Int. J. Financial Stud.2015, 3(4), 530-556; doi:10.3390/ijfs3040530 - published 19 November 2015 Show/Hide Abstract
Abstract: The purpose of this study is to investigate the potential effects of corporate governance (CG) elements on corporate social responsibility (CSR) disclosure. The annual reports of companies for the year 2007–2011 are examined to analyze the relationship between CG and CSR reporting. It considers the elements of CG such as board size, independent directors, foreign nationalities and women representation in the board, ownership concentration, institutional ownership, firm size and profitability. The multiple regression technique is used to measure the impact of CG elements on companies’ CSR reporting. The results of the study demonstrate that overall CSR reporting by Pakistani companies are rather moderate however, the assortments of CSR items are really impressive. The study found positive and significant impact from board size, institutions ownership, ownership concentration and firm size on CSR reporting. The results also display contrary relationships between the women and foreign director’s representation in the board and CSR reporting. This study suggests that organizations should audit their CG activities related to CSR in order to prove themselves good corporate citizens to all stakeholders.
Int. J. Financial Stud.2015, 3(4), 510-529; doi:10.3390/ijfs3040510 - published 29 October 2015 Show/Hide Abstract
Abstract: This study investigates the firm-specific factors affecting the profitability of non-life insurance companies operating in Turkey. For this purpose, data of 24 non-life insurance companies operating in Turkey from the period 2006–2013 were brought together to obtain 192 observed panel data sets. In this study, profitability is measured by two different variables: technical profitability ratio and sales profitability ratio. According to the empirical results, the firm-specific factors affecting the profitability of Turkish non-life insurance companies are the size of the company, age of the company, loss ratio, current ratio, and premium growth rate.
Int. J. Financial Stud.2015, 3(4), 482-509; doi:10.3390/ijfs3040482 - published 23 October 2015 Show/Hide Abstract
Abstract: This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis, when some countries registered a decisive inflow of the central bank liquidity and others showed an outflow. The dynamics in the TARGET2 are here explained as being due to a fall in the level of confidence in the capacity of the Economic and Monetary Union to survive, rather than to disparities in the level of competitiveness among countries of the Eurozone. This crisis of confidence has to be considered as the consequence of the implicit refusal of the European institutions to create a mechanism working as lender of last resort for the euro area member States; indeed, only when the ECB took this responsibility by launching the Outright Monetary Transactions clear signs of improvement were observed in the sovereign debt crisis.
Int. J. Financial Stud.2015, 3(4), 451-481; doi:10.3390/ijfs3040451 - published 9 October 2015 Show/Hide Abstract
Abstract: This paper tries to investigate whether there exist international integrated markets among East Asian economies, by employing the Generalized Purchasing Power Parity (G-PPP) model, then, it would help to suggest whether the East Asian region is the Optimum Currency Area (OCA) or not. The empirical results in this paper suggest that holding the G-PPP among nine Asian countries (China, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam) becomes more applicable in 2000–2013 than of that in 1984–1997. In the period of “globalization,” which is characterized by expansion of world trade, increase of international capital flows, and development of information and communications technologies, Asian economic development has been promoting not only economic integrations but also constructing the stable linkages of real exchange rates. Therefore, it would help to adopt regional coordination for monetary policies to assure the feasibility of a possible monetary union.
Int. J. Financial Stud.2015, 3(4), 431-450; doi:10.3390/ijfs3040431 - published 28 September 2015 Show/Hide Abstract
Abstract: Undiversifiable (or systematic risk) has long been an enemy of investors. Many countercyclical strategies have been developed to counter this. However, like all insurance types, these strategies are generally costly to implement, and over time can significantly reduce portfolio returns in long and extended bull markets. In this paper, we discuss an alternative technique, founded on the premise of physiological bias and risk-aversion. We take a behavioral discussion in order to contextualize the insurance like characteristics of option pricing and discuss how this can lead to a mispricing of the asymmetric relationship between the VIX and the S&P 500. To test this, we perform studies in which we find statistical inefficiencies, thereby making it possible to implement a method of hedging index option premium in a way that has displayed no monthly drawdowns in bullish periods, while still providing large returns in major sell-offs. The three versions of the strategy discussed have negative betas to the S&P 500, while exhibiting similar risk-adjusted excess returns over both bull and bear markets. Further, the performance generated over the entire period, for all three strategies, is highly statistically significant. The results challenge the weak form of the Efficient Market Hypothesis and provide evidence that the methods of hedging could be a valuable addition to an equity rich portfolio for the purpose of counteracting systematic risk.
Int. J. Financial Stud.2015, 3(3), 423-430; doi:10.3390/ijfs3030423 - published 9 September 2015 Show/Hide Abstract
Abstract: This Guest Editor’s note reflects on the contributions of each article in the Special Issue on family firms’ behavior and performance. Building on this, several under-researched areas concerning family involvement in businesses are identified and the resulting impact on firm behavior and performance is explained. Finally, future research directions and insights for practitioners are outlined.