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The present study assesses the commercial bank profit efficiency and its relationship to banking sector competition in a rapidly growing emerging economy, India from 2009 to 2019 using stochastic frontier analysis (SFA).

Lerner indices, conventional and efficiency-adjusted, quantify competition. Two SFA models are employed to calculate alternative profit efficiency (inefficiency) scores: the two-step time-decay approach proposed by Battese and Coelli (1992) and the recently developed single-step pairwise difference estimator (PDE) by Belotti and Ilardi (2018). In the first step of the BC92 framework, profit inefficiency is calculated, and in the second step, Tobit and Fractional Regression Model (FRM) are utilized to evaluate profit inefficiency correlates. PDE concurrently solves the frontier and inefficiency equations using the maximum likelihood process.

The results suggest that foreign banks are less profit efficient than domestic equivalents, supporting the “home-field advantage” hypothesis in India. Further, increasing competition drives bank managers to make riskier lending and investment choices, decreasing bank profit efficiency. However, this effect varies depending on bank ownership and size.

Literature on the competition bank efficiency link is conspicuously scant, with a focus on technical and cost efficiency. Less is known regarding the influence of competition on bank profit efficiency. The article is one of the first to examine commercial bank profit efficiency and its relationship to banking sector competition. Additionally, the study work represents one of the first applications of the FRM presented by Papke and Wooldridge (1996) and the PDE provided by Belotti and Ilardi (2018).

This paper aims to investigate the impact of corporate governance practices on cost efficiency and financial stability for a sample of Islamic and conventional banks. In the analysis, the author uses a set of corporate governance variables that include, the board size, board independence, director gender, board meetings, board attendance, board committees, chair independence and CEO characteristics.

The author uses corporate governance data of Islamic banks that is unique in this field. In the analysis, the author also uses stochastic frontier analysis and panel vector autoregression models to quantify long-run and short-run statistical relationships between the operational efficiency of Islamic Banks and corporate governance practices.

According to the results, Islamic and conventional banks exhibit important differences in the effects of corporate governance practices on cost efficiency and financial stability. Results show that with a blind general adoption of corporate governance practices, Islamic banks may suffer a loss in their value since the adoption of the third layer of binding practices, over and above the already existing ones, imposed by the Sharia Board and the Board of Directors, may lead to cumbersome business operations. This conclusion is of importance to Islamic Banks since they struggle to survive in a very competitive international environment.

The author believes that the results may be of a certain value to regulators, policymakers and managers of Islamic banks. Based on the results, the author postulate that Islamic banks should select carefully international corporate governance practices.

Islamic banks should not adopt additional third layer of binding practices as that would result lower performance and instability that would be damaging for the economy

This study employs a unique sample of Islamic banks that includes corporate governance data hand collected. Our findings of the corporate governance impact on Islamic banks performance and stability are therefore unique in the literature.

This study aims to examine the effects of board structures (BS) on the financial performance and stability of banks in Africa.

Using annual data of 366 banks from 26 African countries from 2007 to 2015, the study estimates growths in financial performance using net interest margin and risk-adjusted return on assets; bank stability using z-scores; and BS using board size, board independence and board gender diversity. The system generalized method of moments and ordinary least squares panel-corrected standard error estimation strategies are used to estimate panel regressions.

The study concludes that board independence has a negative and significant relationship with financial stability but has diverse relationships with financial performance. Board size and board gender diversity have insignificant relationships with financial performance and stability.

The study has relevant implications for practitioners, policymakers and the academic community. The findings provide evidence of the extent to which BS have been instituted to influence the financial profitability and stability of banks in Africa.

This study offers robust evidence on the role of BS in the performance and stability of banks; using a multidimensional conceptualization of the performance and stability of banks in 26 countries in Africa.

This paper aims to examine the relationship between economic freedom and Islamic rural banks' efficiency in the case of Indonesia.

The study covers 40 Islamic rural banks in 34 Indonesian regions from 2014 to 2020. Tobit regression is utilized to expose the impact of economic freedom on the efficiency of Islamic rural banks, and nonparametric frontier data envelopment analysis is used to acquire banks' technical efficiency.

The findings reveal that overall economic freedom has a strong favorable impact on the efficiency of Islamic rural banks. The study’s breakdown components suggest that business freedom, government spending and investment freedom are favorable indicators, whereas government integrity and tax burden are negative indicators, and all indicators agree with previous studies.

This research can serve as a guideline for Islamic rural bank management in terms of maintaining financial efficiency. The government should think about the ramifications of financial sector liberalization and reforms, according to these findings. When financial intermediaries operate in a less constrained environment, they are more likely to pursue competitive practices that increase their operating rate and other efficiency metrics. Finally, academics might utilize this information to investigate the economic flexibility of Islamic rural banks.

The novelty of this study is in using data envelopment analysis and Tobit regression to identify economic freedom and Islamic rural banks' efficiency. To the best of the authors' knowledge, the study of the role of economic freedom in Islamic rural bank's efficiency is limited, particularly in the context of Indonesia.

This study aims to investigate the presence of the audit partner ethnicity on audit fees within the Indonesian context.

The sample consists of 803 firm-year observations from the Indonesia Stock Exchange during the period of 2014–2018. The study uses fixed-effect regression analysis to examine the relationship between audit partner ethnicity and audit fees.

This study reveals that firms audited by audit partners from the main ethnic group demonstrate lower audit fees, indicating a more extensive audit business network for this particular group of auditors compared to those from minority ethnic groups. Particularly, the study finds that firms audited by audit partners from the three largest ethnicities, namely, Balinese, Javanese and West Sumatranese, are associated with lower audit fees compared to others. These findings further contribute to the existing narrative and literature that highlight the ethnic background of audit partners as a form of social capital that influences lower audit fees.

This study provides valuable practical and academic implications regarding the impact of audit partner ethnicity on audit fees. The findings highlight the importance for audit firms to strive for a balanced representation of ethnic diversity in their auditor characteristics, as it can positively influence both governance and marketing strategies. By recognizing and addressing the significance of ethnic diversity among audit partners, firms can enhance their overall effectiveness and success in the auditing profession.

This study makes a unique contribution by providing empirical data on audit pricing theory in Indonesia, specifically focusing on the role of ethnic diversity as a determinant of audit pricing. Previous research has not extensively explored the connection between auditor ethnicity and audit fees, particularly in relation to the business network as a channel mechanism. The theoretical explanations for the fee differentials have also been limited in prior studies. The current study addresses this gap by offering a theoretical basis that highlights the advantage of the dominant ethnic group in establishing an efficient audit market system. Consequently, these auditors are able to charge lower fees to clients without compromising on the quality of their services. This finding aligns with the existing literature on audit fees and underscores the importance of the main ethnic group in fostering an effective audit market, resulting in lower audit fees compared to mixed audit markets.

This study aims to investigate window dressing as practiced by commercial banks in Kuwait, using monthly aggregate balance sheet data covering the period January 1993 to December 2017.

This study applies the structural time series model to decompose an observed time series into unobserved components based on monthly data covering January 1993 to December 2017 on the consolidated balance sheet of commercial banks in Kuwait.

The empirical results indicate that Kuwaiti commercial banks indulge in upward window dressing to boost size and liquidity. This kind of behaviour is indicated by a statistically significant rise in assets under the control of banks in December, followed by a statistically significant decline in January. The operation is funded by borrowing, leading to a December rise and a January fall in foreign and other liabilities, which are also under the control of commercial banks.

This study uses a novel methodology to detect window dressing based on the seasonal behaviour of balance sheet items. This study suggests a unified framework for the motives, targets, types and consequences of window dressing and how they are related.

The financial system has witnessed the substantial growth of financial technology (fintech) firms. One of the strategies that banks have adopted to cope with this emergence is to cooperate with fintech firms. This study empirically investigated whether cooperation between banks and fintech companies would improve banks’ risk-adjusted returns.

We developed a novel index of bank–fintech cooperation across various fintech sectors. A system generalized method of moments (GMM) was used to examine this relationship using a sample of Vietnamese banks from 2007 to 2019.

The findings show that the diversity of bank–fintech cooperation across seven sectors tends to enhance banks’ risk-adjusted returns. The results also highlight that this relationship may depend on the types of fintech sectors and bank ownership. More specifically, the positive association between this cooperation and banks’ risk-adjusted returns only holds in the comparison sector of fintech, whereas there is a negative relationship between them in the payments and mobile wallets sector. Furthermore, state-owned commercial banks that engage in more bank–fintech cooperation tend to generate greater earnings. If we look at listed banks, the positive effect of bank–fintech partnerships on risk-adjusted returns still holds. A similar result was also found in the case of large banks.

Our empirical evidence provides motivations for incumbent banks to implement appropriate strategies toward diversity in bank–fintech partnerships when fintech firms have engaged in various financial segments.

This study adds more evidence to the existing literature on the relationship between bank–fintech cooperation and bank performance.

This study aims to assess how corporate telecommunication (telecom) policies follow telecom sector regulation in mobile money innovation for financial inclusion in developing countries.

Telecom policies are understood in terms of mobile subscriptions, mobile connectivity coverage and mobile connectivity performance, whereas mobile money innovations represent mobile money accounts, the mobile used to send money and the mobile used to receive money. The empirical evidence is based on Tobit regressions.

Telecom sector regulation positively influences mobile money innovations. From net influences, mobile subscriptions and connectivity policies moderate telecom sector regulation to positively influence mobile money innovations, exclusively within the remit of mobile money accounts because the corresponding net influences on the mobile used to send money and the mobile used to receive money are negative. The interactive influences are consistently negative, and hence, thresholds for complementary policies are provided to maintain the positive influence of telecom sector regulation on mobile money innovations.

This study has complemented the extant literature by assessing how corporate telecommunication policies follow telecommunication sector regulation in mobile money innovations for financial inclusion.

The purpose of this Real Impact Viewpoint Article is to analyze the quiet quitting phenomenon from the human capital management perspective.

The methods comprise the analysis of 672 TikTok comments, the use of secondary data and literature review.

Quiet quitting is a mindset in which employees deliberately limit work activities to their job description, meet yet not exceed the preestablished expectations, never volunteer for additional tasks and do all this to merely maintain their current employment status while prioritizing their well-being over organizational goals. Employees quiet quit due to poor extrinsic motivation, burnout and grudges against their managers or organizations. Quiet quitting is a double-edged sword: while it helps workers avoid burnout, engaging in this behavior may jeopardize their professional careers. Though the term is new, the ideas behind quiet quitting are not and go back decades.

Employees engaged in quiet quitting should become more efficient, avoid burnout, prepare for termination or resignation and manage future career difficulties. In response to quiet quitting, human capital managers should invest in knowledge sharing, capture the knowledge of potential quiet quitters, think twice before terminating them, conduct a knowledge audit, focus on high performers, introduce burnout management programs, promote interactional justice between managers and subordinates and fairly compensate for “going above and beyond.” Policymakers should prevent national human capital depletion, promote work-life balance as a national core value, fund employee mental health support and invest in employee efficiency innovation.

This Real Impact Viewpoint Article analyzes quiet quitting from the human capital management perspective.

The purpose of this paper is to examine the effect of stock price crash risk on the adoption of poison pills.

The authors estimate logit and probit regressions. Their sample includes 185 Brazilian public firms for the period 2010–2018. Following previous studies, the authors use the negative skewness of firm-specific weekly returns and the down-to-up volatility of firm-specific weekly returns as measures of firm's stock price crash risk. As proxies of poison pills, the authors employ the “conventional” poison pills in their baseline models and the “eternity” poison pills, which prevent the removal of poison pills from bylaws, in additional models.

The authors find that stock price crash risk measures are not associated with poison pill adoption. However, although stock price crash risk does not lead to poison pill adoption as a complementary corporate governance mechanism that protects firms against hostile takeover attempts, further results show that managers do not draw on stock price crash risk as a pretext to entrench themselves. Additional analyses also highlight that CEO power seems to play a role in moderating the relationship between stock price crash risk and eternity poison pill adoption.

The authors contribute to the literature on stock price crash risk, which calls for research in international contexts to better understand the effect of stock price crash risk on country-specific idiosyncratic features. The authors discuss a controversial anti-takeover mechanism that has been debated by Brazilian policymakers.