This study investigates how corporate liabilities affect firm value by distinguishing between liability levels and changes, as well as between increases and decreases in liabilities, using non-financial firms listed on the Korean stock market from 2011 to 2023. Firm value is measured by Tobin’s Q and its year-over-year change, while liabilities are represented by static leverage ratios and dynamic liability growth measures. Employing linear, nonlinear and asymmetric specifications, the analysis reveals several key findings. Higher liability levels are generally associated with lower firm value, consistent with financial distress and agency cost arguments. In contrast, moderate increases in liabilities are positively related to changes in firm value, suggesting that debt expansion may signal growth opportunities. Nonlinear results indicate an inverted U-shaped relationship between liability changes and firm value, implying diminishing marginal benefits of debt growth. Furthermore, asymmetric analyses show that liability reductions have a stronger negative valuation effect than comparable liability increases, reflecting investors’ greater sensitivity to downside risk. Overall, the findings demonstrate that the valuation effects of corporate liabilities are dynamic, nonlinear, and asymmetric, underscoring the importance of managing both the level and adjustment of liabilities in corporate financing decisions.
Amidst the phenomenon of many rural banks ceasing operations in Indonesia, this study aims to test whether banking competition influences the performance and stability of rural banks in Indonesia (BPR and BPRS). Additionally, we examine the differences between conventional and Sharia rural banks regarding the impact of competition on banking performance and stability. The data for this study includes rural bank data (BPR and BPRS) from Java, Indonesia, obtained from the Financial Services Authority website for the period 2017 to 2022, yielding a total of 5,047 observations. Using a fixed effects regression model to analyse the data and apply a random effects model for robustness testing, the results indicate that high market power negatively affects banking performance and stability. Further analysis reveals a differing concentration effect between conventional rural banks (BPR) and Sharia rural banks (BPRS). We find that banking concentration positively affects the stability of BPR (conventional) banks, while it negatively impacts the stability of BPRS (Sharia) banks. This study provides an empirical contribution by demonstrating that lower banking competition at the rural bank level negatively impacts banking performance and stability. This finding adds to the literature supporting the competition-stability hypothesis in the context of Indonesia’s rural banking industry.
This study explores the safe-haven properties of gold instruments offered in the Malaysian market against six different uncertainty measures namely the Chicago Board Options Exchange Volatility Index (VIX), Equity Market Volatility (EMV), Geopolitical Risk (GPR), Global Economic Policy Uncertainty (GEPU), Monetary Policy Uncertainty (MPU) and World Uncertainty Index (WUI). The three different types of gold instruments offered in the Malaysian market namely the Gold Exchange-Traded Fund (ETF), Gold Futures (FGLD) and Gold Bullion Coin (KIJANG EMAS) were examined in this study. The Autoregressive Distributed Lag (ARDL) model was employed to analyse the long run relationship between the variables. The Bounds test results indicated that the gold returns and uncertainty indexes are correlated in the long run, whilst the ARDL results indicated that five out of six uncertainty measures have significant impact on the returns of these gold instruments. One of the key findings of this study reveals a statistically significant positive relationship between EMV and the returns of specific gold instruments. Specifically, a 1% increase in the EMV index contributes to an increase of 3.56% in the returns of FGLD and 2.81% in the returns of KIJANG EMAS. This study expands the knowledge on the impact of uncertainty on Malaysian gold returns and identifies gold’s safe-haven properties against uncertainty measures.
This study investigates the impact of key economic indicators on money laundering risk in Malaysia through a comparative analysis of machine learning (ML) algorithms. The study utilises three ML techniques, namely Random Forest (RF), Na & iuml;ve Bayes (NB) and Logistic Regression (LR) to predict Malaysias' money laundering risks based on a dataset from 2000 to 2024. The dependent variable, money laundering risk, is analysed against a set of independent economic indicators, including Gross Domestic Product (GDP) per capita, exchange rate, annual inflation, Consumer Price Index (CPI), net secondary income, trade-related metrics, tax revenue and unemployment rate. To address class imbalance and enhance model robustness, data pre-processing, resampling, cross-validation and hyperparameter tuning were systematically implemented. Model performance was evaluated using multiple classification metrics to capture different aspects of predictive accuracy. Results demonstrate that NB consistently outperformed the other algorithms, achieving the strongest overall classification accuracy, agreement beyond chance, lowest prediction error and highest discriminatory power. Feature importance analysis using Recursive Feature Elimination (RFE) with LR algorithm identified the unemployment rate, import volume index, and exchange rate as the most influential predictors of money laundering risk. These findings underscore the value of probabilistic ML approaches and feature selection techniques in enhancing anti-money laundering (AML) risk assessment and provide actionable insights for policymakers and regulatory authorities in Malaysia.
This study examines the impact of corporate social media on stock price behaviour by analysing firms’ engagement on the Weibo platform in China. It contributes to the literature by assessing how two-way social media communication influences investor perceptions and mitigates information asymmetry. Using a panel dataset of 166 firms drawn from the China Fortune 500 that were continuously ranked between 2018 and 2023 and listed on the Shanghai and Shenzhen stock exchanges, the study combines firm-level financial data with Weibo account information collected via Python-based web scraping. A two-step System Generalised Method of Moments (GMM) approach is employed to address potential endogeneity concerns. The results reveal a negative relationship between Weibo adoption and cumulative abnormal returns. This finding suggests that corporate social media enhances the speed and efficiency of information diffusion, thereby reducing information asymmetry among investors. As a result, stock prices adjust more rapidly to publicly available information, limiting the persistence of abnormal returns around the event window. Overall, the evidence is consistent with the semi-strong form of market efficiency and supports the view that corporate social media serves as an effective disclosure channel rather than a source of excess returns.
This study examines the determinants ofInitial Public Offering (IPO) flipping activity in Malaysia during the post-COVID-19 recovery period (2020-2024). Analysing a sample of 123 IPOs listed on Bursa Malaysia, the research investigates the influence of ex-ante variables, including oversubscription ratio (OSR), offer price, offer size and initial returns. Robustness checks were conducted using 1-day, 3-day and 5-day flipping metrics, while controlling for firm size and age. The findings reveal a mean flipping ratio of99.75%, a significant escalation compared to pre-pandemic benchmarks. Regression results consistently show that only IPO offer size and listing board type significantly impact flipping activity; specifically, smaller offerings and ACE Market listings experience substantially higher speculative trading. Interestingly, OSR and initial returns, traditionally viewed as proxies for demand and sentiment, exhibit no significant effect in the post-pandemic landscape. These results suggest a decoupling of traditional demand signals from flipping behaviour, indicating that post-pandemic IPO dynamics are driven more by structural factors than investor demand. These findings offer critical policy implications, suggesting that regulators should enhance oversight of the ACE Market to mitigate excessive speculative volatility. In general, the results highlight the need for refined share allocation policies and stricter monitoring of smaller-sized offerings to ensure long-term market stability and protect retailparticipants from the risks associated with high-intensity flipping in the 'new normal'ofMalaysian capital markets.
This study investigates the complex relationships between property, equity and credit markets in Malaysia from 1994 to 2024. Using wavelet coherence analysis, we examine the co-movements and causal relationships between these markets, considering both time and frequency domains. Preliminary findings, based on conventional approaches, indicated a bi-directional causality between property and equity markets. The comprehensive wavelet analysis revealed significant correlations between property and equity markets, particularly during specific periods such as 2000-2012 and 2020-2024. Furthermore, the results showed that the magnitude and trend of these associations varied across time and frequency intervals, highlighting the possibility of varying diversification advantages for investors with different investment timeframes. Partial wavelet coherence analysis highlights the markets' sensitivity to basic economic fundamentals during pandemics and crises. Our findings have significant implications for both short-term traders and longterm investors, emphasising the important role of the wealth effect and credit-price effect in shaping equity-property relationships.
This article aims to investigate the non-linear correlation between investment and cash flow. Drawing on a sample of 669 Vietnamese publicly listed firms from 2010 to 2021, the study tests two hypotheses concerning the investment–cash flow relationship, employing a two-step system-GMM approach. The sensitivity of investment to cash flow is examined across different financial scenarios and business stages. The results demonstrate a U-shaped investment-cash flow relationship, which consistently holds across various firms’ financial positions and ownership structures. Interestingly, this pattern is absent under the influence of the COVID-19 pandemic. When considering the business life cycle, the results indicate that while companies in the introduction and expansion phases exhibit the inverted U-shaped sensitivity, those in the maturity and decline stages display a U-pattern. These outcomes enrich the existing corporate literature and offer significant practical insights for investors, firm managers, and policy-setting parties, particularly within the emerging market context.
Fintech and fintech businesses have advanced banking and finance innovation. Since COVID-19 in 2020, fintech has accelerated the adoption ofdigital technology in banks to help individual and business customers during the crisis and the new normal. This research seeks to assess the correlations among fintech firms (FIN) and bank performance metrics, specifically Return on Total Assets (ROA) and Return on Equity (ROE), alongside bank attributes, i.e., Total Assets (SIZE), Leverage (LEV), Loans (LOAN), Deposits (DEPO) and Scale (SCA). Additionally, it investigates the influence ofFINon these essential bank profitability indicators in conjunction with macroeconomic variables, including GDP, Consumer Price Index (INF) and the occurrence of COVID-19. Based on consumer and disruptive innovation theories, dataset including 57 banks from Indonesia, Thailand, Malaysia, the Philippines and Vietnam from 2017 to 2021, the study used the dynamic panel model with the two-step Generalised Method of Moments (GMM) estimator, to demonstrate that fintech firms negatively affected bank profitability across ASEAN countries. Fintech hurts small banks more than large banks, and COVID-19 exacerbated its negative impact on ASEAN-5 bank profitability.
This study examines how exchange rate volatility (ERV) impacts economic growth in 18 Organisation of Islamic Cooperation (OIC) countries (1985-2022) through direct and indirect channels. Using the CS-ARDL model and Dumitrescu-Hurlin causality tests, we analyse ERV's effects via inflation, FDI, external debt, trade, and financial development. Results show ERV significantly reduces long-term growth directly via uncertainty and indirectly through key determinants. While FDI, trade, and financial development support growth, inflation and external debt amplify ERVs'negative effects. Robustness checks (CCEMG and AMG estimators) confirm these findings. OICpolicymakers should implement OIC-wide local-currency swap networks and Sharia-compliant hedging instruments (wa'd-based forwards, mur & amacr;bahah swaps), strengthen Islamic money markets, and adopt inflation control with local-currency trade invoicing to mitigate ERV while boosting growth.
This study investigates the influence ofcapital structure and CEO duality on firm financial sustainability, using a panel dataset of publicly listed companies in Vietnam from 2018 to 2022. Two dimensions of sustainability are examined: financial sustainability and operational self-sufficiency, capturing both financial and operational performance. Employing the Generalised Least Squares method, the analysis reveals that capital structure metrics namely debt to total assets and debt to equity ratios significantly affect firm sustainability outcomes, with CEO duality serving as a moderating variable. The findings indicate that a higher debt to total assets ratio adversely impacts both financial sustainability and operational self-sufficiency. In contrast, a higher debt to equity ratio is positively associated with financial sustainability and CEO duality moderates the influence between capital structure and financial sustainability. These results highlight the role of optimal capital structuring and strategic leadership in sustaining firm performance. The study contributes to the literature on corporate governance in emerging markets and provides practical implications for policymakers, management teams, and investors, emphasising the importance of leadership configuration and financing strategies in promoting long-term sustainability.
Lending is a primary activity for banks, and the introduction and growth offintech credit create a new landscape in the competition setting in this field. Previous research focuses on the effect offintech credit provision on bank credit and bank performance, but not the reverse direction. Meanwhile, theoretically it can be expected that bank credit can affect the growth offintech credit. This study employs a country-level dataset from 2013 to 2019 to fill the gaps mentioned. We find that bank credit tends to exert a complementary effect on fintech credit. This result implies that the two types of credit suppliers do not aim at the same target customers and tend to cooperate for their mutual benefits, and the growth of bank credit generally facilitates fintech credit. However, when a country has better institutional quality, bank credit negatively affectsfintech credit, emphasising on the substitution effect. The study offers some implications for relevant stakeholders based on the research findings.
In an era where sustainability practices face increasing global scrutiny, understanding how investment decisions the impact environmental, social and governance (ESG) ratings is essential. This study examines the relationship between corporate overinvestment and ESG ratings using data from Chinese corporations between 2012 and 2020. Employing fixed effects models for empirical analysis, the results reveal a significant negative relationship between overinvestment and ESG ratings, particularly affecting the social aspect. These findings highlight the importance of efficient investment management in enhancing corporate ESG performance. The study provides valuable insights for corporations aiming to optimise resource allocation to improve their sustainability outcomes.
The purpose of this study is to empirically investigate the relationships between top management team (TMT) characteristics (including women representation, political connections, age and tenure) and company performance, moderated by corruption risk. The data analysis is conducted using financial information from publicly traded companies on the primary market of Bursa Malaysia for the period spanning from 2018 to 2022. The regression analysis reveals a significant association between the political connections and tenure of the TMT and company performance. In addition, the moderation analysis demonstrates that corruption risk has a significantly positive effect on the relationship between the representation of women in the TMT and political connections, as well ason company performance. From a theoretical aspect, this study adds to the governance literature on how corruption risk strengthens the relationship between TMT characteristics and company performance in Malaysia. From a practical aspect, the results of this study will aid Malaysian business leaders in understanding the importance of the role of women representation and political connections in TMT, while also helping them develop their corporate governance framework better in uncertain environments. Furthermore, this study offers a unique contribution by advising company owners to enhance the influence of the TMT in improving company performance in conditions of significant corruption risk.
This study examines the relationship between chief financial officer (CFO) tenure and financial statement comparability, addressing a gap in the existing literature regarding how CFO leadership stability affects financial reporting quality, particularly within China’s unique institutional environment of capital markets. We find that longer CFO tenure significantly enhances financial statement comparability, utilising firm-level financial data from the Taiwan Economic Journal (TEJ) and CFO-specific data from the China Stock Market & Accounting Research Database (CSMAR) database covering the period from 2007 to 2018. Furthermore, our analysis reveals that CFO tenure moderates the adverse effects of environmental uncertainty on comparability, highlighting the role of experienced financial leadership in mitigating external risks. These findings contribute to the literature on executive characteristics and reporting quality by providing novel insights into the stabilising function of CFO tenure. From a policy perspective, our results underscore the importance of leadership continuity in corporate financial management, suggesting that regulators and corporate boards should recognise the value of retaining experienced CFOs to promote financial transparency and strengthen market confidence.
This article investigates the relationship among income diversification, bank monitoring and financial risk in the context of commercial banks in Indonesia. Using panel data of 91 Indonesian commercial banks operating during the COVID-19 pandemic, we find that income diversification can reduce bank risk, while monitoring is negatively associated with that risk. While our investigation does not indicate that monitoring can alter the impact of income diversification on bank risk, the results suggest that policymakers should adopt banking transformation by diversifying their income, particularly during a crisis such as the COVID-19 pandemic. We also suggest that banks enhance monitoring to obtain a good external perception that can ultimately increase a bank’s stability.
Being “black boxes” in an economy, consequences resulting from manipulation of number reporting in banks has kept the spotlight of central banks worldwide for decades. Accordingly, many efforts that aim to enhance bank financial information transparency have been studied and proposed. In astonishment, despite the widely demonstrated influential role of intellectual capital in banking operations, the linkage between this factor and bank earnings management is largely unexplored. Motivated by this fact, the study makes the first endeavour to pinpoint how intellectual capital can assist banks in reducing earnings management. By employing the extended-VAIC model rather than the traditional measure, the panel data analysis based on the research sample of 26 Vietnamese banks from 2006 to 2020, with the support of different econometric methods shows that increasing intellectual capital will demotivate banks to be involved in earnings management. Also, three elements of intellectual capital: structural capital, relational capital and capital employed play a crucial role in alleviating bank earnings management. By contrast, the last element, human capital, does not yet help banks preclude financial misrepresentation, especially in small banks. These findings will be of special interest to bank regulators and managers in Vietnam and perhaps, other emerging economies.
This study empirically assesses the impact of digitalisation on bank efficiency in Vietnam using the two-stage framework for an unabalanced sample of 27 banks from 2010 to 2019. In the first stage, we use the conventional data envelopment analysis (DEA) to estimate bank efficiency scores. Then, these efficiency scores are regressed on environmental variables to determine factors affecting bank efficiency. The findings show a negative relationship between digitalisation and bank efficiency. However, the results indicate a U-shaped relationship between digitalisation and bank efficiency, being first impeded and then facilitated. Foreign-owned and state-owned banks are more efficient than their domestic and privately owned peers. Our results, however, show that the impact of digitalisation on bank efficiency does not vary among bank ownership and listing status. Furthermore, bank efficiency is negatively affected by bank size. The results further demonstrate that large banks with higher levels of digitalisation may not be beneficial, at least in the short run. Nonetheless, our study provides additional evidence to the extant literature on the association between digitalisation and bank efficiency. Our empirical evidence also offers motivations for banks to pursue ongoing digitalisation strategies when the banking system environment is more intensively competitive.
This study examines the impact of environmental, social and governance (ESG) practices on firm efficiency in the global tourism and hospitality industry, with a focus on the moderating role of business strategy. Utilising data from 59 firms in the travel, aviation and hotel sectors between 2017 and 2021, the analysis employs the enhanced Russell measure, directional distance function and truncated regression techniques. The findings indicate that the hotel sector outperforms others in both sustainability and market efficiency, while the aviation sector trails due to high energy consumption and disruptions caused by the COVID-19 pandemic. Contrary to the common perception that ESG practices diminish profitability, the results suggest that ESG practices enhance operational efficiency and corporate reputation. Furthermore, business strategy is found to significantly moderate the ESG-efficiency relationship. The study recommends that the aviation sector accelerate the adoption of sustainable aviation fuels, while hotel and travel sectors should continue deepening ESG integration to strengthen long-term resilience and competitiveness.
This research aims to examine the impact of capital inflow, specifically Foreign Direct Investment (FDI) and Portfolio Investment, on economic growth in Indonesia as an emerging market country. The study uses quarterly time series data from 2004 to 2021 and employs the Vector Error Correction Model (VECM) method to analyse the relationship between capital inflow and economic growth. The results show that FDI has a substantial impact on GDP in the short to middle term, while portfolio investment does not contribute as expected to boost economic growth. The instability of Indonesian political conditions and the U.S. economy's power could create "crowd out" when economic shocks occur. The forecasting analysis result of the main interest variable (FDI and Portfolio Investment) shows that Indonesian GDP will increase yearly in the long term, while Foreign Direct Investment and Portfolio Investment have a steady growth condition. This article contributes to the ongoing academic debate about the relationship between capital inflow and economic growth, as previous literature shows different results in developed and developing nations. The research will contribute to answering the question of how capital inflow plays a role in growing economies such as Indonesia in the long term.
