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1 – 10 of 10Sampson Asiamah, Kingsely Opoku Appiah and Ebenezer Agyemang Badu
The purpose of this paper is to examine whether board characteristics moderate the relationship between capital adequacy regulation and bank risk-taking of universal banks in…
Abstract
Purpose
The purpose of this paper is to examine whether board characteristics moderate the relationship between capital adequacy regulation and bank risk-taking of universal banks in Sub-Saharan Africa (SSA).
Design/methodology/approach
The paper uses 700 bank-year observations of universal banks in SSA between 2009 and 2019. The paper further uses the two-step generalized method of moments as the baseline estimator.
Findings
The paper finds that capital adequacy regulation is positively related to overall bank and liquidity risks. Nonetheless, capital adequacy regulation increases credit risk in the sampled banks. The paper further reports that board characteristics individually and significantly moderate the relationship between capital adequacy regulation and risk-taking.
Practical implications
The findings have implications for regulators of universal banks that board characteristics matter for capital adequacy regulation to impact risk-taking behavior.
Originality/value
The paper extends the existing literature on the effect of board characteristics on the capital adequacy regulations and risk-taking behavior nexus of universal banks.
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Retselisitsoe I. Thamae and Nicholas M. Odhiambo
This paper aims to investigate the nonlinear effects of bank regulation stringency on bank lending in 23 sub-Saharan African (SSA) countries over the period 1997–2017.
Abstract
Purpose
This paper aims to investigate the nonlinear effects of bank regulation stringency on bank lending in 23 sub-Saharan African (SSA) countries over the period 1997–2017.
Design/methodology/approach
This study employs the dynamic panel threshold regression (PTR) model, which addresses endogeneity and heterogeneity problems within a nonlinear framework. It also uses indices of entry barriers, mixing of banking and commerce restrictions, activity restrictions and capital regulatory requirements from the updated databases of the World Bank's Bank Regulation and Supervision Surveys as measures of bank regulation.
Findings
The linearity test results support the existence of nonlinear effects in the relationship between bank lending and entry barriers or capital regulations in the selected SSA economies. The dynamic PTR estimation results reveal that bank lending responds positively when the stringency of entry barriers is below the threshold of 62.8%. However, once the stringency of entry barriers exceeds that threshold level, bank credit reacts negatively and significantly. By contrast, changes in capital regulation stringency do not affect bank lending, either below or above the obtained threshold value of 76.5%.
Practical implications
These results can help policymakers design bank regulatory measures that will promote the resilience and safety of the banking system but at the same time not bring unintended effects to bank lending.
Originality/value
To the best of the authors’ knowledge, this is the first study to examine the nonlinear effects of bank regulatory measures on bank lending using the dynamic PTR model and SSA context.
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Johann Valentowitsch, Michael Kindig and Wolfgang Burr
The effects of board composition on performance have long been discussed in management research using fractionalization measures. In this study, we propose an alternative…
Abstract
Purpose
The effects of board composition on performance have long been discussed in management research using fractionalization measures. In this study, we propose an alternative measurement approach based on board polarization.
Design/methodology/approach
Using an exploratory analysis and applying the polarization measure to German Deutscher Aktienindex (DAX)-, Midcap-DAX (MDAX)- and Small Cap-Index (SDAX)-listed companies, this paper applies the polarization index to examine the relationship between board diversity and performance.
Findings
The results show that the polarization concept is well suited to measure principal-agent problems between the members of the management and supervisory boards. We reveal that board polarization is negatively associated with firm performance, as measured by return on investment (ROI).
Originality/value
This exploratory study shows that the measurement of board polarization can be linked to performance differences between companies, which offers promising starting points for further research.
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Daniel Francois Dörfling and Euphemia Godspower-Akpomiemie
This study aims to identify the propensity for clients (legal and natural persons) to adopt peer-to-peer (P2P) short-term insurance policies as opposed to traditional and/or…
Abstract
Purpose
This study aims to identify the propensity for clients (legal and natural persons) to adopt peer-to-peer (P2P) short-term insurance policies as opposed to traditional and/or centralized short-term.
Design/methodology/approach
In this paper data was collected through a survey of 102 sampled short-term insurance clients using convenience sampling. The TAM2 questionnaire was adapted to evaluate the intention to adopt a P2P insurance policy.
Findings
The findings of this study shed light on the factors influencing the adoption and (dis)continuation of short-term insurance products, both traditional and digital, among South African consumers. The results demonstrate that perceived usefulness, ease of use, trust, risk perception and subjective norm play crucial roles in individuals' intention to use or (dis)continue the use of these insurance products.
Practical implications
The study's findings provide actionable insights for practitioners in the short-term insurance sector, with a focus on marketers and e-commerce professionals. These insights emphasize the need to prioritize user-friendly design and trust-building measures in the development of P2P insurance systems. Additionally, practitioners should consider harnessing the power of social influence and carefully balancing innovative features with familiarity in their marketing efforts. These strategies are poised to enhance the adoption and competitive positioning of P2P insurance solutions amidst the evolving landscape of digital transformation.
Originality/value
This study makes a substantial contribution by employing the technology acceptance model (TAM) in a novel and unconventional manner. It not only explicates the intricate dynamics governing the adoption and discontinuation of short-term insurance products, encompassing both conventional and digital alternatives, within the South African consumer milieu but also extends its purview to infer the reasons behind the limited widespread adoption of the digital counterpart, despite its superior value proposition compared to the traditional offering. The findings elucidate the critical determinants shaping individuals' decisions in this dynamic market segment. This research enhances the global discourse on insurance adoption with a unique South African perspective and furnishes insurers and marketers with empirically grounded insights to optimize their strategies and cultivate substantive connections with their target demographic.
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This study aims to explore a range of institutional, environmental and policy conditions that influence the creation of “bossless” or “flat” companies, i.e. firms with little or…
Abstract
Purpose
This study aims to explore a range of institutional, environmental and policy conditions that influence the creation of “bossless” or “flat” companies, i.e. firms with little or no formal hierarchy.
Design/methodology/approach
The author builds on the theory and evidence presented by Foss and Klein (2022) in their study of the costs and benefits of organizing without hierarchy. The author also draws on a variety of related theoretical insights and empirical evidence. The paper is exploratory and anecdotal though and is intended to motivate further research rather than provide a definitive account of bossless organizing.
Findings
The paper develops nine propositions. It suggests that high levels of economic freedom create maximum scope for entrepreneurs to experiment with different organizational forms (1). Likewise, a lack of economic freedom increases the scope for the government to experiment (2). Markets characterized by technological innovation and uncertainty are likely to discourage bossless organizing (3 and 4), while stagnating industries with major capital requirements are likely to encourage it (5). Labor market interventions that increase the cost of employment contracts sometimes encourage firms to flatten (6), but more generally, these interventions encourage expanding management layers (7). In environments with strong intellectual property (IP) laws, companies with more modular and knowledge-based work are more likely to flatten (8). The creation of low-hierarchy firms such as cooperatives is encouraged by public subsidies, access to cheap credit and preferential tax treatment (9).
Originality/value
Studies of bossless or flat firms focus almost exclusively on describing their internal organization and evaluating their performance; little attention is paid to the conditions that encourage or discourage the emergence of these firms. This paper focuses on the latter, with a view to encouraging more scholarly interest in this field.
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Arjun Pratap Upadhyay and Pankaj Kumar Baag
This paper reviews the literature on zombie firms to provide a holistic view by delineating their formation, impact, widespread nature, prevention and policy implications.
Abstract
Purpose
This paper reviews the literature on zombie firms to provide a holistic view by delineating their formation, impact, widespread nature, prevention and policy implications.
Design/methodology/approach
This paper uses a systematic literature review methodology, in which 76 papers published in journals ranked on the Australian Business Deans Council (ABDC) 2022 list were reviewed. The study period was from 2000 to 2022.
Findings
Among the main findings, the widespread problems of zombie firms were evident. The authors found that consistent support, either in the form of government grants or a weak financial framework, was responsible for their formation. The suboptimal performance of factors of production, depressed job creation, low innovation and overall negative impact on economic activity are the consequences of zombification. This can be controlled by ensuring better bankruptcy codes, focused on government assistance, technology use and better due diligence by banks.
Practical implications
This review serves as a reference point for future researchers as a cohesive and holistic study presenting a full picture of the problem, so that the proposed solutions are robust and tenable.
Originality/value
This review is among the initial attempts to comprehensively study published work on zombie firms in terms of analyzing their region-specific nature, with an emphasis on definition, causes, impact and prevention.
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Małgorzata Iwanicz-Drozdowska, Łukasz Kurowski and Bartosz Witkowski
This paper aims to evaluate the role of depositor-specific features in a bank resolution. As the resolution framework in the EU is rather new, there are no empirical studies…
Abstract
Purpose
This paper aims to evaluate the role of depositor-specific features in a bank resolution. As the resolution framework in the EU is rather new, there are no empirical studies referring to the efficiency of this mechanism in protecting financial stability. Thus, the authors have checked the role of societal awareness of deposit guarantee schemes and the resolution, as well as the trust in public institutions, in avoiding bank runs in the case of resolution scenarios.
Design/methodology/approach
The study is based on telephone interviews conducted with 1,000 Poles, including bank customers whose banks have undergone resolution in recent years, and basic statistics of the resolved banks. The authors then apply two classes of models: binary probit regression and ordered probit regression.
Findings
The findings have indicated that the trust in public institutions and the experience gained with age play a key role in overall depositor behaviour. However, for resolutions, declared trust is replaced by case-specific trust based on the obtained information.
Research limitations/implications
The survey is based on a sample of Polish citizens. In the future, international surveys may help diagnose cross-country differences among depositors. Moreover, studies on communication approaches may also support finding highly effective ways to reach various cohorts of depositors.
Originality/value
The existing literature on depositor behaviour in bank failure scenarios has relied on an experimental approach to test various research hypotheses. The research sample is not based on an experiment but on the responses of customers whose banks have actually undergone resolution.
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Sarit Biswas, Sharad Nath Bhattacharya, Justin Y. Jin, Mousumi Bhattacharya and Pradip H. Sadarangani
This paper empirically investigates whether trade openness (TO) in Brazil, Russia, India, China and South Africa (BRICS) countries affects how banks might employ loan loss…
Abstract
Purpose
This paper empirically investigates whether trade openness (TO) in Brazil, Russia, India, China and South Africa (BRICS) countries affects how banks might employ loan loss provisions (LLPs) to smooth out their earnings and how adopting the International Financial Reporting Standards (IFRS) can mitigate it.
Design/methodology/approach
The analysis includes 78 commercial banks from five BRICS nations and spans 2014 through 2020. To test these hypotheses, the authors utilized a fixed-effect and two-step system panel generalized methods of moments (GMM) estimator.
Findings
TO positively affects income smoothing (earnings management) across BRICS commercial banks. The effect is clearer in banks that make financial reports under the IFRS. Path analysis reveals that the effect of TO is driven by nonperforming loans (NPLs). Additionally, the IFRS restricts earnings management in the BRICS banking sector when a better institutional environment is present. The authors found that accounting rules (IFRS) and enforcement (better institutional settings) interact to enhance earnings’ quality.
Practical implications
The relationship between TO and bank earnings management practices is important for understanding the complex interplay between trade and finance and ensuring financial stability, investor confidence and regulatory compliance. This study recommends better regulations and governance mechanisms for financial reports in emerging nations like BRICS. Additionally, macro-prudential regulators and banking supervisors should work closely to ensure transparent TO decisions with improved discipline, institutional quality and regulatory support to enhance bank stability.
Originality/value
The study finds evidence of bank income smoothing in the BRICS and introduces TO as a determinant. It also identifies the evolving role of IFRS in the presence of higher institutional quality and TO, thereby expanding the financial reporting literature.
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Walter Leal Filho, Laís Viera Trevisan, João Henrique Paulino Pires Eustachio, Izabela Simon Rampasso, Rosley Anholon, Johannes Platje, Markus Will, Federica Doni, Muhammad Mazhar, Jaluza Maria Lima Silva Borsatto and Carla Bonato Marcolin
This study aims to investigate how sustainability and ethics are being addressed both by the literature and companies. Furthermore, it seeks to identify the specific strategies…
Abstract
Purpose
This study aims to investigate how sustainability and ethics are being addressed both by the literature and companies. Furthermore, it seeks to identify the specific strategies that these companies use to foster ethical behaviour and promote sustainability in their business operations.
Design/methodology/approach
The study entails a bibliometric analysis and a set of case studies from a sample of companies working in different industry sectors. Based on these tools, it analyses whether – and how – enterprises are placing an emphasis on sustainability and ethics as part of their businesses. In addition, the selected companies' unethical practices or socially irresponsible corporate activities were investigated and presented.
Findings
The findings suggest that using an ethics perspective can be a valuable tool in improving the accuracy and correctness of business decision-making. In addition, the paper has identified the fact that sustainability standards can be used to improve customer satisfaction as many important issues are addressed. Finally, the paper highlights the importance of ethical considerations when designing and implementing sustainability standards at enterprises and the need for regulatory guidance in this regard.
Originality/value
The paper addresses the need for studies on how sustainability and ethics are being discussed by both the literature and companies. The paper presents some elements that can be used as possible corporate indicators for a wider implementation of sustainability and ethics objectives in enterprises.
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Sharad Sharma, Rajesh Kumar Singh, Ruchi Mishra and Nachiappan (Nachi) Subramanian
This study aims to address three research questions pertaining to climate neutrality within the supply chain of metal and mining industry: (1) How can an organization implement…
Abstract
Purpose
This study aims to address three research questions pertaining to climate neutrality within the supply chain of metal and mining industry: (1) How can an organization implement practices related to climate neutrality in the supply chain? (2) How do members of the supply chain adopt different measures and essential processes to assist an organization in responding to climate change-related concerns? (3) How can the SAP-LAP framework assist in analyzing and proposing solutions to attain climate neutrality?
Design/methodology/approach
To address the proposed research questions concerning climate neutrality, this study employs a case study approach utilizing the SAP-LAP (situation, actor, process–learning, action, performance) framework. Within the SAP-LAP framework, adopting a natural resource-based perspective, the study thoroughly examines the intricacies and interactions among existing situations, pertinent actors and processes that impact climate initiatives within a metal and mining company.
Findings
The study's findings suggest that organizations can achieve the objective of climate neutrality by prioritizing resources and capabilities that lead to reduced GHG emissions, lower energy consumption and optimal resource utilization. The study further proposes key elements that significantly influence the pursuit of climate neutrality within enterprises.
Research limitations/implications
This study is one of the earliest contributions to the development of a holistic understanding of climate neutrality in the supply chain of the metal and mining industry.
Practical implications
The study will assist practitioners and policymakers in comprehending the present circumstances, actors and processes involved in enterprises' supply networks in order to attain climate neutrality in supply chains, as well as in taking the right steps to enhance performance.
Originality/value
This study presents a climate neutrality model and provides valuable insights into emission management, contributing to the achievement of the climate neutrality objective.
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