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The objective of this study is to empirically assess the effect of government decisions on market growth in response to social distancing initiatives, government reactions, economic support provision, and containment and health responses, to name a few. A panel dataset of daily stock market returns is analysed in this study, changes in COVID-19 cases, and government responses to 17 countries in the Pacific and South Asia from 1st January 2020 to 31st December 2020. Findings indicate that social distancing policies have a significant negative effect on stock returns but a substantial positive impact on market growth when new cases' growth rate declines after accounting for country characteristics and systematic risk due to foreign factors. A direct negative effect is seen almost immediately, and a subsequently indirect positive effect is noted. As expected, policies regarding social distancing have an immediate negative impact, attributed mainly to the expected negative effect on economic activity. Subsequently, we see an indirect positive effect on market return because social distancing measures reduced the growth of confirmed COVID-19 cases. Both awareness, containment, and health index (ACHI) and Income Support and Debt Relief Index (ISDRI) positively affect market growth, as they are perceived to support individuals' socio-economic well-being and mainly result in positive market returns. © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.

Purpose The purpose of this paper is to investigate how Pakistani banks manage their portfolios (lending vs investment) when the economic indicators are not supportive. This study investigates three aspects of the banking system in Pakistan – prevalence of disintermediation, post-crisis profitability orientation and depositor protection by financial system in unfavorable conditions. Design/methodology/approach This study is limited to identifying the key economic and financial drivers behind disintermediation and its subsequent impact on banks’ profitability and depositors’ protection. GLS panel regressions and Engle–Granger causality test as specified by the error correction model have been used to test the major hypothesis of this study. Findings This study shows that small banks have been shifting major part of their portfolios toward risk-free investments to be able to maintain their profitability more efficiently and effectively, like large banks. The study also observes that significant pairing causality exists between gross credit loans and investments confirming disintermediation hypothesis for all types of banks except Islamic or Sharia compliant banks, whereas for significant pairing causality, the results are mixed for remaining variables among gross credit loans as a proportion of assets and economic variables that include GDP growth, unemployment, KSE-100 and SBP policy rate. It is also confirmed by the results that disintermediation improves banks profitability and depositor protection, thus providing a good rationale and justification to banks for opting it. Originality/value The study focuses on the impact of structural changes in portfolios only of commercial banks’ revenue-generating assets not including other financial institutions as a part of banking system. Furthermore, data are extracted from balance sheets and is the sole property of corresponding author.

The paper evaluates the impact of corporate governance on the Loan Loss Provisions (LLPs) of banks. Linear regression model is applied on a strongly balanced panel data obtained from eighteen commercial banks of Pakistan for the years 2011-2016. The study considers several corporate governance mechanisms such as independent directors, board of directors, Chairman-CEO duality, attendance in board meetings etc. and takes LLPs as proxy for credit risk. Our findings suggest that with reference to Pakistani banks, corporate governance does have an influence on loan loss provisioning. The results clearly indicate that larger boards in Pakistani banks provide ineffective governance through increased loan loss provisioning, while independent directors and director attendance at meetings do not seem to matter. On the other hand where one strong family member dominates, the CEO-Chairman duality appears to induce a reduction in the percentage of LLPs and therefore causes decreases in credit risk. This reflects that the separation of these two positions could lead to higher accountability and responsibility, where there is higher transparency with segregation of duties. The paper concludes that effective corporate governance plays an important role in credit risk management in banks and recommends that regulations are needed to further endorse the validity of CEO-Chairman duality in Pakistan.

The primary purpose of this study was to conduct an exploratory and explanatory analysis to determine the impact of structural income on performance of the all commercial banks in Pakistan from 2008 to 2015. It aimed to establish the theory on dual impact of income diversification and ownership on bank performance in a developing economy. This population was divided into two categories - ownership mode characterized into conventional and Islamic banks and category mode characterized into five proportions of non-markup and mark up income structures. The divisions were analyzed on the basis of change in assets and equity and gross income, using a non-linear approach. This approach ensured robustness of analysis and clearer outcomes regarding strategic approaches in this sector. Ownership mode finding suggested conventional banks tilt towards non-markup income significantly for asset and gross income base increase and Islamic banks insignificantly towards markup income. Our findings also showed that conventional banks lead Islamic banks, and banks with non-markup income between 30%-40% lead other bank categories in terms of managing profitability. Islamic banks are ahead of conventional banks, and category1 banks with non-markup income above 50% are ahead of all other categories in terms of utilization of funds.

Efficient utilization of the resources as trust of the depositors is the first and foremost responsibility of the Islamic bank, as directed in Al-Quran (17:29).Efficiency in managing the cost of the bank is only aspect that bank can control which can lead to increase in income of bank and depositors. There is a vastliterature on theoretical models of business cost minimization but in reality the situation is not promising. This paper aims to measure and compare the real costefficiency of full-fledged Islamic banks operating in Pakistan between the years of 2003 to 2015, using the Panel Stochastic Frontier Approach (SFA). The resultsrevealed that surprisingly the Islamic banks in Pakistan are only 36 percent cost efficient, which can be contributed to the challenges faced because of parallelIslamic & conventional banking system and the nature of support from the regulatory and economic system. While determining the factors for efficiency forbanking, fixed effect estimates revealed that operating efficiency, asset utilization has a positive effect while profit margin has a negative effect on cost efficiency.This study concludes that Islamic banks are facing issues of excess liquidity, inadequate support from regulatory authorities and competition from theconventional banking system which are causing inefficiency in cost management.

Purpose This paper aims to discuss the urgent need to develop a sound and robust universal framework that would prove helpful in creating uniform acceptability of Islamic financial instruments. Among many problems, a particular problem in developing a uniform global framework for Islamic financial instruments is the existence of different madhahib within Islamic Fiqh. The leading and the most prominent Sunni madhahib that have survived till today are four, the Hanbali, Shafi, Maliki and Hanafi, while the most prominent Shia madhab is the Jafari madhab. Design/methodology/approach The research approach was descriptive and exploratory in nature. Secondary resources were used except for a semi-structured interview with a Shariah scholar with the justification that his knowledge and experience regarding the subject matter may prove helpful. The methodology included a systematic review of already issued Sukuk by various madhahib. Compared to a simple narrative review of a few case studies regarding Sukuk, this methodology has a benefit to provide the reader the power to assess the review and even replicate it. The results of this systematic review are summarized in the form of tables. Findings Ingredients were determined that would help make a truly global Sukuk security, a model acceptable to all madhahib of Islamic Fiqh. These ingredients include rentals, relationship between special purpose vehicle (SPV) and originator, transference to SPV, Sukuk structure, guarantee, liquidity, listing and tradability, convertibility, subordination and post-Ijarah price. Moreover, specific steps were also analyzed that must be taken to issue such type of Sukuk al-Ijarah. Research limitations/implications This study is focused only on a type of Islamic financial instrument, i.e. Sukuk whose underlying was Ijarah-based contracts. This is due to lesser global acceptability for other Islamic financial instruments including other forms of Sukuk. Based on the nature of study, purposive/judgmental sampling was done. The sample population was 40 Sukuk (nine each from Hanafi, Shafi and Maliki madhahib, five each from Hanbali and Jafari madhahib and three from non-Muslim zones). Some Sukuk were dropped due to non-availability of enough data and to keep some semblance between the impact of the madhab on financial world and the data. Practical implications For practitioners and regulators, on the basis of the given recommendations, it would be possible to create a standardized product, acceptable for all madhahib of Islamic Fiqh. This standardization will lead to a unified platform that can attract a larger investor pool as well as better integration. For practical purposes, the proposed model of Sukuk al-Ijarah can be replicated for other Islamic financial instruments for global acceptability. Social implications For an Islamic society, the expansion of Islamic economic system depends principally on unity. So integration is critical and also essential for the success of any Islamic financial instrument. When the society will move away from Riba and its associated evil, the society will move in a positive direction, while still making profits. The proposed model may also be utilized for socially responsible initiatives like protection of natural resources, advancement of renewable energy, economic development and rehabilitation to name a few. Originality/value Previous studies were silent on the development of comprehensive frameworks acceptable to all madhahib of Islamic Fiqh. This research study is the first study of its kind and is the first step toward integration, as it would try to suggest a global framework for Sukuk al-Ijarah that can be acceptable by the followers of any madhab of Islamic Fiqh.

Prior research does not provide any consensus on whether Dutch disease can be caused by international remittances. However, remittances cause sectoral imbalances, which may adversely affect the economy. This study's main objective is to determine the impact of remittances on the real exchange rate movement from 1999 to 2019 in 199 countries and territories. This paper will apply the one-step system Generalized Methods of Moment (S-GMM) to the linear dynamic panel data (DPD). This study's main findings indicate that remittances have a depreciating effect on the exchange rate in all countries and in lower-middle-income countries. In comparison, the first lag of remittances has a significant negative impact in high-income countries but a significant positive impact in lower-middle-income countries. The results indicate that lower middle income and low-income economies should adopt macroeconomic policies to neutralize the Dutch disease. From a policy perspective, the imposition of a variable tax or retention on the exports will increase the exporters' cost, and the exchange rate will depreciate accordingly. Such a policy formulation would allow countries to recover from Dutch disease while instigating trade of commodities, which could benefit the economy in the long run. The self-balancing mechanism would also protect the economy against long-run depreciation of currency value.

In the Fourth Industrial Revolution, the prevalence of innovation and technology in the financial sector is indisputable. The purpose of this study is to determine the effect of IT investments on intellectual capital, aggregated and decomposed into its components, competitive advantage, and the performance of banks (Tobin's Q and CAMELS). These forces are further classified in terms of dual banking, bank size, and market position, and any country-based phenomena that might be applicable. Moreover, data is collected from 65 banks in the SAARC region, based on a time span of 11 years, from the years 2008 to 2018, and involving a total of 715 observations. Based on the endogeneity of IT investments, this study uses GMM regression for empirical analysis. The findings elicited from the empirical results demonstrate a positive impact of IT investments on the intellectual capital, and some sub-components. In the case of the impact of IT investments' on competitive advantage, the results are have come out to be diverse in nature. From a theoretical perspective, this paper contributes to the existing literature by presenting a valuable analytical framework for exploring the role of IT investments in a rapidly changing financial sector.

IAS-24 of the International Financial Reporting Standards focuses on the concept and disclosures of related party transactions (RPTs) for a reporting entity. This study examines the interrelationship between RPTs (as disclosed under IAS-24), agency theory, ownership structures and firm performance. Our sample includes nonfinancial companies indexed by the KSE-100 of the Pakistan Stock Exchange during 2006–15. To run the regression models, we determine the regression assumptions, normality, heteroskedasticity, autocorrelation and multicollinearity. We investigate the impact of different RPTs, including cash inflows and outflows, whereas other studies generally look at the impact of RPTs on firm performance in totality. The empirical analysis suggests that institutional ownership has a positive, significant impact on firm performance. Related party purchases have a significant, negative impact on performance, resulting in the expropriation of institutional ownership. RPTs that generate revenues have a significant, positive impact on performance, such that institutional ownership has a propping-up effect with respect to the related parties. In practice, institutional ownership leads to strong corporate governance and contributes to firm performance. While other studies find family ownership responsible for the expropriation effect, we argue that institutional ownership has a propping-up and expropriation effect on related parties. Our study also suggests that certain ownership structures lead to weaker corporate governance mechanisms, resulting in greater agency problems. This, in turn, badly affects company performance and leads to the exploitation of minority shareholders.

This paper aims to identify the impact of firm specific factors on liquidity risk and operational risk management for Islamic banks. The performance of Islamic financial institutions has been explored at length in regards to their operational differences, product offering and customer patronage. However, firm specific factors related to risk management have not been explored in Pakistan. This paper intends to fill that gap using empirical analysis. This study utilizes full-fledged Islamic banks operating in Pakistan during the period of 2006-2014. The ratio of capital to total assets us used as a proxy for liquidity risk and the ratio of return on assets is used as a proxy for operational risk. Size, NPL ratio, capital adequacy ratio, leverage and asset management have been used as independent variables. Results show that CAR, NPL ratio, leverage and asset management have a significant impact on liquidity risk. Size, car, and asset management have a significant impact on operational risk. The findings of this study can be utilized to create policies for enhanced risk management for Islamic financial institutions.

Purpose Inquiring into the role of Islamic and conventional banks regarding the core responsibility of lending is an established phenomenon. This chapter is based on key findings regarding dynamic changes in the structural mix of credit portfolios in Islamic banks and conventional banks of Pakistan. Methodology/approach The nature of the study is exploratory; the sample consists of 5 Islamic banks and 20 conventional banks of Pakistan comparatively evaluated for the time frame of 2008–2014. Findings Our findings show that for Islamic banks, there is an increasing trend in the credit portfolios as a proportion to assets as well as to equity, whereas in case of conventional banks the findings are opposite. The results further prove a positive and negative growth of credit portfolios as proportional to assets and equity in case of Islamic and conventional banks respectively. It is also observed that credit portfolios of Islamic banks are growing with higher degree as a proportion to equity as compared to proportion to assets. On the other hand, conventional banks show higher degree of decline of credit portfolios as a proportion to equity as compared to assets. Originality/value These findings also show that primary stakeholders in Islamic banks are more risk seekers thus more inclined towards risky investments than ordinary credits.

This paper intends to determine the impact of pursuing a strategy for innovation on capital structure decisions and performance. It builds on the R&D management research which is country-focused and utilizes an international sample. This is significant when considering the sample of the study. While past studies have focused on single country samples, this study utilizes the most innovative firms in the world, thereby raising a new aspect in the innovation theory. Interestingly, this study finds that directionality of leverage, R&D investment and performance relationships observed appear to be contrary to existing research. This is attributed to the cross-country characteristics within the sample. This study differs from existing research by indicating variations in patterns of advertisement intensity and R&D investment across countries, as well as variations in patterns of innovation scores and business sophistication. Future research may explore the country characteristics associated with firms that pursue a strategy for innovation.

The purpose of this research is to determine the impact of “Capital investment anomaly” and “Accrual anomaly” on stock returns after controlling the size and book-to-market effects. This study aims to fill a gap regarding the implications of capital investment anomaly and accrual anomaly in South Asian economies, and primarily focused on two developing economies from SAARC region; India and Pakistan. This study uses 320 company-year observations using a sample period of 2009-2014. The sample is representative of 50% of non-financial companies selected systematically from nine different sectors included in Pakistan Stock Exchange (KSE-100 index) and Bombay Stock Exchange (BSE-100 index) each. Selection is based on market capitalization to mitigate any bias in results. Preliminary analysis includes understanding stock performance of capital investment-based, and accrual-based portfolios, followed by stock performance of combined effect portfolios, and sector analysis. Lastly, regression analysis allows determining impact of both anomalies on returns as well as their independence or interdependence. The results of this study show that there exists a negative relationship between Stock Returns and Capital Investment/Accruals. In addition to this, we found that both anomalies are not distinct and work together and are attributed to country characteristics specific to the SAARC/South Asia region. All of the coefficients are statistically significant. The separate results for India and Pakistan are helpful for practitioners to know what strategy to adopt in order to maximize the returns. Combined results are beneficial for prospective investors. The mixed trend of returns for different sectors is useful for both managers and investors in the sense that both anomalies are independent of each other. From a theory development perspective, it reveals the differences in existing literature due to change in geographical context. Keywords: Accruals anomaly; capital investment anomaly; India; Pakistan; sector analysis ABSTRAK Tujuan penyelidikan ini adalah untuk menentukan kesan "Anomali pelaburan modal" dan "Anomali terakru" ke atas pulangan saham selepas mengawal faktor saiz dan kesan nilai buku-kepada - nilai pasaran. Kajian ini bertujuan untuk mengisi jurang mengenai implikasi anomali pelaburan modal dan anomali terakru dalam ekonomi Asia Selatan, terutamanya tertumpu kepada dua ekonomi membangun dari rantau SAARC; iaitu India dan Pakistan. Kajian ini menggunakan 320 pemerhatian bilangan syarikat-tahun bagi tempoh sampel 2009-2014. Sampel ini masing-masing mewakili 50% syarikat bukan kewangan yang dipilih secara sistematik daripada sembilan sektor yang berbeza dalam Bursa Saham Pakistan (indeks KSE-100) dan Bursa Saham Bombay (BSE-100 indeks). Pemilihan adalah berdasarkan permodalan pasaran bagi mengurangkan sebarang bias dalam keputusan. Analisis awal merangkumi pemahaman prestasi saham berasaskan pelaburan modal, dan portfolio berasaskan nilai terakru, diikuti dengan prestasi saham bagi kesan portfolio gabungan, serta analisis sektor. Akhir sekali, analisis regresi menentukan kesan kedua-dua anomali pada pulangan serta faktor bebas atau saling kebergantungan mereka. Hasil kajian menunjukkan terdapat hubungan negatif antara Pulangan Saham dan Pelaburan Modal/Akruan. Di samping itu, kami mendapati bahawa kedua-dua anomali tidak berbeza dan bekerjasama serta dikaitkan dengan ciri-ciri khusus negara untuk SAARC/rantau Asia Selatan. Semua koefisien adalah signifikan secara statistik. Hasil yang berasingan untuk India dan Pakistan sangat berguna bagi para pengamal untuk mengetahui strategi yang sesuai untuk memaksimumkan pulangan. Gabungan keputusan juga adalah bermanfaat untuk bakal pelabur. Trend pulangan yang bercampur bagi sektor yang berlainan berguna untuk kedua-dua pengurus dan pelabur dalam erti kata bahawa kedua-dua anomali adalah bebas antara satu sama lain. Dari perspektif pembangunan teori, ia mendedahkan perbezaan dalam literatur sedia ada akibat daripada perubahan dalam konteks geografi. Kata kunci: Anomali terakru; anomali pelaburan modal; India; Pakistan; analisis sektor