract
Purpose
This paper undertakes an extensive and systematic review of the literature on earnings management (EM) over the past three decades (1992–2022). Furthermore, the study identifies emerging research themes and proposes future avenues for further investigation in the realm of EM.
Design/methodology/approach
For this study, a comprehensive collection of 2,775 articles on EM published between 1992 and 2022 was extracted from the Scopus database. The author employed various tools, including Microsoft Excel, R studio, Gephi and visualization of similarities viewer, to conduct bibliometric, content, thematic and cluster analyses. Additionally, the study examined the literature across three distinct periods: prior to the enactment of the Sarbanes-Oxley Act (1992–2001), subsequent to the implementation of the Sarbanes-Oxley Act (2002–2012), and after the adoption of International Financial Reporting Standards (2013–2022) to draw more inferences and insights on EM research.
Findings
The study identifies three major themes, namely the operationalization of EM constructs, the trade-off between EM tools (accrual EM, real EM and classification shifting) and the role of corporate governance in mitigating EM in emerging markets. Existing literature in these areas presents mixed and inconclusive findings, suggesting the need for further theoretical development. Further, the study findings observe a shift in research focus over time: initially, understanding manipulation techniques, then evaluating regulatory measures, and more recently, investigating the impact of global accounting standards. Several emerging research themes (technology advancements, cross-cultural and cross-national studies, sustainability, behavioral aspects and non-financial indicators of EM) have been identified. This study subsequent analysis reveals an evolving EM landscape, with researchers from disciplines like data science, computer science and engineering applying their analytical expertise to detect EM anomalies. Furthermore, this study offers significant insights into sophisticated EM techniques such as neural networks, machine learning techniques and hidden Markov models, among others, as well as relevant theories including dynamic capabilities theory, learning curve theory, psychological contract theory and normative institutional theory. These techniques and theories demonstrate the need for further advancement in the field of EM. Lastly, the findings shed light on prominent EM journals, authors and countries.
Originality/value
This study conducts quantitative bibliometric and thematic analyses of the existing literature on EM while identifying areas that require further development to advance EM research.
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Ahmed Shoukry Rashad and Mahmoud Farghally
The monetary policy is an important driver of the real estate sector’s performance. The recent wave of monetary tightening in 2022 in response to the cost-of-living crisis has…
Abstract
Purpose
The monetary policy is an important driver of the real estate sector’s performance. The recent wave of monetary tightening in 2022 in response to the cost-of-living crisis has been associated with the decline in housing prices across the globe. There are two main channels through which the US monetary policy may affect the real estate market in the dollar-pegged countries: the cost of serving mortgages (financing cost) and the exchange rate channel (for example, the appreciation of the US dollar and consequently the local currency). The exchange rate channel, which involves the appreciation of the US dollar and the subsequent effect on the local currency, is particularly significant in the case of Dubai, given how international the housing market in Dubai and might be viewed as a tradable good. Using recent data, the purpose of this study to evaluate the spillover impact of the US monetary policy on the housing market performance in the dollar-pegged countries using Dubai as a case study.
Design/methodology/approach
For this purpose, this study collected unique longitudinal data on the volume of the monthly transactions of residential properties and performs a panel-data analysis using within-variation models. The changes in the interest rate policy in the USA are determined by the domestic inflation in the USA, thereby, representing an exogenous shock in the UAE.
Findings
The results are robust to different specifications and suggest that a strong negative correlation between the interest rate in the USA and the housing sector demand in Dubai. Fiscal policy measures can be taken to mitigate tighter financial conditions in case of policy misalignment.
Originality/value
Few studies have looked at the spillover impact of the global monetary conditions on the real estate market in the GCC region. This study fills this gap by exploring the impact of the US financial conditions on Dubai’s real estate, using panel data analysis.
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Haobo Zou, Mansoora Ahmed, Syed Ali Raza and Rija Anwar
Monetary policy has major impacts on macroeconomic indicators of the country. Accordingly, uncertainty regarding monetary policy shifts can cause challenges and risks for…
Abstract
Purpose
Monetary policy has major impacts on macroeconomic indicators of the country. Accordingly, uncertainty regarding monetary policy shifts can cause challenges and risks for businesses, financial markets and investors. Thus, the purpose of this study is to investigate how real estate market volatility responds to monetary policy uncertainty.
Design/methodology/approach
The GARCH-MIDAS model is applied in this study to investigate the nexus between monetary policy uncertainty and real estate market volatility. This model was fundamentally instituted to accommodate low-frequency variables.
Findings
The results of this study reveal that increased monetary policy uncertainty highly affects the volatility in real estate market during the peak period of COVID-19 as compared to full sample period and COVID-19 recovery period; hence, a significant decline is evident in real estate market volatility during crisis.
Originality/value
This study is particularly focused on peak and recovery period of COVID-19 considering the geographical region of Greece, Japan and the USA. This study provides a complete perspective on the nexus between monetary policy uncertainty and real estate markets volatility in three distinct economic views.
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