Journal of Risk and Financial Management

3 pages, 146 KiB

Open AccessEditorial

Editorial: Durable, Inclusive, Sustainable Economic Growth and Challenge

by Cristina Raluca Gh. Popescu

J. Risk Financial Manag. 2025, 18(5), 257; https://doi.org/10.3390/jrfm18050257 - 8 May 2025

Abstract

Nowadays, sustainability and sustainable development play vital roles in our lives [...] Full article

(This article belongs to the Special Issue Durable, Inclusive, Sustainable Economic Growth and Challenge)

19 pages, 292 KiB

Open AccessArticle

Voluntary Audits of Nonfinancial Disclosure and Earnings Quality

by Sunita S. Rao, Carlos Ernesto Zambrana Roman and Norma Juma

J. Risk Financial Manag. 2025, 18(5), 256; https://doi.org/10.3390/jrfm18050256 - 8 May 2025

Abstract

We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as [...] Read more.

We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as “greenwashing”. To credibly signal the CSR report is reliable, a firm can incur the additional costs to voluntarily obtain assurance. Our results show that strong corporate governance plays a crucial role in limiting earnings management. The most consistent improvements in earnings quality occur when firms combine strong governance with CSR assurance from a non-accounting provider (NonACCT). The combination of strong governance and NonACCT assurance appears to be mutually reinforcing, suggesting a symbolic legitimacy strategy that is also substantively effective. Full article

(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)

23 pages, 870 KiB

Open AccessArticle

Exploring Platform Trust, Borrowing Intention, and Actual Use of PayLater Services in Indonesia and Malaysia

by Tri Kartika Pertiwi, Corina Joseph, G. Oka Warmana, Fani Khoirotunnisa and Nanik Hariyana

J. Risk Financial Manag. 2025, 18(5), 255; https://doi.org/10.3390/jrfm18050255 - 8 May 2025

Abstract

This study explores how system-based and cognitive-based factors affect platform trust and its role in the actual use of PayLater services (buy now, pay later or BNPL) in Indonesia and Malaysia. PayLater, a fintech innovation, provides fast and convenient payment options through online [...] Read more.

This study explores how system-based and cognitive-based factors affect platform trust and its role in the actual use of PayLater services (buy now, pay later or BNPL) in Indonesia and Malaysia. PayLater, a fintech innovation, provides fast and convenient payment options through online platforms. By incorporating platform trust into the technology acceptance model (TAM), the research investigates whether borrowing intention acts as a mediator between platform trust and actual usage. Utilizing a quantitative approach with purposive sampling, data were gathered from 106 respondents in Indonesia and 169 in Malaysia, with 62 and 85 respondents meeting the criteria, respectively. Partial least squares (PLS) analysis indicates notable differences in how Indonesian and Malaysian users perceive platform trust, while the effect of platform trust on borrowing intention remains consistent across both nations. Borrowing intention emerges as a crucial factor influencing the actual use of PayLater services. The results offer important insights into the adoption of fintech services in emerging markets, highlighting the significance of platform trust in shaping user behavior. This research provides practical suggestions for fintech providers to improve platform trust and user engagement in cross-country scenarios. Full article

(This article belongs to the Section Financial Technology and Innovation)

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18 pages, 1378 KiB

Open AccessArticle

What Do Children with Above-Average Abilities Understand About Financial Literacy?

by Eulália Santos, Fernando Oliveira Tavares and Cátia Maurício

J. Risk Financial Manag. 2025, 18(5), 254; https://doi.org/10.3390/jrfm18050254 - 7 May 2025

Abstract

Metaphors help to simplify complex concepts, making them more accessible and understandable for children. Children can build a more concrete understanding of these concepts by associating abstract financial ideas with familiar situations or objects. The present study aims to explore what children with [...] Read more.

Metaphors help to simplify complex concepts, making them more accessible and understandable for children. Children can build a more concrete understanding of these concepts by associating abstract financial ideas with familiar situations or objects. The present study aims to explore what children with above-average abilities understand by financial literacy, using words and images as tools of expression. During a workshop, 22 children with above-average abilities participated in two tasks, one individual and one group task. The results showed that “save” (90.9%), “money” (63.9%), “invest” (59.1%), and “bank” (54.5%) are the words most strongly associated with the concept of financial literacy among the children. Regarding images, money (M = 1.77), a clock or calendar (M = 2.50), a pig (M = 2.75), and a house (M = 2.84) were identified as the most representative symbols of financial literacy for this group of children. In the group task, children perceive financial literacy mainly as managing and using money to satisfy needs and desires. The results can inform educators about the need to adapt educational materials to match children’s level of understanding better, promoting more effective and accessible financial education. Full article

(This article belongs to the Special Issue Role of Financial Education, Capital Markets and Digital Finance)

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29 pages, 372 KiB

Open AccessArticle

The Role of Tax Planning Incentives in the Use of Earnouts in Taxable Acquisitions

by Dennis Ahn and Terry Shevlin

J. Risk Financial Manag. 2025, 18(5), 253; https://doi.org/10.3390/jrfm18050253 - 7 May 2025

Abstract

In an acquisition, an earnout is a component of transaction price that is contingent upon future events. Despite its usefulness to acquirers in mitigating valuation risk, using an earnout also has a potentially undesirable tax consequence for the acquirer because there is no [...] Read more.

In an acquisition, an earnout is a component of transaction price that is contingent upon future events. Despite its usefulness to acquirers in mitigating valuation risk, using an earnout also has a potentially undesirable tax consequence for the acquirer because there is no immediate step-up in tax basis for the earnout portion of deal consideration until the resolution of associated contingencies. We thus hypothesize that acquiring firms with high marginal tax rates (MTRs) are less likely to use earnouts. We analyze a sample of taxable acquisitions by U.S. public companies, holding constant other non-tax determinants of earnout use from prior research, and we find results consistent with our prediction. We also find some evidence that strong tax incentives can offset the effect of target valuation uncertainty, suggesting that acquiring firms facing sufficiently high MTRs are willing to trade off mitigating valuation risk for a full, immediate step-up in tax basis. We contribute to the prior literature on determinants of earnout use as well as the role of tax planning incentives in firm choices within mergers and acquisitions. Full article

(This article belongs to the Special Issue Tax Avoidance and Earnings Management)

15 pages, 271 KiB

Open AccessArticle

Foreign Aid–Human Capital–Foreign Direct Investment in Upper-Middle-Income Economies

by Kunofiwa Tsaurai

J. Risk Financial Manag. 2025, 18(5), 252; https://doi.org/10.3390/jrfm18050252 - 6 May 2025

Abstract

The study examined the influence of foreign aid on foreign direct investment (FDI) in upper-middle-income economies using panel data (2011–2021) analysis methods such as two-stage least squares (2SLS) and system GMM (generalized methods of moments). The study also explored if human capital development [...] Read more.

The study examined the influence of foreign aid on foreign direct investment (FDI) in upper-middle-income economies using panel data (2011–2021) analysis methods such as two-stage least squares (2SLS) and system GMM (generalized methods of moments). The study also explored if human capital development enhanced foreign aid’s influence on FDI in upper-middle-income economies during the same timeframe. The conflicting, divergent, and mixed results and views on the relationship between foreign aid, human capital development, and foreign direct investment (FDI) motivated the undertaking of this study to fill in the existing gaps. Apart from FDI enhanced by its own lag, foreign aid significantly improved FDI (under system GMM). FDI was also improved significantly by human capital development across all two panel methods. Under 2SLS and system GMM, foreign aid significantly improved FDI through the human capital development channel. To promote FDI inflows, upper-middle-income economies should develop and implement policies aimed at attracting foreign aid and enhancing the development of human capital. The study suggests that further research on threshold regression analysis on foreign aid–FDI nexus in upper-middle-income economies could better help develop an FDI policy that is beneficial toward economic growth. Full article

(This article belongs to the Section Banking and Finance)

23 pages, 651 KiB

Open AccessArticle

Drivers and Barriers of Mobile Payment Adoption Among MSMEs: Insights from Indonesia

by Aloysius Bagas Pradipta Irianto and Pisit Chanvarasuth

J. Risk Financial Manag. 2025, 18(5), 251; https://doi.org/10.3390/jrfm18050251 - 6 May 2025

Viewed by 24

Abstract

Mobile payment systems have rapidly expanded globally, especially in developing countries like Thailand, Malaysia, and Indonesia. Technological advances, public acceptance, and increased adoption during the COVID-19 pandemic drive this growth. Mobile payments involve key stakeholders: technology providers, end-users, government regulators, and merchants, each [...] Read more.

Mobile payment systems have rapidly expanded globally, especially in developing countries like Thailand, Malaysia, and Indonesia. Technological advances, public acceptance, and increased adoption during the COVID-19 pandemic drive this growth. Mobile payments involve key stakeholders: technology providers, end-users, government regulators, and merchants, each contributing to the adoption ecosystem. Users prefer mobile payments for their speed and convenience over traditional cash transactions. This study explores the driver and barrier factors influencing mobile payment QR adoption among merchants, particularly from the MSME perspective, using existing frameworks based on previous research adapted to MSME conditions. Conducted in Indonesia with 418 MSME business respondents, this study employs a quantitative, cross-sectional methodology with a 95% confidence level and an SEM analysis. The findings reveal that perceived ease of use does not significantly impact perceived experience, while perceived usefulness does. Perceived risk, convenience, experience, and word-of-mouth learning statistically significantly influence merchants’ intention to use mobile payments. However, customer engagement, cost, trust, and complexity appear less influential. Overall, this research advances understanding of the key factors affecting merchants’ adoption of mobile payment and provides insights relevant to MSME economic growth. Full article

(This article belongs to the Special Issue Financial Technology (Fintech) and Sustainable Financing, 3rd Edition)

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17 pages, 2347 KiB

Open AccessSystematic Review

Risks of the Use of FinTech in the Financial Inclusion of the Population: A Systematic Review of the Literature

by Antonija Mandić, Biljana Marković and Iva Rosanda Žigo

J. Risk Financial Manag. 2025, 18(5), 250; https://doi.org/10.3390/jrfm18050250 - 6 May 2025

Viewed by 103

Abstract

Financial technology (FinTech) has significantly changed access to financial services, particularly benefiting historically marginalized communities. While it offers many advantages, FinTech also brings substantial risks associated with this digital transformation. Recent studies highlight the significant impact of FinTech on financial inclusion, especially for [...] Read more.

Financial technology (FinTech) has significantly changed access to financial services, particularly benefiting historically marginalized communities. While it offers many advantages, FinTech also brings substantial risks associated with this digital transformation. Recent studies highlight the significant impact of FinTech on financial inclusion, especially for marginalized populations. To investigate the benefits and drawbacks of FinTech and identify specific risks affecting users, particularly vulnerable groups, we employed the PRISMA method. A systematic literature review was conducted using the Web of Science database to explore recent research on FinTech and its relationship with financial inclusion, focusing on associated risks. The search covered 2010–2025; however, after applying inclusion criteria, the final dataset comprised publications from 2012 to 2025. Unlike previous bibliometric studies broadly addressing FinTech innovations, this review identifies and categorizes key risks affecting financial inclusion, emphasizing regulatory barriers, digital literacy, and socio-cultural challenges. The review is limited by the exclusive use of Web of Science and the English language, suggesting future research avenues using additional databases and multilingual sources. Findings reveal a notable increase in research activity surrounding FinTech and financial inclusion. This highlights challenges such as data privacy, regulation, and financial literacy. By mapping FinTech-related risks, this study aims to inform policymakers and stakeholders about effective strategies to mitigate these challenges and promote safe, inclusive financial ecosystems. Full article

(This article belongs to the Section Financial Technology and Innovation)

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17 pages, 287 KiB

Open AccessArticle

Monetary Policy via Bank Lending Channel: Evidence from Lending Decomposition

by Putra Pamungkas, Fadli Septianto, Irwan Trinugroho, Rossazana Ab-Rahim, Masagus M. Ridhwan and Bruno S. Sergi

J. Risk Financial Manag. 2025, 18(5), 249; https://doi.org/10.3390/jrfm18050249 - 5 May 2025

Viewed by 158

Abstract

This paper examines the regional dimension of monetary policy transmission through the component of the bank lending channel in Indonesia. Understanding the effectiveness of this transmission channel at a regional level is crucial, given the diverse economic characteristics across Indonesian provinces. We employ [...] Read more.

This paper examines the regional dimension of monetary policy transmission through the component of the bank lending channel in Indonesia. Understanding the effectiveness of this transmission channel at a regional level is crucial, given the diverse economic characteristics across Indonesian provinces. We employ panel regression to analyze the panel data consisting of provincial quarterly data from 2010–2023 for 33 provinces in Indonesia. The robustness of the results is further assessed through GMM estimation techniques. We find evidence of the bank lending channel through the use of the policy rate. Our findings are meaningful in the SME and consumer lending channel and are also more profound in Java than in the non-Java region. Further, using GMM estimation, we show that our results are robust. Our study highlights the significant role of regional differences in Indonesia when examining monetary policy effectiveness. Policymakers should therefore consider regional disparities and lending categories to enhance the efficacy of monetary policy interventions. Full article

(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)

25 pages, 354 KiB

Open AccessArticle

The Impact of Corporate Reporting Quality on Sustainable Growth Through Integrated Reporting Lens in Thai Listed Companies

by Wilawan Dungtripop, Pankaewta Lakkanawanit, Trairong Sawatdikun, Muttanachai Suttipun and Lidya Primta Surbakti

J. Risk Financial Manag. 2025, 18(5), 248; https://doi.org/10.3390/jrfm18050248 - 3 May 2025

Viewed by 400

Abstract

The study investigates the relationship between corporate reporting quality, viewed through an integrated reporting perspective, and sustainable growth among Thai-listed companies during the period from 2019 to 2022. Utilizing a sample of 59 SET50 companies and analyzing 232 annual reports, an Integrated Reporting [...] Read more.

The study investigates the relationship between corporate reporting quality, viewed through an integrated reporting perspective, and sustainable growth among Thai-listed companies during the period from 2019 to 2022. Utilizing a sample of 59 SET50 companies and analyzing 232 annual reports, an Integrated Reporting Quality Index (IRQI) was developed to assess reporting quality across three principal components—capitals, guiding principles, and content elements—as well as their respective sub-components, enabling comprehensive evaluation at both macro and micro levels. Although the component-level analysis identified no significant relationships with sustainable growth, the sub-component analysis revealed critical insights. Information connectivity, conciseness, and business model disclosure demonstrated positive associations with sustainable growth, whereas strategic focus exhibited a negative relationship. These findings contribute to the extension of stakeholders and signaling theories within emerging market contexts, emphasizing the importance of effective communication mechanisms over the sheer volume of disclosures. The study further documents substantial improvements in reporting quality following the implementation of the One Report framework, suggesting that well-designed regulatory interventions can elevate corporate disclosure standards. The results offer valuable implications for managers, regulators, and investors, underscoring that fostering effective information connectivity, conciseness, and clear articulation of business models contributes more significantly to sustainable growth than simply increasing the quantity of disclosed information. Full article

(This article belongs to the Section Business and Entrepreneurship)

30 pages, 635 KiB

Open AccessArticle

Unlock Your Firm Value with ESG Performance? Evidence from ASX-Listed Companies

by Jingyan Zhou, Wen Hua Sharpe, Abdel K. Halabi, Helen Song and Sisira Colombage

J. Risk Financial Manag. 2025, 18(5), 247; https://doi.org/10.3390/jrfm18050247 - 1 May 2025

Viewed by 420

Abstract

A research gap exists concerning the moderating roles of corporate governance mechanisms on the nexus of environmental, social, and governance (ESG) performance and firm value. This study aims to address this gap in the Australian corporate context. We examine whether ESG performance can [...] Read more.

A research gap exists concerning the moderating roles of corporate governance mechanisms on the nexus of environmental, social, and governance (ESG) performance and firm value. This study aims to address this gap in the Australian corporate context. We examine whether ESG performance can enhance firm value and whether this relationship is moderated by the corporate governance mechanisms to balance stakeholder interests. Drawing on a sample from the ASX, we find that while high ESG performance can increase firm value, this effect diminishes in the presence of the large number of supply chain contracts. We further discovered a negative moderating effect of board independence and audit quality on ESG performance and firm value. Our findings highlight the contingent nature of ESG value creation, indicating that while ESG activities can enhance firm value, their impact depends on firms’ governance context and contractual arrangements that shape shareholders’ outcomes collectively. Full article

(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)

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40 pages, 1803 KiB

Open AccessArticle

“Feeling Stressed?” A Critical Analysis of the Regulatory Prescribed Stress Tests for Financial Services in the UK

by Stavros Pantos

J. Risk Financial Manag. 2025, 18(5), 246; https://doi.org/10.3390/jrfm18050246 - 1 May 2025

Viewed by 249

Abstract

This paper captures a qualitative review of the regulatory prescribed stress tests for UK financial services designed by the Bank of England and the Prudential Regulation Authority (PRA)/Financial Conduct Authority (FCA) after the Global Financial Crisis. It presents a critical analysis of the [...] Read more.

This paper captures a qualitative review of the regulatory prescribed stress tests for UK financial services designed by the Bank of England and the Prudential Regulation Authority (PRA)/Financial Conduct Authority (FCA) after the Global Financial Crisis. It presents a critical analysis of the use of stress testing as part of supervisory practices for UK banking institutions and insurance undertakings, commenting on their qualitative characteristics, after looking at the regulatory prescribed stress tests from three key categories: the macroeconomic scenarios for banks, denoted as the bank stress tests (BST), the insurance stress tests (IST), and the biennial exploratory scenarios (BES). In this study, five trends describing regulatory prescribed stress are identified: (1) the regulatory collaboration, (2) cross-industry stress tests, (3) exploratory scenarios, (4) reporting and disclosure requirements, and (5) the underlying modelling capabilities and tools. The associated challenges of (A) governance, (B) frequency, (C) individual disclosures, (D) data and modelling, and (E) capabilities and skillset from participating institutions underpinning these stresses are highlighted, shaping the policy recommendations for future exercises. These address the gaps identified from existing stress tests towards the effective prudential supervision of UK financial services, based on each scenario category, for improvements and advances to practices. Full article

(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)

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33 pages, 1998 KiB

Open AccessArticle

The Moderating Role of Finance, Accounting, and Digital Disruption in ESG, Financial Reporting, and Auditing: A Triple-Helix Perspective

by Enkeleda Lulaj and Mileta Brajković

J. Risk Financial Manag. 2025, 18(5), 245; https://doi.org/10.3390/jrfm18050245 - 1 May 2025

Viewed by 294

Abstract

This study investigates the moderating role of finance, accounting, and digital disruption (FADD) in the relationship between auditing and sustainability (AS) and financial reporting and ESG integration (FRESGI) through the triple-helix perspective. Drawing on data from 200 experts across corporate, academic, and governmental [...] Read more.

This study investigates the moderating role of finance, accounting, and digital disruption (FADD) in the relationship between auditing and sustainability (AS) and financial reporting and ESG integration (FRESGI) through the triple-helix perspective. Drawing on data from 200 experts across corporate, academic, and governmental sectors in Kosovo (2024–Q1 2025), the research applied advanced statistical techniques, including EFA, CFA, and moderation analysis using SPSS and AMOS, to explore both direct and interaction effects. The results reveal that FADD significantly enhances ESG integration, with strong direct effects observed in the corporate sector (β = 0.259, p < 0.001) and public institutions (β = 0.281, p < 0.001). However, the moderation analysis shows that the government dimension of FADD (FADD_2) negatively influences the relationship between corporate sustainability practices (AS_1) and ESG reporting, indicating limited coordination across sectors. These findings highlight the need for aligned, sector-specific strategies that harness digital innovation and financial transformation to strengthen sustainable auditing and reporting practices. This study provides actionable insights for policymakers, practitioners, and academics working to advance ESG integration across complex institutional ecosystems. Full article

(This article belongs to the Special Issue Finance and Accounting in Times of Global Uncertainty: ESG, SDGs, and Digital Disruption)

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24 pages, 1216 KiB

Open AccessArticle

The Mediating Role of Conscientiousness in the Relationship Between Auditors’ Ethical Idealism and Fraud Detection

by Abdulrahman Almalki, Yousef Basodan and Helmi Boshnak

J. Risk Financial Manag. 2025, 18(5), 244; https://doi.org/10.3390/jrfm18050244 - 1 May 2025

Viewed by 249

Abstract

Despite the recognized importance of ethical idealism in enhancing fraud detection in the audit context, there remains limited understanding of the mediating role of conscientiousness in the relationship between auditors’ ethical idealism and fraud detection. The purpose of this paper is to analyze [...] Read more.

Despite the recognized importance of ethical idealism in enhancing fraud detection in the audit context, there remains limited understanding of the mediating role of conscientiousness in the relationship between auditors’ ethical idealism and fraud detection. The purpose of this paper is to analyze the influence of auditors’ ethical idealism on fraud detection via using the conscientiousness of auditors as a mediator. This study employs a cross-sectional approach, and quantifiable data were gathered via structured surveys from 401 external auditors employed in offices licensed to practice the accounting and auditing profession in Saudi Arabia. Accidental sampling was used to ensure a representative sample of auditors in Saudi audit firms. This study utilized the Structural Equation Modeling (SEM) technique to examine the relationships between ethical idealism (as independent variable), conscientiousness (as mediating variable), and fraud detection (as dependent variable). The result showed that ethical idealism has a positive effect on auditors’ detection of fraud. However, the proposed mediation effect of conscientiousness between ethical Idealism and fraud detection was not statistically significant. The research underscores that the ethical idealism of auditors can enhance fraud detection, especially when accounting firms give priority to ethical training programs, ensuring that they are guided by strong ethical idealism rather than personal conscientiousness. Full article

(This article belongs to the Special Issue Financial Reporting and Auditing)

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13 pages, 238 KiB

Open AccessArticle

The Impact of Risk Management on Countries in the MENA Region

by Rim Jalloul and Mahfuzul Haque

J. Risk Financial Manag. 2025, 18(5), 243; https://doi.org/10.3390/jrfm18050243 - 1 May 2025

Viewed by 212

Abstract

This study explores how adjustments in risk management can influence the future financial performance of 20 countries in the MENA (Middle East and North Africa) region. While the existing literature has explored risk factors in emerging economies, this research provides novel empirical evidence [...] Read more.

This study explores how adjustments in risk management can influence the future financial performance of 20 countries in the MENA (Middle East and North Africa) region. While the existing literature has explored risk factors in emerging economies, this research provides novel empirical evidence on how risk management practices influence long-term financial stability and growth, a dimension underexplored in the MENA context. Using a Panel Vector Autoregression (PVAR) model, we analyze data from 2005 to 2021 to quantify the dynamic relationship between risk mitigation strategies and key financial outcomes, accounting for regional volatility and cross-country heterogeneity. This methodology allows for the examination of the impact of risk management on future financial outcomes, considering both current uncertainties and strategic approaches to mitigating risks. The results reveal that robust forward-looking risk management practices significantly impact the future financial performance and resilience of the countries in the MENA region. Our findings highlight that a well-designed risk management strategy is crucial for averting financial crises and supporting long-term economic growth and sustainability of nations. This study contributes to the understanding of how strategic risk management can drive future economic and financial stability in the MENA region, providing unique insights into the role of forward-thinking risk practices in shaping national success. Full article

(This article belongs to the Special Issue Financial Management)

14 pages, 3306 KiB

Open AccessArticle

Is Bitcoin’s Market Maturing? Cumulative Abnormal Returns and Volatility in the 2024 Halving and Past Cycles

by Vinícius Veloso, Rafael Confetti Gatsios, Vinícius Medeiros Magnani and Fabiano Guasti Lima

J. Risk Financial Manag. 2025, 18(5), 242; https://doi.org/10.3390/jrfm18050242 - 1 May 2025

Viewed by 301

Abstract

This study examines how cumulative abnormal returns (CARs, the sum of abnormal returns over a period) and volatility behave around Bitcoin halving events, focusing on whether these patterns have evolved as the cryptocurrency market matures. Halvings are periodic events defined by Bitcoin’s algorithm, [...] Read more.

This study examines how cumulative abnormal returns (CARs, the sum of abnormal returns over a period) and volatility behave around Bitcoin halving events, focusing on whether these patterns have evolved as the cryptocurrency market matures. Halvings are periodic events defined by Bitcoin’s algorithm, during which the reward—in the form of newly issued bitcoins—paid to miners for validating network transactions is reduced, impacting miners’ profitability and potentially influencing the asset’s price due to a decreased supply. To carry out the analysis, we collected data on returns and risk for the 2012, 2016, 2020, and 2024 halving events and compared abnormal returns before and around the event, focusing on the 2020 and 2024 halvings. The results reveal significant shifts in Bitcoin’s price behavior within the event window, with an increased occurrence of abnormal returns in 2020 and 2024, alongside variations in average return, volatility, and maximum drawdown across all events. These findings suggest that Bitcoin’s returns and volatility during halvings are decreasing as the cryptocurrency market becomes more regulated and attracts greater participation from institutional investors and governments. Full article

(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)

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21 pages, 309 KiB

Open AccessArticle

Family Business, ESG, and Firm Age in the GCC Corporations: Building on the Socioemotional Wealth (SEW) Model

by Khalil Nimer, Naser Abughazaleh, Yasean Tahat and Mohammed Hossain

J. Risk Financial Manag. 2025, 18(5), 241; https://doi.org/10.3390/jrfm18050241 - 1 May 2025

Viewed by 202

Abstract

This study investigates the relationship between private family control (excluding state and royal) and Environmental, Social, and Governance (ESG) performance among publicly listed firms in the Gulf Cooperation Council (GCC), focusing specifically on the moderating role of firm age. Employing multivariate POLS regression [...] Read more.

This study investigates the relationship between private family control (excluding state and royal) and Environmental, Social, and Governance (ESG) performance among publicly listed firms in the Gulf Cooperation Council (GCC), focusing specifically on the moderating role of firm age. Employing multivariate POLS regression analysis on data from 2016 to 2021 and controlling for established firm-specific variables, we find a robust negative association between private family control and ESG performance, consistent with Socioemotional Wealth (SEW) perspectives where family-centric goals may override broader stakeholder interests. Critically, our results demonstrate that firm age significantly and positively moderates this negative relationship; the detrimental impact of family control on ESG performance attenuates considerably as family firms mature. This attenuation likely reflects the development of sophisticated governance structures, a heightened focus on long-term reputation and SEW preservation, and potential generational shifts towards sustainability values within older firms. Providing the first empirical test of this age moderation effect within the under-researched GCC context, this research extends SEW theory by highlighting the dynamic evolution of family firm sustainability engagement over the lifecycle in a non-Western setting and contributes novel insights to the accounting literature. These findings underscore the need for targeted policies and interventions to foster ESG adoption, particularly among younger private family firms in the GCC, offering valuable insights for regulators, investors, family business owners, and practitioners aiming to foster responsible sustainability practices. Full article

(This article belongs to the Special Issue Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), and Green Finance)

26 pages, 1301 KiB

Open AccessArticle

The Effect of Different Saving Mechanisms in Pension Saving Behavior: Evidence from a Life-Cycle Experiment

by Martin Angerer, Michael Hanke, Ekaterina Shakina and Wiebke Szymczak

J. Risk Financial Manag. 2025, 18(5), 240; https://doi.org/10.3390/jrfm18050240 - 1 May 2025

Viewed by 198

Abstract

We examine how institutional saving mechanisms influence retirement saving decisions under bounded rationality and income risk. Using a life-cycle experiment with habit formation and loss aversion, we test mandatory and voluntary binding savings under deterministic and stochastic income. Voluntary commitment improves saving performance [...] Read more.

We examine how institutional saving mechanisms influence retirement saving decisions under bounded rationality and income risk. Using a life-cycle experiment with habit formation and loss aversion, we test mandatory and voluntary binding savings under deterministic and stochastic income. Voluntary commitment improves saving performance only when income is predictable; under uncertainty, it fails to improve performance. Mandatory savings do not raise total saving, as participants reduce voluntary contributions. These results emphasize the role of income smoothing in enabling behavioral interventions to improve long-term financial outcomes. Full article

(This article belongs to the Special Issue Pensions and Retirement Planning)

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22 pages, 1294 KiB

Open AccessArticle

Variational Autoencoders for Completing the Volatility Surfaces

by Bienvenue Feugang Nteumagné, Hermann Azemtsa Donfack and Celestin Wafo Soh

J. Risk Financial Manag. 2025, 18(5), 239; https://doi.org/10.3390/jrfm18050239 - 30 Apr 2025

Viewed by 208

Abstract

Variational autoencoders (VAEs) have emerged as a promising tool for modeling volatility surfaces, with particular significance for generating synthetic implied volatility scenarios that enhance risk management capabilities. This study evaluates VAE performance using synthetic volatility surfaces, chosen specifically for their arbitrage-free properties and [...] Read more.

Variational autoencoders (VAEs) have emerged as a promising tool for modeling volatility surfaces, with particular significance for generating synthetic implied volatility scenarios that enhance risk management capabilities. This study evaluates VAE performance using synthetic volatility surfaces, chosen specifically for their arbitrage-free properties and clean data characteristics. Through a comprehensive comparison with traditional methods including thin-plate spline interpolation, parametric models (SABR and SVI), and deterministic autoencoders, we demonstrate that our VAE approach with latent space optimization consistently outperforms existing methods, particularly in scenarios with extreme data sparsity. Our findings show that accurate, arbitrage-free surface reconstruction is achievable using only 5% of the original data points, with errors 7–12 times lower than competing approaches in high-sparsity scenarios. We rigorously validate the preservation of critical no-arbitrage conditions through probability distribution analysis and total variance strip non-intersection tests. The framework we develop overcomes traditional barriers of limited market data by generating over 13,500 synthetic surfaces for training, compared to typical market availability of fewer than 100. These capabilities have important implications for market risk analysis, derivatives pricing, and the development of more robust risk management frameworks, particularly in emerging markets or for newly introduced derivatives where historical data are scarce. Our integration of machine learning with financial theory constraints represents a significant advancement in volatility surface modeling that balances statistical accuracy with financial relevance. Full article

(This article belongs to the Special Issue Machine Learning Based Risk Management in Finance and Insurance)

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33 pages, 1904 KiB

Open AccessArticle

Interconnectedness of Stock Indices in African Economies Under Financial, Health, and Political Crises

by Anouar Chaouch and Salim Ben Sassi

J. Risk Financial Manag. 2025, 18(5), 238; https://doi.org/10.3390/jrfm18050238 - 30 Apr 2025

Viewed by 572

Abstract

This study examines the interconnectedness of African stock markets during three major global crises: the 2008 Global Financial Crisis (GFC), the COVID-19 pandemic, and the Russia–Ukraine conflict. We use daily stock index data from 2007 to 2023 for ten African countries and apply [...] Read more.

This study examines the interconnectedness of African stock markets during three major global crises: the 2008 Global Financial Crisis (GFC), the COVID-19 pandemic, and the Russia–Ukraine conflict. We use daily stock index data from 2007 to 2023 for ten African countries and apply a Time-Varying Parameter Vector Autoregressive (TVP-VAR) model. The results reveal that volatility connectedness among African markets intensified during all three crises, peaking during the COVID-19 pandemic followed by the 2008 GFC and the Russia–Ukraine conflict. Short-term connectedness consistently exceeded long-term connectedness across all crises. South Africa and Egypt acted as dominant transmitters of volatility, highlighting their systemic importance, while Morocco showed increased influence during the COVID-19 pandemic. These findings suggest that African markets are more globally integrated than previously assumed, making them vulnerable to external shocks. Policy implications include the need for stronger regional financial cooperation, the development of early warning systems, and enhanced intra-African investment to improve market resilience and reduce contagion risk. Full article

(This article belongs to the Special Issue Machine Learning Based Risk Management in Finance and Insurance)

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16 pages, 1353 KiB

Open AccessArticle

Impact of the COVID-19 Pandemic on the Financial Market Efficiency of Price Returns, Absolute Returns, and Volatility Increment: Evidence from Stock and Cryptocurrency Markets

by Tetsuya Takaishi

J. Risk Financial Manag. 2025, 18(5), 237; https://doi.org/10.3390/jrfm18050237 - 29 Apr 2025

Viewed by 240

Abstract

This study examines the impact of the coronavirus disease 2019 (COVID-19) pandemic on market efficiency by analyzing three time series—price returns, absolute returns, and volatility increments—in the stock (Deutscher Aktienindex, Nikkei 225, Shanghai Stock Exchange (SSE), and Volatility Index) and cryptocurrency (Bitcoin and [...] Read more.

This study examines the impact of the coronavirus disease 2019 (COVID-19) pandemic on market efficiency by analyzing three time series—price returns, absolute returns, and volatility increments—in the stock (Deutscher Aktienindex, Nikkei 225, Shanghai Stock Exchange (SSE), and Volatility Index) and cryptocurrency (Bitcoin and Ethereum) markets. The effect is found to vary by asset class and market. In the stock market, while the pandemic did not influence the Hurst exponent of volatility increments, it affected that of returns and absolute returns (except in the SSE, where returns remained unaffected). In the cryptocurrency market, the pandemic did not alter the Hurst exponent for any time series but influenced the strength of multifractality in returns and absolute returns. Some Hurst exponent time series exhibited a gradual decline over time, complicating the assessment of pandemic-related effects. Consequently, segmented analyses by pandemic period may erroneously suggest an impact, warranting caution in period-based studies. Full article

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21 pages, 747 KiB

Open AccessArticle

Exploring Antecedents of Rural Users’ Continuance of Use Intention Toward Mobile Financial Services in Bangladesh: Deployment of Expectation Confirmation Model

by Md. Benzeer Rizvee, Md. Nur Alam Siddik and Sajal Kabiraj

J. Risk Financial Manag. 2025, 18(5), 236; https://doi.org/10.3390/jrfm18050236 - 27 Apr 2025

Viewed by 933

Abstract

Numerous studies have focused on the phases of technology adoption or acceptance, while little consideration has been given to rural users’ intentions to continue using the technology. Emphasizing this reality, the study has investigated the antecedents that exert ascendancy on rural communities’ inclination [...] Read more.

Numerous studies have focused on the phases of technology adoption or acceptance, while little consideration has been given to rural users’ intentions to continue using the technology. Emphasizing this reality, the study has investigated the antecedents that exert ascendancy on rural communities’ inclination to continue using mobile financial services. This paper conceived the theoretical model based on the expectation confirmation model. Participants in this study were 400 Bangladeshi rural users who were continuously using mobile financial services. For the sake of data analysis, utilizing a structural equation modeling approach, R version 4.4.1 software was deployed. The robust findings show that users’ satisfaction with mobile financial services was significantly influenced by perceived value, perceived risk, perceived cost, government support, and perceived trust. Furthermore, satisfaction demonstrated a substantial and positive influence on the continuance of use intention. Theoretically, the study expands on ECM by adapting the concept to the technological and socioeconomic realities of rural Bangladeshi users, developing digital financial inclusion by investigating the crucial antecedents of satisfaction toward continuance of use intention through evaluation. Practically, service providers may yield strategies to increase the users’ satisfaction, which will escalate continuous use intention. Full article

(This article belongs to the Special Issue Financial Technology (Fintech) and Sustainable Financing, 3rd Edition)

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22 pages, 3034 KiB

Open AccessArticle

Does Fiscal Decentralization Drive CO₂ Emissions? A Quantile Regression Analysis

by Wilman Gustavo Carrillo-Pulgar, Juan Pablo Vallejo-Mata, Katherine Gissel Tixi-Gallegos, Patricio Alejandro Sánchez Cuesta and Josué Romero-Alvarado

J. Risk Financial Manag. 2025, 18(5), 235; https://doi.org/10.3390/jrfm18050235 - 27 Apr 2025

Viewed by 599

Abstract

Achieving sustainable models is a crucial challenge today, where government actions play a fundamental role. Therefore, this study aims to analyze the impact of fiscal decentralization on CO₂ emissions in 40 economies between 2000 and 2020. To this end, an unbalanced panel [...] Read more.

Achieving sustainable models is a crucial challenge today, where government actions play a fundamental role. Therefore, this study aims to analyze the impact of fiscal decentralization on CO₂ emissions in 40 economies between 2000 and 2020. To this end, an unbalanced panel was constructed, and the Method of Moments Quantile Regression (MMQR) was employed. As a robustness check, Driscoll and Kraay’s standard errors approach was used. The MMQR results indicate that fiscal decentralization has a positive and significant effect across all quantiles of CO₂ emissions. Additionally, it was found that revenue-side decentralization has a greater impact on the lower quantiles of CO₂ emissions, while expenditure-side decentralization has a stronger effect on the upper quantiles. The findings also reveal that renewable energy mitigates CO₂ emissions, whereas economic growth, resource rents, and information and communication technologies increase them, although the latter with lower statistical significance. These findings are expected to serve as a basis for public policy formulation aimed at improving environmental quality. Full article

(This article belongs to the Section Energy and Environment: Economics, Finance and Policy)

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20 pages, 326 KiB

Open AccessArticle

Corporate Governance: Driving Climate Change Disclosure and Advancing SDGs

by Indah Fajarini Sri Wahyuningrum, Niswah Baroroh, Heri Yanto, Retnoningrum Hidayah, Annisa Sila Puspita and Laela Dwi Elviana

J. Risk Financial Manag. 2025, 18(5), 234; https://doi.org/10.3390/jrfm18050234 - 27 Apr 2025

Viewed by 330

Abstract

Climate change presents a critical challenge to achieving the 2030 Sustainable Development Goals (SDGs), particularly SDG 13 on Climate Action. This study examined the effect of corporate governance on carbon emission disclosure and carbon performance among 150 non-financial firms listed on the Indonesia [...] Read more.

Climate change presents a critical challenge to achieving the 2030 Sustainable Development Goals (SDGs), particularly SDG 13 on Climate Action. This study examined the effect of corporate governance on carbon emission disclosure and carbon performance among 150 non-financial firms listed on the Indonesia Stock Exchange (IDX) from 2016 to 2022. Drawing on stakeholder, legitimacy, agency, and resource dependence theories, the study utilized panel data comprising 468 firm-year observations and employed ordinary least squares (OLS) regression to assess both direct and moderating effects. The findings indicate that governance attributes covering board size, board gender diversity, foreign ownership, and the presence of a CSR committee had a positive effect on carbon emission disclosure and carbon performance. Moreover, these governance factors enhanced the correlation between disclosure and performance, suggesting that robust governance could strengthen the environmental impact of transparency. However, board independence exhibited a negative or statistically insignificant effect, highlighting a potential disconnect between governance expectations and environmental oversight in emerging markets. Despite increasing awareness, the levels of carbon disclosure and performance in Indonesia remained low, averaging only 27.8% and 6.6%, respectively. This study provides policy recommendations to strengthen ESG regulations, encourages firms to institutionalize sustainability practices, and calls for cross-country comparative research to improve generalizability. Full article

(This article belongs to the Section Business and Entrepreneurship)

8 pages, 443 KiB

Open AccessCorrection

Correction: Leightner (2024). How Australia Has Been Affected by US Monetary and Fiscal Policies: 1960 to 2022. Journal of Risk and Financial Management, 17(3), 96

by Jonathan Leightner

J. Risk Financial Manag. 2025, 18(5), 233; https://doi.org/10.3390/jrfm18050233 - 27 Apr 2025

Viewed by 78

Abstract

There was an error in the original publication (Leightner, 2024) [...] Full article

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20 pages, 330 KiB

Open AccessArticle

Exploring New Aspects of Corporate Dividend Policy: Case of an Emerging Nation

by Biswajit Ghose, Pankaj Kumar Tyagi, Parikshit Sharma, Nivaj Gogoi, Premendra Kumar Singh, Yeshi Ngima, Asokan Vasudevan and Kiran Gope

J. Risk Financial Manag. 2025, 18(5), 232; https://doi.org/10.3390/jrfm18050232 - 26 Apr 2025

Viewed by 286

Abstract

The present study focuses on how various firm characteristics influence their dividend payout policies. The study finds empirical evidence with regard to primarily two aspects of corporate dividend decisions—dividend increase and decrease, whose exploration is inadequate in the past literature. The random effect [...] Read more.

The present study focuses on how various firm characteristics influence their dividend payout policies. The study finds empirical evidence with regard to primarily two aspects of corporate dividend decisions—dividend increase and decrease, whose exploration is inadequate in the past literature. The random effect logistic regression has been considered in order to analyze the panel dataset from 2001–2002 to 2021–2022 including 3739 listed Indian firms. The empirical models are formatted based on the relevant dividend-related theories in the Indian context such as the residual theory, transaction cost theory, signalling theory, etc. Further, additional tests are conducted regarding the robustness of the reported results. The empirical results document that firm size, profitability, promoter holdings, cash holdings, and life cycle have a favourable influence on the propensity of both increasing and decreasing dividend payouts. In contrast, earnings volatility, leverage, and free cash flow reduce firms’ tendency to increase and decrease dividend payments. These results indicate that higher liquidity and ownership concentration provide firms with greater financial flexibility to adjust their dividend policies as per their prevailing opportunities. The findings of the study offer insightful information about how to arrange dividend policies with firm-specific traits which will be helpful for managers and investors to make better decisions. Full article

(This article belongs to the Special Issue Corporate Dividend Payout Policy)

26 pages, 903 KiB

Open AccessArticle

US Bank Lending to Small Businesses: An Analysis of COVID-19 and the Paycheck Protection Program

by Benjamin A. Abugri and Theophilus T. Osah

J. Risk Financial Manag. 2025, 18(5), 231; https://doi.org/10.3390/jrfm18050231 - 26 Apr 2025

Viewed by 247

Abstract

This paper examines the characteristics of banks and their lending behavior in relation to Paycheck Protection Program (PPP) loans and commercial and industrial (C&I) loans to small businesses during the COVID-19 pandemic. Our findings show that lenders facing greater risk tended to lend [...] Read more.

This paper examines the characteristics of banks and their lending behavior in relation to Paycheck Protection Program (PPP) loans and commercial and industrial (C&I) loans to small businesses during the COVID-19 pandemic. Our findings show that lenders facing greater risk tended to lend more PPP loans, consistent with the risk-aversion theory. Specifically, banks with a higher loan–deposit ratio, lower overall profitability, poorer loan quality, and higher exposure to risks in business (C&I) loans are characterized by higher PPP loans. C&I loans to all businesses are negatively related to the loan–deposit ratio and loan loss allowance ratio, but are positively linked with the capital ratio. However, we find important differences in C&I lending to small businesses versus large businesses. Furthermore, there is evidence regarding the success of targeting PPP loans towards more productive sectors of the US economy. Using FDIC-defined banks’ lending specializations, we show that banks focused on international lending had a limited role in PPP lending. Full article

(This article belongs to the Special Issue Contemporary Studies on Corporate Finance and Business Research)

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43 pages, 1198 KiB

Open AccessArticle

Bridging Asset Pricing and Market Microstructure: Option Valuation in Roll’s Framework

by Davide Lauria, W. Brent Lindquist, Svetlozar T. Rachev and Yuan Hu

J. Risk Financial Manag. 2025, 18(5), 230; https://doi.org/10.3390/jrfm18050230 - 25 Apr 2025

Viewed by 158

Abstract

We introduce a binary tree for pricing contingent claims when the underlying security prices exhibit history dependence. We apply the model to the specific cases of moving-average and autoregressive behavior that are characteristic of price histories induced by market microstructure behavior. Our model [...] Read more.

We introduce a binary tree for pricing contingent claims when the underlying security prices exhibit history dependence. We apply the model to the specific cases of moving-average and autoregressive behavior that are characteristic of price histories induced by market microstructure behavior. Our model is market-complete and arbitrage-free. When passing to the risk-neutral measure, the model preserves all parameters governing the natural-world price dynamics, including the instantaneous mean of the asset return and the instantaneous probabilities for the direction of asset price movement. This preservation holds for arbitrarily small, but non-zero, time increments characteristic of market microstructure transactions. In the (unrealistic) limit of continuous trading, the model reduces to continuous diffusion price processes, with the concomitant loss of the microstructure information. Full article

(This article belongs to the Special Issue Featured Papers in Mathematics and Finance, 2nd Edition)

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19 pages, 295 KiB

Open AccessArticle

The Role of Economic Integration Policies in Increasing Economic Growth in Selected Southeast Asian Countries

by Chien Van Nguyen

J. Risk Financial Manag. 2025, 18(5), 229; https://doi.org/10.3390/jrfm18050229 - 25 Apr 2025

Viewed by 295

Abstract

Southeast Asian countries have come together to form the Association of Southeast Asian Nations (ASEAN), especially the formation of the ASEAN Economic Community (AEC) in 2015, which has united countries into an AEC economic bloc. The aims of the study are to assess [...] Read more.

Southeast Asian countries have come together to form the Association of Southeast Asian Nations (ASEAN), especially the formation of the ASEAN Economic Community (AEC) in 2015, which has united countries into an AEC economic bloc. The aims of the study are to assess the impact of integration policies and the role of the AEC on economic growth during the period 1970–2022. Using quantitative analysis methods through OLS, FEM, REM and long-term impact analysis through the ARDL panel, the research results show that a higher level in economic integration is consistent with a higher level of economic growth. Specifically, FDI has a positive impact on economic growth in the short term and the positive impact is stronger in the long term. At the same time, trade openness has a negative impact on growth in the short term, but this effect is no longer in the long term. The result affirms the very positive nature of the AEC for international integration and contribution to economic growth in the Southeast Asian region. Finally, this study has some policy implications for Southeast Asian countries in the context of implementing economic integration policies and setting growth targets. Full article

30 pages, 2587 KiB

Open AccessSystematic Review

Towards Fair AI: Mitigating Bias in Credit Decisions—A Systematic Literature Review

by José Rômulo de Castro Vieira, Flavio Barboza, Daniel Cajueiro and Herbert Kimura

J. Risk Financial Manag. 2025, 18(5), 228; https://doi.org/10.3390/jrfm18050228 - 24 Apr 2025

Viewed by 495

Abstract

The increasing adoption of artificial intelligence algorithms is redefining decision-making across various industries. In the financial sector, where automated credit granting has undergone profound changes, this transformation raises concerns about biases perpetuated or introduced by AI systems. This study investigates the methods used [...] Read more.

The increasing adoption of artificial intelligence algorithms is redefining decision-making across various industries. In the financial sector, where automated credit granting has undergone profound changes, this transformation raises concerns about biases perpetuated or introduced by AI systems. This study investigates the methods used to identify and mitigate biases in AI models applied to credit granting. We conducted a systematic literature review using the IEEE, Scopus, Web of Science, and Science Direct databases, covering the period from 1 January 2013 to 1 October 2024. From the 414 identified articles, 34 were selected for detailed analysis. Most studies are empirical and quantitative, focusing on fairness in outcomes and biases present in datasets. Preprocessing techniques dominated as the approach for bias mitigation, often relying on public academic datasets. Gender and race were the most studied sensitive attributes, with statistical parity being the most commonly used fairness metric. The findings reveal a maturing research landscape that prioritizes fairness in model outcomes and the mitigation of biases embedded in historical data. However, only a quarter of the papers report more than one fairness metric, limiting comparability across approaches. The literature remains largely focused on a narrow set of sensitive attributes, with little attention to intersectionality or alternative sources of bias. Furthermore, no study employed causal inference techniques to identify proxy discrimination. Despite some promising results—where fairness gains exceed 30% with minimal accuracy loss—significant methodological gaps persist, including the lack of standardized metrics, overreliance on legacy data, and insufficient transparency in model pipelines. Future work should prioritize developing advanced bias mitigation methods, exploring sensitive attributes, standardizing fairness metrics, improving model explainability, reducing computational complexity, enhancing synthetic data generation, and addressing the legal and ethical challenges of algorithms. Full article

(This article belongs to the Section Risk)

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