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Article
Publication date: 5 December 2024

Salma Ali, Heba Ali and Amira Tarek

This study aims at investigating the nexus between stock misvaluation, Fintech and COVID-19 via identifying the firm-level misvaluation of Fintech firms, and additionally…

Abstract

Purpose

This study aims at investigating the nexus between stock misvaluation, Fintech and COVID-19 via identifying the firm-level misvaluation of Fintech firms, and additionally examining how the COVID-19 pandemic has affected this misvaluation. This study further examines how the level of stock misvaluation has changed after the COVID-19 pandemic to shed more light on the pricing behavior of Fintech in a post-pandemic world.

Design/methodology/approach

The sample consists of all Fintech firms listed in the STOXX Global Fintech Index over the period (2014–2023). To empirically identify stock misvaluation, the authors apply the widely used approach of Rhodes-Kroph et al. (2005). Then, a series of fixed-effects regressions is conducted to investigate the impact of the COVID-19 pandemic on mispricing.

Findings

This study finds compelling evidence that Fintech stocks tend to be particularly mispriced during the COVID-19 pandemic. This evidence suggests that investors became more attracted to Fintech stocks, as being exposed to widespread adoption, usage and investment worldwide during the pandemic. Interestingly, the findings show that Fintech firms remain overvalued, even after the pandemic, which indicates that investors maintain their positive expectations for Fintech firms after the COVID-19 pandemic.

Practical implications

For investors and fund managers, the observed high valuation in the Fintech sector highlights its noticeable growth in the financial industry. The results also suggest that the impact of the COVID-19 pandemic on pricing behavior is asymmetric across the undervalued and overvalued Fintech stocks. This finding provides important insights for portfolio construction and investment strategies during the hard times of pandemics.

Originality/value

No previous work has been done on the effects of the COVID-19 pandemic on the prevailing levels of mispricing in Fintech stocks. Moreover, the findings provide novel insights into the pricing efficiency in the context of Fintech and extend the understanding of the long-term effects on Fintech firms in a post-pandemic world.

Details

Studies in Economics and Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 11 July 2024

Jamal Ali Al-Khasawneh, Heba Ali and Ahmed Hassanein

This study aims to investigate how stock markets responded to corporate dividend policy changes during the COVID-19 pandemic in the Gulf Cooperation Council (GCC) countries…

Abstract

Purpose

This study aims to investigate how stock markets responded to corporate dividend policy changes during the COVID-19 pandemic in the Gulf Cooperation Council (GCC) countries. Likewise, it explores how efficiently market prices incorporate the news by examining the speed of stock price adjustment to various dividend announcements.

Design/methodology/approach

The sample includes 741 dividend announcements from 2017 to 2021 made by 326 firms listed in the stock markets of the GCC countries. A series of regression analyses examine how dividend announcements influence the market reaction during the COVID-19 pandemic, controlling for other well-documented firm characteristics.

Findings

This study reveals an adverse stock price reaction to all the dividend announcements in most GCC markets. The findings also show strong asymmetric effects of COVID-19 on how the markets react to different dividend changes. Likewise, the authors show that investors tend to underreact to the good news of dividend increases amid hard times of crises due to prevailing uncertainty and bearish sentiment. Besides, regression results reveal that firms with dividend reductions during the pandemic experience less adverse market reactions than dividend-decreasing firms prepandemic.

Practical implications

For firms, the findings confirm the role that corporate dividend policy can play in conveying signals to investors, especially during hard times of crises and turbulences, thereby affecting their share price. For policymakers, the results substantially affect market efficiency and firm valuation in the GCC markets.

Originality/value

This study is not only one of the first few attempts to scrutinize how the pandemic has affected the market reaction to changes in corporate dividend policies but also, to the best of the authors’ knowledge, it is the first to examine how corporate dividend policy could affect stock markets during COVID-19 in the context of GCC markets.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 17 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 21 December 2022

Hadeer Mounir and Heba Ali

This research aims at synthesizing the existing body of literature on the role of environmental, social and governance (ESG) during the Covid-19 global pandemic, identifying the…

Abstract

Purpose

This research aims at synthesizing the existing body of literature on the role of environmental, social and governance (ESG) during the Covid-19 global pandemic, identifying the research agenda and perspectives on the role of ESG during times of economic turbulences and pointing to gaps and future research directions in this area.

Design/methodology/approach

A literature review of academic articles that focus on the role of ESG investments during the Covid-19 pandemic is conducted. These studies are identified based on searching/containing the keywords “ESG”, “Corporate Social Responsibility (CSR)”, “Sustainability” and “Sustainable Finance” in combination with one or more of the following terms: “Covid-19”, “Pandemic” “and Crisis”. Then, the authors explore the key directions/themes in these papers, and highlight the main gaps and areas that are evolving as future research opportunities.

Findings

The empirical findings provide overall compelling evidence in support of the role of ESG during times of crisis, especially when it comes to stock risk and volatility. For example, several studies report that ESG stocks are associated with superior stock performance (higher stock returns and firm value) during the pandemic, while other studies report that ESG act as a risk protection tool during times of crisis, as they document that ESG stocks are associated with lower volatility and lower downside risk during the Covid-19 crisis.

Originality/value

To the best of the authors knowledge, no review of the literature on the role that ESG plays during crises and pandemics has been conducted before. Thus, it fulfills this research gap in the literature.

Details

Management & Sustainability: An Arab Review, vol. 2 no. 3
Type: Research Article
ISSN: 2752-9819

Keywords

Article
Publication date: 13 January 2022

Heba Ali, Hala M.G. Amin, Diana Mostafa and Ehab K.A. Mohamed

The purpose of this paper is to examine the inter-relations among the strength of investor protection institutions, earnings management (EM) and the COVID-19 pandemic.

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Abstract

Purpose

The purpose of this paper is to examine the inter-relations among the strength of investor protection institutions, earnings management (EM) and the COVID-19 pandemic.

Design/methodology/approach

As a proxy for EM, the authors use discretionary accruals measure, estimated using the modified Jones model (1991). As a proxy for the strength of investor protection institutions, the study uses the Investor Protection Index, extracted from the Global Competitiveness Reports. The sample consists of 5,519 firms listed in the Group of Twelve countries during 2015–2020.

Findings

The study shows that firms tend to engage less in EM during the pandemic period. The authors also find a significantly negative relation between the strength of investor protection institutions and EM practices, and interestingly, this negative relation was found to be more pronounced during the pandemic period.

Research limitations/implications

For investors and practitioners, the findings help get insights into the behavior of firms in response of the pandemic shock in countries with solid institutional and legal protection. For policymakers, the findings reaffirm the critical role that institutional incentives and reforms can play, in influencing firms to exert more efforts to promote their financial reporting quality.

Originality/value

To the best of our knowledge, the study is one of the first attempts to examine the link between EM practices and investor protection during the COVID-19 pandemic. The findings extend both the literature on the role of institutional factors in promoting the earnings quality and the literature on COVID-19’s effect on firm performance and practices.

Details

Managerial Auditing Journal, vol. 37 no. 7
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 4 February 2019

Heba Ahmed Abbas Ali

This paper aims to examine the behavioral timing hypothesis in the context of UK rights issues by seeking to establish and investigate inter-relationships between directors’…

Abstract

Purpose

This paper aims to examine the behavioral timing hypothesis in the context of UK rights issues by seeking to establish and investigate inter-relationships between directors’ trading around rights issues as a proxy for stock mis-valuation and post-issue stock price performance.

Design/methodology/approach

The cumulative average abnormal returns, the buy and hold abnormal returns, the standardized residual cross-sectional t-test and the generalized sign test techniques.

Findings

The directors do possess short-term timing ability as they can identify profitable trading situations by buying more often before stock outperformance and by selling more often before stock underperformance. In addition, directors trading prior to the rights offering is found to exert an influence on the long-run abnormal returns of the rights-issuing firm, which supports the story that mis-valuation and behavioral timing are empirical.

Research limitations/implications

Other types of seasoned equity offerings rather than rights issues should be included.

Practical implications

The research provides a direct testing for the strong form of market efficiency hypothesis, which enables policymakers to take into account market reaction to directors’ trades and how it is affected by corporate events (e.g. rights issues) when addressing insider trading regulations.

Originality/value

This study extends available literature in the context of both developed and emerging equity markets to testing the behavioral timing hypothesis by testing the inter-relationships between directors’ trading around rights issues and post-issue short- and long-run performance. To the best of the author’s knowledge, this is the first study that examines these inter-relationships in the UK context.

Details

Review of Accounting and Finance, vol. 18 no. 1
Type: Research Article
ISSN: 1475-7702

Keywords

Abstract

Details

Management & Sustainability: An Arab Review, vol. 2 no. 1
Type: Research Article
ISSN: 2752-9819

Abstract

Details

Management & Sustainability: An Arab Review, vol. 1 no. 1
Type: Research Article
ISSN: 2752-9819

Article
Publication date: 6 February 2025

Marian H. Amin, Heba Ali and Ehab K. A. Mohamed

This paper scrutinizes the nexus between firms’ board characteristics; environmental, social and governance (ESG) performance and industry sensitivity, with the aim of examining…

Abstract

Purpose

This paper scrutinizes the nexus between firms’ board characteristics; environmental, social and governance (ESG) performance and industry sensitivity, with the aim of examining how the impact of board diversity on ESG performance would vary among sensitive versus non-sensitive industries and identify which board characteristics are more influential on ESG performance in these industries.

Design/methodology/approach

A large sample of 31,255 firm-year observations in 5,471 companies listed in the G-7 countries from 2010 to 2022 is examined using a Heckman two-stage least squares (2SLS) approach to address the potential endogeneity concerns within our proposed relationships.

Findings

The findings show that the positive influence of diverse boards on a firm’s ESG performance is particularly amplified in sensitive industries and may be attributed to the greater need of these industries to address stakeholder concerns (as posited by the stakeholder and resource-dependence theories) and mitigate agency conflicts (supporting agency theory). Interestingly, the impact of diversity in board gender and education qualifications appears to be particularly influential and remains robust across a series of regression analyses.

Research limitations/implications

This study has important implications for policymakers and legislators as it provides guidelines pertaining to the composition of boards operating in sensitive industries. For practitioners and firms, the results allow for better understanding of firms’ tendency towards sustainability practices, particularly in the context of sensitive industries.

Practical implications

This study has important implications for policymakers and legislators as it provides guidelines pertaining to the composition of boards operating in sensitive industries.

Originality/value

This study contributes to the increasingly growing literature that investigates the nexus between industry sensitivity, board characteristics and ESG performance.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 13 January 2025

Salma Okasha, Heba Ali and Amira Tarek

This study aims to investigate the nexus between corporate sustainability performance, Fintech and COVID-19 by examining how COVID-19 has impacted Fintech firms’ environmental…

Abstract

Purpose

This study aims to investigate the nexus between corporate sustainability performance, Fintech and COVID-19 by examining how COVID-19 has impacted Fintech firms’ environmental, social and governance (ESG) performance. The study further examines the long-term effects on ESG performance post-pandemic, to shed more light on the persistence of firms’ commitment towards sustainability in a post-pandemic world.

Design/methodology/approach

The sample includes all Fintech firms listed in the STOXX Global FinTech Index over the period 2014–2023. Fixed-effects regression analyses are conducted to examine this relationship, controlling for other firm characteristics. To further ensure results validity, the two-stage least squares estimation method is also used.

Findings

This paper find that Fintech firms exhibit better ESG/pillar performance during COVID-19, supporting the view that firms tend to maintain or enhance their sustainability practices. Interestingly, the findings also reveal that Fintech firms could maintain and even improve their ESG/pillar performance after the pandemic, indicating that these changes are lasting, not merely short-term adaptations during the hard times of the crisis.

Practical implications

For practitioners and firms, the results allow for a better understanding of Fintech firms’ tendency towards sustainability practices, especially in a post-pandemic world. For investors, the findings help get insights into the drivers of the sustainability behavior of Fintech firms in response to the pandemic.

Originality/value

To the best of the authors’ knowledge, this paper is one of the first attempts to investigate how COVID-19 affects Fintech firms’ engagement in sustainability/ESG activities to extend both the increasingly growing literature on sustainability and the literature that focuses on Fintech and its role in a today’s world.

Details

Journal of Global Responsibility, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2041-2568

Keywords

Expert briefing
Publication date: 18 September 2020

In principle, Prime Minister Abdallah Hamdok’s transitional cabinet has prioritised economic stabilisation and reform. In practice, reforms have stalled and conditions continue to…

Details

DOI: 10.1108/OXAN-DB256348

ISSN: 2633-304X

Keywords

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