Search

Hedge fund positions are an important component of crowded trades. These vehicles are particularly active, take highly concentrated positions, and utilize leverage and short sales. Using a database of hedge fund holdings, we measure the degree of security-level crowdedness. The difference between the average returns on portfolios sorted by high versus low crowdedness portfolios is sizable, and the variation in the realized portfolio returns is distinct from other traditional risk factors. Further, hedge fund exposures to crowdedness are often significant, and they help to explain downside "tail risk," as funds with higher exposures experience relatively larger drawdowns during periods of industry distress. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Theoretical background: Much attention has been paid in the finance literature to the issue of raising capital through the capital market. However, there is still not much focus on the analysis of this issue in the context of the transition of companies from the lower to the higher end of the stock market, e.g. the switch from the alternative market to the regulated market. In the Polish literature, the analysis of the going public in two stages is relatively unexplored. Purpose of the article: The purpose of the study is the identification of the impact of switching listing venue from an alternative market to the regulated one on the possibility of raising capital and the financial leverage. The research presents the results of the analysis of raising capital by the companies firstly entering the NewConnect and then transferring to the main market of the Warsaw Stock Exchange. Research methods: The analyses used the following metrics: debt-to-asset ratio and debt-to-equity ratio calculated over a longer time horizon covering the observation window beginning 3 years before the transfer and ending 3 years after the transfer (in total, 7 years). To examine if the ratios differ significantly between before and after the change, the significance analysis was based on the parametric tests: t-student’s paired test for means and the Wilcoxon matched-pairs signed-rank test for medians. Main findings: Listing switch on the Warsaw Stock Exchange and entering a regulated market has triggered the growth of companies but did not lead in equity being raised by companies during the debut on the regulated market. Companies did not reduce financial leverage, debt-to-asset-ratios and debt-to-equity ratios increased in the years following the change of listing venue from the alternative market to the regulated market.

We analyze the impact of the introduction of credit default swaps (CDSs) on real decision-making within the firm. Our structural model predicts that CDS introduction increases debt capacity more when uncertainty about the credit events that trigger CDS payment is lower. Using a sample of more than 56,000 firms across 51 countries, we find that CDSs increase leverage more in legal and market environments where uncertainty about CDS obligations is reduced and when property rights are weaker. Our results highlight the importance of legal uncertainty in the interpretation of the underlying trigger events of global credit derivatives. [ABSTRACT FROM AUTHOR]

This study examines corporate leverage during systemic banking crises in an international setting, including 85 countries from 1987 to 2017. Using the historically determined component of institutions and exogenous variations in institution building, the analyses show that leverage cyclicality varies substantially across institutional settings. Leverage is strongly countercyclical under more binding constraints on the capital supply, suggesting important supply effects of such crises on leverage. Weak institutions are more conducive to crises and uncertainty. Leverage countercyclicality is more pronounced during crises that coincide with higher uncertainty, whereas leverage is procyclical with stronger legal systems and information sharing in capital markets. [ABSTRACT FROM AUTHOR]

We show that constraints can improve financial decision-making by disciplining behavioral biases. In financial markets, restrictions on leverage limit traders' ability to borrow to open new positions. We demonstrate that regulation that restricts the provision of leverage to retail traders improves trading performance. By increasing the opportunity cost of postponing the realization of losses, leverage constraints improve traders' market timing and reduce their disposition effect. We replicate these findings in two distinct experimental settings, further isolating the mechanism and demonstrating generality of the results. The interaction between constraints and behavioral biases has implications for policy and choice architecture. [ABSTRACT FROM AUTHOR]

Using the introduction of Fox News as a natural experiment, we investigate whether partisanship in television news coverage influences fundamental corporate decisions. We find that during the George W. Bush presidency, firms led by Republican-leaning managers headquartered in regions into which Fox was introduced shift upward their total investment expenditures and financial leverage. Our findings imply that in making fundamental corporate decisions, Republican-leaning managers are swayed by the Republican slant of Fox that presents an optimistic macroeconomic outlook. The results highlight the importance of heterogeneity in media slant in understanding the role of the media in corporate decision making. [ABSTRACT FROM AUTHOR]

We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of leverage) or adverse selection (ex ante risky borrowers choosing larger loans). We separate these information asymmetries using a natural experiment resulting from the contract structure of option adjustable-rate mortgages and unexpected 2008 divergence of indexes that determine rate adjustments. Our point estimates suggest that moral hazard is responsible for 40 |$\%$| of the correlation in our sample, while adverse selection explains 60 |$\%$|⁠. We calibrate a simple model to show that leverage regulation must weigh default prevention against distortions due to adverse selection. [ABSTRACT FROM AUTHOR]

The contributions of asset selection and incremental leverage to buyout investment performance are more important than typically assumed or estimated to be. Buyout funds select small firms with distinct value characteristics. Public equities with these characteristics have high risk-adjusted returns relative to common factors. Adding incremental leverage to a publicly traded stock portfolio increases both risks and mean returns in this sample. Direct investments in private equity funds earn lower mean returns than a replicating strategy designed to mimic these key economic features of their investment process with public equities and brokerage loans. [ABSTRACT FROM AUTHOR]

To adapt to the business environment, organisations adhere to management strategies capable of removing the effects of negative events, transforming themselves into resilient organisations. Physical and mental difficulties are the consequences of recent corporate developments, and protecting these organisations is a significant concern for managers. Using regression analysis of panel data, we evaluate the effectiveness and performance of 34 tourism and transport companies listed on the BSE in the 2005–2022 period by testing the effect of leverage on financial performance. Then, we focus on identifying the effects of recent crises (the global financial crisis of 2007–2008 and the COVID-19 pandemic) on financial performance and, implicitly, on organisational resilience. The findings suggest that the research hypotheses were partially validated, noting that the indicators included in the study registered significant decreases for the COVID-19 crisis period compared to the global financial crisis period. The paper provides information on measuring the resilience of companies through their ability to withstand the global financial crisis and the crisis triggered by the COVID-19 pandemic. This study is also among the first to examine the role of financial crises in the leverage and financial performance relationship in Romania. [ABSTRACT FROM AUTHOR]

We assess the impact of the leverage ratio capital requirements on the risk‐taking behaviour of banks both theoretically and empirically. Conceptually, introducing binding leverage ratio requirements into a regulatory framework with risk‐based capital requirements induces banks to re‐optimise, shifting from safer to riskier assets (higher asset risk). Yet, this shift would not be one‐for‐one due to risk weight differences, meaning the shift would be associated with a lower level of leverage (lower insolvency risk). The interaction of these two changes determines the impact on the aggregate level of risk. Empirically, we use a difference‐in‐differences setup to compare the behaviour of UK banks subject to the leverage ratio requirements (LR banks) to otherwise similar banks (non‐LR banks). Our results show that LR banks did not increase asset risk, and slightly reduced leverage levels, compared to the control group after the introduction of leverage ratio in the UK. As expected, these two changes led to a lower aggregate level of risk. Emperical results indicate that credit default swap spreads on the 5‐year subordinated debt of LR banks decreased relative to non‐LR banks post leverage ratio introduction, suggesting the market viewed LR banks as less risky, especially during the COVID 19 stress. [ABSTRACT FROM AUTHOR]

This study examines the effectProfit Management, Company Size, Asset Maturity, Leverage on Debt Maturity Structure(Manufacturing Companies Registered on the IDX for the 2019 - 2021 period). The research population is pThe population for this research is all publicly listed companies on the IDX for the 2019-2021 period. The samples were taken based on purposive sampling, which means the criteria used are as follows: (a) Manufacturing companies listed on the IDX for 2019-2021, (b) Financial reports are accessible, (c) The required variable data is available.Furthermore, to perform data analysis, multiple linear regression through the use of SPSS software as a tool is used in this study. The research results show that hhypothesis 1 earnings management (DA) has a sig value of 0.027<0.05 and β1-0.170<0 then H1 is accepted, meaning that earnings management has a negative effect on the structure of debt maturity. Hypothesis 2 firm size (SIZE) has a sig value of 0.000<0.05 and β2 0.018>0, so H2 is accepted, meaning that firm size has a positive influence on the structure of debt maturity. Hypothesis 3: asset maturity (ASMAT) has a sig value of 0.000<0.05 and β3 0.528>0, so H3 is accepted, meaning that asset maturity has a positive influence on the debt maturity structure. Hypothesis 4 leverage (DAR) has a sig value of 0.510> 0.05, so H4 is rejected, meaning that leverage has no effect on the structure of debt maturity. [ABSTRACT FROM AUTHOR]

We aim to investigate the impact of the adoption of the International Financial Reporting Standards (IFRS) on a firm's strategic voluntary disclosure decisions under different product market conditions. In the corporate world, firms tactically decide the level of voluntary disclosures considering their benefits, like resolving information asymmetry in the financial market, and costs, like providing proprietary information to their rivals. The adoption of IFRS has affected the demands in the financial market for complementary information, and therefore, it would affect the incentive to withhold corporate information in consideration of proprietary costs in the product market. Using a sample of Korean firms, we find that the likelihood of withholding management forecasts in concentrated industries is weaker in the post-IFRS adoption phase than in the pre-IFRS adoption phase. This is because there are greater demands for corporate disclosures for firms in concentrated industries in the post-IFRS adoption phase than earlier. Moreover, we find that the influence of IFRS on the decision of firms in concentrated industries to disclose management forecasts is significant only for firms with higher market power and higher financial leverage. [ABSTRACT FROM AUTHOR]

Firms usually need to attract debt to form and grow, but increasing financial leverage also entails increased risks and costs for stakeholders, such as customers and employees. Accordingly, past research suggests that for common commercial firms (CCFs), which prioritize profits, higher leverage leads to lower sales growth and higher employment costs. However, Certified B Corporations (CBCs) distinguish themselves by having a credible prosocial mission and, therefore, might be better insulated against the adverse effects of higher leverage. Using a European multi-country matched sample of 136 CBCs and 136 CCFs, we find that the negative relationship between leverage and sales growth and the positive relationship between leverage and employment costs are weaker for CBCs than CCFs. Taken together, due to their certified prosocial mission, CBCs enjoy an advantage in debt financing compared to CCFs. [ABSTRACT FROM AUTHOR]

The objective was to investigate the factors related to the financial situation of sponsors that can be associated with the decision to allocate the assets of the defined benefit plans of Brazilian closed supplementary pension entities in the annual period from 2013 to 2019. Previous research has studied the sponsor's financial situation and the allocation of resources by segment type, but there is a gap in relation to portfolio composition in pension plans where there is no compulsory adherence to insurance. The relevance of this research lies in identifying the factors related to the sponsor's financial situation that may be associated with the resources allocation decision in order to understand what may jeopardize the future payment of benefits. This research contributes to the discussion on the relationship between the portfolio of pension plans and the financial situation of the sponsor; and, indirectly, to the debate on issues related to withdrawal of sponsorship, migration between defined benefit and defined contribution plans, and the acquisition of insurance to cover the payment of future benefits. A total of 134 benefit plans and their respective sponsors were analyzed over a seven-year period. Allocation was divided into decision categories according to portfolio composition, and the statistical technique of multinomial logistic regression was used to analyze the data. The results show that the level of funding, the degree of solvency, the size of the company and financial leverage, as well as factors such as past profitability, financial maturity and actuarial solvency, are aspects of the sponsor's financial situation that may influence the allocation decision and contribute to the advancement of research on the relationship between pension fund portfolio composition and the sponsor's financial situation. [ABSTRACT FROM AUTHOR]

This research seeks to identify the factors that influence the creation of Startups with high growth potential in a developing economy. A qualitative approach with an exploratory-descriptive scope was followed, conducting 25 semi-structured interviews with members of entrepreneurship units in the city of Medellín, Colombia. The results indicate that the internal factors that most influence the creation of Startups with growth potential are: the profile of the entrepreneur, his work team and knowledge of the market. External factors correspond to economic aspects and capacity of the entrepreneurship ecosystem, such as: financial leverage, risk capital, financing, loans and calls. It concludes with the need for venture capital financing, specialized advice, and effective collaboration between universities, companies and the State to promote the strengthening of startups and contribute to the economic development of the country. [ABSTRACT FROM AUTHOR]

This paper explores the importance of moving beyond a narrow examination of technology-facilitated abuse (TFA) and domestic and family violence (DFV). Drawing on findings from two studies that capture the experiences of over 300 temporary visa holders in Australia, we detail how technology is one tool used within the context of patterns of control and isolation. We detail the experiences of TFA in our sample and then examine the importance of locating TFA within the broader context of structural inequality. We argue that the position of temporary non-citizens must be the foreground to identify the structural conditions that are sustained by the state and leveraged by perpetrators, rather than the specifics of the tools that are used to enact DFV. [ABSTRACT FROM AUTHOR]

Purpose: Existing theories on the determining factors of corporate investment decisions raise the importance of financial market imperfections in explaining investment behavior. Many factors have been proposed as drivers of investment, mainly in developed economies, while emerging countries have almost been neglected. The main purpose of this study is to examine the effect of financing constraints on the investment behavior of a small context, namely, Jordan, with an imperfect environment. Design/methodology/approach: This study considers panel data regressions from the industrial companies traded at the Amman Stock Exchange with a total of 1,058 firm-year observations. Findings: The results are able to demonstrate that business size, tangibility, market-to-book ratio, profitability, financial slack and leverage are major drivers of investment choices. The results support the importance of information asymmetry in explaining the investment behavior of firms. Nonetheless, the Q-theory is in place, as is firm agility. Practical implications: Policies to reduce information asymmetry are immediately needed to help firms increase investments by providing them with access to training, technology and market information. They also should enhance the firms' opportunities for growth. Moreover, they should make it easier for businesses to access financial slack, such as by improving access to credit and financial institutions. They also can work to improve the financial infrastructure to meet the financing needs of businesses. Finally, smaller businesses should be assisted by improving their ability to invest and grow. Originality/value: To the best of the authors' knowledge, this is one of the first studies, if any, to investigate this issue in a distinct environment. Despite the unique characteristics of Jordan, the findings are applicable to other countries that experience comparable political and economic circumstances because Jordan has traits common to many emerging nations. [ABSTRACT FROM AUTHOR]

This study aims to analyze the effect of Profitability and Leverage on Tax Avoidance with Company Size as a Moderating Variable (Empirical Study of Manufacturing Companies in the Various Industries Sector Listed on the Indonesia Stock Exchange for the 2017-2021 period). The data source for this research uses secondary data in the form of financial reports published on the Indonesia Stock Exchange. In taking the sample for this study using a purposive sampling method and the samples used in this study were 12 companies. The data analysis technique used is hypothesis testing which is processed using the WarpPLS 7.0 application. Based on the results of this study it was found that Profitability has a significant negative effect on Tax Avoidance, Leverage has no effect on Tax Avoidance, Company Size does not moderate the effect of Profitability on Tax Avoidance, and Company Size does not moderate the influence of Leverage on Tax Avoidance. [ABSTRACT FROM AUTHOR]

Purpose: Nonfamily farms are responsible for a disproportionate amount of US agriculture production. The importance of these operations to the volume of agriculture production in the United States has led researchers and policymakers to understand nonfamily farms as large commercial operations. This paper examines whether the distinction between family and nonfamily helps explain the financial outcomes of farm operations and households. Design/methodology/approach: We test for differences in financial outcomes of the household and operations of family and nonfamily farms using an Oaxaca-Blinder decomposition. We compare these results to a decomposition of other possible typologies. Findings: We present evidence that nonfamily farms are a heterogeneous group with a majority of small operations that are dominated by a small number of large operations. We discover that differences associated with the family-nonfamily distinction are largely explained by observable farm and operator characteristics that arise mechanically from the definition. However, we find suggestive evidence that family-nonfamily classification captures differences in economic behavior that lead to higher profitability measures to nonfamily farms. We find little evidence of any inherent structural differences between family and nonfamily farms that helps explain financial outcomes related to leverage or household finances. Practical implications: We conclude that including nonfamily farms in official statistics of farm households may provide a more comprehensive overview of the farm sector, as our results suggest that family and nonfamily farms do not have innate differences that help explain many of their financial outcomes. Originality/value: We incorporate previously unused data on nonfamily farm households and test the difference in mean financial outcomes between family and nonfamily farms. [ABSTRACT FROM AUTHOR]

This study investigates the speed of adjustment (SOA) to target leverage for different industry sectors in Malaysia. Using the two-step system generalized method of moments for 415 non-financial firms from 2010 to 2021, we found that the SOA for the overall sample is 38.6% and 22.0% for total debt and long-term debt, respectively. Our paper reveals the heterogeneity of SOA based on industry sectors. The industrial sector has the slowest adjustment speed (14.1%), whereas the healthcare industry has the quickest adjustment speed (80.4%) to target leverage. Our results are consistent with the dynamic capital structure theory regarding the deviation between target and actual leverage. Furthermore, our study demonstrates the significance of an industry-based perspective when researching SOA, which suggests that the capital structure strategy depends on the industry's business climate. [ABSTRACT FROM AUTHOR]

In the evolving global economic landscape marked by technological advancements, liberalized markets, and the ascent of multinational corporations, Islamic banks have emerged as pivotal entities within the new economic paradigm, addressing the financial needs of societies eschewing Riba (interest) transactions. This study investigates the impact of Islamic banks' profitability indices on the performance of the Amman Stock Exchange (ASE) through the lens of the Stock Price Index (PIX) over the period 2011-2021, with Jordan serving as the focal point due to its significant financial sector development, particularly in Islamic banking. Employing a quantitative analysis approach, the study leverages financial data from three major Jordanian Islamic banks and the ASE, applying statistical tools within the EViews software for analysis. The findings indicate a positive and significant relationship between the profitability indices of Islamic banks and the PIX, affirming the hypothesis that Islamic banks' profitability indices significantly influence the ASE's performance. This relationship underscores the integral role of Islamic banking in enhancing financial market performance, particularly in economies with a substantial Islamic banking sector. The study highlights the resilience and success of Islamic banks amidst global economic challenges and their ability to positively impact the financial market's performance, recommending further research on the multifaceted effects of Islamic banking on market dynamics and advocating for liquidity management to bolster economic activity and market performance. [ABSTRACT FROM AUTHOR]

Purpose: This study investigates the effects of elements of corporate governance along with firm specific variables on the financial leverage of listed Indian firms in the context of agency conflicts and new governance laws. Design/methodology/approach: A series of panel ordinary least squares as well as fixed/random effects regression models of book and market value of financial leverage on variables of corporate governance (board size, board composition, board meeting, board attendance and board gender) along with a set of control variables (asset tangibility, firm size, growth, liquidity and profitability) were estimated by employing 113 listed Indian firms during 2010–2021. Dynamic panel generalized method of moments models were also estimated to check the robustness of empirical results. Further, the full sample of firms was divided into small and large board sized companies using the median approach to investigate differences between small and large board characteristics on financial leverage. Findings: The evidence predominantly suggested that the governance variables have significant impact on leverage ratios of selected firms. Governance variables such as board size, composition, attendance and gender are significantly found to be reducing the financial leverage of firms indicating that in general these attributes in a way, through monitoring managers, put pressure on them to pursue lower financial leverage. Board meeting is found to be positive and significantly related with financial leverage suggesting that the frequency of meetings signals its monitoring ability that may influence lenders' risk assessment lowering borrowing cost. The results on small and large board sized companies indicate that firms with small boards relatively issue more debt compared to firms with large boards suggesting that small boards adopt high debt policy. Practical implications: The main policy implication of the study is that elements of internal corporate governance is a significant governance tool that has the potential to reduce agency conflict between the managers and agents through monitoring and decision making that has tangible effects on critical corporate decisions such as capital structure choices. Originality/value: This paper contributes to the existing literature by bringing new evidence relating to agency conflicts and capital structure decisions in an emerging market like India post adoption of new regulations related to corporate governance specified in Clause 49 of Securities and Exchange Board of India and Companies Act, 2013 as there is significant dearth of such empirical work. [ABSTRACT FROM AUTHOR]

In the dynamic landscape of the present digital era too, knowledge management (KM) continues to occupy the center stage and is pivotal to the common good of society at large. However, the paradigm of KM experienced a significant change with the arrival and meteoric rise of generative artificial intelligence (GenAI), leading to “generative AI knowledge management”. The innovative approach of “generative AI knowledge management” (Generative KM, for short) harnesses the inherent ability of GenAI for creation, analysis, optimization, and diffusion of knowledge in ways never imagined before. GenAI can thus contribute immensely to augment KM systems. GenAI-supplemented KM systems in turn can be leveraged for financial inclusion through financial literacy. This paper explores how the pairing of GenAI with KM systems—Generative KM—can strengthen KM, its application in the context of financial literacy and financial inclusion, and the future of this disruptive technology. The key inference is that KM systems can be enriched significantly with GenAI; KM processes—for example, knowledge acquisition and knowledge creation—can leverage GenAI for its value-add of dynamic content updates. GenAI is well set to be the central piece of KM, as digital technology continues its rapid stride. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Administração FACES Journal is the property of Revista de Administracao FACES Journal and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The primary goal of the research is to determine how the emotional inclinations of investors affect the link between capital cost and systematic risk for businesses listed between 2014 and 2018 on the Tehran Stock Exchange. They work for themselves. The mood of investors is likewise erratic. There are 112 firms in the research's statistical sample. A descriptive-correlation study with an applied approach is the methodology used. The library technique was used to get the data for the theoretical foundations segment, and the financial document documenting method was used to gather the data for the hypothetical testing section. The multiple correlation and regression approach is typically used for hypothesis testing. As demonstrated by the findings, systemic risk and capital cost have a clear and substantial link, but this relationship is also weakened by investors' emotional biases. The financial leverage and the ratio of accruals to the cost of capital are directly and significantly correlated, according to the results of the control variables, and the size of the firm and the cost of capital are significantly correlated as well. The ratio of operational cash flows to capital costs was also not shown to be significantly correlated. [ABSTRACT FROM AUTHOR]

Objective In financial literature, there are two well-explored characteristics of volatility. The first pertains to the asymmetric reactions of volatility to positive and negative news, while the second involves the presence of volatility spillover (contagion) between markets and various financial assets. The asymmetric behavior of volatility refers to empirical evidence that a negative return shock causes a greater increase in volatility than a positive return shock of the same size. Also, concerning the asymmetric impact of news on stock volatility, two hypotheses, namely the leverage effect and volatility contagion, have been postulated. Accordingly, this study aims to explore the leverage effect, dynamic conditional correlation, and volatility spillover among ten selected indices of the Tehran Stock Exchange. These ten industry indices collectively constitute over 75 percent of the overall Tehran Stock Exchange index. Methods In this study, the ARMA (1,1) form was utilized to construct the mean model. Then, the GJR-GARCH model was used to check the leverage effects. Finally, the DCC-GARCH (1,1) framework was employed, which helped to deeply analyze the dynamic linkages in volatility among selected indices of the Tehran Stock Exchange. The daily return data of industry indices, comprising a total of 1117 observations, was utilized during the period from March 25, 2018, to November 16, 2022. Results The result of the GJR coefficient, which was positive and significant for all return series - except for the Chemical and Oil Product Indexes-Indicates leverage effects exist. Also, the result of DCC (1,1) indicates the conditional correlation between all variables is positive and volatility spillover among them was strongly confirmed. Conclusion Financial markets, particularly the stock market, exhibit varied responses to positive and negative shocks, and these shocks impact the correlation between variables. For this reason, this research aimed to investigate the time frame during which the stock market underwent substantial fluctuations. This approach allowed for a more thorough and accurate examination of leverage effects, volatility spillover, and dynamic conditional correlation between returns. In the first half of 2019, despite the drop in the prices of commodities, oil, and the COVID-19 pandemic, the stock market experienced stunning growth, while investors were excited to buy regardless of the fundamental conditions of the companies. This enthusiasm to buy spread among stock market industries, but from the second half of 2019, the situation was completely reversed, and the market sold their shares at the slightest negative news. Hence, based on the results revealing the presence of leverage effect, dynamic conditional correlation, and volatility contagion, investors and portfolio managers can use these findings to mitigate risks and optimize their portfolios. [ABSTRACT FROM AUTHOR]

Copyright of Polish Journal of Management Studies is the property of Czestochowa University of Technology, Faculty of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: The purpose of this research note is to investigate the drivers and market reaction to firms' decision to release general COVID-19-related announcements and to withdraw earnings forecasts and dividends during the COVID-19 pandemic in the continuous disclosure environment of Australia. Design/methodology/approach: The authors first tracked the market reaction of all firms in the Australian Securities Exchange All Ordinaries, Top 300, Top 200 and Top 100 indices during the early period of the COVID-19 pandemic between 1 January and 21 September 2020. The authors then focus the investigation on the incidence of firms deciding to withdraw earnings forecasts and dividends and how the market responded to these incidences during that period. Findings: The market reacted negatively during the March/April 2020 period but then bounced back to the pre-March 2020 level. The market reaction is mainly driven by three industries, including consumer discretionary, health care and utilities. Firms in industry sectors such as consumer discretionary, materials, health care and information technology contribute to the highest percentage of COVID-19 announcements. It is interesting to document that firms issuing COVID-19 announcements and withdrawing earnings forecasts and dividends tend to be larger firms with stronger financial performance and higher financial leverage. Regarding the stock market reaction, while the market generally reacted positively to COVID-19-related announcements, the decision to withdraw earnings forecasts and dividends is significantly regarded as bad news. Originality/value: The COVID-19 pandemic has provided a unique natural event to examine firms' disclosure behaviour in the continuous disclosure environment of Australia during this period of extreme uncertainty. The incidences of earnings forecasts and dividend withdrawals are mainly driven by larger, better performing and higher leverage firms in the consumer discretionary, health care, materials and information technology industry sectors. The market generally reacted favourably to COVID-19-related announcements, despite a significant stock price drop during the March/April 2020 period. The findings provide important regulatory and practical implications. [ABSTRACT FROM AUTHOR]

The transition of China's tangible real economy to an intangible economy, along with phenomena such as capital idling and shadow banking, has significantly altered the relationship between financial markets and actual enterprises. As leveraged capital flows into real enterprises, it is crucial to discern how much is allocated to operational endeavors versus financial market investments. Leveraging the logic of asset allocation and capital acquisition in real enterprises, we developed a model to discern the allocation of leveraged capital. Through descriptive analysis, we delineate the landscape of Chinese listed companies' utilization of leveraged capital for financial assets. Our findings reveal that the proportion of Chinese enterprises holding leveraged capital has steadily risen, surpassing 86.53%, with an increasing trend in leveraged enterprises utilizing capital for financial asset acquisition, growing from 35.02% to 79.12% annually. Among leveraged enterprises investing in financial assets, the portion of leveraged capital directed toward such investments escalates annually, from 20.44% to 46.37%. However, as leveraged capital increases, the ratio allocated to financial assets diminishes. Approximately 14.38% of all leveraged enterprises allocate more than 50% of their financial assets through leveraged capital, with the proportion of enterprises solely reliant on leveraged capital for financial asset purchases steadily increasing, reaching 23.35% in 2020, predominantly concentrated in the manufacturing sector. This research holds theoretical significance for understanding the dichotomy between the virtual and tangible applications of leveraged capital at the microlevel. It uncovers the logical mechanisms governing leveraged capital and disparate asset allocations, fostering opportunities for quantitative exploration of the interplay between finance and the tangible economy. Additionally, our insights provide valuable reference points for regulatory bodies seeking to fortify oversight over leveraged capital utilization. [ABSTRACT FROM AUTHOR]

The purpose of this research is to investigate the effectiveness of audit firm rotation on audit quality in companies listed on the Tehran Stock Exchange using Pearson's linear torque model. In order to achieve the purpose of the study, using the method of screening or systematic removal of the number of 90 companies admitted to the Tehran Stock Exchange, during the period of 2016 to 2021, selection and panel or combined data related to 630 companies-years from the database of the organization The stock market and securities were collected. This research is categorized as descriptive-correlation research in terms of its practical purpose, and historical or post-event-field research in terms of time. The results of the statistical analysis show that there is a direct relationship between the mandatory rotation of auditors and audit quality. In addition, the study shows that the companies that have changed their external auditors during the research period have a higher average "audit quality" and a lower dispersion coefficient of "audit quality" compared to the competing group or companies subject to the retention of independent auditors. They were. The conducted research showed that the coefficient of variance of the "audit quality" factor was higher for the business owners whose independent auditors were subject to mandatory rotation compared to their competitor group or the business owners whose independent auditors were not subject to mandatory rotation. [ABSTRACT FROM AUTHOR]

The article discusses the impact of InsurTech on the Indian insurance sector, highlighting its transformation through improved distribution channels, innovative products, and integration of emerging technologies. Despite challenges like the COVID-19 pandemic and geopolitical conflicts, the Indian insurance industry has shown strong growth and financial strength. Key drivers of this growth include new insurers, diverse product offerings, digital distribution channels, technology-enabled ecosystems, and addressing changing risk landscapes. The article also discusses regulatory interventions, increased foreign investment, and the role of InsurTech in bridging the protection gap. While there are challenges and legal issues to address, the insurtech sector in India is expected to continue growing and play a significant role in achieving "Insurance for all" by 2047. [Extracted from the article]

The purpose of this study is to examine how financial distress is affected by liquidity, activity, profitability, and leverage in real estate and property companies that are listed on the Indonesia Stock Exchange between 2019 and 2022. This study is inspired by the recent financial distress of major industry participants such as FORZ, COWL, MYRX, and ARMY. The approach in this study is quantitative, and the data was gathered using a documentation technique with a sample of 33 companies. This study is conducted with panel data regression using Eviews 12. The results of this study reveal that liquidity, activity, profitability, and leverage simultaneously have a significant impact on financial distress. Liquidity and profitability partially exhibit negative and significant effects on financial distress, while leverage has a positive and significant impact on financial distress. However, activity alone does not significantly affect financial distress. In addition, the findings affirm that the risk of financial distress can be influenced by financial factors such as liquidity, activity, profitability, and leverage. [ABSTRACT FROM AUTHOR]

Theoretical background: Financial flexibility is a manifestation of the ability to finance investments resulting from the need. The sources of flexibility may be different. These are own money (savings) and financial leverage. The approach to investments is not clear, because they are understood in very different ways and have a diverse nature. Research shows that the higher the financial flexibility, the greater the investment opportunities and the greater the investment activity. Purpose of the article: The aim of the research was to identify investment activity in entities such as family farms, in groups separated according to financial flexibility, and to identify factors that influence the amount of investment expenditure. The idea was to indicate whether this process involves periods of increased activity or is rather a continuous process, how this process takes place in separate groups, and which sources of flexibility are most important for meeting the needs of farmers. Research methods: The research covered approximately 12,000 family farms. Financial flexibility groups were separated based on cash resources and the level of financial leverage. There are 4 groups: HC_HL (highly flexible), HC_LL, LC_HL, LC_LL (lowly flexible). The work uses comparative analysis and panel methods (estimation by weighted averages). Main findings: The research showed that investment activities were carried out with varying intensity at intervals depending on financial flexibility. In groups with greater flexibility, they were more cyclical (there were periods of low activity), in groups with lower flexibility this process was continuous (no periods of a clear reduction in investment expenditure). The main factor that had a positive impact on investment outlays were financial flows from operating activities, but also financial leverage and cash, but only when farmers used credit at the same time. However, the factors that had a negative impact on investment activity were subsidies for investment activities (exception: HC_LL group) and the share of cash in assets. To sum up, it should be stated that credit, as a source of financial flexibility, is the driving force behind investment activities in Polish family farms. [ABSTRACT FROM AUTHOR]

This study examines the relationship between cash flow and financial performance with a sample of 122 American banks covering the period from 2019 to 2022. Panel data analysis is applied in the work. Financial performance is computed as the Return on Assets (ROA) and Return on Equity (ROE). The explanatory variables used are the net cash flow, free cash flow, cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, size of banks, leverage ratio (total liabilities to total assets), liquidity ratio (current assets to current liabilities) and efficiency ratio (total revenue to total assets). The results provide evidence of a negative relationship between financial performance and net cash flow. This is also the case for cash flow from investment and financing activities. On the other hand, the relationship of free cash flow with financial performance is positive. As regards the other explanatory variables, leverage and efficiency are positively related to financial performance [ABSTRACT FROM AUTHOR]

This study explores the application of deep learning techniques in forecasting foreign exchange rate volatility, leveraging the capabilities of neural networks to capture complex patterns and non-linear relationships within financial data. The volatility of exchange rates is a critical factor influencing investment decisions, risk management and financial market stability. Traditional models often struggle to capture the dynamic nature of market conditions, leading to increased interest in advanced machine learning methodologies. We applied the auto regressive integrated moving average (ARIMA) and machine learning linear regression (LR) model, deep learning models, i.e. recurrent neural networks (RNN), bidirectional LSTM (BiLSTM), long short-term memory (LSTM) and gated recurrent unit (GRU). In terms of forecasting errors, Python routines were used for such a purpose. Furthermore, in order to investigate the quality of the models used, we compared the performances of these algorithms in US dollar/Algerian dinar exchange rate forecasting through the application of significance statistical tests (R-squared, MSE, RMSE, MAE, MAPE).The results clearly depict that contemporary techniques have been shown to produce more accurate results than conventional regressionbased modelling. The machine learning linear regression (LR) model provides the maximum accuracy rate (99.83%), followed by the RNN models, with the GRU model (92.27%), BiLSTM model (87.34%), LSTM model (74.68%) and ARIMA model (32.29%) [ABSTRACT FROM AUTHOR]

Purpose: In this paper, the authors take the central environmental protection inspection (CEPI) as an exogenous shock to study the reaction of the stock market in China. Using the event study method, the authors check how the first round of the first batch of CEPI supervision affects the cumulative abnormal return (CAR) of the listed firms on the Shenzhen or Shanghai stock exchange. This paper aims to discuss the aforementioned objective. Design/methodology/approach: In this paper, the authors take the first round of the first batch of CEPI supervision as a clean exogenous shock to study its effects on the capital market. The authors collect daily trading data from the China stock market and accounting research (CSMAR) database, with the sample containing 1,950 Chinese firms listed on either the Shenzhen or Shanghai stock exchanges. And detailed information on CEPI supervision is obtained from the official website of the Ministry of Ecology and Environment of the People's Republic of China. The event study method is adopted to analyze the reaction of the stock market under CEPI supervision. Specifically, the authors constructed the cumulative abnormal return of each firm around the event day of CEPI. To capture the deterrent effects of CEPI supervision, the authors examine the situation of polluting and non-polluting firms in the supervised provinces, adjacent provinces and provinces that are not supervised or close to the supervised provinces, respectively. Findings: This paper throws light on the following: (1) the polluting firms in the supervised provinces were negatively impacted by CEPI within 20 trading days of the event day, and its effects spread to the polluting firms in the neighboring provinces; (2) CEPI had a favorable impact on the non-polluting businesses in the provinces that are neither supervised nor close to the supervised provinces. The authors contend that it is because the investment is being forced out of the polluting sector and into the non-polluting sector, which is more pronounced in the provinces not directly or indirectly targeted by CEPI; (3) by comparison, the "looking back monitoring of the first round" has had no discernible detrimental impact on the firms' CAR, indicating an important role of psychology anticipation of investors in the stock market performance; (4) although not physically located in the supervised provinces, the downstream enterprises of the polluting firms suffer significantly from CEPI shock; (5) the effectiveness of CEPI supervision in the supervised provinces depends on the level of local environmental regulation and the ownership structure of the company. Private firms in the provinces with stronger environmental regulations suffer more from the CEPI shock; (6) the multivariate analysis shows that while enterprises with high ROE and financial leverage may be at risk of CAR loss, older, larger firms are less likely to experience CEPI shock; (7) the study of persistent effect reveals that the strike of CEPI supervision can last for at least 10 months after the event day and deterrent effect can be spread within the whole polluting industry. Research limitations/implications: In this paper, the authors only concentrate on the market reaction within 20 trading days after the event day. An analysis of long-term effects should be valuable to get a deeper knowledge of the capital market reaction to the CEPI policy. In addition, the paper only focuses on the first round of the first batch of CEPI. Since CEPI has been built as a constant regulation of local environmental performance, further study may need to track both the reaction of listed firms and investment behavior in the capital market. Practical implications: Policy implications of the paper are as follows: First, for the policymakers, it is important to construct a constant environmental regulation system instead of a campaign movement. Second, for investors, as environmental issues are receiving increasing attention from both the government and the public, investment decisions should take into account firms' environmental performance, which can help reduce the risk from environmental regulations. Third, the firms in the polluting industry should take more action to reduce pollutant releases and adopt green technology, which is essential for sustainable development under environmental protection. Originality/value: This paper contributes to the existing literature in the following aspects. First, the authors provide new evidence on the effects of environmental regulations as a shock to the stock market, which has been wildly concentrated in the literature about environmental policies evaluation and capital market reaction. Second, the authors supplement the literature on green finance and sustainability transformation, which has got increasing attention in recent years. Theoretically, by guiding investment and affecting the stock market performance, environmental regulations are considered to be an efficient way to stimulate polluting firms to transform into green development. The results of the paper support this intuition by showing that the CAR of the non-polluting firms in non-supervised provinces in fact benefit from the CEPI supervision. [ABSTRACT FROM AUTHOR]

This study aims to determine the influence of the industry group business on international acquisition diversification with private ownership and strategic asset seeking as moderating variables. Using resource-based and institutional theory, this study hypothesizes that the industry group business provides benefits and encourages diversification of international acquisitions. In addition, this study also argues that private ownership and strategic assets seeking amplify the influence of industry group business on diversification international acquisition. The novelty of this research aims to address by proposing strategic assets seeking as a moderated variable that influence industry group business on diversified international acquisitions. The sample data of this research are companies listed on the Indonesia Stock Exchange between 2018–2021. The findings of this research can be useful for companies to understand the significance of intangible assets and how they can leverage them to gain a competitive advantage in their respective industries. The results of this study will greatly assist researchers in the field of international acquisitions. [ABSTRACT FROM AUTHOR]

This study examines the impact of board composition on the financial technology of banks listed on the stock exchanges of the Gulf Cooperation Council (GCC) countries. The study focuses on the size of the board, the independent members, the number of board meetings, and their impact on mobile banking, automated teller machines, point-of-sale terminals, and Mada Atheer, which are used as proxies for financial technology. In addition to the Ordinary Least Squares (OLS) method, the study uses the Generalized Method of Moments (GMM) system to control the endogeneity and heteroscedasticity issues. The sample consists of all banks listed in the GCC over eleven years from 2010 to 2020. The study found that the size of the board, the independent directors, and the number of board meetings are all positively and significantly associated with banks' financial technology. Regarding the financial characteristics of banks, the study found that banks' age and financial performance are positively and significantly associated with financial technology, while financial leverage is negatively related to financial technology. The findings of this study have implications for boards of directors of banks, which should continue to invest in banks' financial technology to improve their profitability and competitiveness. [ABSTRACT FROM AUTHOR]

This article examines the factors that influence the value of infrastructure, utility, and transportation companies listed on the Indonesia Stock Exchange from 2018 to 2021. The study finds that liquidity and leverage do not impact firm value, while profitability does. However, firm size does not have a significant effect on firm value. The research suggests that investors should carefully consider these factors when evaluating firm value. The article emphasizes the need for future research to include larger sample sizes and consider other variables that may affect firm value. [Extracted from the article]

• The new-caliber urban construction investment bonds data of 270 prefecture-level cities from 2007 to 2015 is used. • Competition for growth of subnational governments is the endogenous root of the boom of urban debt. • The growth target constraint triggers subnational governments to carry out irrational debt financing through the leverage amplification effect of land leasing and mortgage, and to invest a large amount of financing in infrastructure construction. • Urban debt has shown considerable growth in this debt-stimulated model, which we attribute as the "snowball effect" of urban debt risk. The root causes and governance of subnational debt are intensely discussed in regional and policy research. This study contributes to literature by using the growth target constraints as a lens to investigate the boom of urban debt under political incentives. A theoretical analysis framework of growth target constraints and urban debt is constructed from the perspective of the full cycle of debt operation (financing–investment–repayment). Using the new-caliber urban construction investment bonds data of 270 prefecture-level cities from 2007 to 2015, we find that the competition for growth of subnational governments is the endogenous root of the boom of urban debt. The growth target constraint triggers subnational governments to carry out irrational debt financing through the leverage amplification effect of land leasing and mortgage, and to invest a large amount of financing in infrastructure construction. Unfortunately, these impulsive investments have low returns in terms of efficiency, which ultimately affects debt repayment. Accordingly, urban debt has shown considerable growth in this debt-stimulated model, which we attribute as the "snowball effect" of urban debt risk. This study provides empirical evidence of damage on urban finances caused by political incentive distortion. From these findings, reflections on governance policy for subnational debt in the context of China are drawn. [ABSTRACT FROM AUTHOR]

The article discusses that the global dash for cash amid the worsening COVID-19 pandemic led to selling pressures across advanced-economy sovereign bond markets, causing market disruptions in March 2020. The authors emphasize that these disruptions were more pronounced and broad-based in the US Treasury market due to differences in leverage dynamics, leading to a heavier buildup of leverage and catalyzing more deleveraging during the COVID-19 shock compared to other sovereign bond markets.

Consider the usual linear regression model. A well-known concern is that a bad leverage point, which is a type of outlier, can result in a poor fit to the bulk of the data, even when using any one of many robust regression estimators. In terms of measuring the strength of the association, bad leverage points can mask a strong association among the bulk of the data, and bad leverage points can suggest a strong association when in fact there is, in general, a weak association. This issue can be addressed by using an analog of Pearson's correlation that is eliminates outliers. But this approach can have a negative impact because it eliminates what are known as good leverage points. The paper suggests a class of robust measures of association that deals with this issue. [ABSTRACT FROM AUTHOR]

The unprecedented global impact of the COVID-19 pandemic has heightened the critical significance of supply chain resilience (SCR) within the contemporary supply chain landscape. The body of literature dedicated to SCR has significantly expanded since the early 2000s, with numerous scholars delving into the construction of SCR frameworks based on empirical studies and literature reviews. Despite the usefulness of these frameworks, there has been a notable absence of a generic framework that transcends industry and national boundaries, particularly in light of the disruptive events triggered by the COVID-19 crisis. This study employs the narrative literature review method to intricately integrate itself into the existing SCR literature, conducting a comprehensive analysis, identifying theoretical foundations and empirical discoveries, and synthesizing this knowledge into a cohesive and all-encompassing structure to formulate a conceptual framework for SCR. This generic framework is designed to accommodate the unique characteristics of various supply chains. While the empirical validation of this innovative framework remains pending, it presents a valuable opportunity for scholars to engage in scientific investigations on SCR, building upon the collective insights of their predecessors. Moreover, practitioners can leverage this framework to scrutinize and construct resilient supply chains capable of withstanding future disruptions. [ABSTRACT FROM AUTHOR]

The Ukraine war, high inflation and rising interest rates are jeopardising people's ability to afford essential items such as food and energy, causing a widespread sense of vulnerability worldwide. Consequently, access to finance has become increasingly challenging for vulnerable consumer groups, including young adults without established credit histories, senior citizens with fixed incomes, start-up entrepreneurs, sole traders, single parents, immigrants in Western markets. To address this issue, this study explores the potential use of individuals' financial personality for inclusive credit scoring in these uncertain environments. Examining a sample of low-income individuals in the USA and the Netherlands, our psychometric scoring models (PSMs) demonstrate that late payments can be attributed to factors such as financial capability, materialistic tendencies, impulsive buying behaviour, social desirability and attitudes towards debt. These findings provide evidence that PSMs offer a viable solution to advance financial inclusion for vulnerable customer segments amidst global uncertainty. [ABSTRACT FROM AUTHOR]

Pennsylvania's aging transportation infrastructure has long been a cause for concern, with bridges, highways, and other vital components approaching the end of their serviceable lifespans. The state's infrastructure, one of the nation's oldest, is in dire need of repair and replacement, particularly in the case of bridges, many of which are over 50 years old and in poor condition. However, the financial investment required for this task is substantial, posing challenges within the state's budget constraints. To address this infrastructure crisis, an amendment to Pennsylvania's existing legislation, Act 88, is proposed. This amendment would permit local governments to engage in Public-Private Transportation Partnerships (P3s), leveraging private sector financial resources and expertise. Such local government Transportation P3s have the potential to alleviate the state's infrastructure and financial woes. Currently, Act 88 prohibits municipal governments from participating in these partnerships, hindering the Commonwealth's ability to secure private funding and expertise when public resources are limited. This study aims to address the structural deficiencies in Pennsylvania's transportation infrastructure and its $2.2 billion financial deficit, which hampers repair and improvement efforts. The study employs a descriptive, multi-case analysis to investigate how an amendment to Act 88 could enable local municipalities to engage in P3 transportation projects. These partnerships could provide solutions to budgetary and funding challenges, particularly in the context of locally owned bridge repair and replacement projects. The selected cases are evaluated against various performance criteria, such as value, pricing, budgeting, public accountability, regulatory control, and capacity, offering a comprehensive assessment of the potential benefits of local government participation in P3 transportation projects. [ABSTRACT FROM AUTHOR]

What drives the productivity dynamics of infrastructure companies? Using a panel of firms in 14 countries, we study total factor productivity (TFP) enhancers of utility and network services companies. We find that moving TFP closer to the technological frontier drives productivity growth at higher speeds in Asian countries than in European countries. We also find that financial leverage exerts a positive effect on TFP growth for larger infrastructure firms and that more financially developed countries utilize economies of scale through better use of financial resources. Large utility and transportation companies display a higher rate of TFP growth, indicating that a competition policy to encourage M&As would be prudent for the utility/transportation sectors to maximize economies of scale. In contrast, we find diseconomies of scale for energy companies in some countries. Moreover, young network firms improve TFP growth faster than their peers in countries with fewer product market regulations. Therefore, policies should remove entry barriers while facilitating the departure of old and low‐productivity firms from network markets. Finally, policymakers should offer well‐targeted fiscal incentives for intangible investments to boost TFP because the accumulation of intangible assets such as digital technology promotes more scale economies through network effects. [ABSTRACT FROM AUTHOR]