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Volume 18
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J. Risk Financial Manag., Volume 18, Issue 1 (January 2025) – 18 articles

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13 pages, 312 KiB  
Article
Market Reaction to Earnings Announcements Under Different Volatility Regimes
by Yusuf Joseph Ugras and Mark A. Ritter
J. Risk Financial Manag. 2025, 18(1), 19; https://doi.org/10.3390/jrfm18010019 (registering DOI) - 5 Jan 2025
Abstract
This study investigates the occurrence and persistence of abnormal stock returns surrounding corporate earnings announcements, particularly emphasizing how varying frequencies of financial reporting influence market behavior. Specifically, this research examines the effects of the timing and frequency of disclosures on market reactions and [...] Read more.
This study investigates the occurrence and persistence of abnormal stock returns surrounding corporate earnings announcements, particularly emphasizing how varying frequencies of financial reporting influence market behavior. Specifically, this research examines the effects of the timing and frequency of disclosures on market reactions and stock price volatility during critical earnings announcement periods. By analyzing firms within the Dow Jones Industrial Average (DJIA) from 2014 to 2024, this study evaluates the interplay between financial reporting schedules and market responses to stock prices. Furthermore, it considers the impact of peer firms’ reporting practices on the assimilation of firm-specific information into stock prices. Using econometric models, including Vector Auto Regression (VAR), Impulse Response Functions (IRFs), and Self-Exciting Threshold Autoregressive (SETAR) models, causal relationships between reporting frequency, stock price volatility, and abnormal return patterns across different volatility regimes are identified. The findings highlight that quarterly reporting practices intensify market responses and contribute to significant variations in stock price behavior in high-volatility periods. These insights provide a deeper understanding of the role of financial disclosure practices and forward-looking guidance in shaping market efficiency. This study contributes to ongoing discussions about balancing the transparency benefits of frequent reporting with its potential to amplify market volatility and sector-specific risks, offering valuable implications for policymakers, investors, and corporate managers. Full article
(This article belongs to the Special Issue Advances in Accounting & Auditing Research)
12 pages, 258 KiB  
Article
Analyzing Corporate Social Responsibility, CEO Gender, and Compensation Structure: Evidence from U.S. Firms
by Dmitriy Chulkov and Joungyeon Kim
J. Risk Financial Manag. 2025, 18(1), 17; https://doi.org/10.3390/jrfm18010017 (registering DOI) - 4 Jan 2025
Viewed by 208
Abstract
This article examines how CEO compensation structure and CEO gender were associated with corporate social responsibility (CSR) performance in U.S. firms in the period between 2003 and 2013. Building on prior research in economics, finance, accounting, and management, which suggests gender differences in [...] Read more.
This article examines how CEO compensation structure and CEO gender were associated with corporate social responsibility (CSR) performance in U.S. firms in the period between 2003 and 2013. Building on prior research in economics, finance, accounting, and management, which suggests gender differences in commitment to CSR, this study provides empirical evidence that female CEOs were positively associated with higher CSR performance. The analysis further shows that a higher proportion of equity in CEO compensation was positively associated with CSR, whereas higher proportions of cash bonuses and long-term incentive plans were negatively associated with CSR. Notably, a higher proportion of a cash bonus in CEO compensation further reduced CSR in firms led by female CEOs. These findings offer valuable insights for firms seeking to design executive compensation packages that align CEO behavior with the firms’ CSR objectives. This study contributes to the growing body of literature on CSR by providing empirical evidence on the role of CEO gender and compensation structure. Full article
(This article belongs to the Special Issue Sustainability and CSR in Financial Management: Strategies and Risk Implications)
24 pages, 1631 KiB  
Article
Economic News, Social Media Sentiments, and Stock Returns: Which Is a Bigger Driver?
by Rahul Verma and Priti Verma
J. Risk Financial Manag. 2025, 18(1), 16; https://doi.org/10.3390/jrfm18010016 - 3 Jan 2025
Viewed by 329
Abstract
This study provides empirical evidence on the relative impact of innovations in information content and noise embedded in economic news and social media sentiments on DJIA, S&P 500, NASDAQ, and Russell 2000 index returns. We find that economic news sentiments are relatively more [...] Read more.
This study provides empirical evidence on the relative impact of innovations in information content and noise embedded in economic news and social media sentiments on DJIA, S&P 500, NASDAQ, and Russell 2000 index returns. We find that economic news sentiments are relatively more rational and have a greater impact than irrational social media sentiments. There exist significant negative effects of three distinct categories of social media sentiments and a significant positive impact of economic news sentiments on stock returns. The magnitude of the impact of the economic news sentiments is larger. In addition, the economic news sentiments seem to have greater information content and are driven by risk factors to a greater extent than the sentiments of social media, which probably contain more noise. There are significant negative responses of stock returns to irrational components of social media sentiments while significant positive responses to rational components of economic news sentiments. Lastly, the magnitude of the impact of rational economic news sentiments is higher than that of irrational social media sentiments. Our results are consistent with the view that business news is a manifestation of a rational outlook to a larger extent than social media and can drive stock valuations. Full article
(This article belongs to the Special Issue Forecasting and Time Series Analysis)
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<p>Response of S&amp;P 500 returns to social media and news sentiments.</p> Full article ">Figure 2
<p>Response of NASDAQ returns to social media and news sentiments.</p> Full article ">Figure 3
<p>Response of DJIA returns to social media and news sentiments.</p> Full article ">Figure 4
<p>Response of RUSSELL 2000 returns to social media and news sentiments.</p> Full article ">Figure 5
<p>Response of S&amp;P 500 returns to rational irrational social media and news sentiments.</p> Full article ">Figure 6
<p>Response of NASDAQ returns to rational irrational social media and news sentiments.</p> Full article ">Figure 7
<p>Response of DJIA returns to rational irrational social media and news sentiments.</p> Full article ">Figure 8
<p>Response of RUSSELL 2000 returns to rational or irrational social media and news sentiments.</p> Full article ">
13 pages, 265 KiB  
Article
An Investigation of Trades That Move the BBO Using Strings
by Ying Huang, Bill Hu, Hong Chao Zeng and Matthew D. Hill
J. Risk Financial Manag. 2025, 18(1), 15; https://doi.org/10.3390/jrfm18010015 - 2 Jan 2025
Viewed by 208
Abstract
We investigate the common movement and information content of trades at steps away from the best bid and offer (BBO) using Tokyo Stock Exchange data. We create strings, a series of trades at the same or at an inferior price. The number of [...] Read more.
We investigate the common movement and information content of trades at steps away from the best bid and offer (BBO) using Tokyo Stock Exchange data. We create strings, a series of trades at the same or at an inferior price. The number of the strings is invariant for securities across trading days. The number of shares traded during a string and the time needed for the completion of a string are also significantly related across days for a given stock. The strings represent liquidity beyond the BBO. In addition, the strings characterize the price adjustment process in which we relate to the information on the underlying asset value. The strings measure order aggressiveness beyond the BBO. Finally, we show that the return for the strings is significantly related to the state of the limit order book at the start of the string. Thus, traders can infer information using strings to achieve higher returns. Full article
(This article belongs to the Special Issue Financial Modeling with Spreadsheets, Python, AI, and More)
18 pages, 347 KiB  
Article
The Effect of Accessibility to Bank Branches on Small- and Medium-Sized Enterprise Capital Structure: Evidence from Swedish Panel Data
by Cynthia Sin Tian Ho and Björn Berggren
J. Risk Financial Manag. 2025, 18(1), 14; https://doi.org/10.3390/jrfm18010014 - 31 Dec 2024
Viewed by 313
Abstract
This paper aims to investigate the effects of accessibility to bank branches on the capital structure of small- and medium-sized enterprises (SMEs) by analysing the change in three different leverage measures (total, short-term and long-term leverage). The analysis was conducted using random effects [...] Read more.
This paper aims to investigate the effects of accessibility to bank branches on the capital structure of small- and medium-sized enterprises (SMEs) by analysing the change in three different leverage measures (total, short-term and long-term leverage). The analysis was conducted using random effects models on two data samples. The full sample consisted of 19,064 SMEs while the other sample used to estimate the long-term leverage consisted of 8707 SMEs over two years, 2007 and 2013. The results show that the distance to the nearest bank branch has a negative relationship with total leverage and short-term leverage but a small positive relationship with long-term leverage. An interesting result from the robustness test shows that the distance to the nearest bank negatively affects the long-term leverage of SMEs in rural areas. SME owners and policymakers may benefit from this research amidst the changing banking landscape; policymakers can help increase access to other types of funding for SMEs in bank deserts by increasing the volume of governmental loans. To the best of the authors’ knowledge, the distance to the nearest bank branch office has not been examined in the earlier literature as a determinant of the leverage of SMEs. Full article
(This article belongs to the Section Banking and Finance)
12 pages, 627 KiB  
Article
The Role of Board Independence in Enhancing External Auditor Independence
by Osama Elsayed Abdelmaksoud Fathelbab and Hamzeh Yousef Abu Quba’
J. Risk Financial Manag. 2025, 18(1), 13; https://doi.org/10.3390/jrfm18010013 - 31 Dec 2024
Viewed by 306
Abstract
Legislative regulations have recognized the significance of board independence in enhancing the board’s role and strengthening its autonomy, which are among the key features that mitigate conflicts of interest between management and shareholders. External auditing serves as a pivotal element of corporate governance, [...] Read more.
Legislative regulations have recognized the significance of board independence in enhancing the board’s role and strengthening its autonomy, which are among the key features that mitigate conflicts of interest between management and shareholders. External auditing serves as a pivotal element of corporate governance, acting as a monitoring mechanism to reduce information asymmetry and safeguard principal interests by ensuring the accuracy and fairness of financial statements. This, in turn, reassures data users and stakeholders. The study aimed to examine the effect of board independence on enhancing external auditor independence among 72 Jordanian service companies listed on the Amman Stock Exchange from 2017 to 2021, with a study sample of 62 companies. The findings revealed a negative impact of board member independence on external auditor independence, as measured by audit firm size. However, company size positively influenced external auditor independence, while no effect was found for financial leverage or company age. The findings highlight the need for companies to strengthen internal controls and governance practices to enhance external auditor independence. Additionally, they suggest that company size plays a crucial role, while other factors like financial leverage and company age may have limited impact, indicating areas for further exploration in future research. Full article
(This article belongs to the Special Issue Advances in Accounting & Auditing Research)
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<p>The study model.</p> Full article ">
21 pages, 1246 KiB  
Article
Real Exchange Rate Channel of QE Monetary Transmission Mechanism in Selected EU Members: The Pooled Mean Group Panel Approach
by Stefan Stojkov, Emilija Beker Pucar and Aleksandar Sekulić
J. Risk Financial Manag. 2025, 18(1), 12; https://doi.org/10.3390/jrfm18010012 - 30 Dec 2024
Viewed by 329
Abstract
Since the Great 2008 Recession, central banks around the world have been coping with monetary consequences that highlight structural costs of the economic system and the rise of unconventional monetary measures. This research aims to capture the heterogeneous effects of expansionary balance sheet [...] Read more.
Since the Great 2008 Recession, central banks around the world have been coping with monetary consequences that highlight structural costs of the economic system and the rise of unconventional monetary measures. This research aims to capture the heterogeneous effects of expansionary balance sheet (Quantitative easing) policy on the real effective exchange rate and current account balance under the different exchange rate regimes in crisis circumstances. The sample is structured of two groups of EU countries differentiated by level of monetary autonomy: EZ members (Austria, Belgium, France, Germany, Netherlands, Italy, and Spain) are represented by countries with the highest level of asset purchases by ECB and emerging monetary autonomous EU economies (Czech, Hungary, Poland, and Romania). Empirical findings are based on the framework of cross-sectional dependent, non-stationary, heterogeneous, dynamic panels using the (Pooled) Mean Group estimator during the 2014Q1–2023Q1 time horizon. Results indicate a positive long-run relationship between the central bank balance sheet assets, the real interest rate, and the real effective exchange rate. A negative long-term relationship with the current account balance is confirmed, suggesting a diminishing external position. While error-correction parameters are significant and heterogeneous, research confirms higher real effective exchange rate reaction for the EZ members with higher adjustment toward worsening competitiveness along with external balance. Full article
(This article belongs to the Special Issue Open Economy Macroeconomics)
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<p>APP structure and ECB balance sheet. (<b>a</b>) Largest asset purchases by ECB per country in the period 2014–2023; (<b>b</b>) ECB balance sheet assets. Source: author’s research according to FRED (2024) data.</p> Full article ">Figure 2
<p>Fluctuation of REER and ECB balance sheet dynamics in the EZ member states (Austria, France, Germany, Netherlands, Italy, Spain, and Belgium) in the period 2014Q1–2023Q1. Source: author’s research according to quarterly IMF and FRED (2024) data.</p> Full article ">Figure 2 Cont.
<p>Fluctuation of REER and ECB balance sheet dynamics in the EZ member states (Austria, France, Germany, Netherlands, Italy, Spain, and Belgium) in the period 2014Q1–2023Q1. Source: author’s research according to quarterly IMF and FRED (2024) data.</p> Full article ">Figure 3
<p>Fluctuation of REER and central bank’s balance sheet dynamics in the monetary autonomous EU countries (Czech, Poland, Hungary, and Romania) in the period 2014Q1–2023Q1. Source: author’s research according to quarterly IMF and FRED (2024) data.</p> Full article ">Figure 4
<p>Average current account position (% of GDP) for EZ members in the period 2014Q1–2023Q1. Source: author’s research according to quarterly OECD data.</p> Full article ">
18 pages, 1269 KiB  
Article
Beyond the Traditional VIX: A Novel Approach to Identifying Uncertainty Shocks in Financial Markets
by Ayush Jha, Abootaleb Shirvani, Svetlozar T. Rachev and Frank J. Fabozzi
J. Risk Financial Manag. 2025, 18(1), 11; https://doi.org/10.3390/jrfm18010011 - 29 Dec 2024
Viewed by 389
Abstract
We introduce a new identification strategy for uncertainty shocks to explain macroeconomic volatility in financial markets. The Chicago Board Options Exchange Volatility Index (VIX) measures the market expectations of future volatility, but traditional methods based on second-moment shocks and the time-varying volatility of [...] Read more.
We introduce a new identification strategy for uncertainty shocks to explain macroeconomic volatility in financial markets. The Chicago Board Options Exchange Volatility Index (VIX) measures the market expectations of future volatility, but traditional methods based on second-moment shocks and the time-varying volatility of the VIX often do not effectively to capture the non-Gaussian, heavy-tailed nature of asset returns. To address this, we constructed a revised VIX by fitting a double-subordinated Normal Inverse Gaussian Lévy process to S&P 500 log returns, to provide a more comprehensive measure of volatility that captures the extreme movements and heavy tails observed in financial data. Using an axiomatic framework, we developed a family of risk–reward ratios that, when computed with our revised VIX and fitted to a long-memory time series model, provide a more precise identification of uncertainty shocks in financial markets. Full article
(This article belongs to the Special Issue Financial Markets, Financial Volatility and Beyond, 3rd Edition)
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<p>S&amp;P500 daily returns.</p> Full article ">Figure 2
<p>Last price (S&amp;P500).</p> Full article ">Figure 3
<p>Implied volatility surface. (<b>i</b>) Call price and (<b>ii</b>) put price.</p> Full article ">Figure 4
<p>Values for the upper bound <math display="inline"><semantics> <msub> <mi>a</mi> <mrow> <mi>m</mi> <mi>a</mi> <mi>x</mi> </mrow> </msub> </semantics></math> computed over the time period from 2 January 2014 to 28 July 2023.</p> Full article ">Figure 5
<p>Density fit.</p> Full article ">Figure 6
<p>Log-scaled density fit.</p> Full article ">Figure 7
<p>Parameter estimates in a 4-year rolling window: (<b>i</b>) <math display="inline"><semantics> <msub> <mi>μ</mi> <mn>3</mn> </msub> </semantics></math>, (<b>ii</b>) <math display="inline"><semantics> <msub> <mi>σ</mi> <mn>3</mn> </msub> </semantics></math>, (<b>iii</b>) <math display="inline"><semantics> <msub> <mi>λ</mi> <mi>T</mi> </msub> </semantics></math> &amp; <math display="inline"><semantics> <msub> <mi>λ</mi> <mi>U</mi> </msub> </semantics></math>, and (<b>iv</b>) <math display="inline"><semantics> <mi>ρ</mi> </semantics></math>.</p> Full article ">Figure 8
<p>Comparison of the four moments: theoretical vs. empirical ∼ (<b>i</b>) <math display="inline"><semantics> <mrow> <mi mathvariant="double-struck">E</mi> <mo>[</mo> <mi>X</mi> <mo>]</mo> </mrow> </semantics></math>, (<b>ii</b>) <math display="inline"><semantics> <mrow> <mi>V</mi> <mi>a</mi> <mi>r</mi> <mo>[</mo> <mi>X</mi> <mo>]</mo> </mrow> </semantics></math>, (<b>iii</b>) <math display="inline"><semantics> <mrow> <mi>S</mi> <mi>k</mi> <mi>e</mi> <mi>w</mi> <mo>[</mo> <mi>X</mi> <mo>]</mo> </mrow> </semantics></math>, and (<b>iv</b>) <math display="inline"><semantics> <mrow> <mi>K</mi> <mi>u</mi> <mi>r</mi> <mi>t</mi> <mo>[</mo> <mi>X</mi> <mo>]</mo> </mrow> </semantics></math>. ‘Th’: theoretical moments estimated using the fitted parameters. ‘Emp’: empirical moments computed from the S&amp;P500 log returns.</p> Full article ">Figure 9
<p>Normalized volatility to match NDIG estimates: <b>revised VIX</b> {<b>Volatility of VIX (VVIX)</b>}.</p> Full article ">Figure 10
<p>Residuals of the fitted time series models.</p> Full article ">Figure 11
<p>Signal/Noise ratios detected using performance ratios over <span class="html-italic">S</span> scenarios.</p> Full article ">Figure 12
<p>Novel Uncertainty Shocks. (<b>i</b>) Rachev Ratios (<b>ii</b>) STAR Ratios.</p> Full article ">Figure 13
<p>Long-range dependences: decay of the autocorrelation.</p> Full article ">Figure 14
<p>Traditional VIX vs. revised VIX; (<b>i</b>) Rachev ratios, (<b>ii</b>) STAR ratios.</p> Full article ">
36 pages, 4929 KiB  
Article
Penny-Wise Acumen in Costonomics: Transforming Costs into Entrepreneurial Gold Through Smart Financial Management
by Enkeleda Lulaj
J. Risk Financial Manag. 2025, 18(1), 9; https://doi.org/10.3390/jrfm18010009 - 28 Dec 2024
Viewed by 536
Abstract
This research demonstrates that penny-wise acumen in costonomics can lead to significant financial gains, transforming costs into entrepreneurial gold for enterprises. The study aims to explore how effective financial management, through the application of cost management factors, can convert costs into entrepreneurial opportunities [...] Read more.
This research demonstrates that penny-wise acumen in costonomics can lead to significant financial gains, transforming costs into entrepreneurial gold for enterprises. The study aims to explore how effective financial management, through the application of cost management factors, can convert costs into entrepreneurial opportunities and drive long-term business sustainability. The research utilized exploratory and confirmatory factor analysis (EFA and CFA), along with reliability analysis (Cronbach’s alpha), employing SPSS and AMOS software to examine the relationships between critical cost management factors. The findings reveal strong correlations among these factors, each playing a vital role in optimizing cost efficiency and enhancing business performance. Cost Management Effectiveness (CME) emphasizes clear cost structures, supplier evaluations, and overall cost control. Strategic Cost Management (SCM) focuses on identifying cost drivers and benchmarking against industry standards to uncover cost reduction opportunities. Cost Optimization Mastery (COM) involves monitoring production costs and assessing cost quality to ensure financial stability, while Cost Management Policy (CMP) stresses the importance of robust policies and employee engagement in controlling costs. Lastly, Cost Management Vigilance (CMV) highlights the need for the active monitoring of variable and overhead costs to maintain financial discipline. This research underscores that businesses in the manufacturing, hospitality, and commercial sectors can successfully leverage these cost management practices to foster competitive entrepreneurship and sustainable growth. Future studies should explore the role of emerging technologies in cost management to uncover new strategies for profitability and sustainability. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
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<p>Conceptual model. Source: Prepared by the author (2024).</p> Full article ">Figure 2
<p>Statistical analysis model. Source: Prepared by the author (2024).</p> Full article ">Figure 3
<p>Heatmap of descriptive statistics. Source: prepared by the author (2024).</p> Full article ">Figure 4
<p>Heatmap of KMO and Bartlett’s Test. Source: prepared by the author (2024).</p> Full article ">Figure 5
<p>Heatmap of variance. Source: prepared by the author (2024).</p> Full article ">Figure 6
<p>Heatmap of the component matrix. Source: prepared by the author (2024).</p> Full article ">Figure 7
<p>Cornbach’s Alpha. Source: prepared by the author (2024).</p> Full article ">Figure 8
<p>Heatmap of regression weights. Source: prepared by the author (2024).</p> Full article ">Figure 9
<p>Heatmap of standardized regression weights. Source: prepared by the author (2024).</p> Full article ">Figure 10
<p>Standardized total effects—two-tailed significance heatmap. Source: prepared by the author (2024).</p> Full article ">Figure 11
<p>Model fit metrics heatmap. Source: prepared by the author (2024).</p> Full article ">Figure 12
<p>Path diagram. Source: prepared by the author (2024).</p> Full article ">
19 pages, 338 KiB  
Article
Corporate Governance and Obfuscation in Chairmen’s Letters: The Case of MENA Banks
by Rasha Mahboub
J. Risk Financial Manag. 2025, 18(1), 8; https://doi.org/10.3390/jrfm18010008 - 28 Dec 2024
Viewed by 275
Abstract
The readability (RDB) of annual reports (ARs) plays a crucial role in determining the effectiveness of disclosure of information to interested parties, particularly investors. Given that investors rely on the financial information provided in ARs, the chairman’s letter serves as a key communication [...] Read more.
The readability (RDB) of annual reports (ARs) plays a crucial role in determining the effectiveness of disclosure of information to interested parties, particularly investors. Given that investors rely on the financial information provided in ARs, the chairman’s letter serves as a key communication tool and is the most extensively read section of the report. Consequently, companies are under pressure to provide understandable ARs that can be easily interpreted by investors. Nevertheless, managers sometimes obscure such disclosures in an attempt to bury negative information and hide their own behavior. Drawing from the “managerial obfuscation hypothesis”, this study investigated how the corporate governance (CG) structures affect the RDB of ARs for a sample of 95 banks across seven countries in the MENA region from 2018 to 2022. The findings revealed that board size, frequency of board meetings, and ownership concentration significantly affected the RDB of ARs. Additionally, board independence and gender diversity had a significant negative effect on ARs’ RDB. Conversely, the study found that the presence of role duality within the board had an insignificant effect on ARs’ RDB. As a result, this study recommends enhancing CG structures to enhance the clarity of banks’ reports and boost investor trust. Full article
(This article belongs to the Section Business and Entrepreneurship)
19 pages, 13835 KiB  
Article
Evolution of Financial Development Research: A Bibliometric Analysis
by Servet Say, Mesut Dogan, Daulen Abdeshov, Murat Tekbas, Levent Sezal and Burhan Erdoğan
J. Risk Financial Manag. 2025, 18(1), 10; https://doi.org/10.3390/jrfm18010010 - 28 Dec 2024
Viewed by 535
Abstract
This study aims to analyze publications on financial development between 1986 and 2023 using bibliometric analysis methods. The analysis, based on data obtained from the Web of Science database, utilizes bibliometric tools such as keyword analysis, author collaboration networks, citation analysis, and bibliographic [...] Read more.
This study aims to analyze publications on financial development between 1986 and 2023 using bibliometric analysis methods. The analysis, based on data obtained from the Web of Science database, utilizes bibliometric tools such as keyword analysis, author collaboration networks, citation analysis, and bibliographic coupling to identify trends, key authors, influential journals, and emerging research topics in the field. The results indicate that financial development research is predominantly concentrated in the fields of economics, environmental sciences, and business finance, with economics having the highest number of publications. A significant increase in publications is observed after 2014, particularly after the COVID-19 pandemic. VOSviewer and R Studio programs were chosen in the study due to their strengths in terms of functionality. According to the results, the countries with the most citations were China, the USA, and Pakistan. The most cited authors are Shahbaz M. with 3926 citations, Zingales I. with 3252 citations, and Oztürk I. with 2710 citations. The authors in the top two are also in the top two in terms of total link strength. The analysis shows that key themes such as economic growth, energy consumption, CO2 emissions, and renewable energy have increasingly intersected with financial development, highlighting the growing focus on sustainability. China, Pakistan, and the USA are the most active countries in financial development research, with China leading both in terms of publication count and citations. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Economic Growth)
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<p>Web of Science Categories.</p> Full article ">Figure 2
<p>Annual Scientific Production.</p> Full article ">Figure 3
<p>Co-authorship of Authors.</p> Full article ">Figure 4
<p>Three-Field Plot for Affiliation, Country, and Keywords.</p> Full article ">Figure 5
<p>Co-occurrence of Keywords.</p> Full article ">Figure 6
<p>Word cloud.</p> Full article ">Figure 7
<p>Thematic Evaluation in Authors’ Keywords.</p> Full article ">Figure 8
<p>Most Relevant Sources.</p> Full article ">Figure 9
<p>Citation of Authors.</p> Full article ">Figure 10
<p>Citation of Countries.</p> Full article ">Figure 11
<p>Countries’ Scientific Production.</p> Full article ">Figure 12
<p>Citation of Organizations.</p> Full article ">Figure 13
<p>Bibliographic Coupling of Documents.</p> Full article ">Figure 14
<p>Clusters by Documents Coupling.</p> Full article ">Figure 15
<p>Trend Topics Per Year.</p> Full article ">Figure 16
<p>Topic Dendrogram.</p> Full article ">Figure 17
<p>Bibliographic Coupling of Authors.</p> Full article ">Figure 18
<p>Co-citation of Co-authors.</p> Full article ">
12 pages, 272 KiB  
Article
The Modelling of Auto Insurance Claim-Frequency Counts by the Inverse Trinomial Distribution
by Seng Huat Ong, Shin Zhu Sim and Shuangzhe Liu
J. Risk Financial Manag. 2025, 18(1), 7; https://doi.org/10.3390/jrfm18010007 - 27 Dec 2024
Viewed by 281
Abstract
In the transportation services industry, the proper assessment of insurance claim count distribution is an important step to determine insurance premiums based on policyholders’ risk profiles. Risk factors are identified through regression analysis. In this paper, the inverse trinomial distribution is proposed as [...] Read more.
In the transportation services industry, the proper assessment of insurance claim count distribution is an important step to determine insurance premiums based on policyholders’ risk profiles. Risk factors are identified through regression analysis. In this paper, the inverse trinomial distribution is proposed as a count data model for insurance claims characterised by having long tails and a high index of dispersion. Two regression models are developed to identify associated risk factors. Other popular models, such as the negative binomial and COM-Poisson, are fitted and compared to information criteria. The risk profiles of policyholders are determined based on the selected model. To illustrate the application of the inverse trinomial regression models, the ausprivautolong dataset of automobile claims in Australia has been fitted with identification of risk factors. Full article
(This article belongs to the Special Issue Featured Papers in Finance and Society Wellbeing—in Honor of Professors Joe Gani and Chris Heyde)
25 pages, 340 KiB  
Article
Firm-Level Regulatory Intensity and Labor Investment Efficiency
by Hui Liang James, Thanh Ngo and Hongxia Wang
J. Risk Financial Manag. 2025, 18(1), 6; https://doi.org/10.3390/jrfm18010006 - 26 Dec 2024
Viewed by 356
Abstract
We examine the impact of firm-level regulatory intensity on corporate labor investment efficiency in U.S. firms using a sample from 1995 to 2019. We find that labor investment inefficiency decreases with regulatory intensity, providing evidence that greater regulatory burden pushes managers to make [...] Read more.
We examine the impact of firm-level regulatory intensity on corporate labor investment efficiency in U.S. firms using a sample from 1995 to 2019. We find that labor investment inefficiency decreases with regulatory intensity, providing evidence that greater regulatory burden pushes managers to make better labor investment decisions. This finding is robust to subsample analyses and various model specifications, suggesting that regulations, though seemingly costly, generate efficiencies and positive externalities. We conclude that regulatory requirements prompt firms to invest in labor more accurately to absorb regulatory compliance costs, and U.S. firms can lift their regulatory burden to some extent through improved labor investment. Full article
(This article belongs to the Special Issue Emerging Topics in Business Risk)
19 pages, 310 KiB  
Article
Effect of Audit Committee on Tax Aggressiveness: French Evidence
by Ahmad Alqatan, Safa Chemingui and Muhammad Arslan
J. Risk Financial Manag. 2025, 18(1), 5; https://doi.org/10.3390/jrfm18010005 - 26 Dec 2024
Viewed by 299
Abstract
This study investigates the effect of audit committee characteristics on the level of tax aggressiveness. Drawing on a sample of 72 French listed firms from the SBF120 index for the period from 2015 to 2022, this study measures the level of tax aggressiveness [...] Read more.
This study investigates the effect of audit committee characteristics on the level of tax aggressiveness. Drawing on a sample of 72 French listed firms from the SBF120 index for the period from 2015 to 2022, this study measures the level of tax aggressiveness through the effective tax rate (cash ETR). The descriptive statistics, correlation matrix, variance inflation factor (VIF), and feasible generalized least squares (FGLS) regression were used for analysis of panel data. The findings reveal that measures of the independence of the audit committee, expertise of the audit committee, and audit committee size are significantly linked to tax aggressiveness. The findings also highlighted that the frequency of audit committee meetings is weakly linked to tax aggressiveness. The effectiveness of audit committee members can send a strong signal to the tax authorities, the shareholders, regulators, and the investors who are concerned about the risk of tax aggressiveness. This study contributes to the existing literature aimed at exploring the effect of audit committee characteristics on tax aggressiveness in a French context. This study has several implications for regulators, policymakers, and academia. It helps the policymakers and regulators in policy reforms who aim at combating aggressive tax practices in France, which is one of the primary objectives within the European Union (EU) framework. Full article
(This article belongs to the Section Applied Economics and Finance)
32 pages, 3237 KiB  
Article
Impact of AI Disclosure on the Financial Reporting and Performance as Evidence from US Banks
by Ahmad Alzeghoul and Nizar Mohammad Alsharari
J. Risk Financial Manag. 2025, 18(1), 4; https://doi.org/10.3390/jrfm18010004 - 26 Dec 2024
Viewed by 395
Abstract
Purpose: This study examines the impact of artificial intelligence disclosure within the US banking sector. It may explore the implications of AI disclosure on issues like financial reporting, transparency, accountability, and ethical considerations within the banking sector. Design/methodology/approach: Using a blend of qualitative [...] Read more.
Purpose: This study examines the impact of artificial intelligence disclosure within the US banking sector. It may explore the implications of AI disclosure on issues like financial reporting, transparency, accountability, and ethical considerations within the banking sector. Design/methodology/approach: Using a blend of qualitative and quantitative analyses, the researchers utilized SEC and NASDAQ databases to scrutinize AI disclosures within the top 10 banks. The sample comprised 100 annual reports, and through multiple regression analysis, the research discerned a noteworthy enhancement in performance metrics. Findings: The study found that AI influences financial performance only when moderated by the interaction of shareholders, the board of directors, and independent board members. The findings indicate a rising trend of AI disclosure in financial reports. The study indicates that AI disclosure impacts NII, TEXP, and P/E. Additionally, the study indicated a conflict of interest between agents and principals. Large shareholders tended to favor more AI disclosures, whereas the board of directors either did not support or adopted a more conservative stance on disclosure. Research limitations/implications: This study acknowledges a limitation in the dataset; initially comprising 100 annual reports, it was later refined to meet regression analysis assumptions. Despite this limitation, the study’s insightful results contribute significantly to our understanding of the dynamic relationship between AI disclosure and the performance of top-tier banks in the USA. Originality/Value: By investigating the impact of AI disclosure, the study aims to provide insights into the broader considerations associated with artificial intelligence disclosures in the US banking sector. This study also analyzes how stakeholders respond to the disclosed information about artificial intelligence. Full article
(This article belongs to the Special Issue Advances in Accounting & Auditing Research)
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<p>Research model.</p> Full article ">Figure 2
<p>Model 1: AIFQ and BDSIZE moderation Graph.</p> Full article ">Figure 3
<p>Model 2: AIFQ and BDSIZE moderation Graph.</p> Full article ">Figure 4
<p>Model 1: AIFQ and LARSHE moderation Graph.</p> Full article ">Figure 5
<p>Model 2: AIFQ and LARSHE moderation Graph.</p> Full article ">Figure 6
<p>Model 3: AIFQ and BDSIZE moderation Graph.</p> Full article ">Figure 7
<p>Model 3: AIFQ and LARSHE moderation Graph.</p> Full article ">Figure 8
<p>Model 4: AIFQ and LARSHE moderation Graph.</p> Full article ">Figure 9
<p>Model 4: AIFQ and BDSIZE moderation Graph.</p> Full article ">Figure 10
<p>Model 3: AIFQ and INDPB moderation Graph.</p> Full article ">Figure 11
<p>Model 4: AIFQ and INDPB moderation Graph.</p> Full article ">Figure A1
<p>AI frequency by bank.</p> Full article ">Figure A2
<p>AI frequency by year.</p> Full article ">
17 pages, 484 KiB  
Article
Perceived Internal Audit Quality and External Auditors’ Attributes in Iranian and Iraqi Banks
by Bita Mashayekhi and Yousif Mohammed
J. Risk Financial Manag. 2025, 18(1), 3; https://doi.org/10.3390/jrfm18010003 - 25 Dec 2024
Viewed by 316
Abstract
The significance of internal auditing and its quality cannot be overstated, making it essential to investigate the factors influencing this quality. This study, employing a cross-sectional analysis, aims to assess how the characteristics of external auditors affect the perceived quality of internal audits [...] Read more.
The significance of internal auditing and its quality cannot be overstated, making it essential to investigate the factors influencing this quality. This study, employing a cross-sectional analysis, aims to assess how the characteristics of external auditors affect the perceived quality of internal audits in Iranian and Iraqi banks. In 2024, data regarding the attributes of external auditors and the perceived quality of internal audits were collected through a questionnaire distributed to external auditors from various banks in Iran and Iraq. The data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM). The study reveals a positive relationship between external auditors’ competence and independence and the perceived quality of internal audits, while it shows a negative impact of external audit methodologies on this perceived quality. These findings highlight the importance of external auditors’ independence as a key determinant of perceived internal audit quality. Full article
(This article belongs to the Special Issue Advances in Accounting & Auditing Research)
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<p>Conceptual Model.</p> Full article ">Figure 2
<p>Regression Results.</p> Full article ">Figure 3
<p>Regression Results for Reflective Indicators.</p> Full article ">
34 pages, 927 KiB  
Article
The Impact of Sentiment on Realized Higher-Order Moments in the S&P 500: Evidence from the Fear and Greed Index
by Richard Mawulawoe Ahadzie, Peterson Owusu Junior and John Kingsley Woode
J. Risk Financial Manag. 2025, 18(1), 2; https://doi.org/10.3390/jrfm18010002 - 25 Dec 2024
Viewed by 374
Abstract
This study empirically investigates the relationship between realized higher-order moments and the Fear and Greed Index as a measure of sentiments. We estimate daily realized moments using 5 min return data of the S&P 500 index from 3 January 2011 to 18 September [...] Read more.
This study empirically investigates the relationship between realized higher-order moments and the Fear and Greed Index as a measure of sentiments. We estimate daily realized moments using 5 min return data of the S&P 500 index from 3 January 2011 to 18 September 2020. We find that the Fear and Greed Index significantly impacts realized volatility during periods of extreme fear. Additionally, various sentiment indicators influence realized skewness and realized kurtosis. The VIX index significantly reduces realized skewness across all sentiment levels. Bearish and bullish sentiments have a significant negative relationship with negative realized skewness during periods of extreme fear and extreme greed. However, the Fear and Greed Index and bearish and bullish sentiments have a significant positive relationship with positive realized skewness. During extreme fear, the Fear and Greed Index and bearish and bullish sentiments have a significant negative relationship with realized kurtosis. These results remain consistent when considering the non-linear characteristics of the Fear and Greed Index during periods of extreme fear and extreme greed. These findings highlight the relevance of understanding sentiment in financial risk management and its significant relationship with the asymmetric and extremity characteristics of asset returns. Full article
(This article belongs to the Special Issue Advances in Macroeconomics and Financial Markets)
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<p>This graph reports the time series plot of FGI across time and shows the disparity between various sentiment levels. Extreme fear is defined as FGI ≤ 24, fear is defined as 25 ≤ FGI ≤ 44, neutral is defined as 45 ≤ FGI ≤ 55, greed is defined as 56 ≤ FGI ≤ 75, and extreme greed is defined as FGI ≥ 76.</p> Full article ">
14 pages, 248 KiB  
Article
The Dual-Mandate Debate: What Do Central Banks Really Target?
by Najib Khan
J. Risk Financial Manag. 2025, 18(1), 1; https://doi.org/10.3390/jrfm18010001 - 24 Dec 2024
Viewed by 284
Abstract
Inflation targeting, a monetary policy framework, is criticized for its narrow mandate of safeguarding price stability only and neglecting other equally important macroeconomic variables. This negligence, according to the critics, might have had a role in the unprecedented, real business-cycle fluctuations observed in [...] Read more.
Inflation targeting, a monetary policy framework, is criticized for its narrow mandate of safeguarding price stability only and neglecting other equally important macroeconomic variables. This negligence, according to the critics, might have had a role in the unprecedented, real business-cycle fluctuations observed in the past. Hence, they advocate for mandating central banks with equally emphasizing employment and output growth along with inflation. Theoretical claims aside, the literature does not present any empirical evidence on how to determine whether a central bank adheres to a single or a dual mandate. This study is aimed at filling this gap by analyzing the reaction functions of various central banks, including the ones targeting inflation and the ones with no specific targets. Using the panel data from OECD countries, our findings question the prevalent theoretical misunderstanding in the literature: the central banks with no specific targets (the dual-mandate monetary policy regimes) appear to be targeting the rate of inflation only, whereas the central banks that are thought to have a single-mandate seem to be targeting inflation, output growth, and unemployment. These results are significant, both statistically and economically, and question the baseless criticism of the inflation-targeting regime for neglecting employment and output growth. Full article
(This article belongs to the Special Issue Monetary Policy in a Globalized World)
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