Najaf Iqbal, Ju Feng Xu, Zeeshan Fareed, Guangcai Wan and Lina Ma
This study attempts to document the impact of financial leverage on corporate innovation in the Chinese nonfinancial public firms listed on Shenzhen and Shanghai stock exchanges.
Abstract
Purpose
This study attempts to document the impact of financial leverage on corporate innovation in the Chinese nonfinancial public firms listed on Shenzhen and Shanghai stock exchanges.
Design/methodology/approach
The firm-level data are collected from CSMAR database for ten years, ranging from 2007 to 2016. The authors have employed the panel fixed effects model and further system GMM approach for analysis. The sample is segregated on the basis of state (SOE) and nonstate ownership (NSOE) to check for the diverse effects. In total, three different proxies of financial leverage are used to unearth the varying impact of short-time and long-term leverage separately. Further, corporate innovation is divided into input innovation (R&D/Sales and R&D/Assets) and output innovation (patents and inventions).
Findings
The results suggest that financial leverage is detrimental to the input innovation while conducive for the output innovation when measured by the number of patents. Contrarily, leverage has a negative influence over the output innovation when measured by the number of inventions. This implies that leverage is more damaging for the highest form of innovativeness (inventions) in China. Input innovation is more sensitive to the changes in long-term leverage versus short-term leverage. Further, the authors find that innovation in SOEs is more sensitive to the changes in the leverage as compared to the NSOEs. The results are free from the threat of endogeneity and identification problems, as reported by the system GMM model.
Research limitations/implications
The authors did not segregate the sample on the basis of industry/sector.
Practical implications
The firms pursuing a strategy of radical innovation should try to keep their debt levels lower in order to achieve a higher innovation performance. Although, a rise in the leverage may mean an increased access to finance for a firm but such an access comes at a cost in the form of damage to the corporate innovation. However, increased debt financing may not be so bad for the firms that want to achieve a moderate and not the highest level of innovation. Such firms can produce recurring and synergic effects with debt financing and moderate innovation, once they achieve a level of innovation performance that satisfies their financiers.
Originality/value
To the best of authors’ knowledge, this is probably the first study to check the impact of firm-level financial leverage on both input and output innovation in the Chinese public-listed nonfinancial firms' panel data perspective till now.
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Faisal Abduleh Salman Irag Al-Najaf, Mahdi Salehi and Hind Shafeeq Nimr Al-Maliki
The present study aims to examine the effects of the Islamic sacred months, namely, Muḥarram, Rajab, Dhu al-Qaʿdah and Dhu al-Ḥijjah, on stock prices on the Iran and Iraq Stock…
Abstract
Purpose
The present study aims to examine the effects of the Islamic sacred months, namely, Muḥarram, Rajab, Dhu al-Qaʿdah and Dhu al-Ḥijjah, on stock prices on the Iran and Iraq Stock Exchanges.
Design/methodology/approach
Using the infrastructure models of the capital market, the daily stock prices were calculated for the sacred and non-sacred months. As the data of this study are non-stationary, the AMIRA time-series model was used for better understanding of the model or future projections. The dependent variables of this study are the daily stock indexes for Iranian and Iraqi Stock Exchanges, and independent ones are the sacred and non-sacred months of a lunar year. Data were gathered daily from the financial statements of Iranian and Iraqi Stock Exchanges websites. To test the hypotheses under study, a five-year period from 2012 to 2016 was considered for both Iraqi and Iranian Stock Exchanges, which corresponds with the lunar calendar from 1433-1437AH.
Findings
The obtained results indicated that there is no significant difference in stock prices between the sacred months of Muḥarram, Rajab, Dhu al-Qaʿdah and Dhu al-Ḥijjah and other non-sacred months. However, the stock price in the Iranian Stock Exchange has a significant difference in Rajab and Dhu al-Qaʿdah with other non-sacred months.
Originality/value
The results of this study will reveal more than ever the role of Islamic sacred months for society and users of financial statements to make better financial decisions especially in Islamic emerging markets.
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Khakan Najaf, Abdul Rashid, Young Kyung Ko and Susela Devi K. Suppiah
This study aims to understand how the COVID-19 pandemic dramatically impacts the maturity of all industrial sectors globally. This paper analyses the general patterns of managing…
Abstract
Purpose
This study aims to understand how the COVID-19 pandemic dramatically impacts the maturity of all industrial sectors globally. This paper analyses the general patterns of managing maturity in terms of performance and risk-taking of S&P 500 industrial sectors while determining their association with COVID-19.
Design/methodology/approach
To analyse the immediate response of COVID-19 on maturity management, the authors gather time-series daily index data of S&P sectors from October 2019 until June 2020 from Bloomberg. The authors select this study period to show the immediate effect of COVID-19 on industrial sector maturity management. The performance and volatility of stock are proxies for managing the maturity of each sector. The authors use vector auto-regression (VAR) methodology to determine the impact of global coronavirus.
Findings
This study’s findings suggest that the information technology sectors outperform the other sectors; in contrast, the utility sector exhibits the worst performance during a pandemic. Furthermore, the real estate sector depicts a higher level of systematic risk pattern than other sectors. Interestingly, the empirical result of VAR shows that almost every sector is significantly negatively affected by this pandemic; however, the consumer discretionary sector is immune to it.
Research limitations/implications
Overall, this study’s findings for individual economic sectors demonstrate that the managing maturity of each sector acts differently to the coronavirus outbreak. This study offers insights to researchers, policymakers, regulators, financial report users, investors, employees, clients and society.
Originality/value
This paper contributes to the existing literature on managing the maturity of industry sectors in terms of observing their trends during the financial crisis.
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Osama F. Atayah, Khakan Najaf, Ravichandran K. Subramaniam and Phaik Nie Chin
This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian…
Abstract
Purpose
This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian corporations.
Design/methodology/approach
To test the hypothesis efficiently, the authors have extracted the data from Bloomberg for 788 listed companies of the Malaysian Stock Exchange. The methodology entails ordinary least squares regressions, quantile regression and dynamic system generalized method of moments model.
Findings
First, the authors show that executive management tenure has a significant negative relationship with corporate risk-taking. It means that the long-tenured executives tend to undertake less risky strategies and decisions. Second, this study reveals that the longer executive management tenure has a positive relationship with corporate performance. Third, the moderating effect of corporate risk-taking with executive tenure (Tenure dummy*Risk) has a negative relationship with the corporate performance by 1%.
Practical implications
It implies that the appointment of experienced executive management contributes towards corporate performance directly. However, experienced management trends take less risk, which eventually results in mitigating the corporate performance. On that basis, the findings are significant in highlighting the usefulness of executive leadership term and offers insights to academics, practitioners and policymakers.
Originality/value
This paper is novel since it is unique in evaluating the executive tenure and the preferences to handle risk strategies and how that impact the firm performance.
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This study aimed to explore the importance of various factors considered in the bank selection decisions of micro- and small-sized enterprises (MSEs) in Ethiopia.
Abstract
Purpose
This study aimed to explore the importance of various factors considered in the bank selection decisions of micro- and small-sized enterprises (MSEs) in Ethiopia.
Design/methodology/approach
The study used a structured questionnaire to collect data from 300 MSEs selected through a convenience sampling technique. Descriptive statistics, exploratory factor analysis and linear regression analysis methods are used to identify the most important factors determining bank selection by MSEs.
Findings
The results of exploratory factor analysis revealed that the availability of credit at a reasonable interest rate, lower service charges and the availability of better automated teller machine (ATM) services are the priorities of MSEs in their bank selection decisions. In addition, the results of regression analysis indicated that price competitiveness is the most important factor determining bank selection decisions of MSEs.
Research limitations/implications
This study has two major limitations: first, due to resource constraints, the samples included in this study were taken only from the capital city of the country, Addis Ababa. As customer preferences are likely to vary from region to region, future studies could be carried out by including samples from other cities and rural areas of the country. Second, the study relied on a single data collection instrument. The use of additional data collection instruments, such as interviews and focus group discussions, could provide additional insights into the topic.
Practical implications
Commercial banks need to devise a flexible lending policy and set affordable interest rates and collateral requirements to meet the credit needs of MSEs. MSEs, on the other hand, need to improve their bankability by improving their operating and financial reporting practices. Further research can be conducted by covering other cities and the rural parts of the country.
Originality/value
The topic of bank selection has not been explored with a specific reference to MSEs in Ethiopia. The present study addressed this gap by investigating the factors influencing bank selection decisions of MSEs.
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Computer technology in libraries has revolutionised the concept of rapid and accurate information services. In Pakistan, though, computer technology is new and is being…
Abstract
Computer technology in libraries has revolutionised the concept of rapid and accurate information services. In Pakistan, though, computer technology is new and is being successfully introduced in all types of libraries and information centres. This article reviews the literature on the use of computers in Pakistan’s libraries. The literature includes monographs, journal articles, reports, etc. published inside and outside Pakistan, discussing information technology, specific library applications, the activities of individual libraries and automation education. The need for library automation and the problems faced by Pakistani professionals in this respect are also discussed.
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Usama Laique, Fahad Abdullah, Rebeca García-Ramos and Ijaz Ur Rehman
Previous studies have considered the presence of women directors on corporate boards and their impact on financial performance in isolation, disregarding their interaction with…
Abstract
Purpose
Previous studies have considered the presence of women directors on corporate boards and their impact on financial performance in isolation, disregarding their interaction with other corporate boards and firm-level attributes. Consequently, the results of such studies are largely inconclusive. This study addresses this gap by adopting a system’s approach to corporate governance characteristics and firm financial performance, rooted in a configurational approach.
Design/methodology/approach
The authors used fuzzy set qualitative comparative analysis to investigate the association of outside executive women directors and family-affiliated executive women directors with financial performance in the presence of board and firm-level characteristics in 216 listed non-financial family firms in Pakistan over the period of 2014–2019.
Findings
The findings reveal that various configurations of board and firm characteristics lead to high financial performance, underscoring conjunction, equifinality and asymmetry. The authors note that, the presence of outside executive women directors on corporate boards is frequently associated with high financial performance compared to family-affiliated executive women directors. Additionally, results indicates that presence of either outside executive women directors, family-affiliated executive women directors or both on corporate board associates with low level of leverage and vice versa. Moreover, high proportion of independent directors, large board size and large firm size are frequently associated with high ROE and Tobin’s Q.
Originality/value
This study introduces a novel perspective by integrating board and firm-level characteristics using a configurational approach. Focusing on listed non-financial family firms, the study highlights the asymmetric association between women directors and financial performance, suggesting that their impact fluctuates based on their combination with other board- and firm-level attributes. The study’s findings challenge the notion of a one-size-fits-all approach to board gender diversity and call for a more contextual understanding of how different types of women directors contribute to firm performance in family firms.
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Khalid Ul Islam and Bilal Ahmad Pandow
This study aims to analyze the stock market reaction of the small and medium sectors in the Southeast Asian countries (SEACs), including China, to the Russia–Ukraine war.
Abstract
Purpose
This study aims to analyze the stock market reaction of the small and medium sectors in the Southeast Asian countries (SEACs), including China, to the Russia–Ukraine war.
Design/methodology/approach
This study uses the event study methodology to quantify the magnitude and direction of the impact of the Russia–Ukraine war on the performance of small and medium indices of SEACs. Assuming market efficiency, this study uses the market model to capture abnormal returns on the event date and across the event window.
Findings
The Russia–Ukraine war adversely affected most of the sample countries, with a prolonged impact over the 50-day post-event window. In most cases, the study has failed to establish statistical significance for the results. One major reason for the low impact is the proactive role of the governments of the SEACs in mitigating the war’s impact on their respective economies by providing subsidies, exercising price controls and stockpiling.
Originality/value
To the best of the authors’ knowledge, this study is the first to analyze the impact of the Russia–Ukraine war on the small and medium sectors of SEACs, including China. It highlights the importance of geographic proximity and the proportion of bilateral trade in understanding how war and geopolitical tensions affect the stock market performance in other countries in the current global scenario. In addition, this study uses a range of parametric and nonparametric tests that adjust for the cross-country dependence and event-induced volatility to substantiate the statistical significance of the results and this supports the robustness of the results.
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Amina Rizwan, Shabana Naveed, Faisal Mustafa, Muhammad Shehzad Hanif, Aitzaz Khurshid and Talha Zubair Ahmad Khan
This study explores the adoption of crowdfunding in Pakistan, focusing on the challenges and opportunities within its unique entrepreneurial ecosystem. The research aims to…
Abstract
Purpose
This study explores the adoption of crowdfunding in Pakistan, focusing on the challenges and opportunities within its unique entrepreneurial ecosystem. The research aims to provide insights into the regulatory mechanisms, stakeholder engagement and institutional factors influencing crowdfunding adoption.
Design/methodology/approach
Seventeen semi-structured interviews were conducted using a purposive sampling technique. Data was collected from diverse stakeholders involved in the crowdfunding process including investors, entrepreneurs, platform owners and regulators.
Findings
The study identifies various challenges, including regulatory gaps, investor concerns, platform-related issues and systemic challenges such as political instability and weak institutions. These challenges hinder the effective implementation of crowdfunding in Pakistan. Moreover, the study highlights opportunities for financial inclusion, bridging the gap between investors and entrepreneurs, and leveraging Pakistan’s entrepreneurial landscape for crowdfunding growth. While several challenges were common to both developed and developing countries, the study also identified distinct challenges such as digital literacy, reliance on the undocumented economy, insufficient regulatory frameworks and investor mindset specific to developing countries.
Research limitations/implications
Since crowdfunding is an emerging phenomenon in Pakistan, this study had limitations as no official crowdfunding platform other than the Pakistan National Investor Portal had started operations. Therefore, this study involved only those stakeholders who were involved in designing regulatory sandbox suggestions. The sample size could be increased to include stakeholders from other developing countries in the future. This article, however, provides significant strategic guidance for policymakers in developing a framework to improve financial inclusion in development.
Practical implications
The study provides critical areas of concern for regulatory authorities for developing appropriate legislation to help overcome the challenges to the institutionalization of crowdfunding. This study also encourages stakeholders like investors and entrepreneurs to participate in crowdfunding while looking at the perspective of other parties.
Social implications
This research highlights the need for the Pakistani society to be well-informed about alternative investment opportunities, like crowdfunding. The micro, small and medium enterprises (MSME) sector, along with the government, can also explore the benefits of crowdfunding to address their lack of access to capital and enable the inclusion of an informal economy to reduce poverty in a developing country.
Originality/value
Crowdfunding is a new phenomenon in Pakistan, and the scope of its application in the MSME sector has not been thoroughly investigated. This study reveals how micro and small firms can use crowdfunding to boost their economic operations by overcoming challenges and taking advantage of fintech (financial technology) to achieve financial inclusion, leading to economic sustainability.
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This study aims to know the tactician role of financial technology (FinTech) in the field of accounting and auditing through contextualized systematic literature review by using…
Abstract
Purpose
This study aims to know the tactician role of financial technology (FinTech) in the field of accounting and auditing through contextualized systematic literature review by using bibliometric analysis.
Design/methodology/approach
The qualitative bibliometric analysis includes studies from 2017 to 2021 using the Scopus and Web of Science databases, which yielded 277 published papers with the keywords, FinTech accounting and auditing. The contextualized systematic literature review greatly helped in clarifying the content within each cluster.
Findings
The study identified the tactician role of fintech primarily in the accounting and auditing professional field. Fintech is still in its inception, with continual development and implementation taking place especially, in the auditing field. The findings also confirm that FinTech can produce a confluence between various research areas, including accounting, auditing, business finance, economics, management and business field.
Research limitations/implications
The study describes the tactician role of FinTech and its huge possibility for future study in the accounting and auditing field among professionals, academics and regulators.
Practical implications
This study be able to help accounting professionals, policymakers and government regulators to establish policy development, as this research emphasizes the tactician role of FinTech in the accounting and auditing field.
Social implications
FinTech in accounting and auditing might add to the existing field of FinTech in the IR4.0 era that give benefits to different players such as policymakers, governments, researchers, FinTech entrepreneurs and practicing professionals.
Originality/value
To the best of the author’s knowledge, little focus has been given about FinTech in the accounting and auditing field using bibliometric analysis. The insights of systematic literature review provide researchers on FinTech among practicing professionals and offer opportunities for further scientific endeavours.