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Clean technology (cleantech) is becoming increasingly important as firms and industries seek to address challenges around the global scarcity of resources and also achieve wider social and environmental goals. Yet there are underlying problems with how capital markets respond to this increasing demand for new and innovative cleantech investments. In this article, we use a large U.K. dataset to first consider the extent to which firms engaging with cleantech increase their demand for external capital. We then consider how different types of debt and equity financiers deal with this demand for funds. Our key findings are that: 1) businesses engaging with clean technologies have a higher demand for external capital and 2) these demands are not being fully met by traditional providers which forces firms to seek out alternative and nontraditional sources of finance.

We show that foreign capital liberalization reduces capital misallocation and increases aggregate productivity for affected industries in India. The staggered liberalization of access to foreign capital across disaggregated industries allows us to identify changes in firms' input wedges, overcoming major challenges in the measurement of the effects of changing misallocation. Liberalization increases capital overall. For domestic firms with initially high marginal revenue products of capital (MRPK), liberalization increases revenues by 23%, physical capital by 53%, wage bills by 28%, and reduces MRPK by 33% relative to low MRPK firms. The effects of liberalization are largest in areas with less developed local banking sectors, indicating that inefficiencies in that sector may cause misallocation. Finally, we propose an assumption under which a novel method exploiting natural experiments can be used to bound the effect of changes in misallocation on treated industries' aggregate productivity. These industries' Solow residual increases by 3–16%.

Interest rates are central determinants of saving and investment decisions. Costly financial intermediation distort these price signals by creating a spread between the interest rates on deposits and loans with substantial effects on the supply of funds and the demand for credit. This study investigates how interest rate spreads affect climate policy in its ambition to shift capital from polluting to low-carbon sectors of the economy. To this end, we introduce financial intermediation costs in a dynamic general equilibrium climate policy model. We find that costly financial intermediation affects carbon emissions in various ways through a number of different channels. For low to moderate interest rate spreads, carbon emissions increase by up to 7 percent, in particular, because of lower investments into the capital intensive clean energy sector. For very high interest rate spreads, emissions fall because lower economic growth reduces carbon emissions. If a certain temperature target should be met, carbon prices have to be adjusted upwards by up to one third under the presence of capital market frictions.

Although extant literature investigates the role of sell-side equity analysts in capital markets, most studies do not consider that sell-side equity analysts often work in hierarchical teams. Lead analysts manage a team of associate and junior analysts who participate in the team’s tasks. Building on the delegation theory in the management literature, we hypothesize and find a division of labor between lead and associate analysts, where lead analysts are more likely to delegate tasks (1) that are less significant, (2) that are simpler, (3) when the workload of the lead analyst increases, and (4) when the associate analyst is more competent. Our results further suggest that associate analysts play a significant role in forecasting. By contrast, lead analysts are the main contributors to the qualitative aspects of analyst reports and are more likely to participate in earnings conference calls. Overall, our study documents the significant role of associate analysts in forecasting and the division of labor between lead and associate analysts. This paper was accepted by Brian Bushee, accounting.

We examine the association between internal forecasting sophistication and end-of-the-year accounting misreporting. We draw on survey data from investment center managers of Dutch companies. Consistent with our hypothesis, results suggest that more sophisticated internal forecasting allows firms to reduce their costly accounting misreporting, as these firms make more accurate projections and create contingency plans such that they can revise operational plans in a more appropriate and timely manner. Cross-sectional analyses reveal that the benefits in terms of greater forecasting capabilities can vary across conditions. We find that investments in internal forecasting are less effective in reducing the demand for misreporting when environmental volatility is high, when capital market pressure to meet expectations is comparably high, and when within-firm information asymmetry is high. The paper especially speaks to the planning role of budgeting and forecasting, as opposed to the relatively more extensively studied evaluation and incentive role. JEL Classifications: M12; M41.

Despite the advantages of debt, a significant number of firms that have an established leverage policy deliberately become all-equity. These firms eliminate a substantial amount of long-term debt as the average firm’s leverage ratio is approximately 30 percent at the year-end prior to debt elimination. Firm-level “shocks” such as CEO turnover and changes in credit ratings cannot explain the dramatic recapitalization decision. Consistent with the tradeoff theory, firms that eliminate debt have lower benefits (less tax shield benefits, agency costs) and higher costs (probability of financial distress, access to capital markets, etc.) of leverage in the three prior years compared to a matched sample. We also find that the factors influencing the decision to eliminate all debt is different from those to significantly reduce leverage or to have very low debt levels. Firms primarily finance the approximately $70 million of average long-term debt eliminated using proceeds from sales of relatively unproductive assets and from equity issues. Interestingly, over half of these firms issue significant amount of new debt within three years of becoming all-equity. Firms with lower liquidity and non-debt tax shields, higher potential overinvestment agency costs, and those that issue equity at the debt elimination year are more likely to relever quickly.

We develop a flexible and bias-adjusted approach to jointly examine skill, scalability, and value added across individual funds. We find that skill and scalability (i) vary substantially across funds, and (ii) are strongly related as great investment ideas are difficult to scale up. The combination of skill and scalability produces a value added that (i) is positive for the majority of funds, and (ii) approaches its optimal level after an adjustment period possibly due to investors' learning. These results are consistent with theoretical models in which funds are skilled and able to extract economic rents from capital markets.

PurposeThe global economy is plagued by an unprecedented shock that has devastated economic growth under the coronavirus pandemic. The prolonged movement control orders, social distancing, and lockdowns have triggered the global economic downturn, disrupted the demand and supply chains, reduced the pool of workforce, and caused many jobs loss. This paper aims to analyze the global economic cost of the coronavirus pandemic, and its current and future implications.Design/methodology/approachBased on contingency theory, this paper provides an in-depth analysis of the current situation on the global economic cost of the COVID-19 outbreak and gives insights from an organizational perspective.FindingsThis paper found that the world has witnessed far-ranging economic consequences due to the coronavirus pandemic in four aspects: (i) decline in personal consumption; (ii) decline in the investments and stock prices in capital market; (iii) decline in government spending in developmental projects and increase in new borrowing; and (iv) decline of exports of goods to international markets.Originality/valueThe novelty lies in investigating the effects of the COVID-19 pandemic on micro and macroeconomic levels — the components of GDP, consumer behavior, business investments, government spending, and global exports. The paper suggests the need for urgent actions by the world leaders to oversee, anticipate, and manage the risks and cushion the economic consequences. It concludes that the flexibility and adaptability of leaders, effectiveness, workforce protection, efficient use of modern technology, including automation and artificial intelligence, would enhance the resilience of supply chains which will support organizations to sustain in this critical time.

The deleterious effect of debt restructuring on banks’ balance sheets and, consequently, on the economy as a whole has been a key policy issue. This paper studies how post-default fiscal policy interacts with this sovereign-bank loop and shape the response of a model economy. Calibration of the model matches characteristics of the Greek economy at the time of the bond exchange. Debt restructuring in place of higher lump-sum taxation or lower nonproductive government spending harms the economy even if no other cost of default is considered. However, the sovereign-debt loop is less costly to the economy than increases in labor or capital taxes to service debt. Even so, if fiscal policy is too responsive, a crowding-out effect inhibits the recovery of capital markets, hence a more conservative fiscal stance is desirable. Thus, how diabolic the post-default sovereign-bank loop is depends to a large extent on the way fiscal policy responds.

While the globalization of production has been a prominent target of anti-globalization backlash, globalized finance has seemed to be much less in the public bull’s-eye. The blueprint for the post-war international economy agreed at Bretton Woods in 1944 envisioned nothing like today’s extensive and fluid global capital market. The demise of the 1946–73 fixed exchange rate system, however, also brought a progressive dismantling of barriers to international financial flows motivated by special-interest politics, national economic competition, and ideology—alongside the benign desire for a more efficient international allocation of capital. Unfortunately, free cross-border financial capital mobility can compromise governments’ capacities to attain domestic economic and social goals in several ways. This essay links the dynamics of financial liberalization to the Teflon-like resilience of finance to backlash so far, and suggests that stronger backlash could emerge if national governments fail to enhance multilateral cooperation to manage the financial commons.

In the process of production and operation, the funds held by enterprises often do not meet the needs of the expanding production scale, so enterprises usually obtain the required funds by borrowing. However, the financing mode of enterprises is not only limited to borrowing from banks or other financial institutions. With the rapid economic development and the continuous activity of the capital market, the bond market has gradually become an important channel for enterprise financing [1]. In order to improve the layout of the industrial chain, Guangyi Technology has carried out continuous mergers and acquisitions (M&A) since 2013. Due to its limited funds, Guangyi Technology acquired a large amount of funds required for M&A by means of equity pledge. However, the copyright cloud project invested in M&A in the early stage did not achieve the expected results, leading to a frequent breach of equity pledge, which evolved into debt defaults. Therefore, this article takes Guangyi Technology as the research subject and puts forward relevant avoidance suggestions through the evaluation of its debt default risk.

Negara-negara kawasan Asia Tenggara tengah menyongsong integrasi pasar modal. Kehadiran momentum itu, dibutuhkan kondisi ekonomi masing-masing negara yang stabil dan pasar modal yang menarik. Momentum ini juga merupakan kesempatan pasar modal syariah untuk lebih dikembangkan di kawasan ini. Penelitian ini bertujuan untuk menguji pengaruh Foreign Direct Investment (FDI) dan variabel ekonomi makro yakni pertumbuhan ekonomi, inflasi, suku bunga acuan dan nilai tukar terhadap return indeks saham syariah di empat negara ASEAN yaitu Indonesia, Malaysia, Thailand dan Singapura. Periode penelitian sejak kuartal IV tahun 2006 sampai dengan kuartal I tahun 2020. Metode yang digunakan dalam pembuktian empiris pada penelitian ini adalah Autoregressive Distributed Lag Bounds Testing Approach (ARDL). Penelitian ini menemukan hubungan kointegrasi jangka panjang pada semua negara objek penelitian. Dalam hubungan jangka panjang dan dinamika jangka pendek, penelitian ini menemukan adanya variasi hasil dan arah koefisien di 4 negara ASEAN. Kecepatan penyesuaian kembali keseimbangan jika terjadi goncangan berturut-turut Indonesia, Malaysia, Thailand dan Singapura adalah 44.7%, 65.4%, 43.5% dan 50.0% per bulannya.

PurposeThere is ambiguity regarding whether coronavirus disease 2019 (COVID-19) is a boon or bane for the IT services industry. On the one hand, it has created opportunities, especially with the growth of collaborative technologies. On the other hand, many firms have reduced their IT budgets owing to the ongoing recession. This study explores how IT firms have assessed the risk of the pandemic in the early days and informed capital market participants. In addition, it examines the impact of such online disclosures on information asymmetry.Design/methodology/approachThe authors analysed annual reports of publicly listed firms in the USA filed on the Securities and Exchange Commission website in 2020 and examined whether the disclosure scenario of technology firms was different from that of the other industries. Moreover, the risk sentiment of COVID-19-related disclosures was assessed by employing text analytics. Information asymmetry was measured using the bid–ask spread.FindingsOverall, it was found that IT services firms were less likely to discuss the COVID-19 pandemic in their annual reports. Interestingly, it was observed that technology firms that chose to communicate about the pandemic had a lower incidence of words related to risks. Furthermore, communicating about COVID-19 in annual reports calms investors and improves the information asymmetry situation about the firm. Variation in the severity of the pandemic and the responses of state governments was controlled for by employing state-fixed effects in the empirical models.Originality/valueThe authors inform the literature on corporate disclosures and technology and highlight the importance of effectively communicating about the pandemic.

This study aims to examine the impact of sustainability disclosure and environmental performance on market performance. Population of this study is non-financial companies listed in Indonesian Stock Exchange (IDX) from 2015 to 2019. Samples are 32 companies that participated in KLHK PROPER award (or 160 observations). Using multiple linear regression for panel data, this study found that sustainability disclosure is not associated with market performance, while environmental performance is positively associated with market performance. This study indicates that the Indonesia Financial Services Authority and the Ministry of Environment and Forestry need to improve the quality of policies related to sustainability used by companies in the Indonesian Capital Market.

In 2018, the European financial regulation MiFID II introduced research unbundling rules that banned the bundling of research payments with execution costs. The aim of research unbundling is to increase transparency for investors and to avoid agency conflicts. Opponents argue that research unbundling reduces small and medium-sized enterprise (SME) research and, thereby, SMEs’ financing opportunities because this research can no longer be cross-subsidized by research fees paid for larger companies. The outbreak of COVID-19 and its impact on financial markets fueled intense discussions on rebundling for SMEs. Consequently, in February 2021, the European Commission adopted a Capital Markets Recovery Package that allows bundled research for SMEs below a market capitalization of EUR 1 billion. Against this backdrop, the authors conducted a survey among European market participants to investigate changes in research services due to research unbundling and the COVID-19 pandemic. Moreover, they examine market participants’ views on the expected effects and improvements of the option to rebundle SME research as provided by the recovery package. Key Findings ▪ MiFID II’s research unbundling led to a drop in research coverage, but did not affect firms’ access to equity. ▪ The COVID-19 pandemic did not aggravate the impact of research unbundling on research coverage and firms’ access to equity. ▪ Market participants are skeptical about the value of the Capital Markets Recovery Package and believe that the option of bundled payments for SMEs will not be used.

The current crisis, as well as complicated economic relations between countries, sustainable development risks of global value chains (GVCs), and international trade protectionism cause changes in the modern system of global foreign direct investment (FDI). Due to the complexity of these risks and the vulnerability of the world economy to future global recessions, it is necessary to develop a new concept of cross-border capital flows in the form of FDI. The research aims to identify structural changes in global FDI in the context of international trade and capital market challenges. Structural and dynamic analysis and a descriptive assessment were conducted to examine global foreign direct investment in the system of international capital movement, taking into account the unstable economic environment. A test of the impact of the current coronavirus crisis revealed that the retrospective transformation of global FDI occurred due to changes in the internationalisation of companies, cross-border mergers and acquisitions, and regional structure of FDI. Corporate disinvestment and the growing importance of intangible assets also played an important role. As a result, the slowdown in global FDI led to a decline in reinvested earnings in many economic sectors. As the long-term recovery of the world economy will be largely determined by the dynamics of global FDI, transnational companies (TNCs) should consider local crises and strive to geographically distribute capital investment. The research revealed that the differentiation of national GVC strategies and new approaches to foreign outsourcing of TNCs are the main risks of regionalisation or nationalisation of global value chains and a corresponding decrease in FDI. The findings can be used to modify well-known FDI concepts, taking into account their impact on modern international economic relations.

Within an open economy framework characterized by vertical linkages in production, and search frictions with two-sided heterogeneity in the labor market, raising trade barriers is shown to increase unemployment across skill levels and to reduce labor market participation and aggregate income. These effects are not necessarily moderated by maintaining frictionless mobility of capital across borders. We find that a flexicurity reform of a liberal welfare state can dampen the adverse effects of de-globalization.

Lockdowns and voluntary social distancing led to significant reduction in people’s mobility. Yet, there is scant evidence on the heterogeneous effects across segments of the population. Using unique mobility indicators based on anonymized and aggregate data provided by Vodafone for Italy, Portugal, and Spain, we find that lockdowns had a larger impact on the mobility of women and younger cohorts. Younger people also experienced a sharper drop in mobility in response to rising COVID-19 infections. Our findings, which are consistent across estimation methods and robust to a variety of tests, warn about a possible widening of gender and inter-generational inequality and provide important inputs for the formulation of targeted policies.

SYNOPSIS This paper examines comment letters on firms' annual reports in an emerging market. The literature primarily focuses on comment letters issued by the U.S. Securities and Exchange Commission (SEC), although many other market regulators also use SEC-style comment letters. Comment letters can potentially be very impactful in emerging markets due to weak institutions and low disclosure quality in these markets. Using comment letters in China from 2015 to 2019, I find that the market response to the receipt of comment letters is significantly negative and associated with the severity of the comment letters. The receipt (severity) of comment letters is associated with adverse regulatory consequences, CEO turnover, corrective actions to remedy financial reporting, and poor future financial performance in the propensity score matched sample (recipient sample). Overall disclosure quality in the post-review year does not increase, but some comment letter topics prompt topic-specific financial reporting changes.

Purpose This study aims to explore the opportunities and challenges in activating a Smart Contract to enhance the efficiency and effectiveness of Ṣukūk offerings in the Islamic capital market. Design/methodology/approach The study adopts a mono-method qualitative approach. Data were obtained from survey interviews of two issuances on the fusion of smart contracts in Ṣukūk structures that were Sharīʿah-compliant. A thematic approach was further used to analyze the interview data based on the onion research method while opportunities and challenges of activating the Smart Ṣukūk (SṢ) relied on doctrinal evidence. Findings The results from the issuances across two jurisdictions showed that deployment of SṢ can resolve contractual ambiguities arising from Sharīʿah interpretations, jurisdictional policies and legal regime issues, which affect Ṣukūk origination and issuances especially on the right of investors in the event of Ṣukūk defaults. Although SṢ is automated, the third party’s presence is not eliminated as the blockchain platform still relies on the validators who are usually blockchain developers functioning as a third party in the Ṣukūk chain. Research limitations/implications The study relies on doctrinal literature to explain the features and requirements of SṢ. The empirical approach is limited to interview data based on local SṢ issuances. Future studies need to explore regulators’ role and global standards in cross-border issuance of SṢ with multiple jurisdictions/laws. Practical implications The paper concludes that the offering of SṢ using local currency has been successful in the two issuances because of the facilitative regulatory environment. However, addressing Ṣukūk’s challenges in cross-border offerings would require guidance from international standard-setters such as the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board. Originality/value This study is an advanced application of smart contracts to alleviate the related Ṣukūk challenges in the Islamic capital market.

We argue that the COVID epidemic disproportionately affected the economic well-being and health of poor people. To disentangle the forces that generated this outcome, we construct a model that is consistent with the heterogeneous impact of the COVID recession on low- and high-income people. According to our model, two-thirds of the inequality in COVID deaths reflect preexisting inequality in comorbidity rates and access to quality health care. The remaining third stems from the fact that low-income people work in occupations where the risk of infection is high. Our model also implies that the rise in income inequality generated by the COVID epidemic reflects the nature of the goods that low-income people produce. Finally, we assess the health–income trade-offs associated with fiscal transfers to the poor and mandatory containment policies.

Since the establishment of the Indonesia Stock Exchange (IDX) capital market in 2007, based on the IDX president director's report, the results of the merger between the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (BES) have increased market capitalization by 103.84% with daily stock transactions. increased by 131.8%. These results reflect strong global investment sentiment and attract investors for large expected returns. Where the higher the expected return value, the greater the level of risk that might occur and become the basis for consideration for investors. The purpose of this research is to analyze the effect of inflation and interest rates as independent variables on stock return as the dependent variable and how big the role of ROA is as a mediator between the independent variables and the dependent variable. The population in this study was 188 financial statements of mining companies listed on the Indonesia Stock Exchange in 2018. The sampling in this study used a purposive sampling technique. The analytical method was path analysis using IBM SPSS 16 software. There are 3 accepted hypotheses and 4 of them are rejected. Testing the direct influence hypothesis shows that two paths have a significant effect, namely interest rates on ROA and interest rates on stock returns. Testing the indirect effect hypothesis shows that there is one path that has a significant effect, namely interest rates on stock returns through ROA.

Purpose The purpose of this study is to empirically analyze the role of sukuk in the monetary policy transmission mechanism through the asset price and exchange rate channels in the Indonesian economy. Design/methodology/approach Using the monthly data from January 2003 to November 2017, this study uses a multivariate vector error correction model causality framework. To examine the role of sukuk in the monetary policy transmission mechanism through the asset price channel, this study uses the variables of consumption, inflation, interest rates, economic growth and the composite stock price index. Meanwhile, to examine the role of sukuk in the monetary policy transmission mechanism through the exchange rate channel, this study used variables of inflation, interest rates, economic growth, foreign investment and exchange rate. Findings This study documented that sukuk has no causal relationship with inflation through asset price and exchange rate channels. Nevertheless, sukuk has a bidirectional causal relationship with economic growth through asset price and exchange rate channels. Sukuk is also documented to have a causal relationship with monetary policy variables of interest rate and stock prices through asset price and exchange rate channels. Finally, a unidirectional causality is recorded running from the exchange rate to sukuk in the exchange rate channel. Research limitations/implications The finding of independence of the sukuk market from interest rates provides evidence that the trading of the sukuk in Indonesia has been in harmony with the Islamic tenets. Practical implications The relevant Indonesian authorities need to enhance both domestic and global sukuk markets as part of efforts to promote the sustainability of Islamic capital market development in Indonesia. Originality/value To the best of the authors’ knowledge, this study is among the first attempts to empirically investigate the role of sukuk in monetary policy transmission through asset price and exchange rate channels in the context of the Indonesian economy.

This study aims to assess the extent and quality of corporate social responsibility (CSR) disclosure practices of Shari’ah Compliant Companies (ShCCs) in Indonesia. Further, the study examines the factors influencing the extent and quality of CSR disclosure of ShCCs in Indonesia. A checklist comprising of 33 items was constructed to measure the extent and quality of disclosure. Using data from the year 2014 annual reports of 100 ShCCs in Indonesia, the results showed that the extent and quality of CSR disclosure among ShCCs in Indonesia were low with more than half of the sample companies scored less than 50% for extent of disclosure and all sample companies scored less than 50% for quality of disclosure. The multiple regression analysis revealed that award and leverage had an impact on the extent and quality of CSR disclosure. The findings indicate the need for improvement in the disclosure practice in annual reports of ShCCs. The relevant regulatory authority may issue guidelines and monitor companies’ compliance to the guidelines to assist companies in enhancing CSR disclosure. Continuous and concerted efforts by the regulatory authority and ShCCs are necessary to ensure achievement of social transparency and accountability. This in turn may propel the development of Islamic capital market to the next level.

Sustainable investing is of tremendous interest in both academia and the investment industry. However, despite the interest and the surge in assets under management (AUM) inflow, environment, social, and governance (ESG) data currently remain a fundamental challenge because they are deficient in quantity, consistency, and quality. In light of this data challenge, many investors and academics have come to rely on commercial ESG raters to assess the ESG quality of various corporations. However, the commercial ESG ratings still suffer some notable biases. This article documents one possible bias, termed quantity bias. The authors find that the amount of ESG data available for a given company is positively correlated with the commercial ESG rating of that company and the weighted average cost of its capital. The implication for investors is that they should do their homework and examine what the ESG data actually say rather than simply check the box. For corporations, it implies that they will get favorable treatment in the capital market if they publish more ESG data. TOPICS:ESG investing, information providers/credit ratings, performance measurement Key Findings ▪ The current state of ESG data is severely deficient. To get around ESG data challenges, people have come to rely on commercial ESG raters. However, commercial ESG ratings also exhibit various biases. The bias documented in this article is termed the quantity bias. ▪ The authors found this bias to be statistically significant; not only does it lead to higher commercial ESG ratings, but more importantly for corporations, it leads to lower cost of funding. ▪ The implication of this bias is twofold. For corporations, publishing more ESG data helps the bottom line. For investors, one must carefully examine what the ESG data say about the company’s sustainability practices, rather than performing a simple box-ticking exercise.

Purpose: The aim of this article is to present the impact of the COVID-19 pandemic on the capital markets of post-communist economies and, whether these markets are reacting in the same way. The research concerns indices of stock exchanges in Poland, Hungary, Latvia, Lithuania, Bulgaria, Czech Republic, Romania, Estonia, Croatia, and Slovenia. Methodology: The investigation covers the period from 30 SEP 2019 to 31 DEC 2020 divided into three sub-periods - pre-pandemic, pandemic shock, and pandemic stabilization. A trend analysis of the indices studied and a volatility analysis of the returns of the indices were conducted. Econometric trend models and GARCH-class models were applied. Findings: As a main finding it can be concluded that the capital markets of the post-communist economies responded to the pandemic in an analogous way, as well as that the scale and level of development of stock markets does not affect their response to the pandemic and stock market prosperity during the pandemic period. Practical Implications: The work focuses on the analysis of major stock market indices in countries with very different levels of capital market development. The course of the pandemic varies from country to country in terms of freezing the economy. As a consequence, it allows answering the fundamental question from the economic point of view: To what extent does a crisis of a non-economic nature affect the stock exchange situation in countries at the stage of capital market development? Originality/Value: The analysis of the level of capital markets development in post-communist countries has been the subject of many works, including by authors. However, the emergence of a pandemic creates a unique (hopefully) opportunity for research under extreme conditions such as the pandemic. As a consequence, information is obtained about the economic resilience, or lack thereof, of post-communist countries to crisis situations of a non-economic nature., peer-reviewed

In 1985, James A. Baker III's “Program for Sustained Growth” proposed a set of economic policy reforms including, inflation stabilization, trade liberalization, greater openness to foreign investment, and privatization, that he believed would lead to faster growth in countries then known as the Third World, but now categorized as emerging and developing economies (EMDEs). A country-specific, time-series assessment of the reform process reveals three clear facts. First, in the ten-year period after stabilizing high inflation, the average growth rate of real GDP in EMDEs is 2.6 percentage points higher than in the prior ten-year period. Second, the corresponding growth increase for trade liberalization episodes is 2.66 percentage points. Third, in the decade after opening their capital markets to foreign equity investment, the spread between EMDEs average cost of equity capital and that of the US declines by 240 basis points. The impact of privatization is less straightforward to assess, but taken together, the three central facts of reform provide empirical support for the Baker Hypothesis and suggest a simple neoclassical interpretation of the unprecedented increase in growth that has taken place in EMDEs since the early 1990s.

This study examines the effect of corporate social responsibility disclosure (CSRD) on earnings quality (EQ) in member countries of the Gulf Cooperation Council (GCC). Using 1845 firm-year observations covering the 2008–2016 period, this study performs panel data regressions to examine the association between CSRD as measured by a dummy variable and three common EQ measures, namely, value relevance (VR), accrual quality (AQ), and earnings persistence (PER). The study concludes that CSRD in three of the six GCC countries (Bahrain, Saudi Arabia, and the United Arab Emirates) has a positive and significant association with EQ in terms of VR. The use of generalized least squares (GLS) shows that CSRD has an effect on AQ in Kuwait and Bahrain whereas CSRD has an effect on PER only in Kuwait. Regulators of capital markets should use CSR information as guidelines to improve financial reporting quality and achieve better allocation of resources in capital markets.

This paper aims to examine the association between the change in the firm’s risk disclosure level and investors’ reaction in the Egyptian capital market. An event study was conducted over two years (2018 and 2019) to capture how investors respond to the Egyptian firm’s reported risk information. The findings revealed that the Egyptian firms’ risk disclosure did not provide new information to the capital market. Hence, investors did not change their expectations regarding the firm's future cash flows and their trading reaction in the capital market.

The Asian Financial Crisis in 1997 and various other scandals in large companies in Indonesia led to the emergence of good corporate governance (GCG). Regulators on the capital markets understand that good corporate governance promotes transparency and improves the quality of financial reporting, including cash management, responsibly. Furthermore, high cash levels lead managers to misuse the fund for personal gain, because the assets under their supervision increase thereby. This research analyzes the effect of corporate governance, such as board size, and independence on cash holding in Indonesia. Data were obtained from 373 firms in seven industries publicly tabulated on Indonesia Stock Exchanges (IDX) from 2008-2017 and 2,742 firm-year observations. The obtained data were analyzed using Common, Fixed, and Random Effects Models. The result showed that the total number of the board of directors, is positively and significantly proportional to Board Size thereby increasing the company holds cash. Meanwhile, the other corporate governance variable, known as Board Independence, is insignificant in any three models. The result also showed positive coefficients of board size on cash holding (CASH) in companies with and without CEO duality. The result further showed that the independent board had a significant and negative impact on cash holding (CASH), which is more pronounced in companies with CEO duality and used to strengthen corporate governance. The results have specific policy implications like the importance of corporate governance, in particular the role of the Board of Directors in the effective supervision of managers and transparency of enterprises.

The rise of the Islamic capital market in the emerging economy of Malaysia over the past few decades motivates us to investigate the impact of the Syariah compliant status on the level of exchange rate exposure. The Syariah compliant status implies that a company should use a minimal level of debt as capital to finance its operations. Given this, it is hypothesized that Syariah compliant firms should exhibit lower levels of exchange rate exposure than their counterparts, supported by the strong theoretical connection between interest rate and exchange rate. In terms of specification, previous efforts in pricing exchange risk failed to capture the true size of exposure due to the use of single time domain in traditional model. To cater the bias in estimation, this study intends to calculate multi-horizon exchange rate exposure based on maximal overlap discrete wavelet transformation to decompose single series into multiple time domains. The financial risk analysis involves 30 listed non-financial individual stocks in Malaysia having different Syariah compliant status from November 2013 until May 2018. As a result, the study finds no significant difference in currency exposure between Syariah compliant and non-Syariah compliant stocks. Secondly, it is found that the extent of currency exposure and the percentage of exposed firms exhibit non-homogenous trend across different time scales where large amount of exposure is concentrated at higher scale. From policy implications, the study suggests that Syariah compliant firms and non-Syariah compliant firms share the same exchange risk profile where exchange risk management routine is expected to be identical for both groups. Besides, the enhanced level of exposure at higher scale requires vigorous financial risk hedging strategies especially within widened investment interval.

The practice of Waqf-Al-Nuqud in Bangladesh is interesting to discuss. The construction of waqf in Bangladesh is in the spotlight, considering that waqf has played a role in improving the economy and reducing poverty. Bangladesh waqf management has succeeded in providing a positive response for the benefit of the community, so it is certainly interesting to explore waqf construction information. This study is classified as a literature review which is carried out by collecting information and data with the help of various literature references such as reference books, journal articles and research results. The findings of this study indicate that the waqf practice carried out by the state of Bangladesh has been managed by the Social Investment Bank Ltd (SIBL). This bank has developed a social capital market (The Volutary Capital Market). One of the Islamic financial instruments that have been developed is in the management of cash waqf , namely the Mudarabah Cash Waqf Deposit with the option of a specific purpose. This list of destinations is available to the wāqif who will have the right to choose the destinations to be served from the list or other purposes permitted by the Shariah. Regulations in Bangladesh are contained in the 2013 Waqf Special Law which regulates the method of handing over and developing waqf . The implication of this finding is that waqf management in Bangladesh is managed by developing Islamic financial instruments with the deposit model, it can be adopted by other countries in improving waqf management.

The study uses a market-oriented approach to investigate the relationship between the financial system and SMEs access to finance in Nigeria between 1995 and 2019. Both indicators from the capital and money markets are used as independent variables while some macroeconomic variables such as inflation rate, interest rate and exchange rate are also used. The study made use of Auto-Regressive Distributed Lag to explore the long and short-run relationship and the result shows that the capital market has a more significant impact on SMEs access to finance than the money market. Variables such as inflation rate, exchange rate and interest rate all have a significant influence on access to finance by the SMEs. it is recommended that the money market as an important aspect of the financial system in Nigeria should be made to devote more credit to the SMEs sector as it has shown from this study that the bulk of the credit going into the private sector from the money market might not go into the SMEs sector. The inflation rate should also be controlled as well as reducing the lending rate and guide against unreasonable currency devaluation to promote access to finance by the SMEs in Nigeria.

In 1786, the Van Staphorst brothers, America's Dutch investment bank, entered the French office of the Director General of Finance, intent on making an offer for a portion of France's holdings of American bonds. Unknowingly, their offer set off a bidding war that could have ended with poorly capitalized American financial adventurers owing a large portion of bonds which could threaten the fragile health of American credit. At the eleventh hour, the Van Staphorsts conjured up a bold, unprecedented, scheme to persuade the French that it would be unnecessary to sell their American bonds at discounted prices.

This study aims to analyze the trends, progress, and opportunities for future research on managerial ability literature. Since receiving a lot of attention after the study of Demerjian et al. (Manag Sci 58:1229–1248, 2012. http://doi.org/10.1287/mnsc.1110.1487 ), there has been no literature review study on managerial ability research. Using a systematic review process, this study includes 120 papers. The studies’ period ranged from 1974 to 2020. The findings of this literature review are presented in two parts, namely (1) a discussion of trends in the five classifications (topics, research settings, theories, methods, and primary data analysis techniques) and the current progress in existing studies; and (2) suggestions for future research. We classify suggestions for future research into nine themes: firm performance, capital market, reporting quality, auditing, investment decisions, financial decisions, tax, corporate social responsibility, and others. In addition, the development of managerial ability definition over time is provided prior to the literature review findings.

Objetivo: Analisar a relevância do Goodwill para o mercado de capitais brasileiro e verificar possíveis diferenças em períodos de recessão econômica. Metodologia: Utilizou-se dados econômico-financeiros de companhias que negociam ações na Brasil, Bolsa e Balcão (B3) em períodos trimestrais no intervalo de 2011 a 2018. Para medir a relevância do Goodwill, adotou-se o modelo de avaliação por valor residual que possui alicerce nos estudos de Ohlson (1989) e Ohlson (1995). Para análise dos dados, optou-se pela regressão quantílica, nos quantis 0,10; 0,25; 0,50; 0,75 e 0,90. Resultados: O mercado reage positivamente ao aumento do Goodwill em todos os níveis (0,10; 0,25; 0,50; 0,75; 0,90) das empresas analisadas, o que sugere que o aumento do seu valor em relação ao ativo implica em aumento do valor de mercado, não apenas em média, mas para todas as empresas, o que converge com os achados de Hartwig (2018) e Faleiro & Souza (2018). Em períodos de recessão econômica, percebe-se que as empresas alocadas nos quantis 0,25, 0,50 e 0,90 são sensíveis a diminuição do valor de mercado, o que demonstra que a crise tem implicações para estas companhias. Além disso, não há diferença significativa da relevância do Goodwill em momentos de crise econômica e dos períodos da inexistência da crise econômica. Contribuições do Estudo: Como contribuição teórica destaca-se a coleta dos dados de forma mais tempestiva, em que a variável Valor de Mercado foi coletada na data da publicação dos relatórios e o uso da regressão quantílica, uma abordagem diferente, em que pode-se observar em qual faixa a variação do Goodwill é mais relevante para o mercado. Ainda, aponta-se que os resultados do estudo são importantes para os usuários externos, ainda mais ao considerar a discussão que ocorre no IASB acerca do Goodwill.

Based on comprehensive grain price data, we employ a storage model to estimate consistent interest rates and compare capital market development between Britain and China. Interest rates for Britain were lower than China’s on average by about 3 percentage points from 1770 to 1860. For country pairs with bilateral distance less than 200 kilometers, the regional capital market integration in the Yangzi Delta in China comes close to the British average; but at larger distances, spatial interest rate correlations in Britain are twice those of the Delta and three or more times as high as elsewhere in China. Overall, our results suggest capital market development differences at an early date, so that capital market performance may be important for the Great Divergence that emerged between China and Western countries at this time. (JEL E43, E44, N23, N25, N53, N55, Q11)

The coronavirus crisis has led to a sharp increase in the debt-to-GDP ratios of the euro area member states. Without external support, access to the capital market could be seriously threatened in the medium term for Italy, but also for other member states. While the Pandemic Emergency Purchase Programme, which is designed as a monetary policy instrument, is regarded by some as a violation of the prohibition of monetary financing, the Next Generation EU recovery fund is likely to direct the fundamental structures of the European Union towards a fiscal union with considerable redistribution elements. This article analyses an alternative strategy, namely debt relief by the European System of Central Banks through an EU debt agency. Such a scheme would be possible without amending the EU treaties and would avoid negative equity at the central banks. The question is under what circumstances would this approach be suitable and proportionate?

The goal of this paper is to empirically investigate and analyze the board's involvement in the information technology governance (ITG) function and how the ITG degree has implications for enterprise agility and financial performance. The analysis primarily relies on perceptual metrics. That is board members' views on the importance and impact of the decisions considered and made on the business outcome. The contribution is reflected in the relation of several of the most significant enterprise resources in complex conditions. The approach seeks to determine whether enterprise agility and business performance are the result of a higher degree of ITG or are critical elements of contingency. The test results show that enterprise agility has a significant indirect impact between ITG attainment and performance and that predefined IT role factors drive this relationship. The limitation of the research is that the capital market is not sufficiently developed in Bosnia and Herzegovina, and the responsibilities of the IT supervisory and audit bodies are not fully formulated.

This paper aims to analysis the data related to the stock market in India to see the development of the Indian stock market in the banking sector. A stock market is a place to buy and sell a stake in a listed company. Like any other market, in the stock market, buyers and sellers meet and interact with each other. In India's development banking sector, the stock market is playing a crucial role to develop our country. Thus, this paper wants to show the real way to achieve status in the Indian economy. Thus, the overall growth of the economy is a function of how well the stock market performs and empirical evidence has proven that capital market development is critical to economic growth. In this way, how Indian stock market is a new era in India.

Classical security design papers equate competitive capital markets to securities being fairly priced in expectation. We revisit Nachman and Noe’s (1994) adverse selection setting, modeling capital market competition as free entry of investors and allowing firms to propose prices for their securities, as happens in private securities placements and bank lending. We identify equilibria in which high types issue underpriced debt, which yields positive expected profits to uninformed lenders, while low types issue steeper securities, such as equity. In addition, pooling equilibria exist in which all firms issue underpriced debt. Introducing pre-existing capital structures provides further foundations for pecking-order theories of external finance.

The purpose of this study is to analyze macroeconomic indicators that affect the growth volume of corporate sukuk emissions in Indonesia. Macroeconomic indicators used in this study are inflation, exchange rates and ithe BI rate. So the research object examined by the author is Inflation (X1), Kurs (X2), and BI Rate (X3) as independent variables and Corporate Sukuk Emissions in Indonesia (Y) as the dependent variable. The method used in this study is a quantitative research method with a descriptive approach. The author selects companies that issue corporate sukuk in Indonesia as a research sample. The data used in this study are secondary data on capital market statistics for the 2014-2018 period downloaded Otoritas Jasa Keuangan (OJK) website. The research model used is multiple linear regression analysis using windows-based data processing applications. The results of this study are that inflation has a negative and significant effect on the Growth Volume of Corporate Sukuk Emissions in Indonesia, Exchange Rate has a positive and significant effect on the Growth Volume of Corporate Sukuk Emissions in Indonesia, and the BI Rate does not significantly influence the Growth Volume of Corporate Sukuk Emissions in Indonesia.

The phenomenon of underpricing occurs in most of the world’s capital markets, including Indonesia, but with varying degrees. This paper discusses underpricing analysis of the non-financial corporations that underbid prime shares in the Indonesia stock exchange, and aims to prove the underpricing phenomenon of non-finance companies that underpricing the initial public offering by 2014-2018 while studying the factors influencing it. The methodology used to this study is quantitative method, use multiple regression in the calculations. The variable under study is financial leverage, underwriter’s reputation, and company size. The results of the tests prove that of all three variables, only one variable has no effect on underpricing is financial leverage. The variable reputation of underwriter and company size both have a partial negative effect on underpricing, and simultaneously these three variables effect on underpricing. A good and experienced underwriter reputation guarantees investors about determining the best price for the initial public offering at the time of the IPO (Initial Public Offering). The size of the company is a consideration for investors to invest in a company by using the amount of its total assets as a basis for making investment decisions

The main issue discussed here, using a juridical normative method, regards the legal validity and implementation of, and legal protection given to investors, found in the Financial Services Authority Regulation No. 41/POJK.04/2020 re. Electronic Public Offering of Equity, Debt Securities and/or Syaria’ Undivided Share. Important to note is the fact that the Financial Services Authority is established by virtue of Law No. 21 of 2011 to replace and take over the functions of the Capital Market and Financial Institution Supervisory Agency and the Central Bank in regulating and supervising Indonesian Banks and Capital Markets and lastly protect consumers in the financial services industry. Here should also mentioned the fact that the Capital Market Law (No. 8/1995) and its implementing regulations has yet to respond to how advances in information technology can be utilized to regulate-control and supervise public offering of shares or equity in the Capital Market.

The novel coronavirus disease-2019 (COVID-19) is a deadly disease that increases global healthcare sufferings. Further, it affects the financial and natural resource market simultaneously, as both are considered complementary goods. The volatility in the oil prices deteriorates the global financial market to substantiate the "financial resource (oil) curse" hypothesis primarily filled with earlier studies. In contrast, this study moved forward and extended the given relationship during the COVID-19 pandemic in a panel of 81 different countries. The study's main objective is to examine the volatility in the domestic credit provided to the private sector due to oil shocks and the COVID-19 pandemic across countries. The study is essential to assess the healthcare vulnerability in the COVID-19 pandemic, leading to the damage of financial stability, causing deterioration in the oil rents to affect the global sustainability agenda. The study employed statistical techniques to get sound inferences of the parameter estimates, including robust least squares regression, seemingly unrelated regression, and innovation accounting matrix to get a variable estimate at the level and inter-temporal framework. The results confirmed the U-shaped relationship between oil rents and financial development during the COVID-19 pandemic. Thus, it verifies the "financial resource (oil) curse" hypothesis at the initial stage of the COVID-19 pandemic. Later down, it supports the capital market when economies are resuming their economic activities and maintaining the SOPs to restrain coronavirus at a global scale. The qualitative assessment confirmed the negative effect of financial development and oil shocks on environmental quality during the pandemic crisis. The innovation accounting matrix shows that the COVID-19 pandemic will primarily be the main factor that intervenes in the relationship between oil rents and financial development, which proceed towards the "resource curse" hypothesis during the following years' time period. Therefore, the need for long-term economic policies is highly desirable to support the financial and resource market under the suggested guidelines of restraining coronavirus worldwide.

The adoption and implementation of International Financial Reporting Standards (IFRS) are anticipated to enhance the quality and credibility of financial statement in terms of reliability, transpar...

The Composite Stock Price Index (IHSG) is a description of information regarding the movements of all stock prices that affect capital market conditions and produce a trend. There are three factors that mainly influence the IHSG, namely inflation, BI interest rates, and the rupiah exchange rate. The purpose of this study was to examine the relationship between inflation, BI interest rates, rupiah exchange rate and the IHSG in the period of 2016-2020. The method in this research used quantitative methods. The results showed that inflation and BI interest rates have a negative and insignificant effect on the IHSG, while the Rupiah exchange rate has a significant negative effect on the IHSG.Keywords :IHSG, Inflasi, Suku Bunga BI, Nilai Tukar Rupiah

In modern conditions a developed stock market is a necessary element of the country's economy effective functioning as it establishes legal and economic relations between businesses that need financial resources and individuals who can provide them. The level of business activity in this sector determines the state of economic development of the country. Exchange activity in a market economy requires government regulation in order to ensure the efficiency, balance and stability of the exchange market. The purpose of the article is to analyze the state regulation of the stock market in Ukraine. The article analyzes the dynamics of trading on the stock market of Ukraine, identifies problems with its operation. The main models of state regulation of the financial services market are considered, namely: monoregulatory and polyregulatory. It is concluded that there is a multi-regulatory model of organized markets in Ukraine, as regulatory functions are assigned to the National Commission on Securities and Stock Market and the National Bank of Ukraine on domestic government bonds, money market derivative contracts, money market instruments. The state regulation of the stock market in Ukraine in accordance with the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Simplification of Attracting Investments and Introduction of New Financial Instruments" of June 19, 2020 is studied. which includes capital markets and commodity markets; improving the organization of the depository and clearing system; introduction of a trade repository and a liquidation of the netting mechanism; enshrining in law the differences between qualified and unqualified investors; introduction of green bonds as a new type of financial instruments. It is concluded that the adoption of the above law is an important step in the development of the stock market, as this law amends the law "On Securities and Stock Market" and establishes uniform rules for all exchange traders, defines the market regulator and circulation mechanism. financial instruments, radically changes the structure of the capital market and adapts Ukrainian legislation to the norms of the European Union in the field of financial services, bringing Ukraine closer to the global financial space.

Under the current complex economic situation and the impact of COVID-19, China’s capital market reform has entered a critical period, with opportunities and challenges coexisting. One of the important challenges is how to improve the well-being of investors in capital markets. Financial education, which has been offered by financial institutions in many countries in recent years, is likely to become an effective policy instrument to meet this challenge. Using survey data of individual investors from China, this study examines the potential impact of financial education programs offered by financial institutions on individuals’ investment diversification. The results show financial education is positively associated with the investment diversification of individual investors. An analysis of the underlying mechanism shows that financial education contributes to the improvement of investment diversification by mitigating limited attention bias, strengthening social trust, and promoting the use of professional investment advisors. These findings suggest that the persistent promotion of financial education programs has a positive effect on optimizing financial asset allocation decisions and improving financial welfare of Chinese households. © 2021 Informa UK Limited, trading as Taylor & Francis Group.