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The study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).

Data for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.

Reported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.

For policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.

The approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

This paper aims to conduct an empirical study to investigate whether an industry’s position affects the transmission of information and economic shocks.

This paper conducts an empirical study of inventory performance based on a large panel of 71 industries in the manufacturing, wholesale and retail sectors over a 10-year period (2007–2016).

It is found that the position of a focal industry in the supply chain network moderates the impacts of macroeconomic uncertainty shocks and shocks from supplier/customer industries on the focal industry’s inventory. On the one hand, more central industries are more sensitive to macroeconomic uncertainty shocks as well as spillover shocks from their supplier and customer industries. On the other hand, uncertainty shocks from more central industries have higher impact on their partner industries than those from less central industries.

A manager needs to take into account the network positions of suppliers/customers in supply network when making inventory decisions. For example, when sharing information with partners, the network position of a partner affects how important its information is.

The key novelty of this paper is the introduction of network structure that represents the supplier–customer relationships in the entire economy, and the modeling of uncertainty shocks transmitted through the supply chain network.

This study examines the extent to which regulatory policy uncertainty, macroeconomic risk, banking industry innovations, etc. influence variability in financial sector development among emerging economies in sub-Sahara Africa (SSA).

Data for the empirical inquiry were compiled from a sample of 25 economies from the subregion from 2010 to 2020. Empirical estimates examining the relationships noted above were carried out using the two-step system generalized method of moments estimation technique.

Results the empirical estimates suggest that regulatory policy uncertainty and macroeconomic risk adversely influence or constrain financial sector development among the economies examined in the study. Banking industry innovations on the other hand is found to positively influence the development of the financial sector in these economies. Furthermore, moderating empirical analysis suggests that effective governance positively moderates the relationship between banking industry innovations and financial development among economies in the subregion.

This study’s approach to the mechanics of financial development among economies in SSA is designed to offer different perspectives to those found in the existing literature on financial development in three fundamental ways. First, although the verification of the role of banking industry innovations in financial development may not be new, it is important to point out that the approach used in this study is based on an index for innovations with different constituents or principal components in its construction; making the variable significantly different from what has been examined in the literature. In addition, the review of regulatory policy uncertainty and macroeconomic risk (both variables are multifaceted constructs using the principal component analysis procedure) further brings into this study’s analysis, a different approach to examining conditions influencing variability in financial development among developing economies.

This paper investigates the role of economic disagreement in the cross-sectional pricing of individual stocks. Economic disagreement is quantified with ex ante measures of cross-sectional dispersion in economic forecasts from the Survey of Professional Forecasters (SPF), determining the degree of disagreement among professional forecasters over changes in economic fundamentals.

The authors introduce a broad index of economic disagreement based on the innovations in the cross-sectional dispersion of economic forecasts for output, inflation and unemployment so that the index is a shock measure that captures different aspects of disagreement over economic fundamentals and also reflects unexpected news or surprise about the state of the aggregate economy. After building the broad index of economic disagreement, the authors test out-of-sample performance of the index in predicting the cross-sectional variation in future stock returns.

Univariate portfolio analyses indicate that decile portfolios that are long in stocks with the lowest disagreement beta and short in stocks with the highest disagreement beta yield a risk-adjusted annual return of 7.2%. The results remain robust after controlling for well-known pricing effects. The results are consistent with a preference-based explanation that ambiguity-averse investors demand extra compensation to hold stocks with high disagreement risk and the investors are willing to pay high prices for stocks with large hedging benefits. The results also support the mispricing hypothesis that the high disagreement beta provides an indirect way to measure dispersed opinion and overpricing.

Most literature measures disagreement about individual stocks with the standard deviation of earnings forecasts made by financial analysts and examines the cross-sectional relation between this measure and individual stock returns. Unlike prior studies, the authors focus on disagreement about the economy instead of disagreement about earnings growth. The authors' argument is that disagreement about the economy is a major factor that would explain disagreement about stock fundamentals. The authors find that disagreement in economic forecasts does indeed have a significant impact on the cross-sectional pricing of individual stocks.

This study aims to investigate the influence of macroeconomic conditions on corporate cash holdings in terms of their influence on the level of cash and the speed of adjustment of cash to target levels in the Gulf Cooperation Council countries (GCC).

The study employs both static and dynamic regression analyses considering a sample of 2,878 firm-year observations drawn from stock markets in GCC countries over the 2010–2018 period.

Consistent with the precautionary motive, the results show that GCC firms tend to accumulate cash reserves in weak economic periods. Evidence also reveals that the estimated adjustment coefficients from dynamic panel models show that GCC firms adjust more slowly toward their target cash ratio in periods of unfavorable economic conditions.

This study has important implications for managers, policymakers and regulators. For managers, the study is an important reference to understand and design cash management policies by considering financial constraints imposed by macroeconomic conditions. In particular, managers should pay more attention to periods of credit crunch and weak economic conditions in which firms may be exposed to greater bankruptcy risks. For policymakers and regulators, this study may be useful in assessing the effect of macroeconomic factors on firm's cash holding decision. Therefore, in an effort to increase the supply of external financing available to firms, policymakers may devise investment friendly environment by controlling macroeconomic factors.

This paper offers some insights on the macro determinants of cash holdings by investigating emerging economies. It explores the role of macroeconomic conditions on corporate cash holdings in terms of their influence on the costs of external funds and financial constraints.

This study aims to empirically investigate the impact of oil prices, political instability and changes in stability on the bank diversification of the two types of banking systems in the Middle East and North African (MENA) countries.

The study uses bank diversification, stability measurement of probability of default and Zscore by adopting the generalised method of moment for the data between 2007 and 2021. The authors estimate short- and long-run dynamic panel analysis and a robustness test.

The findings reveal that Islamic banks are slightly lower in diversification and stability than conventional peers in the region. Diversification increases with a positive increase in GDP growth, law and order, political stability, bank size, asset quality, oil price, return on equity, profitability and change in banking asset-based stability. The authors found consistency in the two stability measurements in both short- and long-run situations.

Despite the change in banking stability and economic growth and oil prices improved diversification, banks in the region are not diversifying during the crisis period and political instability. Therefore, policymakers should improve mechanisms to monitor the crisis and political unrest to avoid the systemic risk that adversely affects the system through macro-financial linkages in the region.

This study uses change dual stability measurements and oil prices to predict MENA region bank diversification. The authors extended the banking literature by estimating the relationship between crisis periods, political and banking stability, oil prices and other institutional indicators of banking diversification. This study uncovers the effect of the global crisis period on banking diversification and the impact of banking stability changes and validates the models through robustness tests.

This study examines whether country-level financial integration affects firms' accounting choices and the quality of financial information.

This study employs Propensity Score Matching (PSM), and panel regressions of a large sample of data from 20 emerging markets over the period 1987–2018.

This study finds evidence that increased level of financial integration is significantly positively associated with firms' accruals earnings management (AEM) and real earnings management (REM).

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness of financial reporting quality. The study also has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness and quality of financial reporting. The findings can be of interest to analysts, auditors and other monitoring institutions who play a crucial role in detecting earnings management and reducing information asymmetry. Finally, the study has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study reveal how country-level financial integration affects accruals and real earnings management in a sample of firms from 20 emerging markets. Further, the study adds to the growing body of literature on emerging markets where capital markets mechanisms, regulatory environment and firm's corporate governance are distinct to developed markets.

This article examines dynamic volatility spillovers between stock index returns of four main hospitality sub-sectors in US during the coronavirus disease 2019 (COVID-19) pandemic. These are tourism and travel, hotel and lodging, recreational services and food and beverages. Volatility spillovers are explicitly used as accurate and informative proxies for risk contagion between sectors during turbulent times.

The authors employ dynamic conditional correlation-generalized autoregression heteroskedasticity (DCC-GARCH) and wavelet coherence analysis (WCA) to analyze the phenomenon. The authors’ timeframe is divided into three main sub-periods, namely the pre-pandemic, the first wave and the second wave periods.

This study’s results reveal immense negative shocks in returns of all four sub-sectors on the Black Monday (8th March 2020). Moreover, high volatility persistence was observed during both waves with an exception of tourism and travel which exhibited lower volatility persistence during the second wave. The authors discovered magnified contagion effects between tourism and travel, hotel and lodgment and recreational services during the first wave of the pandemic with tourism and travel being the main volatility transmitter. Lower magnitudes of spillovers were observed between food and beverages and other sub-sectors with a decoupling effect being evident during the second wave.

This study’s findings contribute to the contagion theory by providing evidence of disproportional volatility spillover among hospitality sub-sectors despite being exposed to similar turbulent economic conditions.

Crucial implications can be drawn from this study’s findings to assist in risk management, asset valuation and portfolio management. The importance of close monitoring, safety measures, international diversification and adequacy of liquid assets during health crises cannot be stresses enough for hospitality firms. Retail investors, speculators and asset managers can take advantage of this study’s findings to design trading strategies and hedge against risk.

A body of knowledge pertaining to effects of crises such as COVID-19 on hospitality stocks has been proliferating. Nonetheless, there is still a relative dearth of empirical literature on volatility spillover between hospitality sub-sectors especially during periods of rising economic uncertainties.

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.

The increased capital requirements and the implementation of new liquidity standards under Basel III sparked various concerns among researchers, academics and other stakeholders. The question is whether Basel III regulation is ideal, that is, adequate to deal with a crisis, such as the 2007–2009 global financial crisis? The purpose of this paper is threefold: First, perform a stress testing exercise on the US banking sector, while examining liquidity and solvency risk indicators jointly under the Basel III regulatory framework. Second, allow the study to cover the post-crisis period, while referring to key Basel III regulatory requirements. And third, focus on the resilience of domestic systemically important banks (D-SIBs), which are supposed to support the US financial system in times of stress and therefore whose failure causes the entire financial system to fail.

The authors used a sample of the 24 largest US banks observed over the period Q1-2015 to Q1-2021 and a scenario-based vector autoregressive conditional forecasting approach.

The authors found that the model successfully produces accurate forecasts and simulates the responses of the solvency and liquidity indicators to different real and historical macroeconomic shocks. The authors also found that the US banking sector is resilient and can withstand both historical and hypothetical macroeconomic shocks because of its compliance with the Basel III capital and liquidity regulations, which consist of encouraging banks to hold high-quality liquid assets and stable funding resources and to strengthen their capital, which absorbs the losses incurred in a crisis.

The authors developed a framework for testing the resilience of the US banking sector under macroeconomic shocks, while examining liquidity and solvency risk indicators jointly under Basel III regulatory framework, a point not yet well studied elsewhere, and most studies on this subject are based on precrisis data. The authors also focused on the resilience of D-SIBs, whose failure causes the failure of the entire financial system, which previous studies have failed to examine.