Type of the article: Research ArticleAbstractThis study examines the associations of market conditions, firm size, and sustainability performance with asset returns in the Indonesian capital market. As investment activity has expanded in the post-COVID-19 period, identifying the factors associated with asset returns has become increasingly important for investors and corporate decision-makers. Using the Capital Asset Pricing Model (CAPM) as the theoretical foundation, this study incorporates firm-specific financial and sustainability characteristics into an integrated empirical framework to examine their associations with asset returns.Using a balanced panel dataset of 108 firm-year observations, the study employs a panel regression model. Market conditions are represented by the market excess return, firm size by the natural logarithm of total assets, and sustainability performance by the LSEG ESG Score (formerly Refinitiv ESG Score).The findings indicate that market excess return and sustainability performance are positively associated with asset returns, while firm size is not statistically significant. Additional analysis shows that when market excess return is excluded from the model, firm size remains statistically insignificant, whereas sustainability performance remains positively and statistically significantly associated with asset returns. Furthermore, the model’s explanatory power declines substantially when market excess return is excluded, indicating that market excess return provides considerable incremental explanatory information beyond firm-specific financial and sustainability characteristics. Overall, the findings suggest that market conditions are an important factor associated with variations in asset returns, while sustainability performance remains an important firm-specific characteristic associated with asset returns even when market excess return is excluded from the model.AcknowledgmentWe would like to express our deepest gratitude to Universitas Jenderal Achmad Yani (UNJANI), Indonesia, for funding this research in 2025. We also extend our sincere appreciation to the anonymous reviewers for their valuable suggestions and constructive feedback, which have made a significant contribution to improving the quality of this article.
Type of the article: Research ArticleAbstractTransition economies combine large informal sectors with constrained fiscal capacity, and many have turned to digital tax administration to raise revenue and curb informality. This study assesses digital tax administration as a fiscal-governance innovation in 25 transition economies, asking whether it increases corporate tax revenue and reduces the informal economy, and whether these effects are linked. Using a balanced annual panel for 2008–2022 (375 country-years) and fixed-effects models, it proxies digital administration by the United Nations Online Service Index – a broad measure of digital-government maturity – and tests mediation between revenue and informality. A higher Online Service Index is robustly associated with higher corporate tax revenue (β = 0.89, p < 0.01) – an increase of about 0.89 percentage points of GDP, roughly 41% of the sample mean – that holds across alternative specifications including two-way fixed effects, alternative constructions of the index, and sub-periods. Its association with a smaller informal economy (β = −3.62, p < 0.05) is fragile: it is concentrated in the pandemic years 2020–2021, turns insignificant once they are excluded (β = −1.54, p = 0.12), and does not survive two-way fixed effects or all alternative informality measures. An exploratory decomposition finds no evidence that this association runs through corporate tax revenue: the indirect path is insignificant (about 16% of the total effect), indicating parallel rather than sequential channels. Digitalizing tax administration is associated with a reliable corporate-revenue dividend, whereas the informality association is conditional, pandemic-bound, and does not operate through tax revenue.AcknowledgmentThis article was prepared based on the results of a study funded by the Ministry of Education and Science of Ukraine entitled “GovTech for Ukraine: A Digital, Secure, Transparent, and Equitable State in Times of War and Post-War Reconstruction” (registration number: 0126U000544).
Type of the article: Research ArticleAbstractGlobal account ownership rose from 51 to 76 percent of adults between 2011 and 2021, much of it through digital channels, yet the depth and innovativeness of national financial systems vary sharply across economies. This study quantifies how the rule of law and the model of digital government relate to two dimensions of financial-sector development, banking-sector depth and digital financial innovation, across developed, developing, and transition economies, and tests whether digital government can substitute for institutional quality. Using a panel of 183 economies over 2000–2021 (estimation window 2003–2021) and a four-wave Global Findex panel, the analysis applies two-way fixed-effects and pooled wave-fixed-effects models with country-clustered standard errors. The rule of law is positively associated with banking-sector depth, but the association is heterogeneous: it is largest and most robust in transition economies (β = 22.17, p = 0.020) and insignificant in developing economies. Digital government, by contrast, is not significantly related to banking-sector depth (p = 0.322) yet is strongly associated with digital financial innovation, where the rule of law also matters; the e-government association is strongest for digital-payment adoption (β = 51.99, p < 0.001). In these cross-country estimates, the rule-of-law × e-government interaction is negative and significant (β = −10.69, p = 0.018), and the marginal association of the rule of law declines by almost half as digital government expands, a pattern consistent with partial substitution. These findings are robust to the 2025 revision of the governance data and to extending the sample through the 2024 Findex wave.AcknowledgmentsThis article was prepared based on the results of a study funded by the Ministry of Education and Science of Ukraine entitled “GovTech for Ukraine: A Digital, Secure, Transparent, and Equitable State in Times of War and Post-War Reconstruction” (registration number: 0126U000544).
Type of the article: Research ArticleAbstractFinancial reporting quality is important for maintaining investor confidence, but earnings management remains a persistent concern in developing markets where corporate governance mechanisms are still being strengthened. Vietnam offers a suitable context for this issue because listed firms operate in an environment marked by evolving governance practices, uneven disclosure quality, and concentrated ownership structures. This study examines whether board quality helps limit real earnings management (REM) and accrual-based earnings management (AEM) among Vietnamese non-financial listed firms. The dataset includes 3,697 firm-year observations for companies listed on the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange from 2017 to 2023. Board quality is captured by an unweighted Board Characteristics Index based on ten board-related attributes. AEM is proxied by performance-matched discretionary accruals, while REM is derived from abnormal cash flows from operations, abnormal production costs, and abnormal discretionary expenses. Panel regression models are estimated, and Feasible Generalized Least Squares (FGLS) is applied to address heteroskedasticity. The main results show that board quality is negatively and significantly related to REM, with a coefficient of –0.0701 and a z-value of –3.19 at the 1% level. In contrast, the relationship between board quality and AEM is negative but statistically insignificant, with a coefficient of –0.0194. These findings indicate that boards are better able to constrain earnings manipulation through operating activities than through accrual choices. For Vietnamese listed firms, stronger board monitoring over real business decisions may help improve the transparency of financial reporting.
Type of the article: Research ArticleAbstractThe blockchain financial system allows users to send money fast without any border restrictions. However, the same structure of the blockchain may be used as a means of laundering money. This paper assesses the relationship between the complexity of transaction networks and the likelihood of their illicit nature within the public Elliptic Bitcoin benchmark and examines whether anomaly detection using machine learning helps to interpret risks from an AML/CFT perspective. This empirical analysis assumes that Elliptic provides an anonymized transaction network in which nodes correspond to Bitcoin transactions, edges reflect directed transactions, and anonymized features facilitate licit/illicit classification of transactions. Furthermore, the dataset is not considered evidence of sender wallet addresses, receiver wallet addresses, transaction amount, timestamp, ownership of exchanges, user geography, and national AML/CFT effectiveness. Based on the labelled analytical dataset presented in the uploaded workbook (46,564 observations, including 42,019 licit transactions and 4,545 illicit transactions), a logit model found a significant positive correlation between illicit transactions and degree centrality (beta = 1.870, p < 0.001), clustering coefficient (beta = 0.940, p < 0.001), and flow entropy (beta = 0.680, p < 0.001). Isolation Forest and Autoencoder reached AUCs of 0.866 and 0.841, respectively. In turn, the coefficient measuring a country’s regulatory capacity and its interaction term are not included in the estimation because there is no country-window marginal effect. Therefore, this paper does not test for the impact of regulatory capacity of the USA, Singapore, and UAE on transaction classification.
Type of the article: Research ArticleAbstractExchange rate volatility is a critical macroeconomic risk factor in emerging markets, particularly for export-oriented sectors such as mining in South Africa. The South African mining sector is inherently affected by exchange rate volatility, yet it is the economy’s largest foreign-currency earner through the export of mining resources. The study examines the effect of exchange rate volatility on mining companies’ share returns within South Africa. The study applies the system Generalized Method of Moments (GMM) estimator to account for both endogeneity and dynamic effects, using panel data from 15 Johannesburg Stock Exchange-listed mining companies over the period 2011 to 2024. The empirical results reveal that exchange rate volatility has a positive and significant effect on the share returns of mining companies, with a coefficient of 0.808, and on total returns (1.094). This indicates that higher currency risk is related to higher return premiums. In contrast, a negative and significant relationship exists between exchange rate volatility and share prices (99.45), implying an adverse valuation effect during heightened uncertainty. Regarding the control variables, GDP growth has a positive effect on share returns (8.978), while oil prices exhibit a negative relationship (–0.327). The results of the study support the risk-return trade-off and the flow-oriented exchange rate approach. The study therefore shows that exchange rate volatility plays a dual role through the enhancement of returns while depressing valuations. This highlights the benefits of implementing currency risk management strategies for investors and policymakers.
Type of the article: Research ArticleAbstractThis study examines the relationship between family ownership and investment efficiency in the Middle East and North Africa (MENA) region by investigating the mediating role of environmental, social, and governance (ESG) performance and the moderating role of board gender diversity. Using a sample of non-financial firms from eight MENA countries (Saudi Arabia, Egypt, Jordan, Kuwait, United Arab Emirates, Qatar, Oman, and Bahrain) over the period 2015–2023, comprising 3,245 firm-year observations, and ESG data obtained from Refinitiv, the analysis employs firm fixed-effects and system GMM estimations. The results indicate that family ownership is positively associated with investment efficiency (β = 0.044, p < 0.01). Family ownership also has a positive effect on ESG performance (β = 0.118, p < 0.01), while ESG performance is positively associated with investment efficiency (β = 0.039, p < 0.01). Further analysis reveals that ESG performance partially mediates the relationship between family ownership and investment efficiency. Moreover, board gender diversity strengthens the positive effect of ESG performance on investment efficiency (β = 0.001, p < 0.01), indicating that firms with greater female board representation are better able to translate sustainability engagement into efficient capital allocation. The findings highlight the complementary roles of family ownership, ESG performance, and board gender diversity in enhancing investment efficiency in emerging markets. These results provide important implications for policymakers, investors, and corporate leaders seeking to promote sustainable governance and efficient investment decisions in the MENA region.
Type of the article: Research ArticleAbstractThis study evaluates and compares risk measurement models for ten major cryptocurrencies: Bitcoin, Ethereum, Tether, Ripple, Dogecoin, Cardano, Binance Coin, Polkadot, Solana, and USD Coin. Using daily log-return data from January 2017 to October 2024, the analysis applies Modified Cornish-Fisher Value-at-Risk and standard, exponential, threshold, and Markov-switching generalized autoregressive conditional heteroskedasticity models. The main comparison is conducted at the 99% confidence level, while model reliability is assessed through out-of-sample backtesting using 500 observations and the Kupiec unconditional coverage and Christoffersen conditional coverage tests. The results reveal substantial heterogeneity in cryptocurrency risk. Modified Cornish-Fisher Value-at-Risk produces highly sensitive estimates for assets with extreme skewness and kurtosis, particularly Ripple, Cardano, and Dogecoin. However, no single model performs consistently better across all assets. Bitcoin is the only cryptocurrency for which all tested models pass both backtesting procedures. The Markov-switching specification provides acceptable coverage for Bitcoin, Ripple, and Dogecoin but does not consistently outperform conventional volatility models. Standard and asymmetric volatility models provide stronger support for Cardano, Binance Coin, and Polkadot, whereas Ethereum, Solana, and USD Coin remain difficult to model under the examined specifications. These findings demonstrate that cryptocurrency risk measurement requires asset-specific model selection based on both estimated loss magnitude and formal backtesting evidence.
Type of the article: Research ArticleAbstractThe article highlights that third-party funding is a major issue in investment-State dispute resolution because it can fund worthwhile claims but also empowers a private party without legal status over proceedings. It presents an analytical model to manage third-party funding within investment-State arbitration by examining funding through the question of control: who drives the claim. Building upon doctrinal insights from existing literature, institutional materials, and case studies, this study aims to reinterpret funding through the lens of influence. The evidence suggests that control over proceedings does not inherently spring from the availability of third-party funds, but from material influence exercised over five critical arbitration stages: case selection, legal budget, settlement, tribunal constitution, and enforcement of arbitral awards. Thus, the article develops a six-part model incorporating five aspects of third-party control. The procedural points are mandatory disclosures at the initial arbitration stage and triggered disclosure of funding-related contract clauses. It proposes requiring proof of financial resources and segregating funded assets, while rebuttably presuming security for legal expenses if any discovered cost award would outweigh claimant finances. It also advocates formal protection for the client to direct claim management and settlement decisions, mandating similar disclosure for funded respondent actions. Supporting arguments identify three situations justifying the security for costs presumption and two instances where funding disclosures should be implemented. The study concludes that investment-State arbitration becomes genuinely equitable only when attention shifts from formal party status to third-party procedural influence.
Type of the article: Research ArticleAbstract This study investigates whether fiscal reforms influence the effectiveness of Environmental, Social, and Governance performance in the control of accrual-based earnings management. Previous studies report inconsistent findings about the relationship between sustainability performance and earnings management, while limited attention has been paid to the role of tax policy reforms in this relationship. Using an unbalanced panel of 334 non-financial companies listed on the Tadawul exchange over the period 2017–2024 (2,128 firm-year observations), the study investigates the moderating role of value-added tax reforms introduced in 2018 and increased in 2020. The empirical analysis employs feasible generalized least squares and a difference-in-differences approach. The findings indicate that Environmental, Social, and Governance performance is negatively associated with earnings management (β = −0.0147, p < 0.05). The result indicates that stronger sustainability engagement reduces discretionary reporting practices. In contrast, the value-added tax rate variable is positively associated with earnings management (β = 0.2094, p < 0.05). However, the interaction term between Environmental, Social, and Governance and value-added tax reforms is negative (β = −0.1542, p < 0.05). The results suggest that sustainability-oriented governance practices reduce the adverse effect of fiscal reforms on earnings manipulation. These findings demonstrate that Environmental, Social, and Governance performance serves as an effective internal governance mechanism during periods of fiscal transition. The study also provides policy-relevant implications for improving financial transparency in emerging markets subject to tax reforms.AcknowledgementThis work was supported by the Deanship of Scientific Research, Vice Presidency for Graduate Studies and Scientific Research, King Faisal University, Saudi Arabia. [Grant No. KFU264262]
Type of the article: Research ArticleAbstractCorporate investment allocation is essential for sustainable firm growth, particularly in emerging markets where firms may shift resources between long-term productive assets and more flexible financial assets under conditions of agency conflicts, weak monitoring, and limited transparency. This study investigates how corporate governance affects real and financial investment in Vietnamese listed non-financial firms and examines whether corporate social responsibility disclosure moderates these relationships. The analysis is based on a balanced panel of 356 firms listed on the Ho Chi Minh City and Hanoi stock exchanges during 2017–2024, yielding 2,848 firm-year observations. The study applies firm- and year-fixed-effects models with clustered standard errors and further addresses endogeneity through lagged-regressor specifications, fixed-effects instrumental-variable estimation, and two-step system generalized method of moments estimation. The results show that larger boards, higher board independence, and greater institutional ownership are associated with higher fixed-asset investment and lower financial investment, whereas chief executive officer duality and ownership concentration are associated with lower fixed-asset investment and higher financial investment. The moderating estimates indicate that corporate social responsibility disclosure strengthens these patterns. Among disclosing firms, the marginal effects of board size, board independence, and institutional ownership on fixed-asset investment increased to 0.556, 0.521, and 0.321, while their corresponding effects on financial investment declined to –0.496, –0.641, and –0.426. Overall, the findings indicate that stronger governance quality and more transparent corporate social responsibility disclosure can jointly improve the orientation and sustainability of corporate capital allocation in Vietnam.
Type of the article: Research ArticleAbstractInvestment efficiency is a critical issue in emerging markets, as information asymmetry and agency conflicts can lead firms to make investments that deviate from optimal levels. This study aims to examine the impact of executive characteristics specifically executive experience and executive size and earnings smoothing on investment efficiency and debt maturity, while also investigating the mediating role of debt maturity. The study utilizes an unbalanced panel dataset of manufacturing firms listed on the Indonesia Stock Exchange from 2015 to 2024. Following data selection and outlier handling, the final sample comprises 275 observations from 87 firms. Analysis was conducted using panel data regression in STATA 17 and the Sobel test to assess mediation effects. The results indicate that executive experience and executive size both have a positive and significant impact on investment efficiency; earning smoothing also shows a significant positive effect. However, executive experience, executive size, and earning smoothing do not significantly affect debt maturity, nor does debt maturity significantly influence investment efficiency. The Sobel test reveals that debt maturity provides only marginal evidence of mediation regarding the relationship between executive size and investment efficiency, and it does not mediate the relationships of executive experience or earning smoothing with investment efficiency. These findings suggest that investment efficiency is driven more by internal capacity and governance mechanisms than by debt maturity.AcknowledgmentThis research was conducted without financial support from any public, commercial, or nonprofit funding agency.
Type of the article: Research ArticleAbstractThe relevance of the study lies in the fact that maintaining the financial stability of the banking sector does not always ensure the recovery of lending to the real economy. The article aims to identify and quantitatively assess structural imbalances in Ukraine’s financial market during 2020–2024 and to substantiate priority areas for improving state regulation, considering the relationships among banking-sector asset growth, capitalization, and lending intensity. The article frames this problem in the context of wartime financial system transformation, where regulatory policy must balance preserving systemic resilience with restoring banks' credit function and supporting economic recovery.The methodological basis of the study includes structural-dynamic analysis, correlation-regression modeling, and the calculation of an aggregated financial stability indicator based on official data from the National Bank of Ukraine and the State Statistics Service of Ukraine. The results show that the growth of banking-sector assets and capital in 2020–2024 was accompanied by a substantial decline in the loan-to-deposit ratio – from 67.6% in 2021 to 39.4% in 2024. Regression estimates indicate an inverse relationship between bank asset growth and credit transformation, suggesting that resources were primarily directed toward liquid, low-risk instruments rather than lending to the real economy. It is concluded that compliance with capitalization requirements supports macrofinancial stability but does not guarantee lending activity recovery.Improving state regulation effectiveness requires targeted credit incentives for banks, developing partial credit guarantee mechanisms, differentiating regulatory requirements by asset structure, expanding refinancing programs for productive lending, and strengthening control over the allocation of bank liquidity to the real economy.AcknowledgmentThe study did not receive any special funding from the government, commercial, or non-profit organizations. The authors would like to thank their colleagues for their professional comments and academic support during the study. The statements expressed in the article are solely the responsibility of the authors.
Type of the article: Research ArticleAbstractFinancial reporting accuracy is central to investor confidence in emerging markets, yet the governance mechanisms protecting it remain underexamined in Jordan. This study examines whether board gender diversity and six functional diversity dimensions are associated with higher reporting accuracy, proxied by lower real earnings management (REM), among 105 Jordanian listed non-financial firms over 2017–2023 (735 firm-year observations). REM is estimated using Roychowdhury-type abnormal cash flows and production costs; panel regression models relate board composition to REM, controlling for firm size, leverage, and return on assets. A one-unit increase in female director share is associated with a 0.126 reduction in REM (β = −0.126, p < 0.05). All six functional diversity proxies – financial expertise, multiple directorships, board independence, board size, managerial ownership, and meeting frequency – are significantly and negatively associated with REM, with financial expertise showing the largest marginal effect (β = −0.059, p < 0.001) and meeting frequency the smallest (β = −0.003, p < 0.001). The gender-only model explains 7.9% of REM’s variation (R2 = 0.079); adding functional diversity more than doubles this to 19.0% (R2 = 0.190), indicating substantial incremental explanatory power. Because gender and functional diversity are estimated separately, this pattern is consistent with complementary rather than substitutive effects, though a combined model was not estimated. These results suggest that, in an emerging market such as Jordan, appointing more financially qualified and independent directors, together with modest increases in female representation, can materially improve reported-earnings reliability and should be prioritized in corporate governance reform.
Type of the article: Research ArticleAbstractThis study evaluates whether explainable machine-learning models can provide reliable and operationally interpretable short-horizon delinquency monitoring in U.S. auto lease securitization panels. Six public SEC ABS-EE trust-family panels were harmonized at the contract-month level. The primary outcome is one-month-ahead incident escalation to 30 or more days past due among contracts below 30 days past due at the feature month. Fully tuned penalized logistic regression (M1), unconstrained gradient boosting (M2), and governance-constrained gradient boosting (M3/X-LEASE) were assessed through chronological development, calibration, locked out-of-time testing, contract-held-out validation, six leave-one-issuer-out experiments, and later temporal evaluation. The locked test comprised 198,301 observations and 768 events. M2 produced the strongest discrimination (AUC-ROC 0.8151; PR-AUC 0.0269), while M3 exceeded the logistic benchmark by PR-AUC but did not outperform M2. At an exact 1% review capacity, each model generated 1,984 alerts; M2 detected 104 events, compared with 61 for M3, so the hypothesized recall advantage of X-LEASE was not supported. Full-sample TreeSHAP analysis showed stable feature rankings across tested issuers, later periods, and contract-level resampling. M3 relied more heavily on credit score and issuer controls and had a more concentrated explanation structure, but this does not establish superior auditability or fairness. The results support human-reviewed early-warning monitoring within the tested securitization panels, not lifetime default prediction, automated adverse decisions, or universal transferability.AcknowledgmentsThe authors acknowledge the public availability of SEC EDGAR Form ABS-EE, Exhibit 102 asset-level data. No individuals or institutions outside the author team provided paid analytical, editorial, or funding support for this manuscript.
Type of the article: Research ArticleAbstractThis study investigates the critical drivers of sustainable performance among agricultural startups (agri-startups) in Vietnam, a nation highly vulnerable to climate change. The research uses the Resource-Based View and Institutional Theory to model how green finance – including green credit incentives, green venture capital availability, and institutional support – influences perceived sustainable startup performance through eco-innovation capability. Furthermore, the moderating role of climate change risk perception is explored. Data were collected via an online Google Forms survey conducted from September to December 2025 across Vietnam. The study purposefully sampled 282 founders and senior managers (directors, head/deputy heads of departments) of agri-startups, as these leaders are the primary decision-makers directly responsible for strategic financial acquisitions and green innovation initiatives. Analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with a Reflective-Formative higher-order construct technique, the quantitative results (n = 282) reveal that green credit incentives, green venture capital, and institutional support are positively associated with eco-innovation capability (R2 = 23.7%). This capability, in turn, acts as a vital driver of holistic sustainable performance (R2 = 26.1%). Notably, climate change risk perception significantly moderates the relationship between eco-innovation and performance (β = 0.259, p < 0.001). The findings suggest that ensuring startup survival and sustainable growth highlights the need for policymakers to prioritize accessible green credit and institutional frameworks over generalized support. Concurrently, venture capitalists must evaluate founders’ climate risk awareness as a critical metric for funding resilient agricultural ventures.AcknowledgmentThe authors gratefully acknowledge financial support from the Science and Technology Program for New Rural Development, 2021–2025 (Second Round), Government of Viet Nam, under project code 738/QĐ-NNN-VPĐP. We also thank Ho Chi Minh National Academy of Politics, Vietnam, for facilitating access to survey respondents and supporting the research activities of this study.
Type of the article: Research ArticleAbstractThis paper examines the impact of colocation (permitting traders to place their servers in close proximity to exchange servers) on the price volatility at India’s fastest exchange, which operates at 6 microseconds. The study employs the event study method to examine the relationship between colocation and price volatility. The study analyzed daily trading data from the Bombay Stock Exchange (BSE) Sensex-30 index from January 1, 2000 to December 31, 2023. The findings of the study suggest a remarkable level of stability at BSE following the implementation of colocation in November 2010. Furthermore, there is substantial evidence of improved price volatility following the reduction in latency at BSE. The colocation has positively supported high-frequency trading, leading to improved price volatility in the Indian securities market. The study conducted additional analyses to assess its robustness and found qualitatively similar results. The study has implications for regulatory bodies, retail investors, market participants, and other interested stakeholders, providing valuable insights into the efficiency of colocation implementation at BSE.AcknowledgmentsThe authors would like to acknowledge that this research work is fully funded by Kingdom University, Bahrain, through the research grant number KU-2025-26-02.
Type of the article: Research ArticleAbstractFinancial statement fraud (FSF) continues to undermine investor confidence, particularly in emerging markets where governance enforcement remains uneven. This study examines how Fraud Triangle factors influence FSF and whether earnings management strengthens these relationships in Vietnam. Using a two-step system GMM regression on 138 listed non-financial firms over 2019–2022 to address potential endogeneity concerns, the results show that financial distress significantly increases fraud risk. Firm performance is also positively associated with fraud, implying that pressure to maintain good results may contribute to misreporting. State ownership and foreign ownership are both negatively associated with FSF, indicating that monitoring by these shareholders constrains fraudulent behavior. Industry characteristics proxied by receivables intensity are positively related to fraud, suggesting greater opportunity for manipulation in revenue-related accounts. In contrast, liquidity and auditor reputation do not exhibit statistically significant effects, suggesting that external audit prestige alone may be insufficient to constrain fraudulent reporting in transitional regulatory environments. Importantly, earnings management is positively associated with FSF and significantly strengthens the impact of financial distress on fraud, indicating that discretionary accruals amplify the translation of financial pressure into misreporting. These findings point to the importance of improving financial management, enhancing transparency, and strengthening regulatory oversight to reduce fraud risk and support more effective detection by policymakers, auditors, and investors.Acknowledgment(s)This research is funded by the University of Economics and Law, Vietnam National University Ho Chi Minh City/VNU-HCM
Type of the article: Research ArticleAbstractThis study examines the relationship between governance quality, leverage, and firm performance and financial distress in Jordanian industrial companies listed on the Amman Stock Exchange (ASE). The industrial sector was chosen for this study due to its capital-intensive nature, reliance on external funding, and ongoing operational and market challenges in Jordan. The sample consists of 474 observations from 2014 to 2022. The quality of governance is represented by board size and board independence, leverage is represented by the debt-to-assets ratio, and firm performance is represented by gross margin. For financial distress, the integrated logit model indicates that board size is not statistically significant (coefficient = 0.078, p = 0.361), and the board independence is also not statistically significant (coefficient = 2.341, p = 0.076). Leverage, on the other hand, has a positive and significant association with financial distress (coefficient = 3.560, p = 0.001), while gross margin is negatively and significantly associated with financial distress (coefficient = –9.614, p < 0.001). The results suggest that financial distress for Jordanian industrial firms is primarily attributed to financing pressure and operating performance, and that the governance proxies used in this study do not adequately explain financial distress.AcknowledgmentThis research was funded through the annual funding track by the Deanship of Scientific Research, from the vice presidency for graduate studies and scientific research, King Faisal University, Saudi Arabia [Grant No. KFU263483].
Type of the article: Research ArticleAbstractThe transition to a circular economy is a strategic priority in Vietnam’s sustainable development agenda, necessitating robust fiscal instruments to mitigate high capital cost barriers. This study aims to evaluate the legal and financial efficacy of accelerated depreciation mechanisms for sustainable investments in Vietnam by benchmarking them against ASEAN Taxonomy standards. Using a doctrinal legal analysis and a quantitative simulation of the Depreciation Tax Shield (DTS) via a Net Present Value (NPV) approach, the study quantifies the financial impact of various depreciation scenarios on a hypothetical capital expenditure.The simulation-based evidence indicates that the current maximum depreciation coefficient of 2.0 provides a marginal tax shield benefit of only 2.86 billion VND per 100 billion VND of investment, which is approximately 20% lower than the tax shield values in neighboring countries that utilize initial investment allowances. Furthermore, the doctrinal analysis confirms a systemic misalignment between Vietnam’s project-based regulatory management and the asset-based classification logic of the ASEAN Taxonomy, creating significant barriers to rapid capital recovery amid risks of technological obsolescence. The study concludes that Vietnam should establish a synchronized national green asset catalogue and increase the depreciation coefficient to 3.0 for strategic equipment. Such reforms would not only optimize financial benefits but also directly enhance Vietnam’s competitiveness in attracting green foreign direct investment within the region.
