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Might the impact of the financial stress on exchange markets be asymmetric and exposed to regime changes? Departing from the existing literature, highlighting that the domestic and foreign financial stress in terms of money market have substantial effects on exchange market, this paper aims to investigate the impacts of the bond yield spreads of three emerging countries (Mexico, Russia, and South Korea) on their exchange market pressure indices using monthly observations for the period 2010:01–2019:12. Additionally, the paper analyses the impact of bond yield spread of the US on the exchange market pressure indices of the three mentioned emerging countries. The authors hypothesized whether the negative and positive changes in the bond yield spreads have varying effects on exchange market pressure indices.

To address the research question, we measure the bond yield spread of the selected countries by using the interest rate spread between 10-year and 3-month treasury bills. At the same time, the exchange market pressure index is proxied by the index introduced by Desai et al. (2017). We base the empirical analysis on nonlinear vector autoregression (VAR) models and an asymmetric quantile-based approach.

The results of the impulse response functions indicate that increases/decreases in the bond yield spreads of Mexico, Russia and South Korea raise/lower their exchange market pressure, and the effects of shocks in the bond yield spreads of the US also lead to depreciation/appreciation pressures in the local currencies of the emerging countries. The quantile connectedness analysis, which allows for the role of regimes, reveals that the weights of the domestic and foreign bond yield spread in explaining variations of exchange market pressure indices are higher when exchange market pressure indices are not in a normal regime, indicating the role of extreme development conditions in the exchange market. The quantile regression model underlines that an increase in the domestic bond yield spread leads to a rise in its exchange market pressure index during all exchange market pressure periods in Mexico, and the relevant effects are valid during periods of high exchange market pressure in Russia. Our results also show that Russia differs from Mexico and South Korea in terms of the factors influencing the demand for domestic currency, and we have demonstrated the role of domestic macroeconomic and financial conditions in surpassing the effects of US financial stress. More specifically, the impacts of the domestic and foreign financial stress vary across regimes and are asymmetric.

This study enriches the literature on factors affecting the exchange market pressure of emerging countries. The results have significant economic implications for policymakers, indicating that the exchange market pressure index may trigger a financial crisis and economic recession.

This chapter examines the impact of sectoral indebtedness on GDP in Czechia, initially a low-indebted small open economy in which debt dynamics are becoming a major concern. The impact of household debt, non-financial corporation debt and public debt is analysed with the use of local projections based on instrumental variable estimations. The results show a more pronounced influence of household debt compared to non-financial corporation and government debt. Initially, increasing household debt stimulates short-run economic activity, but in the medium run, it limits household consumption and negatively affects output. This negative impact gradually turns into a positive effect in the long run. Non-financial corporation debt has a negative short- to medium-run impact but can have a small positive effect in the long run due to the prevalence of tradable industries. Public debt initially has a short-run negative impact, but then gradually becomes positive. Overall, the findings have implications for macroeconomic policies and the importance of monitoring financial stability.

Financial inclusion can be proxied by banking status. The purpose of this study is to investigate the potential effects of financial capability on the financial fragility of US adults with various banking statuses during the COVID-19 pandemic.

This study utilized the 2021 National Financial Capability Study (NFCS) dataset to investigate the relationship between financial capability and financial fragility among consumers with different banking statuses. The analysis controlled for employment shocks, health shocks and other consumer characteristics. Banking statuses included fully banked, under-banked (utilizing both banking and alternative financial services) and unbanked individuals. Logistic regression analyses were conducted on both the entire sample and subsamples based on banking statuses.

The results showed that financial capability was negatively associated with financial fragility. The magnitude of the potential negative effect of financial capability was the greatest among the fully banked group, followed by the underbanked and unbanked groups. Respondents who were underbanked or unbanked were more likely to experience financial fragility than those who were fully banked. Additionally, respondents who were laid off or furloughed during the pandemic were more likely to experience financial fragility than those without employment shocks. The effect size of financial capability factors was greater than that of COVID-19 shock factors. These results suggest that higher levels of both financial capability and financial inclusion may be effective in reducing the risk of financial fragility.

This study represents one of the first attempts to examine the potential effects of financial capability on financial fragility among consumers with various banking statuses during the COVID-19 pandemic. Furthermore, this study offers new evidence to determine whether COVID-19 shocks, as measured by health and employment status, are associated with financial fragility. Additionally, the effect size of financial capability factors is greater than that of COVID-19 shock factors. The results from the 2021 NFCS dataset provide valuable insights for banking professionals and public policymakers on how to enhance consumer financial wellbeing.

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal value, especially when the auditing process is not mandatory. This study aims to examine how national culture-religiosity affects that decision. The authors further examine how foreign-owned MNCs might behave differently from local MNCs, although the host country’s cultural-religiosity value might influence that decision.

This study obtains the data from three sources: Hofstede Framework, Pew Research Center and World Bank Enterprise Survey in cross-sectional mode. The final sample consists of 8,590 SMNCs from 45 countries as the observations. This study uses robust regression analysis to test the effects of culture, religiosity and controlling shareholders on the audited financial statements decision.

The regression results support the hypothesis, whereas cultural-religiosity values are associated with the audited financial report. The findings confirm stakeholder theory and institutional theory.

This study fills a gap in the literature by providing empirical evidence on the cultural and religiosity effects on the accounting decision of SMNCs. The results can be used as the foundation for future research related to MNCs’ managerial behavior toward accounting policies, especially with the psychosocial factors.

This study aims to reveal to what extent successful European listed firms depend on their intellectual capital investment in achieving business success during the global financial crisis.

This study used value added intellectual coefficient (VAIC) methodology to measure the effect of intellectual capital on financial performance of business, which consist of 683 the sample listed firms. To examine the nexus between intellectual capital, legal origin and firm performance, estimated panel test and ordinary least squares regression model is used to data obtained from a sample of European countries.

The finding of this study suggests that there exists a positive relationship between intellectual capital and firm performance with return on assets (ROA) before the financial crisis, while firm performance with return on equity did not contribute to intellectual capital before and after the crisis period. Additionally, common law countries have a positive and statistically significant impact on firm performance with ROA for the before-crisis period, while code law countries have positively significant effect with VAIC on ROA.

The VAIC method has played a critical role in the management decision-making process to integrate the intellectual capital in the financial crisis period.

This study examines intellectual capital components such as human capital, structural capital and process capital efficiencies and firm performance in the legal origin context. The empirical evidence shows that there are significant impacts of legal origin on the nexus between intellectual capital and performance of listed firms during the global financial crisis.

This study examines the non-linear impact of financial development on income inequality and analyses the mediators through which financial development affects income inequality.

The study uses a dynamic panel threshold method with an endogeneous threshold variable on a comprehensive sample of 85 countries over the period of 1996-2015.

The author finds that financial development activities increase income inequality in developed countries. However, financial development promotes income equality in developing countries. Further, the study finds that education and institutional quality are the channels through which financial development has non-linear impacts on income inequality.

The study explores relatively new method to examine the nonlinear impact of financial development and also considers new dataset for the main explanatory variable.

The study aims to find out the impact of financial inclusion and financial development on financial stability using panel data from eight countries in the Middle East and North Africa (MENA).

To achieve the aim of the study, the researcher prepared two indicators of financial inclusion and governance to find out the impact of financial development on the relationship between financial inclusion and financial stability. Data on financial inclusion was obtained from the International Monetary Fund, data on financial development and financial stability were obtained from the World Bank.

The results of the fixed and random effect methods show that financial inclusion has a significant positive effect on financial stability. Additionally, financial development represents a moderating variable in the significant positive effect on the relationship between financial inclusion and stability in the MENA countries.

The current study suffers from some limitations that researchers must be aware of in future research. First, there is an inability to determine qualitative aspects such as time and cost when designing a composite indicator of financial inclusion. Second, due to limited data, we used only eight countries from the MENA. It is suggested to expand the sample to include other countries.

This paper contributes to the related literature between financial inclusion and financial stability by confirming or denying the results of previous studies. Also, to the best of the author’s knowledge, this paper is the only one that explains the role of financial development in the relationship between financial inclusion and stability in MENA countries, using a composite index to calculate financial inclusion. Finally, the study seeks to focus the attention of the government and policymakers to build a system of financial inclusion that leads to improving financial stability.

Small-to-medium-sized enterprises (SMEs) in e-commerce often invest in information technology (IT) to stay competitive. However, whether and how IT capability (ITC) translates into financial performance requires further research. This paper examines the role of ITC in enabling value proposition innovation (VPI) as an important mechanism that improves financial performance for Chinese e-commerce SMEs during the COVID-19 pandemic. We argue that ITC is critical for enabling innovation because it elevates SMEs’ understanding of changing customer needs, especially when SMEs operate on multiple e-commerce platforms (multihome).

We used partial least squares structural equation modeling (PLS-SEM) and tested the hypotheses that ITC mediated by VPI and moderated by multihoming increases the financial performance of e-commerce SMEs through a survey among 206 Chinese SMEs operating on Taobao.

We find that not only higher levels of ITC lead to better financial performance, but also that the effect is fully mediated by VPI. Moreover, the effect of ITC on innovation is enhanced when vendors operate on multiple platforms.

The study identifies VPI as an important mechanism through which SMEs can leverage their ITC to adapt, innovate and thrive in competition. Our work suggests that using technology to develop innovative ideas and identify opportunities (which are reflected in VPI) is key to success and that doing so is more likely when vendors multihome. Thus, this study contributes to the innovation literature by explicating a concrete link between ITC, multihoming, VPI and increased financial performance. Different e-commerce stakeholders, including SME owners, IT and service providers and e-commerce platforms, can benefit from the findings of this work.

The purpose of this study is to analyze the nonlinear effects of corporate philanthropy on the responses of both internal and external stakeholders as well as its impact on corporate financial performance.

Based on the stakeholder theory, the authors developed a conceptual model to examine the nonlinear effects of corporate philanthropy on company performance. For the empirical analysis, data from 397 company-years was analyzed using a using a Heckman two-stage model. The robustness of the findings was also confirmed through panel regression analysis.

The study revealed a linear relationship between corporate reputation and corporate philanthropy, whereas job satisfaction exhibited a nonlinear relationship with corporate philanthropy.

This research bridges the gap in extant literature by scrutinizing the nonlinear associations between corporate philanthropy and financial performance. Additionally, it addresses an emerging scholarly demand to uncover the “dark side” of corporate philanthropy through an investigation into its adverse impacts on employee satisfaction. Moreover, the study augments existing understandings of stakeholder theory and corporate philanthropy, positing that the influence of corporate philanthropy, as conceptualized through stakeholder theory, hinges on perceived fairness in multilateral relationships.

The study evaluates the role of institutional framework and macroeconomic instability on financial market development among emerging economies.

The study uses panel data compiled from 32 countries from the sub-region of Sub-Sahara Africa (SSA), covering the period starting from 1996 to 2019. Empirical analyses were carried out using the two-step system generalized method of moments (TS-GMM) statistical framework.

Reviewed results suggest that institutional quality, effective governance and corruption control have a significant positive impact on financial market development among economies in the sub-region. Further empirical estimates show that macroeconomic risk and macroeconomic uncertainty have significant adverse effects on financial market development. Additionally, reported empirical estimates suggest that an improved institutional framework has the potential to lessen the adverse effect of macroeconomic instability on financial market development among economies in the sub-region.

The uniqueness of this empirical inquiry compared to related studies in the present literature stems from the fact that studies employing similar empirical approaches on the subject matter for economies in the sub-region are rare. Additionally, the analysis pursued in this study employs critical variables whose impact on financial market performance in the sub-region has not been examined per our review. These variables include indexes such as macroeconomic risk and institutional quality, which are unique to this study based on their construction; these indexes are generated using a principal component analysis procedure with different underlying variables compared to what may be found in the literature.