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The purpose of this paper is to analyse the creation of shareholder value (SHV) created by non‐depository financial institutions and, especially, by leasing and factoring (L&F) companies.

The cost of capital of both L&F companies is estimated using an accounting procedure and, next, the economic value added (EVA) created by Italian L&F companies over the period 2002‐2004 is estimated.

L&F companies display high profitability and EVA levels over the period analysed: a very large part of leasing and factoring companies achieved a positive EVA and the lowest median level of EVA created is at least 11 per cent of capital invested in the company, while at least 50 per cent of leasing companies achieved a positive EVA and the lowest median level of EVA created is almost 2 per cent of capital invested in the company.

Future research may try to investigate other markets. The paper's focus on Italy for data collection for L&F is problematic and data are collected from a unique data base.

SHV creation is the main strategic objective of L&F companies so the paper is of interest to both academics and practitioners.

This is the first study focusing on SHV creation by non‐depository financial institutions and, especially, L&F companies.

Does the adoption of the Enterprise Risk Management (ERM) improve bank profitability? Does ERM also reduce bank risk? By analyzing a sample of banks located in European emerging markets between 2005 and 2013, the aim of this chapter is to empirically investigate the determinants of firm performance, both in terms of bank profitability and risk, with respect to the adoption of Enterprise Risk Management (ERM). In order to capture the effect of the ERM program adoption on banks’ performance, we both use market-based measures as well as accounting-based indexes. Following the seminal literature on the topic (Aebi, Sabato, & Schmid, 2012; Eckles et al., 2014; Ellul & Yerramilly, 2013; Hoyt & Liebenberg, 2003, 2011; Lin, Wen, & Yu, 2012; Pagach & Warr, 2010), we adopt a binary proxy variable, that is, the appointment of a Chief Risk Officer (CRO), to define whether the firm is currently undertaking an ERM program. Our results show that a post-ERM firm experiences an increase in the risk-adjusted profits and a reduction of the overall risk.

The COVID-19 pandemic deteriorated the economic situation and raised the issue of the quality of banks’ assets and, in particular, the growth of non-performing loans (NPLs). The study approaches a topical subject that is of interest to banks and society at large, as credit availability is likely to be reduced. Over the last 10 years, the Baltic countries’ banking sector has significantly improved its risk management policies and practices, increased capital ratios on its balance sheets, and created risk reserves. The current chapter examines the factors affecting NPLs in the Baltic States based on advanced econometric modelling applied to data extracted from the International Monetary Fund (IMF) and Eurostat. The study results show that credit risk management in the Baltic States has significantly improved compared to the period before the global financial crisis (GFC), the capitalisation of credit institutions is one of the highest in the European Union (EU), and banks are liquid and profitable. Lending recovered from the downturn in the first phase of the pandemic, and credit institutions have taken advantage of the European Central Bank’s (ECB) long-term funding programme ITRMO III to improve the liquidity outlook. Although the credit quality of commercial banks has not deteriorated, as the exposures of credit institutions in the most affected sectors are insignificant and governments have provided fiscal support to businesses and households, some challenges remain. The increase in credit risk is expected due to rising production prices as well as the rebuilding of disrupted supply chains. The findings allow conclusions to be drawn on the necessary actions to mitigate the credit risk of the banking sector.

This paper aims to examine the impact of bank managerial ability on the cost of loans using an extensive data set of US banks from 2001:Q1 to 2021:Q2.

First, the authors use multiple fixed-effects estimation to estimate the impact of managerial ability on bank loan pricing. In addition, the authors also perform different econometrics regression methods to test the robustness of the model including: Prais–Winsten regression, Newey–West regression and the Fama McBeth method, instrumental variable regression, propensity score matching method and quantile regression.

The results show that banks with higher managerial ability tend to provide loans with lower costs, and this effect is stronger at larger banks. In addition, research results from the quantile regression model show that the negative impact of managerial ability on the cost of loans will be stronger at banks with higher lending costs.

To the best of the authors’ knowledge, this study is one of the first to investigate this relationship between managerial ability and bank loan pricing from the supply side. In addition, this paper examines the impact of bank managerial ability on the loan costs of banks of different sizes, as well as differs across the distribution of the dependent variable. Therefore, this paper is of particular interest to regulators and policymakers.

The authors compare two market collapse incidents, focusing on their role as turning points for ESG considerations among investors that do not fall under the SRI class. The authors draw from the signaling theory to posit that ESG performance acts as a buffer to retain institutional shareholders under stress conditions.

The authors collect extensive data on institutional shareholdings and corporate performance during the pandemic and the 2008 financial crisis to examine the potential of ESG to act as a downward risk hedging mechanism. The authors test whether superior ESG scores function as insurance and resilience signals that lock investors in through times of high probability of divestments.

Findings indicate that ESG weighs in investment decisions during economic downturn and poor returns. The nature of this positive relationship is not static but dynamic contingent on overall risk materiality considerations.

The authors update regulators, firms, investors and academics on ESG, risk and crisis management. The shifting materiality and the altering impact of ESG practices is our core implication, as well as limitation, in terms of metrics, temporal evolution and interaction with institutional factors, along with portfolio alpha and safe haven potential in ESG asset classes.

The authors extend current literature focusing on portfolio returns and firm valuations to highlight the role of ESG in shareholder retention during poor return periods. The authors further add to existing studies by examining the shifting materiality of ESG pillars during different crisis settings.

This paper aims to investigate bank-specific determinants affecting the dividend policy of commercial banks listed in the Middle East and North Africa (MENA) region countries.

The study uses pooled and panel tobit and logit regression analyses based on 16-year unbalanced data with 1,593 firm-year observations collecting from 117 commercial banks listed in 11 MENA countries.

The results indicated that the main bank-specific factors affecting dividend payment decisions are bank size, profitability, capital adequacy, credit risk and bank age in the context of the MENA emerging markets. In addition, the analysis showed that the yearly dummy for the global financial crisis (2008–2009) has a significant negative effect, while the yearly dummy for the Arabic spring crisis (2010–2011) has no significant effect on the dividend payment decision of banks listed in the MENA region. Furthermore, the growth opportunity is not one of the key factors affecting dividend policies by banks in MENA emerging markets. Considering this information, it is reasonable to conclude that MENA region banks’ dividend decisions follow investment decisions. In other words, the dividend decisions and investment decisions are independent of each other. The findings support theories (hypotheses) of dividends such as residual, signalling, regulatory pressures, transaction cost and lifecycle.

This study is restricted to a sample of one type of financial firm, conventional commercial banks listed in the MENA markets because of the problem of missing data and limited information on other financial firms for the same period, particularly Islamic banks. Moreover, the focus of this study was on factors that are considered bank fundamentals. However, ownership variables were not included in the study because of unavailability.

The results of this study have several important implications for banks’ dividend policymakers, regulators, analysts and investors. Dividend policymakers in MENA emerging markets seem to use residual dividend policy, in which they distribute dividends according to what is left over after all acceptable investment opportunities have been undertaken. These inconsistent, unstable dividend policy trends make it difficult for investors to predict future dividend decisions. Further, this practise may convey information to shareholders about a lack of positive future investment opportunities. This may negatively affect the share value of banks. Acquiring a broad understanding of the dividend behaviour of MENA banks enables regulators to take more effective regulatory actions to protect shareholders and depositors. Finally, the results of this study can help analysts and investors build their dividends predictions and investment strategies.

The banking sector plays a disproportionately large role in the development of emerging economies. Therefore, this study is one of the first to examine a large cross-country sample of MENA banks (117) for an extensive period (2000–2015). The study includes both the Global financial crisis and Arab uprising periods, including after the liberalization and recent economic reforms and structural changes in financial sectors across MENA countries.

The paper aims to identify “problematic” agricultural credit co‐operatives (CCAM) and to evaluate their risk of insolvency as a function of financial indicators, providing regulators and other stakeholders with a set of tools that would be predictive of future insolvency and perhaps bankruptcy.

Using a database of CCAM failures in the period between 1995 and 2009, statistical models of failure of CCAM, are estimated and compared, using logistic regression analysis and multiple discriminant analysis for assessing the potential failure of CCAM as a function of financial/economical indicators.

The paper identified the variables customer resources growth, transformation ratio, credit overdue, expenses ratio, structural costs, liquidity, indebtedness and financial margin as determinants of CCAM failure. It suggests that CCAM take measures geared to boosting business, to shoring up the financial margin and the deposit base, to bolstering the complementary margin and to improving the credit recovery processes. Additionally it is necessary to increase cost efficiency, rationalizing structures and procedures consistent with reducing operating costs without detriment to the quality of service provided.

This paper helps to understand why agricultural credit co‐operatives fail.

The study aimed to determine how reputational risk affects the stocks prices of companies listed on the Lima Stock Exchange.

The study follows a documentary research with a quantitative approach. Companies from different sectors listed on the Lima Stock Exchange were taken as a sample.

The incidence between the reputational risk and the stock price of the companies listed on the stock market, as well as the impact on profitability indicators and income level were demonstrated. Additionally, it was determined that the cost of capital has a greater impact if the entity is financed from the issuance of bonds rather than by subsidiaries.

Companies that presented well-known events in Peru and those that caused damage to their corporate reputations were studied. Likewise, information from sources such as Monitor Empresarial de Reputación Corporativa, Peruvian Securities Market Regulator’s office and Lima Stock Exchange was documented in order to analyze the variations in financial indicators during the indicated events. Financial models such as CAPM and GORDON-SHAPIRO were also used.

The purpose of this paper is to provide a theoretically informed analysis of social and environmental reporting (SER) evolution, i.e. how and why the SER evolved over time in a cooperative bank in Italy.

The paper is based on a qualitative fieldwork case study conducted from 2011 to 2015. Information and data were collected through several methods including: interviews with managers involved in the SER’s process; analysis of the SER-related documents; analysis of the website; and observations in the field. The analysis of the empirical evidence draws on the institutional logic (IL) perspective, which provides theoretical insights to interpret the role of the contrasting institutional forces in the evolution of SER.

The empirical analysis unveils three different stages in the evolution of SER: the “birth” whereby a new form of social reporting was initiated; the “development” through which SER was implemented to become a formal component of the organizational management; and the “de-structuring” when the SER was gradually de-composed. This gradual de-structuring, as well as the initiation and implementation processes, was influenced by different institutionally infused rationalities and logics. These institutionally infused rationalities and logics, along with the specific organizational and contextual events, provided the resources, and created the space and opportunity, for the SER-related changes to occur.

The analysis offers theoretical insights to understand “how” (i.e. processes) and “why” (i.e. the conditions under which) SER gradually evolved, i.e. emerged, was constructed and developed during the phases of implementation and post-implementation. Furthermore, it is shown that SER is multifunctional in nature and unveils how and why these multiple functions change over time. Finally, the analysis provides a theoretical contribution by illuminating the role that different and contrasting ILs play in driving the adoption of organizational practices.