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1 – 10 of 95Michael O’Neill, Jie (Felix) Sun, Geoffrey Warren and Min Zhu
We model the relation between excess returns, fund size and industry size for active equity funds.
Abstract
Purpose
We model the relation between excess returns, fund size and industry size for active equity funds.
Design/methodology/approach
We study and contrast four markets – global equities, emerging markets, Australia core and Australia small caps – and use the results to investigate the extent to which funds deviate from estimated capacity.
Findings
We uncover a significantly negative relation between returns and both fund size and industry size across all markets. The estimated percentage of funds operating above versus below capacity varies both across markets and over time, as does the role played by fund size versus industry size. We find a greater prevalence of funds operating significantly below than above capacity, in contrast to findings for US equity mutual funds. Significant deviations from estimated capacity persist for a median of between two and six quarters.
Originality/value
Our main contribution is to show that the dynamics governing deviations from capacity for active equity funds vary across markets.
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Esther Lea Ledoux and Nadia Smaili
The purpose of this paper is to analyze FTX cryptocurrency frauds. FTX is a former cryptocurrency exchange platform that went bankrupt because of fraud in 2022.
Abstract
Purpose
The purpose of this paper is to analyze FTX cryptocurrency frauds. FTX is a former cryptocurrency exchange platform that went bankrupt because of fraud in 2022.
Design/methodology/approach
Using a qualitative method and a case study of FTX, the authors document the multiple fraud schemes perpetrated. The authors collected media and research articles that discussed the FTX case. The authors analyzed 18 articles.
Findings
Based on this case, the authors highlight the governance and ethics weaknesses in the FTX environment. The authors also discuss cryptocurrency risks and regulation of cryptocurrencies. The FTX affair has shaken up the international regulatory world, which has been seeking solutions to protect customers and investors and helping banks take positions since 2022.
Originality/value
This study contributes to the fraud literature by deeply examining cryptocurrency fraud risks. In addition, the findings could help financial institutions and guide them in the cryptocurrency world.
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This study investigates the reasons behind the very high net interest margins in the Greek banking industry compared to the euro-area, focussing on the association between bank…
Abstract
Purpose
This study investigates the reasons behind the very high net interest margins in the Greek banking industry compared to the euro-area, focussing on the association between bank competition and recapitalisations.
Design/methodology/approach
The author conducts a dynamic panel analysis covering the period from the early 2000s to 2021, that controls for possible endogeneity and treats for heterogeneity. The author also employs local projections impulse response functions that control for structural changes in Greek banking.
Findings
The author finds that low bank competition has contributed to high net interest margins in Greece. Interestingly, the impact of recapitalisations conditional to low bank competition has had a significant further impact on increasing net interest margins, which is a noteworthy case due to several Greek bank recapitalisations in the last ten years. The author’s findings are supported by local projections impulse response functions.
Originality/value
To mitigate distortions in bank competition, the author argues to accelerate steps toward the direction of the banking union and a common bank regulation framework in the euro-area.
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Manar Lootah, Kimberly Gleason, Deborah Smith and Taisier Zoubi
The purpose of this paper is to examine failures in internal and external controls associated with sovereign wealth funds (SWFs), using three caselets to illustrate the fraud…
Abstract
Purpose
The purpose of this paper is to examine failures in internal and external controls associated with sovereign wealth funds (SWFs), using three caselets to illustrate the fraud triangle theory factors.
Design/methodology/approach
This study uses a qualitative research approach. Caselets are used to illustrate the fraud triangle factors associated with SWFs.
Findings
Ideally, SWFs would be characterized by opacity and the strategic flexibility to advance political goals, but this operational agility facilitates an environment ripe for fraud, in large part because there is little transparency with regard to their regulatory structure. Elements of the fraud triangle inherent in the structure of SWFs contribute to the fraud found in the three case examples.
Research limitations/implications
The authors use three SWF fraud cases rather than statistical sampling of all SWFs, which limits the generalizability of the findings. Future research should explore additional recommendations for the evaluation of SWF governance.
Practical implications
The overlap between public sector governance and SWF governance creates an environment amenable to fraud, and as a result, fraud has occurred in several SWFs. Governance recommendations should take into account the lessons learned from previous SWF fraud cases.
Social implications
Ideally, SWFs would be characterized by opacity and the strategic flexibility to advance political goals, but this operational agility may also facilitate an environment ripe for fraud, in large part because there is little transparency with regard to their regulatory structure.
Originality/value
To the best of the authors’ knowledge, this paper is the first to identify the fraud triangle risk factors associated with sovereign wealth funds using SWF fraud caselets.
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Shuaikang Hao, Lifang Peng, Xinyin Tang and Ling Huang
This study introduces a new type of platform recommendation about mutual funds and draws on the signaling theory to conduct a quasi-experimental design to investigate how the…
Abstract
Purpose
This study introduces a new type of platform recommendation about mutual funds and draws on the signaling theory to conduct a quasi-experimental design to investigate how the platform recommendation influences investors’ investment decisions. Moreover, the authors examine the combined effect of star ratings and the platform recommendation on fund flow and test the investment value of recommended funds.
Design/methodology/approach
This study implements a quasi-experimental design based on 1,295 mutual funds traded on Alipay’s online platform to test the hypotheses.
Findings
The empirical results show that the recommended funds received higher fund flows from investors when the platform recommendation was established. Moreover, a substitution effect between tag recommendation and star ratings on fund flow was identified. We also uncovered that investing in platform-recommended funds can yield significant and higher fund returns for investors than those without platform recommendations.
Originality/value
Our findings shed new insights into the role of platform recommendations in helping fund investors make investment decisions and contribute to the business of online mutual fund transactions by investigating the effect of platform recommendations on fund flow and performance.
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Mohammed W.A. Saleh, Derar Eleyan and Zaharaddeen Salisu Maigoshi
This study examines the impact of institutional ownership (IO) on firm performance. It also investigates whether powerful CEOs using a “CEO score index” moderate IO and firm…
Abstract
Purpose
This study examines the impact of institutional ownership (IO) on firm performance. It also investigates whether powerful CEOs using a “CEO score index” moderate IO and firm performance nexus by drawing on insights from the agency and resource dependency theories.
Design/methodology/approach
Data were obtained from annual reports of companies listed on the Palestine Security Exchange from 2009 to 2019. Panel data regressions were conducted based on 528 observations. In addition, this study repeated the analysis using a one-step generalized method of moments (GMM) and two-stage least squares analysis to deal with the endogeneity issue.
Findings
Results show that IO and CEO power is positively associated with firm performance. Besides, it has been established that CEO power strengthens the relationship between IO and performance. Thus, this can be summarized that IO improves firm performance; however, with the powerful CEO intervention, the performance will improve even more.
Originality/value
Studying IO is timely given since the type of ownership is paramount to identify which form of a high degree of ownership affects the performance negatively, especially, in the Palestine environment which is dominated by institutional investors. This is of great importance to the investors as it will enable them to identify the type of firms to which they can commit their funds, and which firm excels through the CEO power. Besides, the inconsistency results in previous literature on IO, and firm performance indicates that there is an indirect effect that needs alternative explanations.
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Alongside its remarkable growth, problematic Bitcoin investment (BI) behavior and its associated negative consequences have become prevalent, and only a few studies have examined…
Abstract
Purpose
Alongside its remarkable growth, problematic Bitcoin investment (BI) behavior and its associated negative consequences have become prevalent, and only a few studies have examined it. Therefore, this study aims to examine problematic BI behavior by investigating its specific antecedents and consequences and identifying which antecedents were more influential in it. In addition, we also examine the role of financial literacy on the relationship between the antecedents and problematic BI behavior.
Design/methodology/approach
We collected survey data from 413 investors with Bitcoin investment experience in 2018, when a Bitcoin frenzy occurred. The partial least squares method was used to test the proposed research model.
Findings
The results show that prudent, negative urgency, overexpectation and sensation seeking are positively associated with problematic BI behavior, while restraint is negatively associated. Problematic BI behavior is negatively related to investor well-being. Our findings also indicate that both objective and subjective financial literacy moderate the relationship between the antecedents and problematic BI behavior. Four types of investors in terms of their objective and subjective Bitcoin knowledge show different patterns in the relationship between the antecedents and problematic BI behavior.
Originality/value
This study offers insights for researchers by providing a deeper understanding of the contextual antecedents of problematic BI behavior and the role of financial literacy in it. This study provides detailed implications for financial institutions, policymakers, and regulators to guide rational Bitcoin investment behaviors.
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Cong-Hoang Nguyen, Mandisa Greene and Shu-Hsing Wu
This study aims to explore the relationship between board diversity and financial performance, examining how the presence of women on corporate boards affects metrics such as…
Abstract
Purpose
This study aims to explore the relationship between board diversity and financial performance, examining how the presence of women on corporate boards affects metrics such as profitability. In addition, this study investigates how corporate governance and ownership structure influence gender diversity policies and the appointment of women to boards.
Design/methodology/approach
Two hypotheses were proposed and following regression models were developed for data analysis. The sample for this study consists of companies listed on the Taiwan Stock Exchange in five years (2015–2019). The data was extracted from the Taiwan Economic Journal Taiwan database with the final data set comprised 9,379 firm-year observations.
Findings
This study indicates a positive association between board diversity and financial performance. Moreover, the relationship between female directors on the board and financial performance is stronger for firms with a higher percentage of institutional investors.
Originality/value
By highlighting how gender-balanced boards and engaged institutional shareholders improve profitability, this study suggests that actively recruiting women directors and pursuing governance reforms that empower shareholders can pay dividends for Taiwanese companies. The results make an important contribution to the limited research on diversity's impact within Asian corporate settings.
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