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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.

The purpose of this paper is to examine whether and how Islamic banks' financing affects corporate investment efficiency.

To achieve the research purpose, an empirical model was constructed to describe the relationship between Islamic banks' financing and corporate investment efficiency. The empirical model was tested through generalized method of moments (GMM) estimation technique using a panel data of 163 Malaysian listed firms for the period 2007–2017.

This study provides evidence that Islamic banks' financing plays an important role in enhancing investment efficiency and that this positive effect comes mainly from non-PLS contracts. Moreover, the results show that the effect of Islamic banks' financing in preventing suboptimal investments is stronger in the financial crisis period. The results also reveal that the contribution of Islamic banks' financing in reducing suboptimal investments is more prominent when firms face over-investment problems.

This research contributes to the debate on the financial implications of Islamic banks' financing modes by exploring their effect on corporate investment efficiency.

From a managerial perspective, the research findings are beneficial to Islamic bank managers to the extent that they highlight the role of Islamic financial contracts in improving corporate investment efficiency. In addition, the lower effect of PLS contracts on investment efficiency implies that policymakers in Malaysia should multiply their efforts to further expand the PLS financing.

This paper offers some insights on the role of Islamic banks' financing in mitigating agency conflicts and reducing asymmetric information problems. It is the first attempt focusing on the role of Islamic financing in fostering corporate investment decisions.

The purpose of this paper is to examine whether the basic premises according to the pecking order theory (POT) provide an explanation for the capital structure mix of firms operating under Islamic principles.

Pooled ordinary least squares, fixed and random effects regressions were performed to test the POT applying data from a sample of 66 Islamic-compliant firms listed on Saudi Stock Market over the period 2006–2016.

The results show that sale-based instruments (Murabahah, Ijara) track the financial deficit quite closely followed by equity financing and as a last alternative to finance deficit, Islamic-compliant firms issue Sukuk. In the crisis period, these firms seem more reliant on equity, then on sale-based instruments and on Sukuk as last option. The study findings also indicate that the cumulative financing deficit does not wipe out the effects of conventional variables, although it is empirically significant. This provides no support for the POT attempts by Saudi Islamic-compliant firms

This research contributes to the theory of capital structure in re-validating the findings of a previous theoretical and empirical study. It helps understand the capital structure of Islamic-compliant firms in comparison with conventional firms. It highlights some areas where further research on topics related to capital structure of Islamic-compliant firms is needed. The failure of the POT to explain Saudi firms’ financing choices strongly pushed researchers to test the market timing theory for the Saudi Stock Market. Further research studies could re-examine the trade-off theory in the absence of interest tax shield as in an Islamic economy.

From a managerial perspective, this research can serve firm executive managers in their financing decisions to add value to the companies. Furthermore, policymakers, bankers and standard-setting organizations should undertake more collective work to simplify the process of issuing Islamic financial instruments including Sukuk. Moreover, the Saudi Government has to encourage the private sector to be more innovative in developing products and services that are in line with Sharia principles. Finally, to attract investors, the Capital Market Authority has to encourage transaction, efficiency and liquidity of Islamic financial instruments.

The proposed study presents several originalities. First, it explores the implications of relevant Islamic principles on financing preferences of Saudi firms. Second, the present study enables us to investigate what the sudden abundance of liquidity, generated by the record levels of oil prices, implied for the firms’ financing behavior. Finally, it provides further evidence on the impact of financial crisis on the firms’ capital structure choice in a period of considerable slowdown in the world.

The purpose of this paper is to examine whether the sensitivity of investment to cash flow varies with exogenous financial conditions.

A dynamic model of investment based on the Euler equation approach is employed to investigate the impact of macro-financial factors on the sensitivity of investment to cash flow. The sample comprises data from 84 non-financial firms listed on Saudi stock market over the period 2007–2018.

The results show that the sensitivity of investment to cash flow is positive, implying the presence of financing constraints for Saudi firms. Evidence also reveals that better financial conditions relax firms' financing constraints. However, contractionary monetary policy, poor financial development and liquidity crisis strengthen the dependence of firms on internally generated funds when undertaking new investment projects.

The empirical results have useful policy implications. First, policymakers should pay attention to the importance of policymaking based on the monetary demand of microeconomic entities. In monetary contraction periods, firms face greater challenges in accessing external finance. These firms are likely to experience under-investment which at a macro level would translate into lower investments and economic growth for the country. Second, policymakers are encouraged to implement complementary measures that, coupled with existing financial reforms, may promote efficiency, competitiveness and transparency in firms' operations. Finally, managers and investors should consider financial structure and condition as important factors in their investment decision.

This study extends previous research by investigating whether the widely reported positive investment and cash flow relationship can be observed using data from an emerging market, specifically Saudi Arabia. It also sheds light on the investment-cash flow debate under a macroeconomic perspective and provides further evidence on the impact of financial crisis on the investment-cash flow (ICF) sensitivity.

This study aims to explore the role of board gender diversity in mitigating chief executive officer (CEO) luck. CEOs are “lucky” when they receive stock option grants on days when the stock price is the lowest in the month of the grant, implying opportunistic timing.

This study uses a logistic regression analysis and an instrumental-variable analysis. The sample consists of 3,249 firm-year observations from 2010 through 2015.

The results show that female directors significantly deter the opportunistic timing of option grants. This study finds that gender diversity – as measured by the percentage of women on the board, the percentage of female independent directors and the percentage of female directors on the compensation committee are likely to reduce the odds that CEOs receive opportunistically timed lucky grants. The results are consistent with those in prior research that documents the benefits of board gender diversity.

The research findings are beneficial to policymakers and regulators, as it allows them to assess the importance of diversity on boards in the monitoring of the managers, particularly as it pertains to the design of CEO compensation packages. Furthermore, these findings have implications for Ibero-American countries as they shed light on the importance to undertake measures and reforms to promote board effectiveness by the introduction of gender diversity.

While prior research has examined the effect of board gender diversity on firm performance, the study is the first to investigate the effect of female directors on the opportunistic timing of option grants, using a rigorous empirical framework that explicitly accounts for endogeneity.

Este estudio busca explorar el papel de la diversidad de género en la junta directiva para mitigar la suerte del CEO. Los directores ejecutivos tienen “suerte” cuando reciben subvenciones de opciones sobre acciones en los días en que el precio de las acciones es el más bajo en el mes de la subvención, lo que implica un momento oportunista.

Empleamos un análisis de regresión logística, así como un análisis de variables instrumentales (IV). La muestra consta de 3249 observaciones de las firmas desde 2010 hasta 2015.

Nuestros resultados muestran que las directoras disuaden significativamente el momento oportunista de la concesión de opciones. Descubrimos que la diversidad de género, medida por el porcentaje de mujeres en la junta directiva, el porcentaje de directoras independientes y el porcentaje de directoras en el comité de compensación probablemente reduzcan las probabilidades de que los directores ejecutivos reciban subvenciones afortunadas en el momento oportuno. Nuestros resultados son consistentes con los de investigaciones anteriores que documentan los beneficios de la diversidad de género en la junta.

Los resultados de la investigación son relevantes para los responsables de la formulación de políticas y los reguladores, ya que les permite evaluar la importancia de la diversidad en los directorios en el seguimiento de los gerentes, particularmente en lo que respecta al diseño de paquetes de compensación de los directores ejecutivos. Además, estos hallazgos tienen implicaciones para los países iberoamericanos, ya que arrojan luz sobre la importancia de emprender medidas y reformas para promover la efectividad de los directorios mediante la introducción de la diversidad de género.

Si bien investigaciones anteriores han examinado el efecto de la diversidad de género de la junta en el desempeño de la empresa, nuestro estudio es el primero en investigar el efecto de las directoras en el momento oportunista de las concesiones de opciones, utilizando un marco empírico riguroso que explica explícitamente la endogeneidad.

Este estudo busca explorar o papel da diversidade de gênero no conselho de administração para mitigar o destino do CEO. Os CEOs têm “sorte” de receber opções de compra de ações nos dias em que o preço das ações é mais baixo no mês de concessão, o que é um momento oportunista.

Foi utilizada uma análise de regressão logística, bem como uma análise de variáveis instrumentais (IV). A amostra é composta por 3.249 observações de empresas de 2010 a 2015.

Nossos resultados mostram que as diretoras inibem significativamente o momento oportunista de outorga de opções. Descobrimos que a diversidade de gênero, medida pela porcentagem de mulheres no conselho de administração, a porcentagem de conselheiros independentes e a porcentagem de diretoras no comitê de remuneração, provavelmente reduz as chances de CEOs receberem subsídios da sorte em tempo hábil. Nossos resultados são consistentes com pesquisas anteriores que documentam os benefícios da diversidade de gênero no conselho.

Os resultados da pesquisa são relevantes para os formuladores de políticas e reguladores, pois permitem que avaliem a importância da diversidade nos conselhos na gestão de gerentes, especialmente no que se refere ao desenho de políticas. Além disso, esses achados têm implicações para os países ibero-americanos, uma vez que lançam luz sobre a importância de empreender medidas e reformas para promover a eficácia dos conselhos por meio da introdução da diversidade de gênero.

embora a evidência científica prévia tenha examinado o efeito da diversidade de gênero do conselho no desempenho da empresa, nosso estudo é o primeiro a investigar o efeito das diretoras no momento oportunista de concessões de opções, usando uma estrutura empírica rigorosa que explica explicitamente a endogeneidade.

The purpose of this paper is to investigate how Islamic banks (IBs) and conventional banks (CBs) in Malaysia choose their capital structure and what are the most significant factors that affect their decisions regarding their capital structure.

This study applies the autoregressive distributed lag (ARDL) approach for a sample of 54 Banks listed on Malaysian stock market over the period 2010–2018.

The study findings show that the capital structure of IBs appears to be driven by similar factors to those previously found in the corporate finance literature. They also provide evidence of the existence of a long-run and short-run relationship between leverage and its main determinants for Islamic and CBs. However, the results show that various independent variables on the capital structure do exhibit different effects (in magnitude of the coefficient) among Islamic and CBs. Moreover, we find that IBs slowly adjust their capital structure toward the desired leverage ratio than CBs.

This research contributes to the theory in re-validating capital structure theories on IBs. It helps understand the capital structure of IBs in comparison with CBs. If in conventional finance, the standard presiding decisions of an economic agent is optimizing the risk-return ratio, this standard is not the only or the primary decision criterion in the Islamic finance context where spiritual and theological considerations are taken into consideration.

This research can contribute to managers in understanding the choice of capital structure for IBs within the bound of Sharia requirement. Such an understanding provides managers with applied knowledge of determining their appropriate capital structure to compete locally and globally in which IBs operate.

This paper offers some insights on the determinants of capital structure by investigating Islamic and CBs. It explores the implication of relevant Islamic principles on capital structure. Moreover, it analyses the determinants of capital structure using ARDL method that permits to identify the short-run and long-run relationships between capital structure and its main determinants.

This chapter estimates causality properties between real money demand and a number of determinants, that is, real output, the lending rate and the real exchange rate, across 10 Asian economies through linear and nonlinear causality methodologies spanning the period 1990–2012. The results document both bidirectional and unidirectional causality between monetary aggregates (M1 and M2) and their determinants for different country groups. The empirical findings exemplify the role of the demand for money as a policy tool and can provide useful policy recommendations to the Asian monetary authorities in their vision of forming a future monetary union.

The purpose of this paper is to estimate causality properties between real money demand and a number of determinants, i.e., real output, the lending rate and the real exchange rate, across ten Asian economies.

The study makes use of the causality methodology of Emirmahmutoglu and Kose (2011) over the period 1990-2012.

The results document both bidirectional and unidirectional causality between monetary aggregates (M1 and M2) and their determinants for different country groups.

The empirical findings exemplify the role of the demand for money as a policy tool and can provide useful policy guidelines to the Asian central banks in their quest for price stability.

This paper for the first time estimates causality properties between real money demand and a number of determinants, across ten Asian economies that have not used before in the literature. In addition, it employs the innovative methodology of Emirmahmutoglu and Kose (2011). The advantages of this approach are: it overcomes the problem of pre-testing needs to determine the order of integration, the lag orders on the autoregressive coefficients as well as the exogenous variable coefficients are mixed for all the cross-section units of the sample, and it is based on the approach of Meta-analysis which is capable of obtaining common results, combining those provided by a number of independent studies which test the same hypothesis.