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1 – 10 of 35Gianni Amisano and Alessandra Del Boca
This paper investigates which company characteristics affect the decision to introduce profit‐sharing. Unlike most studies, this paper relies on a ten‐year panel. The results…
Abstract
This paper investigates which company characteristics affect the decision to introduce profit‐sharing. Unlike most studies, this paper relies on a ten‐year panel. The results presented in this paper are based on the estimation of a panel data fixed‐effect logit model. Given that they are immune from heterogeneity bias, it is believed that these results are more reliable than those obtained by estimating cross‐sectional models. These results are in line with the common findings of the literature. Companies that are more likely to introduce profit‐sharing (PS) are larger firms which invest more, due to the lower cost of debt, and tend to pay higher wages as an incentive to boost the initially lower productivity. These companies are more likely to undertake investment projects which support the interpretation of PS as a risk‐sharing device.
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Haruna Issahaku, Munira Alhassan Muhammed and Benjamin Musah Abu
This paper aims to estimate the determinants of the intensity of use of financial inclusion by households in Ghana.
Abstract
Purpose
This paper aims to estimate the determinants of the intensity of use of financial inclusion by households in Ghana.
Design/methodology/approach
Due to the reality of a household using one or more financial products or services, this study uses the generalised Poisson model applied to GLSS6 and GLSS7 data collected in 2012/2013 and 2016/2017 respectively, to estimate the determinants of the intensity of use of financial inclusion. To deepen the analysis, a multinomial probit model is also applied.
Findings
Results show that infrastructural variables such as roads, public transport and banks stimulate the intensity of financial inclusion. In addition, agricultural development characteristics such as markets and cooperatives are essential for the intensity of inclusion.
Research limitations/implications
There is a need to incorporate how many services or depth of services that people use as part of the conceptualisation of financial inclusion, as this can provide more policy-relevant evidence to enhance priority setting in financial inclusion policies. Also, micro-level financial inclusion studies in agrarian economies should consider exploring agricultural development and infrastructure variables in the modelling framework. As lead to further studies, count models of financial inclusion should consider exploring cross-country analysis, the use of panel data, or other methodological approaches to provide more robust evidence.
Originality/value
Previous studies have not modelled financial inclusion based on a count model as a means of measuring intensity though conceptualisations highlight the fact that people use varied financial products or services. Following from this angle, to the best of the authors’ knowledge, this study provides the first attempt at analysing the underlying determinants of the number of financial products or services used by households.
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Hanieh Hekmat, Ali Rahmani and Hassan Yazdifar
This study aims to highlight the accuracy, performance and selection of the IPO valuation methods in the Islamic Republic of Iran’s emerging market.
Abstract
Purpose
This study aims to highlight the accuracy, performance and selection of the IPO valuation methods in the Islamic Republic of Iran’s emerging market.
Design/methodology/approach
The authors performed accurate ex ante evaluations based on a pre-IPO data set obtained from valuation institutions. This study considered valuation methods through correlations, Mann–Whitney U tests and regression analysis, using a sample of 83 IPOs from January 2017 to March 2021.
Findings
The authors found that the dividend discount model (DDM) was the most popular in Iran. Even after controlling firm characteristics and market circumstances, the IPO price was highly correlated to pre-IPO reports’ estimates. The results showed that firms’ age, size and profitability affected the selection of valuation methods. The valuers did not apply forward P/E in a volatile market. Firm size affected the weights assigned to free cash flow to the firm, and the valuers considered the asset-in-place intensity to determine the weights of DDM, P/E and net asset value, and they mainly used the P/E to value old firms. Finally, this study estimated the accuracy of the pre-IPO report at 61% and found the highest accuracy to be associated with DDM.
Originality/value
IPO pricing in emerging markets constitutes a more significant dilemma than in developed markets. This paper provides empirical evidence of IPO pricing focusing on valuation methods used in the context of an emerging market – the Islamic Republic of Iran.
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This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article aims to…
Abstract
Purpose
This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article aims to reveal the moderator effect of financial literacy on locus of control and financial behavior.
Design/methodology/approach
Responses were collected from a questionnaire given to a convenience sample of 1,347 individual investors. Exploratory factor analysis (EFA), which reveals the factor structure of the scale, was used at the beginning of the study, and then confirmatory factor analysis (CFA) was performed to confirm this new factor structure. Hypothetical relationships were examined using structural equation modeling.
Findings
The study provides statistical support for the validity and reliability of the scales. The statistical results of the analysis reveal that financial literacy and locus of control have a positive effect on financial behavior. Moreover, the authors prove that financial literacy changes the relationship between internal locus of control and financial behavior. In conclusion, financial literacy plays a significant role as a moderator variable that interacts with locus of control.
Originality/value
The findings of the research are important in demonstrating empirical evidence for the theoretical correlations. In support of the current literature, this study has confirmed the positive effects of internal locus of control and financial literacy on the financial behavior of individual investors. In addition, it has been determined that the relationship between an individual's financial behavior and internal locus of control varies according to their level of financial literacy.
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This study aims to investigate the association between social inclusion and financial inclusion. Social inclusion and financial inclusion are two major development policy agendas…
Abstract
Purpose
This study aims to investigate the association between social inclusion and financial inclusion. Social inclusion and financial inclusion are two major development policy agendas in many countries, and the association between them has received little attention in the policy and academic literature.
Design/methodology/approach
The findings reveal a positive and significant correlation between social inclusion and financial inclusion for Asian countries, Middle Eastern countries and African countries while the correlation between social inclusion and financial inclusion is negative for European countries. The findings also show that European and Asian economies experience higher levels of social inclusion and account ownership in a formal financial institution while African countries and Middle Eastern countries experience lower levels of social inclusion and account ownership.
Originality/value
The association between social and financial inclusion has received little attention in the policy and academic literature. This is the first study that investigates the association between social and financial inclusion.
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Tingting Zhang, Desheng Wei, Zhifeng Liu and Xihao Wu
This paper studies the effects of lottery preference on stock market participation at the macro level.
Abstract
Purpose
This paper studies the effects of lottery preference on stock market participation at the macro level.
Design/methodology/approach
The authors use the abnormal search volume intensity for lottery-related keywords from the Baidu search engine to capture retail investors' lottery preference. To measure stock market participation, they use five different macro-level measures from various angles. They perform the time series regression analysis in their empirical study.
Findings
First, the validation tests show that the lottery preference index in this study is reasonable. Further, the authors find that lottery preference increases people's propensity to enter and trade in the stock market. Besides, they find that the effect on trading behavior is asymmetric, that is, high lottery preference has a more significant impact on trading behavior than low lottery preference. However, lottery preference has no significant effect on the stockholding.
Originality/value
This paper contributes to the growing literature that examines the determinants of stock market participation and the role of lottery/gambling preference in the financial market. It also provides direct and novel evidence for Statman's (2002) conclusions about the similarity of lottery players and stock traders.
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Anisza Hasmawati and Azhar Mohamad
This study aims to investigate the potential application of Istisna’ financing in Malaysia.
Abstract
Purpose
This study aims to investigate the potential application of Istisna’ financing in Malaysia.
Design/methodology/approach
Using primary data from semi-structured interviews with 17 participants, including Islamic financial institutions (IFIs), regulatory body and property development companies, the findings of the study suggest that Istisna’ is perceived as a good contract that has unique features and the potential to be implemented in Malaysia; although, it has only been implemented a little by current businesses, mainly due to its perceived high risks.
Findings
The authors find there is a gap between the theory and the actual operation of IFIs in Malaysia – some salient features of an Islamic contract are actually difficult to execute in reality as there are many factors to be considered, such as default risk in Istisna’, legal issues and accounting treatment of Istisna’ contract. This study recommends the further development of Istisna’ in Malaysia due to its huge potential in the Islamic financial market there.
Practical implications
Istisna’ is a unique type of sale contract that is used in the manufacturing sectors where the sale of a commodity is transacted before the commodity exists. In practice, data from the Central Bank of Malaysia show that Istisna’ financing is scarce.
Originality/value
The study differs from previous research studies on Istisna’ – to the best of the authors’ knowledge, this is the first study to provide evidence the real thoughts of IFIs with regard on Istisna’ specifically and IFIs’ operations in general. Previous studies related to Istisna’ have limited scopes, as they have mainly explored the theoretical nature of the contract, issues of permissibility from the Shariah perspective and its comparability with other IFIs product such as Salam. In this study, from respondents’ views, the authors notice actually there is a gap between theory and the real practice of Islamic finance. An Islamic finance instrument may be an ideal choice to customers but not very popular from IFIs’ sides. In this respect, the authors add to the growing literature of Istisna’ by asking the direct questions to IFIs and the authors get honest responses pertaining to default risk, legal issues and accounting treatment.
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Nikolaos Daskalakis and Efstathios Karpouzis
The purpose of this paper is to add to the existing literature about whether and how a continuous belief-update mechanism affects investors' risk perceptions in crowdfunding. The…
Abstract
Purpose
The purpose of this paper is to add to the existing literature about whether and how a continuous belief-update mechanism affects investors' risk perceptions in crowdfunding. The authors build on existing literature on the impact of a continuous belief-update mechanism on return expectations and risk perceptions, as a result of the funders' personal return and risk experiences, and apply this approach to the crowdfunding area. The authors thus add two specific insights about these dynamic new markets. First, the authors measure the perceived risk along multiple dimensions. Second, the authors consider how perceived risk differs across experienced investors and inexperienced investors, using two levels of analysis.
Design/methodology/approach
The paper uses a unique data set of survey respondents on crowdfunding with financial returns. The data set covers Germany, Poland and Spain. Survey data were derived by market research conducted in two stages. The first stage consists of two questions asked within an omnibus survey conducted by computer-assisted telephone interviews. In the second stage, multiple questions (including QA.1 and QA.2 and demographics) were included in an online survey or computer-assisted web interview for the same three countries.
Findings
The authors find that experienced investors perceive risks at lower levels than users that are aware of crowdfunding, but have not yet had the experience of an actual investment. The authors also find that investors, who invest larger proportions of their savings in crowdfunding with financial returns, perceive risks even lower than “lighter” investors, for the majority of risks the authors investigate.
Research limitations/implications
The study is limited in three European countries and explores crowdfunding with financial returns only.
Practical implications
The study suggests that investors' participation and activity in crowdfunding with financial returns can be increased, either via providing incentives for “first investment” or via the creation of investment simulators.
Originality/value
This study contributes to the following three areas. First, the authors shed new evidence on the dynamics of crowdfunding with financial returns and explore how decisions are being made in a context of reverse information asymmetries. Second, the authors explore how the “crowd” reshapes risk perceptions via a belief-update mechanism; this is of high importance under the absence of traditional financial intermediaries, which increases the severity of information asymmetries. Third, the authors enrich literature associated with how laypeople take investment decisions, showing how prior experience affects investment decision making.
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M. A. Hossain, M.K. Chowdhury and R.S.R. Gorla
We determine the effects of micro‐inertia density and the vortex viscosity on laminar free convection boundary layer flow of a thermomicropolar fluid past a vertical plate with…
Abstract
We determine the effects of micro‐inertia density and the vortex viscosity on laminar free convection boundary layer flow of a thermomicropolar fluid past a vertical plate with exponentially varying surface temperature as well as surface heat flux. The governing nonsimilarity boundary layer equations are analyzed using: first, a series solution for small ξ (a scaled streamwise distribution of micro‐inertia density), second, an asymptotic solution for large ξ and, third, a full numerical solution implicit finite difference method together with Keller‐box scheme. Results are expressed in terms of local skin friction and local Nusselt number. The effects of varying the vortex viscosity parameter, Δ, surface temperature and the surface heat flux gradient n and m respectively against ξ for fluids having Prandtl number equals 0.72 and 7.0 are determined.
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Ajaya Kumar Panda and Swagatika Nanda
The purpose of this paper is to capture the pattern of return volatility and information spillover and the extent of conditional correlation among the stock markets of leading…
Abstract
Purpose
The purpose of this paper is to capture the pattern of return volatility and information spillover and the extent of conditional correlation among the stock markets of leading South American economies. It also examines the connectedness of market returns within the region.
Design/methodology/approach
The time series properties of weekly stock market returns of benchmark indices spanning from the second week of 1995 to the fourth week of December 2015 are analyzed. Using univariate auto-regressive conditional heteroscedastic, generalized auto-regressive conditional heteroscedastic, and dynamic conditional correlation multivariate GARCH model approaches, the study finds evidence of returns and volatility linkages along with the degree of connectedness among the markets.
Findings
The findings of this study are consistent with increasing market connectedness among a group of leading South American economies. Stocks exhibit relatively fewer asymmetries in conditional correlations in addition to conditional volatility; yet, the asymmetry is relatively less apparent in integrated markets. The results demonstrate that co-movements are higher toward the end of the sample period than in the early phase. The stock markets of Argentina, Brazil, Chile, and Peru are closely and strongly connected within the region followed by Colombia, whereas Venezuela is least connected with the group.
Practical implications
The implication is that foreign investors may benefit from the reduction of the risk by adding the stocks to their investment portfolio.
Originality/value
The unique features of the paper include a large sample of national stock returns with updated time series data set that reveals the time series properties and empirical evidence on volatility testing. Unlike other studies, this paper uncovers the relation between the stock markets within the same region facing the same market condition.
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