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1 – 10 of over 4000Samir Trabelsi and Amna Chalwati
This paper examines the relationship between poison pills, real earnings management and initial public offering (IPO) failure.
Abstract
Purpose
This paper examines the relationship between poison pills, real earnings management and initial public offering (IPO) failure.
Design/methodology/approach
The authors sampled 2,997 IPO firms that went public during 1993-2015.
Findings
The authors find that IPO firms manipulate earnings upward using real earnings management. The authors also find that IPO firms exhibiting a higher level of real earnings management have a higher probability of IPO failure. In addition, the authors find that weak shareholders' governance is positively associated with IPO failure.
Practical implications
These results suggest that poor governance structures in failed firms open the door to manipulating real activities and increasing operational risk.
Originality/value
The study findings are of most significant interest to potential investors and other stakeholders affiliated with a firm going public, an auditor, an underwriter, the lawyers who consult with the firm and employees or executives who might consider joining that firm.
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Hassan Akram and Khalil ur Rahman
This study aims to examine and compare the credit risk management (CRM) scenario of Islamic banks (IBs) and conventional banks (CBs) in Pakistan, keeping in view the phenomenal…
Abstract
Purpose
This study aims to examine and compare the credit risk management (CRM) scenario of Islamic banks (IBs) and conventional banks (CBs) in Pakistan, keeping in view the phenomenal growth of Islamic banking and its future implications.
Design/methodology/approach
A sample of five CBs and four IBs was chosen out of the whole banking industry for the study. Secondary data obtained from the banks’ annual financial reports for 13 years, starting from 2004 to 2016, were analyzed. Multiple regression, correlation and descriptive analysis were used in the examination of the data.
Findings
The results show that loan quality (LQ) has a positive and significant impact on CRM for both IBs and CBs. Asset quality (AQ), on the other hand, has a negative impact on CRM in the case of IBs, but has a significantly positive relation with CRM in the case of CBs. The impact of 16 ratios measuring LQ and AQ have also been individually checked on CRM, by making use of a regression model using a dummy variable of financial crises for robust comparison among CBs and IBs. The model proved significant, and CRM performance of IBs was observed to be better than that of CBs. Moreover, the mean average value of financial ratios used as a measuring tool for these variables shows that the CRM performance of IBs operating in Pakistan was better than that of CBs over the period of the study.
Practical implications
The research findings are expected to facilitate bankers, investors, academics and policy makers to build a better understanding of CRM practices as adopted by CBs and IBs. The findings would be useful in formulating policy measures for the progress of the banking industry in Pakistan.
Originality/value
This research is unique in terms of its approach toward analyzing and comparing CRM performance of CBs and IBs. Such work has not been carried out before in the Pakistani banking industry.
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Graça Azevedo, Jonas Oliveira, Luiza Sousa and Maria Fátima Ribeiro Borges
The purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.
Abstract
Purpose
The purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.
Design/methodology/approach
The paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.
Findings
Findings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.
Research limitations/implications
The content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.
Originality/value
The current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.
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Hoa Thi Nguyen and Dung Thi Nguyet Nguyen
The purpose of this paper is to examine the determinants of mutual funds’ performance at both a country level and a fund level in Vietnam.
Abstract
Purpose
The purpose of this paper is to examine the determinants of mutual funds’ performance at both a country level and a fund level in Vietnam.
Design/methodology/approach
The different types of funds with more than three-year operation are selected to remove outliers of the stock market boom from 2015 to 2018. The data set includes 54 mutual funds operating during the period from 2008 until November 2018.
Findings
The research finds that there is a positive relationship between macroeconomics and mutual funds’ performance. Furthermore, country-level governance such as regulation effectiveness, political stability, economic growth and financial development has a positive correlation with mutual funds’ performance. However, the impact of fund-level factors is diverse with the no significant impact of board size on mutual fund’s performance, while passive funds perform better than active funds in Vietnam.
Practical implications
The research results suggest that investors should pay attention to the types of funds and operating expense when making an investment decision in mutual funds. There are some recommendations for both government policy-makers and the mutual fund industry that are likely to facilitate the development of this field in Vietnam.
Originality/value
The research contributes to the understanding of what are the factors that should be considered when investing in mutual funds.
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Reginald Masimba Mbona and Kong Yusheng
The Chinese Telecoms Industry has been rapidly growing over the years since 2001. An analysis of financial performance of the three giants in this industry is very important…
Abstract
Purpose
The Chinese Telecoms Industry has been rapidly growing over the years since 2001. An analysis of financial performance of the three giants in this industry is very important. However, it is difficult to know how many ratios can be used best with little information loss. The paper aims to discuss this issue.
Design/methodology/approach
A total of 18 financial ratios were calculated based on the financial statements for three companies, namely, China Mobile, China Unicom and China Telecom for a period of 17 years. A principal component analysis was run to come up with variables with significance value above 0.5 from each component.
Findings
At the end, the authors conclude how financial performance can be analysed using 12 ratios instead of the costly analysis of too many ratios that may be complex to interpret. The results also showed that ratios are all related as they come from the same statements, hence, the authors can use a few to represent the rest with limited loss of information.
Originality/value
This study will help different stakeholders who are interested in the financial performance of each company by giving them a shorter way to analyse performance. It will also assist those who do financial reporting on picking the ratios which matter in reflecting the performance of their companies. The use of PCA gives unbiased ratios that are most significant in assessing performance.
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Abdel Latef M. Anouze and Imad Bou-Hamad
This paper aims to assess the application of seven statistical and data mining techniques to second-stage data envelopment analysis (DEA) for bank performance.
Abstract
Purpose
This paper aims to assess the application of seven statistical and data mining techniques to second-stage data envelopment analysis (DEA) for bank performance.
Design/methodology/approach
Different statistical and data mining techniques are used to second-stage DEA for bank performance as a part of an attempt to produce a powerful model for bank performance with effective predictive ability. The projected data mining tools are classification and regression trees (CART), conditional inference trees (CIT), random forest based on CART and CIT, bagging, artificial neural networks and their statistical counterpart, logistic regression.
Findings
The results showed that random forests and bagging outperform other methods in terms of predictive power.
Originality/value
This is the first study to assess the impact of environmental factors on banking performance in Middle East and North Africa countries.
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Md. Bokhtiar Hasan, Md Mamunur Rashid, Md. Naiem Hossain, Mir Mahmudur Rahman and Md. Ruhul Amin
This research explores the spillovers and portfolio implications for green bonds and environmental, social and governance (ESG) assets in the context of the rapidly expanding…
Abstract
Purpose
This research explores the spillovers and portfolio implications for green bonds and environmental, social and governance (ESG) assets in the context of the rapidly expanding trend in green finance investments and the need for a green recovery in the post-COVID-19 era.
Design/methodology/approach
This study utilizes Diebold and Yilmaz’s (2014) spillover method and portfolio strategies (hedge ratio, optimal weights and hedging effectiveness) for the data starting from February 29, 2012, to March 14, 2022.
Findings
The study’s findings reveal that the lower volatility spillover is evidenced between the green bonds and ESG stocks during tranquil and turbulent periods (e.g. COVID-19 and Russia-Ukraine War). Furthermore, hedging costs are lower both in normal times and during economic slumps. Investing the bulk of the funds in green bonds makes it possible to achieve maximum hedging effectiveness between the S&P green bond (GB) and the S&P 500 ESG.
Practical implications
Both investors and policymakers may use these findings to make wise investment and policy choices to achieve post-COVID environmental sustainability.
Originality/value
Unlike previous research, this is the first to explore the interconnectedness among the major global and country-specific green bonds and ESG assets. The major findings of this study about the lower volatility spillovers and hedging costs between green bonds and ESG assets during the tranquil and turbulent periods may contribute to the post-COVID investment portfolio for environmental sustainability.
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Jeongjoon Park, Jaewan Bae and Changjun Lee
Given the importance of style allocation strategy under the outsourced chief investment officer (OCIO) structure, the authors examine the validity of style allocation strategies…
Abstract
Purpose
Given the importance of style allocation strategy under the outsourced chief investment officer (OCIO) structure, the authors examine the validity of style allocation strategies in the Korean stock market. The authors find that external investment agencies can improve performance by using newly suggested investment styles such as high dividend yield and low volatility as well as traditional styles. In addition, the authors find that the style combination strategies create economically large and statistically significant returns. Finally, empirical results indicate that factor timing strategies suggested in this study can improve the reward-to-risk ratio. In sum, the empirical findings indicate that external investment agencies under the OCIO structure can improve performance using active style allocation strategies.
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