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Volume 18
Issue 3
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J. Risk Financial Manag., Volume 18, Issue 3 (March 2025) – 60 articles

Cover Story (view full-size image): This study investigates the performance of homebuilder exchange-traded funds (ETFs), which offer investors exposure to residential real estate through diversified holdings in construction and related companies. Spanning from 2006 to 2023, our analysis applies both traditional and conditional performance models, including an extended Carhart factor framework. The results show that, while homebuilder ETFs outperform benchmarks in certain periods, particularly during the COVID-19 lockdowns, they also carry higher downside risk. The findings highlight portfolio managers' strengths in security selection despite limitations in market timing, offering timely insights for investors in the housing-linked ETF space. View this paper
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15 pages, 284 KiB  
Article
Financial Literacy, Financial Knowledge, and Financial Behaviors in OECD Countries
by Manuel Carlos Nogueira, Luís Almeida and Fernando Oliveira Tavares
J. Risk Financial Manag. 2025, 18(3), 167; https://doi.org/10.3390/jrfm18030167 - 20 Mar 2025
Viewed by 438
Abstract
As an integral part of financial inclusion, adequate and correct financial knowledge provides individuals with tools to achieve better financial performance throughout their lives. Financial knowledge also contributes to agents exhibiting financial behaviors. As there is consensus in the literature regarding the benefits [...] Read more.
As an integral part of financial inclusion, adequate and correct financial knowledge provides individuals with tools to achieve better financial performance throughout their lives. Financial knowledge also contributes to agents exhibiting financial behaviors. As there is consensus in the literature regarding the benefits of financial literacy, we decided to investigate the importance of several indicators that generally appear to explain this literacy in a set of twenty OECD countries, considering financial literacy, financial knowledge, and financial behavior. Using estimation through corrected heteroscedasticity, the results show that the completion of higher education contributes positively and significantly to financial literacy and financial knowledge and behaviors. Inequality in access to health and education, as well as the level of household debt, negatively impacts financial literacy and knowledge. Still, on the other hand, progression in human development contributes to progression in literacy and financial behavior. In terms of average income, it can be seen that it contributes to literacy and financial behavior, but surprisingly, public spending on education does not impact financial literacy. Full article
(This article belongs to the Special Issue The New Horizons of Global Financial Literacy)
4 pages, 174 KiB  
Editorial
Financial Econometrics and Quantitative Economic Analysis
by Sergej Gričar, Nemanja Lojanica and Tamara Backović
J. Risk Financial Manag. 2025, 18(3), 166; https://doi.org/10.3390/jrfm18030166 - 20 Mar 2025
Viewed by 149
Abstract
Since the foundational contributions of Katarina Juselius and Søren Johansen on cointegration, along with earlier works by influential scholars like Clive Granger, the field has witnessed significant developments [...] Full article
(This article belongs to the Special Issue Financial Econometrics and Quantitative Economic Analysis)
13 pages, 1162 KiB  
Article
Financial Literacy and Behavioral Intention to Use Central Banks’ Digital Currency: Moderating Role of Trust
by Mohanamani Palanisamy, Maria Tresita Paul Vincent and Md Billal Hossain
J. Risk Financial Manag. 2025, 18(3), 165; https://doi.org/10.3390/jrfm18030165 - 19 Mar 2025
Viewed by 376
Abstract
Building on the Innovation Diffusion Theory, this study proposes and explores the influence of financial literacy on the behavioral intention to use central banks’ digital currency (CBDC) and the moderating role of trust of respondents in the financial institution on the above relationship. [...] Read more.
Building on the Innovation Diffusion Theory, this study proposes and explores the influence of financial literacy on the behavioral intention to use central banks’ digital currency (CBDC) and the moderating role of trust of respondents in the financial institution on the above relationship. This study has employed a quantitative research design to examine the relationship between financial literacy, behavioral intention to use CBDC and trust. The final sample comprised 241 respondents who had used CBDC across India. The statistical relationship between the above variables was assessed using PROCESS macro in SPSS 23.0. Findings revealed that financial literacy emerges as a strong predictor of CBDC use. Individuals with higher financial literacy are more likely to understand the features, benefits and risks associated with adopting CBDC. The interaction effect reveals that as financial literacy increases, the relative importance of trust diminishes. On the other hand, those who lack sufficient knowledge of financial literacy depend more on trust to fill in their knowledge gaps. This is one of the first studies to scientifically support the relationship between trust and financial literacy and how both influence behavioral intention to use CBDC. This research contributes valuable knowledge to the discourse on the use of CBDC, which is crucial for achieving a nation’s broader digital transformational goal. Full article
(This article belongs to the Special Issue Fintech, Business, and Development)
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22 pages, 973 KiB  
Article
Heterogeneous Links Between Corruption and Innovation in a Global Economy
by Roberto Iorio and Maria Luigia Segnana
J. Risk Financial Manag. 2025, 18(3), 164; https://doi.org/10.3390/jrfm18030164 - 19 Mar 2025
Viewed by 149
Abstract
This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? [...] Read more.
This study examines the impact of corruption on business innovation from a comparative perspective and shows that this relationship is inherently heterogeneous across firms and countries. It addresses two main research questions: (i) Does corruption facilitate or hinder innovation in the countries studied? (ii) To what extent is the relationship between corruption and innovation mediated/shaped by countries’ institutional configurations and firm characteristics (foreign and domestic ownership)? We analyze data from the fifth and sixth waves (2012–2016 and 2018–2019) of the EBRD’s World Bank Business Environment and Enterprise Performance Survey (BEEPS), using a balanced panel of 3584 establishments in 22 Eastern European and Central Asian economies. The results provide two key insights into the relationship between corruption and innovation. First, the institutional setting plays a crucial role in shaping both the strength and the direction of this relationship, for example, when comparing EU and non-EU countries. Second, the impact of corruption at the firm level varies depending on the ownership structure: the ‘greasing’ effect is particularly relevant for foreign firms operating in weak institutional environments, but appears to be ineffective—if not ‘sanding’—for foreign firms in contexts with stronger anti-corruption controls. Full article
(This article belongs to the Special Issue Globalization and Economic Integration)
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17 pages, 466 KiB  
Article
The Determinants of CEO Compensation in the Banking Sector: A Comparison of the Influence of Cross-Listing and Loan Growth in Developed Versus Developing Countries
by Ben Le, Nischala Reddy and Paula Hearn Moore
J. Risk Financial Manag. 2025, 18(3), 163; https://doi.org/10.3390/jrfm18030163 - 19 Mar 2025
Viewed by 170
Abstract
This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings [...] Read more.
This study explores the determinants of CEO compensation in the banking sector, focusing on cross-listing and loan growth. Using 8800 observations from 45 countries spanning 2004 to 2018, the analysis reveals significant differences in compensation structures between developed and developing economies. The findings show that CEO stock options and restricted stock compensation are positively correlated with cross-listing in the U.S. market, with a stronger effect in developing countries. Loan growth is associated with higher incentive-based pay but lower fixed salaries, aligning CEO compensation with performance-driven growth and risk management. These results underscore the role of regulatory environments and institutional quality in shaping executive pay, offering valuable insights for policymakers, financial institutions, and investors navigating a globalized banking sector. Full article
(This article belongs to the Special Issue Lending, Credit Risk and Financial Management)
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23 pages, 2641 KiB  
Article
Chinese vs. US Stock Market Transmission to Australasia, Hong Kong, and the ASEAN Group
by Richard C. K. Burdekin and Ran Tao
J. Risk Financial Manag. 2025, 18(3), 162; https://doi.org/10.3390/jrfm18030162 - 18 Mar 2025
Viewed by 204
Abstract
This study seeks to quantify the rising financial linkages between mainland China, Australia, Hong Kong, New Zealand, and the six largest Association of Southeast Asian Nations (ASEAN group). Stock market co-movements would be consistent with growing trade ties. Our sample runs from 2010 [...] Read more.
This study seeks to quantify the rising financial linkages between mainland China, Australia, Hong Kong, New Zealand, and the six largest Association of Southeast Asian Nations (ASEAN group). Stock market co-movements would be consistent with growing trade ties. Our sample runs from 2010 through 2022, including the coronavirus pandemic. Markov switching analysis allows for changing effects as we move from periods of low market volatility to periods of high volatility. The results offer support for the premise that growing trade and investment ties between China, Australasia, Hong Kong, and the ASEAN region have been accompanied by significant financial market integration, as reflected in stock market co-movement. US effects are also significant and tend to be stronger during high-volatility episodes. Under low-volatility conditions, Shanghai effects become more important and are significant for all six ASEAN group countries. Full article
(This article belongs to the Section Financial Markets)
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14 pages, 816 KiB  
Article
The Greater Sustainability of Stablecoins Relative to Other Cryptocurrencies
by Adi Wolfson, Gerard Khaladjan, Yotam Lurie and Shlomo Mark
J. Risk Financial Manag. 2025, 18(3), 161; https://doi.org/10.3390/jrfm18030161 - 18 Mar 2025
Viewed by 283
Abstract
Cryptocurrencies are decentralized digital financial services that do not physically exist in the world of tangible products and goods, and therefore purportedly offer some positive environmental sustainability features. However, since they are based on blockchain technology, which requires a relatively large input of [...] Read more.
Cryptocurrencies are decentralized digital financial services that do not physically exist in the world of tangible products and goods, and therefore purportedly offer some positive environmental sustainability features. However, since they are based on blockchain technology, which requires a relatively large input of energy, their climatic impact is not benign. Furthermore, they are very volatile and characterized by low levels of transparency and control, thus creating some negative economic and social sustainability effects. Stablecoins, which are a pegged type of cryptocurrency, exhibit much less volatility and have higher levels of management and interoperability. This raises the following question: are stablecoins more sustainable compared to other cryptocurrencies? To explore this, a sustainability assessment was conducted, comparing cryptocurrencies and stablecoins across environmental, social, and economic dimensions while identifying the key characteristics of sustainability. It was found that stablecoins can mitigate the economic and social risks associated with cryptocurrencies and thus increase their overall sustainability. Moreover, since stablecoins are managed and governed to a greater extent, a key consideration in their development is the selection and implementation of more appropriate mechanisms that can reduce energy use and enhance sustainability. Finally, stablecoins offer more effective—and not just more efficient—solutions, based on value co-creation between several providers and a customer. Full article
(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)
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16 pages, 308 KiB  
Article
Risk–Response Budgeting: A Financial Optimization Approach to Project Risk Management
by Yossi Hadad and Baruch Keren
J. Risk Financial Manag. 2025, 18(3), 160; https://doi.org/10.3390/jrfm18030160 - 18 Mar 2025
Viewed by 228
Abstract
Projects are exposed to risks that may hinder their success regarding cost, schedule, and quality/content. After identifying these risks, the project manager must select a subset for mitigation, constrained by a limited risk response budget. The problem lies in the uncertainties surrounding risk [...] Read more.
Projects are exposed to risks that may hinder their success regarding cost, schedule, and quality/content. After identifying these risks, the project manager must select a subset for mitigation, constrained by a limited risk response budget. The problem lies in the uncertainties surrounding risk realization, their impact on the project’s parameters, and the outcomes of the risk response plan. This paper proposes a method for allocating the risk–response budget to mitigate project risks. The method begins with a Monte Carlo simulation to assess each risk’s impact and residual impact post-mitigation. These simulation results are the input for mathematical programming calculations, determining the optimal budget allocation among the risks based on various objective functions (e.g., maximizing expected net savings or minimizing variance). Each objective function can yield a different optimal budget allocation, so the final step involves weighing all results to make a conclusive decision. A case study illustrates the proposed method. Full article
(This article belongs to the Section Financial Technology and Innovation)
17 pages, 3649 KiB  
Article
Artificial Intelligence in Financial Behavior: Bibliometric Ideas and New Opportunities
by Aliya Bayakhmetova, Lyudmila Rudenko, Liubov Krylova, Buldyryk Suleimenova, Shakizada Niyazbekova and Ardak Nurpeisova
J. Risk Financial Manag. 2025, 18(3), 159; https://doi.org/10.3390/jrfm18030159 - 17 Mar 2025
Viewed by 521
Abstract
Artificial intelligence is transforming financial behavior and decision-making processes, offering new opportunities to optimize financial systems and reduce bias. This study explores the intersection of AI and financial behavior using bibliometric analysis to identify trends, gaps, and emerging directions in this rapidly evolving [...] Read more.
Artificial intelligence is transforming financial behavior and decision-making processes, offering new opportunities to optimize financial systems and reduce bias. This study explores the intersection of AI and financial behavior using bibliometric analysis to identify trends, gaps, and emerging directions in this rapidly evolving field. A total of 1019 documents are available in Scopus for the period 1987–2024. The articles are analyzed using the Bibliometrix R package and the Bibliophagy graphical user interface. Key findings show a robust annual growth rate of 13.34%, highlighting the growing relevance of the topic. The analysis revealed central themes such as machine learning, decision-making, and financial inclusion, along with critical gaps in ethical considerations, regional disparities, and practical applications of AI for marginalized populations. Leading contributors and influential sources, including journals such as IEE Access and Expert Systems with Applications, were mapped to understand the intellectual structure of the field. The study highlights the urgent need to address and mitigate algorithmic biases to ensure fairness, transparency, and ethical outcomes in AI-driven systems. It also highlights the importance of improving financial literacy and adapting AI tools for fair financial inclusion. These insights provide a roadmap for future research and practical innovation, ensuring that AI is integrated into financial systems ethically and effectively to promote a more inclusive global financial ecosystem. Full article
(This article belongs to the Special Issue Financial and Sustainability Reporting in a Digital Era, 2nd Edition)
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25 pages, 2138 KiB  
Article
Optimizing Portfolios with Pakistan-Exposed Exchange-Traded Funds: Risk and Performance Insight
by Ali Jaffri, Abootaleb Shirvani, Ayush Jha, Svetlozar T. Rachev and Frank J. Fabozzi
J. Risk Financial Manag. 2025, 18(3), 158; https://doi.org/10.3390/jrfm18030158 - 17 Mar 2025
Viewed by 270
Abstract
This study examines the investment landscape of Pakistan as an emerging and frontier market, focusing on implications for international investors, particularly those in the United States, through exchange-traded funds (ETFs) with exposure to Pakistan. The analysis encompasses 30 ETFs with varying degrees of [...] Read more.
This study examines the investment landscape of Pakistan as an emerging and frontier market, focusing on implications for international investors, particularly those in the United States, through exchange-traded funds (ETFs) with exposure to Pakistan. The analysis encompasses 30 ETFs with varying degrees of exposure to Pakistan, covering the period from 1 January 2016 to February 2024. This research highlights the potential benefits and risks associated with investing in these ETFs, emphasizing the importance of thorough risk assessments and portfolio performance comparisons. By providing descriptive statistics and performance metrics based on historical optimization, this paper aims to equip investors with the necessary insights to make informed decisions when optimizing their portfolios with Pakistan-exposed ETFs. The second part of the paper introduces and assesses dynamic optimization methodologies. This section is designed to explore the adaptability and performance metrics of dynamic optimization techniques in comparison with conventional historical optimization methods. By integrating dynamic optimization into the investigation, this research aims to offer insights into the efficacy of these contrasting methodologies in the context of Pakistan-exposed ETFs. The findings underscore the significance of Pakistan’s market dynamics within the broader context of emerging markets, offering a pathway for diversification and potential growth in investment strategies. Full article
(This article belongs to the Special Issue Financial Innovations and Derivatives)
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27 pages, 470 KiB  
Article
Environmental Risk Concern and Short-Term IPO Performance of Green Stocks During the COVID-19 Crisis Period
by Jang-Chul Kim, Sharif Mazumder and Pritam Saha
J. Risk Financial Manag. 2025, 18(3), 157; https://doi.org/10.3390/jrfm18030157 - 14 Mar 2025
Viewed by 564
Abstract
This study examines the effect of firms’ greenness on IPO underpricing and subsequent short-term performance during the COVID-19 crisis period. Using 173 U.S. IPOs, we find that IPO underpricing is more pronounced for brown firms (i.e., firms have higher carbon footprints or operate [...] Read more.
This study examines the effect of firms’ greenness on IPO underpricing and subsequent short-term performance during the COVID-19 crisis period. Using 173 U.S. IPOs, we find that IPO underpricing is more pronounced for brown firms (i.e., firms have higher carbon footprints or operate in pollution-intensive industries) than for green firms (i.e., firms are engaged in environmentally sustainable practices). However, when we account for the exogenous change in environmental concerns, we find that an increase in environmental concerns causes lower initial day returns for brown firms. Later, we examine the post-IPO 3-month (6-month) holding period returns and find that brown firms earn higher returns than green firms when environmental concerns increase. Additionally, cross-sectional regressions indicate that firm-level characteristics, such as offer price and Hi-Tech, are positively associated, while R&D, leverage, and profitability are negatively associated with IPO. Full article
(This article belongs to the Special Issue Finance, Risk and Sustainable Development)
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23 pages, 936 KiB  
Article
Revisiting the Fraud Triangle in Corporate Frauds: Towards a Polygon of Elements
by Paolo Roffia and Michele Poffo
J. Risk Financial Manag. 2025, 18(3), 156; https://doi.org/10.3390/jrfm18030156 - 14 Mar 2025
Viewed by 823
Abstract
The fraud triangle has long served as a fundamental model for understanding corporate fraud, emphasizing opportunity, pressure, and rationalization. Over time, this framework evolved with the fraud diamond, which introduced capability; the fraud pentagon, which added arrogance; and the fraud hexagon, which incorporated [...] Read more.
The fraud triangle has long served as a fundamental model for understanding corporate fraud, emphasizing opportunity, pressure, and rationalization. Over time, this framework evolved with the fraud diamond, which introduced capability; the fraud pentagon, which added arrogance; and the fraud hexagon, which incorporated collusion and reshaped arrogance. Building on these developments, this study proposes a seventh dimension: the pleasure and thrill of risk-taking. This psychological factor highlights the gratification that some individuals derive from engaging in fraud as a high-stakes game. Through a qualitative analysis of five major corporate fraud cases—Société Générale, Enron, Wirecard, Parmalat, and Theranos—this study highlights the presence of this additional motivational factor. By introducing the fraud polygon, this research provides a more comprehensive framework for understanding corporate fraud’s multifaceted nature. This model has significant implications for both academic research and practical fraud prevention, offering insights into the interplay between systemic vulnerabilities and intrinsic motivations. Full article
(This article belongs to the Special Issue Bridging Financial Integrity and Sustainability)
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20 pages, 275 KiB  
Article
Research on the Influence of Government-Guided VC Funds on Regional Economic Development
by Xiaoli Wang and Yi Tan
J. Risk Financial Manag. 2025, 18(3), 155; https://doi.org/10.3390/jrfm18030155 - 14 Mar 2025
Viewed by 340
Abstract
Using data from the Qingsike Private Equity Database, in this paper, we systematically examine how government policy-guiding funds impacted regional economic development in China from 2010 to 2021. An empirical analysis confirms that government-guided funds have a significant positive effect on regional economic [...] Read more.
Using data from the Qingsike Private Equity Database, in this paper, we systematically examine how government policy-guiding funds impacted regional economic development in China from 2010 to 2021. An empirical analysis confirms that government-guided funds have a significant positive effect on regional economic growth, particularly in less affluent areas. Additionally, we found that the level of venture capital marketization and industrial structural upgrading mediate the relationship between policy-guiding funds and regional economic growth. These findings suggest that government policy-guiding funds foster regional economic advancement by enhancing market dynamism in the venture capital sector and optimizing industrial structures. A further analysis of moderating effects reveals that the effectiveness of policy-guiding funds is significantly influenced by government intervention and reginal marketization levels. In highly marketized regions, government-guided funds demonstrate a stronger economic stimulus effect. However, excessive government intervention can disrupt efficient market operations, thereby weakening the positive impact of the funds. These findings underscore the importance for policymakers to design and implement policy-guiding funds while carefully balancing the interplay between marketization and government intervention to achieve optimal outcomes. Full article
(This article belongs to the Section Applied Economics and Finance)
20 pages, 823 KiB  
Article
Crowdfunding Amidst FinTech Winter: Complement or Substitute?
by Shadi Al Shebli, Ahmet Faruk Aysan and Ruslan Nagayev
J. Risk Financial Manag. 2025, 18(3), 154; https://doi.org/10.3390/jrfm18030154 - 14 Mar 2025
Viewed by 427
Abstract
This study examines the transformative potential of FinTech, particularly crowdfunding, in the context of traditional financial systems amidst the FinTech market downturn (‘Winter’) of 2022. We address a fundamental question: Does crowdfunding represent a viable alternative to conventional finance, or does it merely [...] Read more.
This study examines the transformative potential of FinTech, particularly crowdfunding, in the context of traditional financial systems amidst the FinTech market downturn (‘Winter’) of 2022. We address a fundamental question: Does crowdfunding represent a viable alternative to conventional finance, or does it merely function as an extension of existing financial infrastructure? To investigate this relationship empirically, we developed a proprietary crowdfunding index and employed Interconnectedness Index methodology to compare the spillover effects of crowdfunding and traditional financial systems with common economic factors such as interest rates, USD index, economic uncertainty, cryptocurrency (Bitcoin), as well as commodities (gold and oil). Despite crowdfunding’s remarkable growth trajectory over the past decade, our empirical evidence indicates that it has not yet emerged as a viable substitute for conventional financial mechanisms. These findings carry substantial implications for regulatory frameworks, industry stakeholders, and academic discourse, contributing to the broader understanding of FinTech’s disruptive capacity within the financial ecosystem. Full article
(This article belongs to the Special Issue Financial Technologies (Fintech) in Finance and Economics)
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33 pages, 3170 KiB  
Article
Environmental, Social and Governance-Valued Portfolio Optimization and Dynamic Asset Pricing
by Davide Lauria, W. Brent Lindquist, Stefan Mittnik and Svetlozar T. Rachev
J. Risk Financial Manag. 2025, 18(3), 153; https://doi.org/10.3390/jrfm18030153 - 13 Mar 2025
Viewed by 556
Abstract
Environmental, social and governance (ESG) ratings (scores) provide quantitative measures for socially responsible investment. We consider ESG scores to be a third independent variable—on par with financial risk and return—and incorporate such numeric scores into dynamic asset pricing. Based on this incorporation, we [...] Read more.
Environmental, social and governance (ESG) ratings (scores) provide quantitative measures for socially responsible investment. We consider ESG scores to be a third independent variable—on par with financial risk and return—and incorporate such numeric scores into dynamic asset pricing. Based on this incorporation, we develop the entire investment process for the ESG market: portfolio optimization and efficient frontier, capital market line (the market portfolio), risk-assessment measures and hedging instruments (options). There is currently no riskless asset available in such an ESG market; to address this, we develop the so-called shadow riskless rate, applicable to markets having only risky assets. We believe this to be the first paper that fully develops, under a single dynamic pricing framework, the entire investment process for an ESG market. As there are significant differences in methodologies developed by providers of ESG scores, we do not take the position that data from any single agency are to be favored. Consequently, we utilize ESG scores from Refinitiv in the manuscript’s empirical studies and redo all computations using S&P Global RobeoSAM ESG scores. Full article
(This article belongs to the Special Issue Empirical Research on Asset Pricing and Portfolio Selection)
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15 pages, 950 KiB  
Article
Impact of Infrastructure Development on Foreign Direct Investment in BRICS Countries
by Kunofiwa Tsaurai
J. Risk Financial Manag. 2025, 18(3), 152; https://doi.org/10.3390/jrfm18030152 - 13 Mar 2025
Viewed by 568
Abstract
This study focused on exploring the influence of infrastructural development on foreign direct investment (FDI) in BRICS countries, including Brazil, Russia, India, China, and South Africa, using a fixed-effects approach. Secondary data ranged from 1991 to 2021. Existing theoretical and empirical literature on [...] Read more.
This study focused on exploring the influence of infrastructural development on foreign direct investment (FDI) in BRICS countries, including Brazil, Russia, India, China, and South Africa, using a fixed-effects approach. Secondary data ranged from 1991 to 2021. Existing theoretical and empirical literature on the subject (the infrastructural development-led FDI nexus) is quite mixed, which therefore makes it difficult for policy makers to make decisions. Internet penetration and fixed telephone subscriptions had a significant enhancing effect on FDI, whilst renewable energy infrastructure’s effect was found to be minimal and non-significant. In the fixed-effects model, the interaction term produced results showing that financial development enabled infrastructural development and significantly enhanced FDI inflows into BRICS countries. To improve FDI inflows, BRICS nations should implement policies with the aim of enhancing Internet penetration, fixed telephone subscriptions, and financial development. A threshold analysis of the infrastructural development levels that significantly improve FDI inflows is recommended to provide more clarity and specificity for policy making. Full article
(This article belongs to the Section Economics and Finance)
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24 pages, 2278 KiB  
Article
Exploring the Relationship Between Financial Education, Financial Attitude, Financial Advice, and Financial Knowledge: Insights Through Financial Capabilities and Financial Well-Being
by Arturo García-Santillán, Ma. Teresa Zamora-Lobato, Esmeralda Tejada-Peña and Liduvina Valencia-Márquez
J. Risk Financial Manag. 2025, 18(3), 151; https://doi.org/10.3390/jrfm18030151 - 13 Mar 2025
Viewed by 585
Abstract
This study analyzes the relationship between financial education, financial attitude, financial advice, financial knowledge, and behavior and its influence on financial capabilities, as well as their impact on financial well-being. The population consists of individuals over 18 years of age, who are primarily [...] Read more.
This study analyzes the relationship between financial education, financial attitude, financial advice, financial knowledge, and behavior and its influence on financial capabilities, as well as their impact on financial well-being. The population consists of individuals over 18 years of age, who are primarily higher education students. A non-probabilistic self-selection sampling method was used, and data were collected through an electronic form on Google Forms. The design is quantitative, non-experimental, and cross-sectional. The instrument includes sections on sociodemographic profiles, financial education, financial attitudes, financial advice, financial knowledge and behavior, financial capabilities, and financial well-being using a 1 to 5 Likert scale. To ensure validity and reliability, statistical indices such as Cronbach’s alpha and McDonald’s omega were applied. Data normality was assessed, and exploratory and confirmatory factor analyses were conducted using structural equation modeling (SEM). The findings from the results of this study largely align with the existing literature regarding the relationship between financial knowledge and financial capabilities, as well as between financial capabilities and financial well-being. However, a discrepancy is observed in the hypotheses related to financial education, financial attitudes, and financial counseling, suggesting that although these factors are important, their influence may depend on other contextual elements or mediators not considered in this study. This opens the possibility for further investigation into how these factors interact in the development of financial capabilities. Full article
(This article belongs to the Section Financial Markets)
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25 pages, 1284 KiB  
Article
Factors Influencing the Adoption of FinTech for the Enhancement of Financial Inclusion in Rural India Using a Mixed Methods Approach
by Rabindra Kumar Jena
J. Risk Financial Manag. 2025, 18(3), 150; https://doi.org/10.3390/jrfm18030150 - 13 Mar 2025
Viewed by 970
Abstract
The swift expansion of financial technology (FinTech) can substantially improve financial inclusion, especially in the rural regions of emerging nations such as India. FinTech has the potential to drive inclusive growth, reduce inequalities, and foster sustainable economic development. This research examines the determinants [...] Read more.
The swift expansion of financial technology (FinTech) can substantially improve financial inclusion, especially in the rural regions of emerging nations such as India. FinTech has the potential to drive inclusive growth, reduce inequalities, and foster sustainable economic development. This research examines the determinants affecting the adoption of FinTech services in rural India by synthesizing three theoretical frameworks: The Technology Acceptance Model (TAM), the Theory of Planned Behavior (TPB), and the Technology Readiness Index (TRI). A mixed methods approach that combines partial least squares structured equation modeling (PLS-SEM) and fuzzy set comparative qualitative analysis (fsQCA) was used to evaluate the suggested framework. The integrated PLS-SEM and fsQCA offer a comprehensive, elegant, and resilient method for data analysis. While fsQCA addresses more intricate patterns within the data, PLS-SEM effectively identifies the relationships among significant factors. This makes the mixed method approach more judicious and advantageous than the single method approach. The findings showed that attitude (β = 0.35), perceived behavioral control (β = 0.28) from the Theory of Planned Behavior (TPB), perceived ease of use (β = 0.31) from the Technology Acceptance Model (TAM), and perceived insecurity (β = −0.19) from the Technology Readiness Index (TRI) all have a big impact on how people use FinTech. The findings also indicate that the desire to adopt FinTech positively influences financial inclusion among rural residents. These research findings enhance the debate on sustainable development by demonstrating how specific FinTech interventions can close the financial inclusion gap, empower rural populations, and achieve various Sustainable Development Goals (SDGs). The study’s findings could help governments, banks, and FinTech firms aiming to enhance the accessibility and use of digital financial services in rural India. Full article
(This article belongs to the Special Issue Fintech, Business, and Development)
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14 pages, 283 KiB  
Article
Entrepreneurship and Student Loans: An Analysis of the Association Between Self-Employment and Student Loans
by Christopher Wertheim, Leobardo Diosdado, Sandra DeGrassi, Alexandra Theodossiou and Eugene Bland
J. Risk Financial Manag. 2025, 18(3), 149; https://doi.org/10.3390/jrfm18030149 - 12 Mar 2025
Viewed by 456
Abstract
This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to [...] Read more.
This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to finance the education of one household member are more likely to report that the other member of the household pursued self-employment, with everything else remaining equal. This association between student loans and household self-employment is both economically and statistically significant. Our results highlight the importance of alternative forms of financing for entrepreneurship and expand upon existing knowledge about the unintended effects of student loans. Policymakers should consider these results when analyzing the various intended and unintended benefits of policies affecting the availability of student loans. Full article
(This article belongs to the Special Issue Global Perspectives on Loan Debt Issues and Risks)
20 pages, 308 KiB  
Article
Environmental, Social, and Governance (ESG) and Firm Valuation: The Moderating Role of Audit Quality
by Mika Vaihekoski and Habeeb Yahya
J. Risk Financial Manag. 2025, 18(3), 148; https://doi.org/10.3390/jrfm18030148 - 12 Mar 2025
Viewed by 610
Abstract
This paper investigates whether the external audit quality has an impact on the link between ESG performance and firm valuation using a sample of publicly listed Nordic firms. The results from a fixed-effect panel regression show that higher ESG scores lead to higher [...] Read more.
This paper investigates whether the external audit quality has an impact on the link between ESG performance and firm valuation using a sample of publicly listed Nordic firms. The results from a fixed-effect panel regression show that higher ESG scores lead to higher valuation when a Big Four audit firm is engaged as the external auditor, highlighting the impact of audit quality on the the reliability of the ESG evaluation. The finding highlights the importance of intense external audits in reinforcing investors’ confidence in ESG–firm valuation assessment. Full article
(This article belongs to the Special Issue Advances in Accounting & Auditing Research)
19 pages, 967 KiB  
Article
The Role of Organizational Culture in Digital Transformation and Modern Accounting Practices Among Jordanian SMEs
by Elina F. Hasan, Mohammad Abdalkarim Alzuod, Khalid Hasan Al Jasimee, Sajead Mowafaq Alshdaifat, Areej Faeik Hijazin and Laith T. Khrais
J. Risk Financial Manag. 2025, 18(3), 147; https://doi.org/10.3390/jrfm18030147 - 10 Mar 2025
Viewed by 1072
Abstract
This study investigates the impact of digital transformation on modern accounting practices among Jordanian SMEs, focusing on the moderating role of organizational culture. Digital transformation using AI, blockchain, and cloud computing improves operational efficiency, real-time financial reporting, and decision making. However, the integration [...] Read more.
This study investigates the impact of digital transformation on modern accounting practices among Jordanian SMEs, focusing on the moderating role of organizational culture. Digital transformation using AI, blockchain, and cloud computing improves operational efficiency, real-time financial reporting, and decision making. However, the integration of these technologies poses challenges such as skill gaps, cost constraints, and cultural resistance. A quantitative survey of 480 employees in managerial roles from Jordanian SMEs shows that organizational culture plays a dual role as a driver and moderator of digital transformation. The findings confirm the role of digital transformation in reshaping modern accounting practices. Also, this study shows that to get the most out of digital transformation in accounting, a culture of innovation and continuous learning is required. Full article
(This article belongs to the Special Issue The Future of Sustainable Finance: Digital and Circular Synergies)
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21 pages, 1428 KiB  
Article
Implementation of Sustainability Strategies in Operations and Abnormal Stock Returns Under Uncertainty: Evidence from Companies Listed on the Vietnamese Stock Market During the COVID-19 Outbreak
by Nguyen Thi Ngoc Hoa, Khuu Thi Phuong Dong, Nguyen Kim Khanh and Nguyen Minh Canh
J. Risk Financial Manag. 2025, 18(3), 146; https://doi.org/10.3390/jrfm18030146 - 10 Mar 2025
Viewed by 471
Abstract
This study examines the effects of implementing sustainable strategies in operations on the abnormal stock returns of companies listed on the Vietnamese stock market under uncertain conditions, using an event study and difference-in-differences analysis. Daily trading data were obtained from 107 companies listed [...] Read more.
This study examines the effects of implementing sustainable strategies in operations on the abnormal stock returns of companies listed on the Vietnamese stock market under uncertain conditions, using an event study and difference-in-differences analysis. Daily trading data were obtained from 107 companies listed on the Vietnamese stock market from 2 January 2020 to 31 March 2020 (~6313 observations included in the sampling). Of these, 41/107 (38.3%) and 66/107 (61.7%) did and did not implement sustainability strategies in their operations, respectively. The feasible generalized least-squares regression model indicated a positive impact of the implementation of sustainable strategies in operations on abnormal stock returns of the companies during the COVID-19 pandemic (p < 0.01 in the context of the COVID-19 pandemic). The results underline the implementation of sustainability strategies in the operations of companies as a critical tool to mitigate damage under uncertain conditions, enhance resilience, and achieve long-term competitive advantages. Full article
(This article belongs to the Special Issue Finance, Risk and Sustainable Development)
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19 pages, 7959 KiB  
Systematic Review
A Selective Systematic Review and Bibliometric Analysis of Gender and Financial Literacy Research in Developing Countries
by Carol Wangari Maina and Diána Koponicsné Györke
J. Risk Financial Manag. 2025, 18(3), 145; https://doi.org/10.3390/jrfm18030145 - 10 Mar 2025
Viewed by 481
Abstract
Disparities in financial literacy between males and females pose significant challenges in the developing world, particularly in terms of banking sector participation and economic engagement. Women, in particular, face greater difficulties in managing personal and household income due to lower financial literacy levels [...] Read more.
Disparities in financial literacy between males and females pose significant challenges in the developing world, particularly in terms of banking sector participation and economic engagement. Women, in particular, face greater difficulties in managing personal and household income due to lower financial literacy levels compared to men. This research aims to analyze the causes, effects, and potential measures to address these disparities, situating the discussion within socio-cultural, educational, and economic contexts. A systematic review and bibliometric analysis were conducted to examine relevant studies, with Open Alex serving as the primary database. The search was conducted from 2010 to 2024. Initially, 1620 papers were identified and through stringent inclusion criteria following PRISMA guidelines, 193 studies were selected for the final review. The study employed bibliometric techniques such as co-authorship, keywords analysis, and citation analysis to identify key topics, contributors, and research gaps in the literature. The findings reveal that socio-cultural practices, a lack of resources, and low income levels significantly contribute to women’s financial illiteracy. Furthermore, the research underscores the increasing recognition of the importance of adopting a gender-sensitive approach to financial literacy. These disparities limit women’s decision-making power and exacerbate socio-economic imbalances in developing countries. This study offers valuable implications for policy and practice, advocating for targeted interventions to enhance women’s financial literacy and economic participation. The results emphasize the need for differentiated strategies and provide a foundation for future research focused on closing the gender gap in financial competence and economic empowerment. Full article
(This article belongs to the Special Issue The New Horizons of Global Financial Literacy)
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21 pages, 1681 KiB  
Article
Exploring Parallel Compound Real Options in MNCs International Transactions
by Andrejs Čirjevskis
J. Risk Financial Manag. 2025, 18(3), 144; https://doi.org/10.3390/jrfm18030144 - 10 Mar 2025
Viewed by 425
Abstract
This paper investigates the valuation of international acquisitions of multinational corporations (MNCs) using real options theory, focusing on L’Oréal’s acquisition of Aesop. It explores how MNCs create growth and deferral options simultaneously in M&A deals, enhancing market value and promoting sustainable practices. The [...] Read more.
This paper investigates the valuation of international acquisitions of multinational corporations (MNCs) using real options theory, focusing on L’Oréal’s acquisition of Aesop. It explores how MNCs create growth and deferral options simultaneously in M&A deals, enhancing market value and promoting sustainable practices. The study addresses two key questions: the role of MNCs in advancing sustainability and the measurement of market value added through parallel compound options. Using L’Oréal’s acquisition of Aesop as a case study, the paper demonstrates the strategic benefits of combining growth and deferral options. Examples include L’Oréal’s expansion into new markets like China, leveraging Aesop’s sustainable practices, and achieving competence-based collaborative synergies. The findings provide a framework for assessing collaborative synergies in international transactions, contributing to the literature on strategic management, international business, and financial management. In conclusion, the paper highlights the importance of strategic flexibility and sustainability in MNC acquisitions, offering valuable insights for future research and practical applications in international business. Full article
(This article belongs to the Section Economics and Finance)
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15 pages, 1107 KiB  
Article
The Impact of Eurasian Economic Union Membership on Mutual Trade in Services: What Are the Challenges for Small Economies?
by Davit Hakhverdyan, Ruzanna Tadevosyan, Anna Pakhlyan and Svetlana Ratner
J. Risk Financial Manag. 2025, 18(3), 143; https://doi.org/10.3390/jrfm18030143 - 10 Mar 2025
Viewed by 571
Abstract
Despite the fact that a decade has elapsed since the establishment of the Eurasian Economic Union (EAEU), the impact of the EAEU on the economic development of its member states remains a subject of ongoing debate. This article examines the mutual trade in [...] Read more.
Despite the fact that a decade has elapsed since the establishment of the Eurasian Economic Union (EAEU), the impact of the EAEU on the economic development of its member states remains a subject of ongoing debate. This article examines the mutual trade in services between the Eurasian Economic Union (EAEU) countries, with the aim of assessing the impact of membership on it. The difference-in-difference model has been applied for impact assessment. The model utilizes data from five EAEU member countries—Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia—capturing periods both before and after their EAEU membership, spanning 17 years in total. The results show that membership in the EAEU has significantly affected the exports of services from Russia and Belarus and has a less significant impact on the exports of services from Kazakhstan to the EAEU. At the same time, it has no significant effect on the exports of services from Kyrgyzstan and Armenia to other EAEU countries. In order to ascertain the challenges that exist, expert surveys among service exporters from Armenia have been conducted. Representatives of companies exporting various services to the EAEU have been selected as experts. The survey results indicate the presence of various barriers, including legal, logistical (for cargo transportation companies), and cultural challenges. These barriers encompass licensing difficulties, technical obstacles related to VAT refunds, a ban on cash payments, and difficulties with financial transfers due to sanctions against Russia. The findings of this research are of practical importance and can serve as a guideline for policymakers in the EAEU. Full article
(This article belongs to the Special Issue Open Economy Macroeconomics)
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24 pages, 3801 KiB  
Article
Risk-Adjusted Performance of Random Forest Models in High-Frequency Trading
by Akash Deep, Abootaleb Shirvani, Chris Monico, Svetlozar Rachev and Frank Fabozzi
J. Risk Financial Manag. 2025, 18(3), 142; https://doi.org/10.3390/jrfm18030142 - 9 Mar 2025
Viewed by 1070
Abstract
Because of the theoretical challenges posed by the Efficient Market Hypothesis with respect to technical analysis, the effectiveness of technical indicators in high-frequency trading remains inadequately explored, particularly at the minute-level frequency, where the effects of the microstructure of the market dominate. This [...] Read more.
Because of the theoretical challenges posed by the Efficient Market Hypothesis with respect to technical analysis, the effectiveness of technical indicators in high-frequency trading remains inadequately explored, particularly at the minute-level frequency, where the effects of the microstructure of the market dominate. This study evaluates the integration of traditional technical indicators with Random Forest regression models using minute-level SPY data, analyzing 13 distinct model configurations. Our empirical results reveal a stark contrast between in-sample and out-of-sample performance, with R2 values deteriorating from 0.749–0.812 during training to negative values in testing. A feature importance analysis demonstrates that primary price-based features dominate the predictions made by the model, accounting for over 60% of the importance, while established technical indicators, such as RSI and Bollinger Bands, account for only 14–15%. Although the indicator-enhanced models achieved superior risk-adjusted metrics, with Rachev ratios between 0.919 and 0.961, they consistently underperformed a simple buy-and-hold strategy, generating returns ranging from −2.4% to −3.9%. These findings challenge conventional assumptions about the usefulness of technical indicators in algorithmic trading, suggesting that in high-frequency contexts, they may be more relevant to risk management rather than to predicting returns. For practitioners and researchers, our findings indicate that successful high-frequency trading strategies should focus on adaptive feature selection and regime-specific modeling rather than relying on traditional technical indicators, as well as indicating the critical importance of robust out-of-sample testing in the development of a model. Full article
(This article belongs to the Special Issue Machine Learning Applications in Finance, 2nd Edition)
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21 pages, 1154 KiB  
Article
Determinants of Financial Performance in Advertising and Marketing Companies: Evidence from Central and Eastern European Countries
by Tetiana Zavalii, Serhii Lehenchuk, Lyudmyla Chyzhevska and Iryna Hrabchuk
J. Risk Financial Manag. 2025, 18(3), 141; https://doi.org/10.3390/jrfm18030141 - 8 Mar 2025
Viewed by 705
Abstract
The issue of key determinants affecting the financial performance of advertising and marketing companies in Central and Eastern Europe remains understudied, despite the industry’s rapid growth and regional specifics. This study investigates financial performance determinants of advertising and marketing companies in four CEE [...] Read more.
The issue of key determinants affecting the financial performance of advertising and marketing companies in Central and Eastern Europe remains understudied, despite the industry’s rapid growth and regional specifics. This study investigates financial performance determinants of advertising and marketing companies in four CEE countries (the Czech Republic, Poland, the Slovak Republic, and Ukraine) during 2021–2023, employing the least absolute deviations method. The study examines three financial performance measures (Return on Assets, Return on Equity, and Operating Profit Margin) using three independent variables (Current Ratio, Debt to Equity, and Total Asset Turnover) and control variables such as Company Size, Leverage, and Company Type. The results show that Total Asset Turnover consistently has a significant positive impact on ROA and ROE across all studied countries. The study also identified significant regional variations in liquidity and capital structure impacts, particularly in the Polish market, and uncovered distinct patterns in how financial leverage affects various performance metrics across the studied countries. Specifically, while leverage shows a predominantly negative relationship with ROE in most countries, it positively influences OPM for Polish, Slovak, and Ukrainian companies, suggesting that the role of financial leverage in company performance is highly context-dependent. The novelty of the study lies in a comprehensive investigation of specific determinants of financial performance in the CEE advertising and marketing sector, revealing the crucial role of efficient asset and equity management in the region. Full article
(This article belongs to the Section Business and Entrepreneurship)
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26 pages, 3743 KiB  
Article
The Role of Innovation Development in Advancing Green Finance
by Aleksy Kwilinski, Oleksii Lyulyov and Tetyana Pimonenko
J. Risk Financial Manag. 2025, 18(3), 140; https://doi.org/10.3390/jrfm18030140 - 7 Mar 2025
Cited by 1 | Viewed by 723
Abstract
This study aims to investigate how innovation development drives green finance in the Visegrad countries by analyzing the role of R&D investments, high-tech trade, and patent activity in attracting greenfield investments. Using a vector autoregression (VAR) model with data from 2007 to 2022, [...] Read more.
This study aims to investigate how innovation development drives green finance in the Visegrad countries by analyzing the role of R&D investments, high-tech trade, and patent activity in attracting greenfield investments. Using a vector autoregression (VAR) model with data from 2007 to 2022, this study employs forecasting techniques, impulse response functions, and variance decomposition analyses to assess the dynamic relationship between innovation and green financial flows. The findings reveal that R&D expenditures are the strongest driver of green investments, explaining over 93% of the variance in Poland and Hungary. High-tech trade significantly influences investment trends, contributing up to 84% of the variance in the Czech Republic, while patent applications initially boost greenfield investments but show diminishing returns over time. Although innovation-driven investments remain stable overall, the impact of trade and patents varies across countries, reflecting regional differences. This study identifies key challenges, such as commercialization gaps and policy disparities, highlighting the need for targeted financial and innovation policies. To sustain green finance growth, policymakers should expand R&D funding, strengthen trade infrastructure, and enhance intellectual property commercialization. Additionally, financial institutions and investors should play a more active role in developing green investment markets to support long-term economic resilience and sustainability. Full article
(This article belongs to the Special Issue Integrating the Metaverse, Cryptocurrency, and AI for Sustainable Financial Development)
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16 pages, 509 KiB  
Article
The Impact of the Legal Environment on Bank Profitability: An Empirical Analysis of the Angolan Banking Sector
by João Jungo and Cláudio Félix Canguende-Valentim
J. Risk Financial Manag. 2025, 18(3), 139; https://doi.org/10.3390/jrfm18030139 - 6 Mar 2025
Viewed by 599
Abstract
An efficient legal system facilitates the enforcement of guarantees, enables the recovery of non-performing loans and increases trust between creditors and borrowers. This study examines the effect of the legal environment and the profitability of the Angolan banking sector. Specifically, it analyses the [...] Read more.
An efficient legal system facilitates the enforcement of guarantees, enables the recovery of non-performing loans and increases trust between creditors and borrowers. This study examines the effect of the legal environment and the profitability of the Angolan banking sector. Specifically, it analyses the influence of property rights and the rule of law on bank profitability in Angola. The study employs various econometric methods for analyzing panel data, such as Feasible Generalized Least Squares (FGLS), and instrumental variables models such as Two-Stage Least Squares (IV-2SLS), Generalized Method of Moments (IV-GMM) and Quantile Regression (MQREG). The study concludes that improving the legal environment by strengthening property rights and promoting the rule of law favours the profitability of Angolan banks. In terms of practical implications, this study shows that the legal environment in Angola is an important barrier to the promotion of credit in Angola, and, above all, to improving the profitability of banks. This study contributes to the scarce literature highlighting the relationship between the legal system and the Angolan banking sector, a topic that has been little explored in the context of African countries. Furthermore, the study awakens the dormant debate on the legal system and finance. Full article
(This article belongs to the Section Banking and Finance)
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20 pages, 5576 KiB  
Article
Is Globalization Coming to an End Due to the Rise in Income Inequality?
by Vladimir Popov
J. Risk Financial Manag. 2025, 18(3), 138; https://doi.org/10.3390/jrfm18030138 - 6 Mar 2025
Viewed by 384
Abstract
The reversal of the trend towards the decline in income inequality in the last four decades in most countries has created favorable grounds for the rise of nationalist and anti-globalization sentiments. Economic failures of countries, groups of people and individuals are among important [...] Read more.
The reversal of the trend towards the decline in income inequality in the last four decades in most countries has created favorable grounds for the rise of nationalist and anti-globalization sentiments. Economic failures of countries, groups of people and individuals are among important factors that cause nationalism. The rise of nationalism in many countries in recent decades, as measured by the decline in the “pride in your own country” indicator from the World Values Survey, is statistically significantly related to the change in income inequality (Gini coefficient) within the country. When globalization is properly managed, it is good for growth and income distribution and does not lead to nationalism. But if it is accompanied by the decline in real incomes for large masses of people, nationalist political forces have additional arguments for instigating anti-globalization and isolationist sentiments. The rise in income inequality within major countries since the 1980s poses a threat not only to social stability, but also to globalization. Full article
(This article belongs to the Special Issue Globalization and Economic Integration)
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