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Fears over public accounting becoming increasingly concentrated have inspired several attempts to study the relationship between competition and audit quality. These studies have yielded conflicting results without a clear reason as to why. This paper aims to propose a new approach and empirically demonstrate a non-monotonic association between competition and audit quality.

Using metropolitan statistical area level data from the USA over the period of 2000–2014, the author shows that the effect that changes in the competition will have on audit quality depends upon the current competitive state of the market.

Audit quality is at its highest level when competition is neither too high nor too low. In addition, the point of inflection at which competition turns from being helpful to harmful is influenced by the saturation of the Big 4 auditors in the market.

These findings can help explain the mixed results of the literature and provide insight into the role that regulators can play in modulating competition.

This is the first paper to document a non-monotonic relationship between competition and audit quality. By introducing and exploring the validity of a non-monotonic component in the audit quality equation, the authors can better determine, which competitive structures generate desired levels of audit quality.

The purpose of this paper is to investigate whether a non-monotonic relationship may exist between financial distress and foreign exchange (FX) exposure. The authors hypothesize that firms with higher FX exposures are those with the lowest levels of financial distress because the costs of hedging exceed the benefits and those with highest levels of financial distress due to the conflict of interest between shareholders and bondholders.

The methodology allows for the possibility of a non-monotonic relation between financial distress and FX exposure for firms known to have ex-ante exposures. The approach is to include a Black-Scholes-Merton financial distress measure and standard accounting-based financial distress measures.

The results support the hypothesis of a non-monotonic relationship between financial distress and exposure; companies with the lowest and highest levels of financial distress are willing to bear greater FX exposures.

The authors examine whether a non-monotonic relationship may exist between distress and FX exposure. Intuition for this non-monotonic relationship is provided by Stulz (1996) as he describes the risk management practices of firms with low, medium, and high default probabilities.

The purpose of this paper is to explore the effects of large shareholdings from the agency problem perspective of overinvestment, and re‐test the role of board independence in the context of concentrated ownership.

Using a five‐year panel data of Chinese non‐financial listed companies between 2001 and 2005, the paper estimates both a fixed‐effects model and a random‐effects model.

The paper finds evidence of a significant non‐monotonic relationship between large shareholdings and firm level overinvestment. It also finds that state‐owned firms and firms with more independent directors experience lower level of overinvestment. However, firms with more frequent meetings experience a higher level of overinvestment.

The paper's findings indicate that concentrated ownership is not always a bad thing. The crux of the matter is how to induce large shareholders' incentive to monitor managers' opportunistic behaviors and restrict their motivation to expropriate minority shareholders.

In the context of concentrated ownership, the key to improve corporate governance is to strengthen board independence.

The paper provides useful information on non‐monotonic governance effects of large shareholdings in Chinese listed companies and overinvestment.

The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.

This study uses the Johansen cointegration test to examine the presence of long‐run equilibrium relationship between labour productivity and real wages in Malaysia. In addition, the Granger causality test within the vector error‐correction model (VECM) is used to ascertain the direction of causality between the variables of interest.

The Johansen test suggests that real wages and labour productivity are cointegrated. Moreover, labour productivity and real wages have a quadratic relationship (i.e. inverted U‐shaped curve) instead of linear relationship. Hence, the effect of real wages on labour productivity is non‐monotonic. Furthermore, the Granger causality test indicates that real wages and labour productivity are bilateral causality in nature.

This study is limited to the labour productivity in the manufacturing sector only.

This study demonstrates that the effect of real wages on labour productivity is non‐monotonic; hence increase in real wages alone does not always enhance labour productivity. Thus, other incentives should be offered to stimulate long‐term labour productivity growth in Malaysia.

This study examines the impact of initial informality years on subsequent firm performance and the moderating effect of institutional quality on this relationship.

The study draws on the World Bank Enterprises Survey (WBES) data covering 116 developing economies over the 2006–2018 period. The study also utilizes data from the Heritage Foundation, the World Bank World Development Indicators (WDI) and the Fraser Institute Economic Freedom Database.

The study demonstrates that firms that start operation without formal registration perform better than firms that start operation formally. However, contrary to prior studies that show a linear relationship between time spent unregistered and subsequent firm performance, this study finds a non-monotonic relationship between the two – taking an inverted–U shape form. The study further shows that institutional quality at country level moderates this relationship such that firms operating in countries marked by poorly functioning formal institutions benefit from remaining unregistered longer.

This study is the first to show a non-monotonic relationship between the time firms spend without registration and their subsequent performance. By doing so, it reconciles the contradicting findings in the extant literature regarding the relationship between the two variables. It also identifies one important boundary condition – institutional quality – that moderates this relationship.

To study the steady viscous incompressible electrically conducting fluid flow past a circular cylinder under the influence of an external magnetic field at high Reynolds numbers (Re).

The finite difference method is applied to solve the governing non‐linear Navier‐Stokes equations. First order upwind difference scheme is applied to the convective terms. The multigrid method with coarse grid correction is used to enhance the convergence rate. The defect correction technique is employed to achieve the second order accuracy.

A non‐monotonic behavior in separation angle when N≥5 and separation length when N≥3 is found with the increase of external magnetic field. The drag coefficient is found to increase with increase of N. The pressure drag coefficient, total drag coefficient and rear pressure are found to exhibit a linear dependence with N^0.5. The pressure Poisson equation is solved to find pressure fields in the flow region. It is found that the upstream base pressure increases with increase of external magnetic field while the downstream base pressure decreases with the increase of the external magnetic field.

The non‐monotonic behaviors in the separation angle and separation length at high Re are explained through pressure fields which are found first time for this problem. The linear dependence of the pressure drag coefficient, total drag coefficient and the pressure at rear stagnation point with N^0.5 is in agreement with experimental findings.

This study aims to investigate the influence of macro-financial conditions on firm-level capital allocation as a micro-transmission mechanism of monetary policy in Vietnam.

The authors employ a dynamic model of investment based on the Euler equation approach that allows for financial frictions. The financial conditions are proxied by a composite index of the current states of financial variables, including interest rates, exchange rates, stock prices, and credit demand – which captures short-term shocks in monetary transmission channels. Corporate financing constraints, as a reflection of financial frictions, are measured by the sensitivity of investment to internal funds, which are extensively examined in terms of both negative and positive cash flows.

In the presence of a non-monotonic (or U-shaped) investment–cash flow relation, the empirical evidence from Vietnamese listed firms indicates that financial conditions affect investment behavior for only firms with negative cash flows, in the sense that better financial conditions alleviate the level of “negative” financing constraints (i.e. the sensitivity of investment to negative cash flow). This effect is greater for larger firms and more likely pronounced for firms without state ownership.

This study contributes to the literature on corporate financing constraints in a manner of considering the macroeconomic dimension, specifically exploring the asymmetric impacts of financial conditions on the investment sensitivity to cash flow.

This paper applies a volume-price probability wave differential equation to propose a conceptual theory and has innovative behavioral interpretations of intraday dynamic market equilibrium price, in which traders' momentum, reversal and interactive behaviors play roles.

The authors select intraday cumulative trading volume distribution over price as revealed preferences. An equilibrium price is a price at which the corresponding cumulative trading volume achieves the maximum value. Based on the existence of the equilibrium in social finance, the authors propose a testable interacting traders' preference hypothesis without imposing the invariance criterion of rational choices. Interactively coherent preferences signify the choices subject to interactive invariance over price.

The authors find that interactive trading choices generate a constant frequency over price and intraday dynamic market equilibrium in a tug-of-war between momentum and reversal traders. The authors explain the market equilibrium through interactive, momentum and reversal traders. The intelligent interactive trading preferences are coherent and account for local dynamic market equilibrium, holistic dynamic market disequilibrium and the nonlinear and non-monotone V-shaped probability of selling over profit (BH curves).

The authors will understand investors' behaviors and dynamic markets through more empirical execution in the future, suggesting a unified theory available in social finance.

The authors can apply the subjects' intelligent behaviors to artificial intelligence (AI), deep learning and financial technology.

Understanding the behavior of interacting individuals or units will help social risk management beyond the frontiers of the financial market, such as governance in an organization, social violence in a country and COVID-19 pandemics worldwide.

It uncovers subjects' intelligent interactively trading behaviors.

This paper aims to examine the effect of capital structure on Islamic banks’ (IBs) performance to provide guidance to finance managers for raising capital funds. As newcomers to the markets, IBs are facing a trade-off. They can either use high capital ratios which increase the soundness and safety of the bank and lower the required return by investors, or depend on deposits and Islamic bonds which are considered cheaper sources of funds due to their tax rebate. An IB’s management must carefully decide the appropriate mix of debt and equity, i.e. capital structure, to maximize the value of the bank.

Using a sample of 85 IBs covering banking systems in 19 countries, the study uses a two-stage least squares method to examine the performance determinants of IBs to control the reverse causality from performance to capital structure.

After control of the macroeconomic environment, financial market structure and taxation, results indicate that IBs’ performance (profitability) responds positively to an increase in equity (capital ratio). The result is consistent with the signaling theory which predicts that banks expected to have better performance credibly transmit this information through higher capital. Optimal capital structure results of the IBs found a non-monotonic U-shaped relationship between the capital-asset ratio and profitability, supporting the efficiency risk and franchise value hypotheses.

Due to limitations for market data, the study uses book accounting ratios. Future research where market data are available could use performance measures, such as Tobin’s Q in performance determinants models.

The non-monotonic relationship found between IBs’ return on equity and capital ratios suggests that equity issuances for IBs’ with low capital ratios (lower than the turning point of 37.41 per cent) are expensive and have a negative effect on their profitability. On the other hand, managers of well-capitalized IBs (banks with capital ratios beyond 37.41 per cent) are advised to rely on equity when faced by a decision to raise capital, as the capital ratio starts to affect their profitability positively.

Islamic banking literature has been silent on IBs’ capital structure and its relevance; this study will try to fill in the existent gap.

In general, the return from participation in MNREGA will be highest for those women whose mobility and social interaction is least impeded by conservative social norms. However, if any intervention enhances knowledge base, or challenges traditional norms of gender, then return from that intervention may be highest for those women impede most by conservative social norms. It may be interpreted as non-monotonic effect of restrictedness across caste and religion. The purpose of this paper is to examine non-monotonicity hypothesis of social restrictedness for the intervention MNREGA.

Using primary data from three districts of West Bengal, the paper has tried to see whether there exists any non-monotonic effect of restrictedness on household’s “expenditure on consumption,” “expenditure on temptation good,” “expenditure on women’s health” and “expenditure on children’s education and health” across castes and religion. The sample is relatively homogeneous in terms of socio economic status, but differs in affiliation to castes and religion.

As a result of participating the labor force through MNREGA, the contribution of women to household earnings increases, which may potentially increase their bargaining power within the household. The conventional notion is that women who are least fettered by social norms should get maximum benefits of participation in MNREGA. However, the analysis shows that women of upper caste (UC) community have been able to exercise the highest level of agency in allocating household resources compared to the women of scheduled caste community. It substantiates the non-monotonicity of restrictedness of social norms across castes and religions. Agency of Muslim women has not increased significantly compared to the UC women.

The study suffers from usual limitations of sampling.

There is hardly any study deciphering MNREGA from the perspective of caste, religion and gender.