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J. Risk Financial Manag., Volume 18, Issue 7 (July 2025) – 65 articles

Cover Story (view full-size image): Do “green” stocks with lower carbon intensity truly provide a reliable safe haven for investors during oil price shocks? This groundbreaking study examines the constituent stocks of the Hang Seng Index in Hong Kong and reveals that low-carbon stocks—commonly perceived as the darlings of sustainable investing—tend to exhibit higher volatility than their high-carbon counterparts, such as those in the utilities and energy sectors. By mapping the intricate web of connectedness among carbon intensity, oil price shocks, and external factors, the study challenges conventional ESG wisdom and uncovers why the pursuit of stable and sustainable returns is more complex than it appears. The findings of this study also offer valuable insights for both individual and institutional investors as they strategize around carbon investments. View this paper
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22 pages, 535 KiB  
Article
Digital Transformation Capability, Organizational Strategic Intuition, and Digital Leadership: Empirical Evidence from High-Tech Firms’ Performance in the Yangtze River Delta
by Yu Zhang, Trairong Swatdikun, Pankaewta Lakkanawanit, Shi-Zheng Huang and Heng Chen
J. Risk Financial Manag. 2025, 18(7), 405; https://doi.org/10.3390/jrfm18070405 - 21 Jul 2025
Viewed by 644
Abstract
Despite growing scholarly interest in digital transformation, few studies have systematically explored the mechanisms linking digital transformation capability to firm performance. This study examines both the direct and indirect effects of digital transformation capability on firm performance, offering novel insights by incorporating organizational [...] Read more.
Despite growing scholarly interest in digital transformation, few studies have systematically explored the mechanisms linking digital transformation capability to firm performance. This study examines both the direct and indirect effects of digital transformation capability on firm performance, offering novel insights by incorporating organizational strategic intuition and digital leadership as mediating variables. These mediators align with the emerging emphasis on strategic risk management in the literature. A survey was conducted among 620 high-tech enterprises in the Yangtze River Delta using a structured questionnaire. The data were analyzed using SPSS 23.0 for descriptive and correlational statistics, SmartPLS 4.0 for structural equation modeling (SEM), and PROCESS 4.2 for mediation analysis. The results reveal a significant direct effect of digital transformation capability on firm performance. Mediation analysis further shows that organizational strategic intuition and digital leadership each significantly mediate this relationship, and a chain mediation pathway involving both variables is also confirmed. These findings deepen our understanding of how digital transformation capability drives performance outcomes and offer practical guidance for high-tech firms seeking sustainable competitive advantages in dynamic digital environments. This study advances the theoretical discourse by clarifying the pathways through which digital transformation capability affects firm performance and provides empirical evidence to inform strategic decision-making in high-tech management. Full article
(This article belongs to the Special Issue The Role of Digitization in Corporate Finance)
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21 pages, 356 KiB  
Article
Accrual vs. Real Earnings Management in Internationally Diversified Firms: The Role of Institutional Supervision
by Yan-Jie Yang, Yunsheng Hsu, Qian Long Kweh and Jawad Asif
J. Risk Financial Manag. 2025, 18(7), 404; https://doi.org/10.3390/jrfm18070404 - 21 Jul 2025
Viewed by 309
Abstract
This study investigates whether internationally diversified firms substitute between accrual-based and real earnings management and examines how institutional supervision moderates this relationship. Drawing on a sample of Taiwanese firms listed on the Taiwan Stock Exchange from 2003 to 2016, we conduct regression analyses [...] Read more.
This study investigates whether internationally diversified firms substitute between accrual-based and real earnings management and examines how institutional supervision moderates this relationship. Drawing on a sample of Taiwanese firms listed on the Taiwan Stock Exchange from 2003 to 2016, we conduct regression analyses to test our hypothesis. We find that internationally diversified firms actively shift between accrual and real earnings management strategies depending on the constraints they face. Specifically, firms tend to rely more on accrual-based manipulation when information asymmetry is high and switch to real earnings management when accruals are more easily detected. We also show that stronger institutional supervision—measured by information transparency and investor protection—significantly curbs accrual-based earnings management. These findings reflect the higher volatility and agency problems associated with international operations, such as exposure to foreign risks and the distance between parent and subsidiary firms. By highlighting the conditions under which firms manage earnings and the supervisory mechanisms that constrain such behavior, this study offers practical insights for managers seeking to smooth earnings, investors aiming to evaluate firm transparency, and policymakers designing regulations to deter opportunistic financial reporting. Full article
(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)
23 pages, 1007 KiB  
Article
Mobile Banking Customer Satisfaction and Loyalty: The Roles of Technology Readiness
by Hien Ho, Sahng-Min Han, Jinho Cha and Long Pham
J. Risk Financial Manag. 2025, 18(7), 403; https://doi.org/10.3390/jrfm18070403 - 21 Jul 2025
Viewed by 534
Abstract
This study explores the relationship between customer satisfaction and loyalty in mobile banking, emphasizing the moderating role of Technology Readiness. As mobile banking becomes increasingly central to financial service delivery, understanding the nuanced drivers of customer loyalty is essential for strategic growth. Drawing [...] Read more.
This study explores the relationship between customer satisfaction and loyalty in mobile banking, emphasizing the moderating role of Technology Readiness. As mobile banking becomes increasingly central to financial service delivery, understanding the nuanced drivers of customer loyalty is essential for strategic growth. Drawing from the Technology Readiness Index, this study examines how four dimensions, optimism, innovativeness, discomfort, and insecurity, moderate the satisfaction–loyalty linkage. Data were collected via a structured survey from 258 mobile banking users in the United States, analyzed using partial least squares structural equation modeling (PLS-SEM). Results show that optimism and innovativeness positively moderate this relationship, while discomfort and insecurity act as negative moderators. Practically, this research introduces a segmented approach to mobile banking service design, underscoring the need for differentiated strategies that address varying levels of user readiness. Theoretically, this study addresses a gap in mobile banking literature by shifting the focus from adoption to sustained usage and satisfaction-based loyalty, enriching the discourse on customer behavior in digital finance. Full article
(This article belongs to the Special Issue Mobile Payments and Financial Services in the Digital Economy)
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23 pages, 2234 KiB  
Article
Exploring the Dynamic Link Between Crude Oil and Islamic Stock Returns: A BRIC Perspective During the GFC
by Tanvir Bhuiyan and Ariful Hoque
J. Risk Financial Manag. 2025, 18(7), 402; https://doi.org/10.3390/jrfm18070402 - 20 Jul 2025
Viewed by 753
Abstract
This study examines the relationship between crude oil returns (CRT) and Islamic stock returns (ISR) in BRIC countries during the Global Financial Crisis (GFC), employing wavelet-based comovement analysis and regression models that incorporate both contemporaneous and lagged CRT across 40 cases. The wavelet [...] Read more.
This study examines the relationship between crude oil returns (CRT) and Islamic stock returns (ISR) in BRIC countries during the Global Financial Crisis (GFC), employing wavelet-based comovement analysis and regression models that incorporate both contemporaneous and lagged CRT across 40 cases. The wavelet analysis reveals strong long-term comovement at low frequencies between ISR and CRT during the GFC. Contemporaneous regressions show that increases (decreases) in CRT align with corresponding movements in ISR. Lagged regressions indicate that CRT can predict ISR up to one week ahead for Brazil, Russia, and China, and up to two weeks for India, although the predictive strength weakens beyond this window. These findings challenge the perception that Islamic stocks were immune to the GFC, showing they were affected by global oil market dynamics, albeit with varying degrees of resilience across countries and time horizons. Full article
(This article belongs to the Special Issue The New Horizons of Global Financial Literacy)
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27 pages, 721 KiB  
Article
What Drives Cost System Sophistication? Empirical Evidence from the Greek Hotel Industry
by Ioannis E. Diavastis
J. Risk Financial Manag. 2025, 18(7), 401; https://doi.org/10.3390/jrfm18070401 - 19 Jul 2025
Viewed by 400
Abstract
The increasing complexity of the hotel industry necessitates the implementation of sophisticated cost systems capable of delivering accurate and relevant cost information to support managerial decision-making. Investigating the determinants of cost system design is crucial, given that no single accounting system is universally [...] Read more.
The increasing complexity of the hotel industry necessitates the implementation of sophisticated cost systems capable of delivering accurate and relevant cost information to support managerial decision-making. Investigating the determinants of cost system design is crucial, given that no single accounting system is universally applicable across all business contexts. This study addresses a critical gap by examining the key drivers of cost system sophistication through the theoretical frameworks of contingency and upper echelons theories, focusing specifically on the Greek hotel sector. Employing multiple regression analysis, the findings reveal that firm size, cost structure, the importance of cost information in decision-making, and the integration of information technology significantly influence the complexity of cost systems. Conversely, factors such as competition, service diversity, business strategy, organizational life cycle, and executive characteristics showed no statistically significant impact. These findings contribute to management accounting and hospitality literature by integrating theoretical perspectives and identifying key determinants of cost system sophistication. Moreover, the study offers practical insights for designing cost systems that meet the specific needs of the hotel industry. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
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18 pages, 1349 KiB  
Article
Analysing Market Volatility and Economic Policy Uncertainty of South Africa with BRIC and the USA During COVID-19
by Thokozane Ramakau, Daniel Mokatsanyane, Sune Ferreira-Schenk and Kago Matlhaku
J. Risk Financial Manag. 2025, 18(7), 400; https://doi.org/10.3390/jrfm18070400 - 19 Jul 2025
Viewed by 426
Abstract
The contagious COVID-19 disease not only brought about a global health crisis but also a disruption in the global economy. The uncertainty levels regarding the impact of the disease increased volatility. This study analyses stock market volatility and Economic Policy Uncertainty (EPU) of [...] Read more.
The contagious COVID-19 disease not only brought about a global health crisis but also a disruption in the global economy. The uncertainty levels regarding the impact of the disease increased volatility. This study analyses stock market volatility and Economic Policy Uncertainty (EPU) of South Africa (SA) with that of the United States of America (USA) and Brazil, Russia, India, and China (BRIC) during the COVID-19 pandemic. The study aims to analyse volatility spillovers from a developed market (USA) to emerging markets (BRIC countries) and also to examine the causality between EPU and stock returns during the COVID-19 pandemic. By employing the GARCH-in-Mean model from a sample of daily returns of national equity market indices from 1 January 2020 to 31 March 2022, SA and China are shown to be the most volatile during the pandemic. By using the diagonal Baba, Engle, Kraft, and Kroner (BEKK) model to analyse spillover effects, evidence of spillover effects from the US to the emerging countries is small but statistically significant, with SA showing the strongest impact from US market shocks. From the Granger causality test, Brazil’s and India’s equity markets are shown to be highly sensitive to changes in EPU relative to the other countries. Full article
(This article belongs to the Section Economics and Finance)
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18 pages, 304 KiB  
Article
Analysis of the Capital Structure of Latin American Companies in Light of Trade-Off and Pecking Order Theories
by Jesús Pinillos, Hugo Macías, Luis Castrillon, Rolando Eslava and Sadan De la Cruz
J. Risk Financial Manag. 2025, 18(7), 399; https://doi.org/10.3390/jrfm18070399 - 19 Jul 2025
Viewed by 339
Abstract
The study of capital structure is one of the most relevant topics in finance because, despite the various theories that seek to explain it, there is still no consensus on the determining factors or the behaviors of financing decisions in companies. This study [...] Read more.
The study of capital structure is one of the most relevant topics in finance because, despite the various theories that seek to explain it, there is still no consensus on the determining factors or the behaviors of financing decisions in companies. This study empirically analyzes the capital structure decisions of Latin American companies during the period of 2013–2023, in light of trade-off and pecking order theories. A panel data methodology was applied to 62 companies, using fixed and random effects models. The results show that, on average, companies correct around 5.80% of the gap between their current and optimal level of indebtedness per period, partially supporting the trade-off theory. However, the effects of the financial deficit on indebtedness are heterogeneous and, in most cases, inconsistent with the pecking order theory, especially in countries such as Colombia. It is concluded that country risk has a marginal influence on debt decisions, and the need to consider each country’s institutional and market particularities when analyzing the dynamics of capital structure in emerging economies is emphasized. Full article
17 pages, 3136 KiB  
Article
Financial Market Resilience in the GCC: Evidence from COVID-19 and the Russia–Ukraine Conflict
by Farrukh Nawaz, Christopher Gan, Maaz Khan and Umar Kayani
J. Risk Financial Manag. 2025, 18(7), 398; https://doi.org/10.3390/jrfm18070398 - 19 Jul 2025
Viewed by 400
Abstract
Global financial markets have experienced significant volatility during crises, particularly COVID-19 and the Russia–Ukraine conflict, prompting questions about how regional markets respond to such shocks. Previous research highlights the influence of crises on stock market volatility, focusing on individual events or global markets, [...] Read more.
Global financial markets have experienced significant volatility during crises, particularly COVID-19 and the Russia–Ukraine conflict, prompting questions about how regional markets respond to such shocks. Previous research highlights the influence of crises on stock market volatility, focusing on individual events or global markets, but less is known about the comparative dynamics within the Gulf Cooperation Council (GCC) markets. Our study investigated volatility and asymmetric behavior within GCC stock markets during both crises. Furthermore, the econometric model E-GARCH(1,1) was applied to the daily frequency data of financial stock market returns from 11 March 2020 to 31 July 2023. This study examined volatility fluctuation patterns and provides a comparative assessment of GCC stock markets’ behavior during crises. Our findings reveal varying degrees of market volatility across the region during the COVID-19 crisis, with Qatar and the UAE exhibiting the highest levels of volatility persistence. In contrast, the Russia–Ukraine conflict has had a distinct effect on GCC markets, with Oman exhibiting the highest volatility persistence and Kuwait having the lowest volatility persistence. This study provides significant insights for policymakers and investors in managing risk and enhancing market resilience during economic and geopolitical uncertainty. Full article
(This article belongs to the Special Issue Behavioral Finance and Financial Management)
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16 pages, 564 KiB  
Article
Liability Management and Solvency of Life Insurers in a Low-Interest Rate Environment: Evidence from Thailand
by Wilaiporn Suwanmalai and Simon Zaby
J. Risk Financial Manag. 2025, 18(7), 397; https://doi.org/10.3390/jrfm18070397 - 18 Jul 2025
Viewed by 885
Abstract
This research investigates the liability management of Thai life insurers in a prolonged low-interest rate environment. It examines the impact of interest rate changes on life insurance products, solvency, and profitability. The study identifies a significant shift in product portfolios toward non-interest-sensitive products, [...] Read more.
This research investigates the liability management of Thai life insurers in a prolonged low-interest rate environment. It examines the impact of interest rate changes on life insurance products, solvency, and profitability. The study identifies a significant shift in product portfolios toward non-interest-sensitive products, which helps mitigate financial risk and enhance solvency. The solvency of Thai life insurers is influenced by their return on assets, with higher risk exposures requiring more capital, potentially lowering solvency levels. However, the proportion of risky investment assets is not significantly related to the solvency position in the Thai market. The market index return is a significant predictor of stock returns for Thai life insurers, while changes in interest rate sensitivity are not statistically significant between low-rate and normal periods. The average solvency level under Thailand’s regulatory regime is also not statistically different between normal and prolonged low-interest rate situations. This study contributes to the understanding of liability management practices among life insurers in Thailand and provides insights into the challenges and strategies for maintaining solvency and profitability in a low-interest rate environment. Full article
(This article belongs to the Section Financial Markets)
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26 pages, 12522 KiB  
Article
The General Equilibrium Effects of Fiscal Policy with Government Debt Maturity
by Shuwei Zhang and Zhilu Lin
J. Risk Financial Manag. 2025, 18(7), 396; https://doi.org/10.3390/jrfm18070396 - 17 Jul 2025
Viewed by 276
Abstract
This paper highlights the importance of accounting for both the maturity structure of government debt and the composition of fiscal instruments when studying the macroeconomic effects of fiscal policy. Using a dynamic stochastic general equilibrium (DSGE) model featuring a debt maturity structure and [...] Read more.
This paper highlights the importance of accounting for both the maturity structure of government debt and the composition of fiscal instruments when studying the macroeconomic effects of fiscal policy. Using a dynamic stochastic general equilibrium (DSGE) model featuring a debt maturity structure and six exogenous fiscal shocks spanning both the expenditure and revenue sides, we show that long-maturity debt systematically weakens the expansionary effects of fiscal policy under dovish monetary policy, particularly in response to increases in government purchases, government investment, and capital income tax cuts, where long-term financing leads to the significant crowding-out of private activity. In contrast, short-term debt financing yields output multipliers that often exceed unity. The maturity structure also alters the relative efficacy of fiscal instruments: while labor income tax cuts produce the largest multipliers under short-term debt, government purchases become more potent under long-term debt financing. We also show that the stark difference between short- and long-term debt becomes muted under a hawkish monetary regime. Our results have important policy implications, suggesting that the maturity composition of public debt should be carefully considered in the design of fiscal policy, particularly in high-debt economies. Full article
(This article belongs to the Special Issue Monetary Policy in a Globalized World)
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36 pages, 1465 KiB  
Article
USV-Affine Models Without Derivatives: A Bayesian Time-Series Approach
by Malefane Molibeli and Gary van Vuuren
J. Risk Financial Manag. 2025, 18(7), 395; https://doi.org/10.3390/jrfm18070395 - 17 Jul 2025
Viewed by 256
Abstract
We investigate the affine term structure models (ATSMs) with unspanned stochastic volatility (USV). Our aim is to test their ability to generate accurate cross-sectional behavior and time-series dynamics of bond yields. Comparing the restricted models and those with USV, we test whether they [...] Read more.
We investigate the affine term structure models (ATSMs) with unspanned stochastic volatility (USV). Our aim is to test their ability to generate accurate cross-sectional behavior and time-series dynamics of bond yields. Comparing the restricted models and those with USV, we test whether they produce both reasonable estimates for the short rate variance and cross-sectional fit. Essentially, a joint approach from both time series and options data for estimating risk-neutral dynamics in ATSMs should be followed. Due to the scarcity of derivative data in emerging markets, we estimate the model using only time-series of bond yields. A Bayesian estimation approach combining Markov Chain Monte Carlo (MCMC) and the Kalman filter is employed to recover the model parameters and filter out latent state variables. We further incorporate macro-economic indicators and GARCH-based volatility as external validation of the filtered latent volatility process. The A1(4)USV performs better both in and out of sample, even though the issue of a tension between time series and cross-section remains unresolved. Our findings suggest that even without derivative instruments, it is possible to identify and interpret risk-neutral dynamics and volatility risk using observable time-series data. Full article
(This article belongs to the Section Financial Markets)
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35 pages, 526 KiB  
Article
Can CBDC Mimic Cash? A Deep Dive into the Digital Euro Case
by Patrick Schueffel
J. Risk Financial Manag. 2025, 18(7), 394; https://doi.org/10.3390/jrfm18070394 - 17 Jul 2025
Viewed by 871
Abstract
Central Bank Digital Currencies (CBDCs) are increasingly positioned as digital equivalents to physical cash, yet their ability to replicate the full functionality of cash remains contested. This study investigates whether the proposed Digital Euro can credibly serve as a substitute for physical Euro [...] Read more.
Central Bank Digital Currencies (CBDCs) are increasingly positioned as digital equivalents to physical cash, yet their ability to replicate the full functionality of cash remains contested. This study investigates whether the proposed Digital Euro can credibly serve as a substitute for physical Euro cash. Using a qualitative comparative framework, the analysis evaluates both currencies using 36 pairwise comparisons. The findings reveal that while the Digital Euro offers advantages in portability, divisibility, and digital integration, it falls short in key areas such as anonymity, fungibility, recognizability, and universal acceptability. These limitations are primarily due to technological dependencies, regulatory constraints, and the absence of physical tangibility. The study concludes that the Digital Euro cannot fully mimic the role of physical cash, particularly in offline and privacy-sensitive contexts. As a result, the hypothesis that the Digital Euro is an electronic equivalent of physical Euro cash is rejected. These findings underscore the continued relevance of physical currency and highlight the need for cautious, evidence-based CBDC design and implementation. Full article
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14 pages, 638 KiB  
Article
The Impact of the Fed’s Monetary Policy on Cryptocurrencies: Novel Policy Implications for Central Banks
by Tayfun Tuncay Tosun and Erginbay Uğurlu
J. Risk Financial Manag. 2025, 18(7), 393; https://doi.org/10.3390/jrfm18070393 - 16 Jul 2025
Viewed by 1461
Abstract
This study aims to analyze the impact of the U.S. Federal Reserve System’s monetary policy on major cryptocurrencies. Specifically, it explores whether the effects differ between volatile cryptocurrencies, such as Bitcoin and Ethereum, and the stablecoin Tether. To this end, we utilize an [...] Read more.
This study aims to analyze the impact of the U.S. Federal Reserve System’s monetary policy on major cryptocurrencies. Specifically, it explores whether the effects differ between volatile cryptocurrencies, such as Bitcoin and Ethereum, and the stablecoin Tether. To this end, we utilize an autoregressive distributed lag (ARDL) bounds testing approach, analyzing monthly data from January 2019 to April 2025. The empirical results indicate that the responses of volatile and stable cryptocurrencies to the Fed’s monetary policy differ. In the long term, the prices of Bitcoin and Ethereum tend to react positively to the Fed’s monetary policy changes, whereas Tether’s prices experience a negative impact. We recommend novel policy implications in this study based on these empirical findings. Full article
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22 pages, 904 KiB  
Article
Financial Inclusion as a Pathway to Poverty Alleviation and Equality in Latin America: An Empirical Analysis
by Jeniffer Rubio and Micaela León
J. Risk Financial Manag. 2025, 18(7), 392; https://doi.org/10.3390/jrfm18070392 - 16 Jul 2025
Viewed by 422
Abstract
This study examines the impact of financial inclusion (FI) on reducing poverty and income inequality in Latin America and the Caribbean (LAC), using panel data from 15 countries for the period 2004–2021. System GMM with robust errors was used to address endogeneity issues, [...] Read more.
This study examines the impact of financial inclusion (FI) on reducing poverty and income inequality in Latin America and the Caribbean (LAC), using panel data from 15 countries for the period 2004–2021. System GMM with robust errors was used to address endogeneity issues, and FI was assessed in terms of access to and use of the financial system. The results indicate that increased FI contributes to reducing poverty and income inequality in LAC. While access to financial services plays a crucial role in poverty reduction, the utilization of financial services has a more profound impact on combating income inequality. These results underscore the importance of policies designed to improve financial access and promote the use of financial products and services. It is recommended to expand the banking infrastructure, facilitate the provision of low-cost accounts, and strengthen financial education programs. Full article
(This article belongs to the Section Financial Markets)
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31 pages, 6172 KiB  
Article
Shipping Decarbonisation: Financial and Business Strategies for UK Shipowners
by Eleni I. Avaritsioti
J. Risk Financial Manag. 2025, 18(7), 391; https://doi.org/10.3390/jrfm18070391 - 16 Jul 2025
Viewed by 286
Abstract
The maritime sector faces urgent decarbonisation pressures due to regulatory instruments, such as the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII), which mandates reductions in greenhouse gas emissions per transport work. This paper investigates the challenge of identifying CII-compliant strategies that are [...] Read more.
The maritime sector faces urgent decarbonisation pressures due to regulatory instruments, such as the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII), which mandates reductions in greenhouse gas emissions per transport work. This paper investigates the challenge of identifying CII-compliant strategies that are also financially viable for UK shipowners. To address this, operational and technical data from UK-flagged vessels over 5000 GT are analysed using a capital budgeting framework. This includes scenario-based evaluation of speed reduction, payload limitation, and retrofitting with dual-fuel LNG and methanol engines. The analysis integrates carbon taxation, and pilot fuel use to assess impacts on emissions and profitability. The findings reveal that while the short-term operational measures examined offer modest gains, long-term compliance and financial performance are best achieved through targeted retrofitting supported by carbon taxes and favourable market conditions. The study provides actionable insights for shipowners and policymakers seeking to align commercial viability with regulatory obligations under the evolving CII framework. Full article
(This article belongs to the Special Issue Featured Papers in Climate Finance)
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21 pages, 703 KiB  
Article
Behind the Screens: Digital Transformation and Tax Policy
by Zahra Souguir, Naima Lassoued, Imen Khanchel and Eya Bejaoui
J. Risk Financial Manag. 2025, 18(7), 390; https://doi.org/10.3390/jrfm18070390 - 15 Jul 2025
Viewed by 349
Abstract
This study investigates the impact of digital transformation on corporate tax avoidance in the banking industry, focusing on banks in the Middle East and North Africa (MENA). This study employs regression analysis on a sample of 123 banks in the MENA region, covering [...] Read more.
This study investigates the impact of digital transformation on corporate tax avoidance in the banking industry, focusing on banks in the Middle East and North Africa (MENA). This study employs regression analysis on a sample of 123 banks in the MENA region, covering the period from 2011 to 2022. The results indicate a negative relationship between digital transformation and tax avoidance, with conventional banks showing a stronger inclination to adopt these trends compared to Islamic banks. Digital transformation is identified as an effective mechanism that enhances transparency and mitigates tax avoidance activities. Full article
(This article belongs to the Special Issue Tax Avoidance and Earnings Management)
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26 pages, 354 KiB  
Article
Book–Tax Differences and Earnings Persistence: The Moderating Role of Sales Decline
by Mark Anderson and Sina Rahiminejad
J. Risk Financial Manag. 2025, 18(7), 389; https://doi.org/10.3390/jrfm18070389 - 14 Jul 2025
Viewed by 311
Abstract
This study investigates why firms with large book–tax differences (BTDs) exhibit lower earnings persistence, particularly during periods of revenue declines. While prior literature has linked BTDs, especially large positive BTDs (LPBTDs), to earnings management, we propose an alternative explanation rooted in operational disruptions. [...] Read more.
This study investigates why firms with large book–tax differences (BTDs) exhibit lower earnings persistence, particularly during periods of revenue declines. While prior literature has linked BTDs, especially large positive BTDs (LPBTDs), to earnings management, we propose an alternative explanation rooted in operational disruptions. Using a large panel of U.S. firms from 1995 to 2016, we examine whether short-term earnings persistence is affected by sales trends and the direction of BTDs. Our findings reveal that both large positive and large negative BTDs are significantly associated with reduced earnings persistence when sales decline. The effect is pronounced in both accrual and cash flow components of earnings. We develop and test a framework based on “operations theory,” which attributes this reduction to real business shocks, such as asset write-downs, facility closures, and reserve adjustments, that arise during sales decline periods. These results highlight the importance of distinguishing operationally driven BTDs from those arising through discretionary accruals. Our findings have implications for investors, regulators, and researchers seeking to interpret BTDs more accurately in volatile economic environments. Full article
(This article belongs to the Special Issue Tax Avoidance and Earnings Management)
27 pages, 1115 KiB  
Article
The Impact of Cost Stickiness on R&D Investment and Corporate Performance: An Empirical Analysis of Japanese Firms
by Shoichiro Hosomi and Gongye Ge
J. Risk Financial Manag. 2025, 18(7), 388; https://doi.org/10.3390/jrfm18070388 - 14 Jul 2025
Viewed by 382
Abstract
This study examines the impact of cost stickiness on research and development (R&D) investment and corporate performance in Japanese firms. Additionally, it investigates the moderating effect of managerial overconfidence and financial slack. To do so, we analysed a sample of 4877 observations from [...] Read more.
This study examines the impact of cost stickiness on research and development (R&D) investment and corporate performance in Japanese firms. Additionally, it investigates the moderating effect of managerial overconfidence and financial slack. To do so, we analysed a sample of 4877 observations from Japanese firms listed on the Tokyo Stock Exchange between 2014 and 2020. The results show that cost stickiness generally promotes R&D investment while negatively affecting corporate performance. Further, although managerial overconfidence does not moderate the relationship between cost stickiness and R&D investment, it weakens the negative effect of cost stickiness on corporate performance. Meanwhile, financial slack strengthens the positive impact of cost stickiness on R&D investment, but it does not moderate the relationship between cost stickiness and corporate performance. These findings provide strategic insights into resource allocation behaviour in driving innovation and influencing corporate outcomes in the Japanese market context. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
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15 pages, 280 KiB  
Article
From Risk Preferences to Portfolios: Comparing SCF Risk Scales and Their Predictive Power for Asset Ownership
by Shane Heddy, Congrong Ouyang and Yu Zhang
J. Risk Financial Manag. 2025, 18(7), 387; https://doi.org/10.3390/jrfm18070387 - 12 Jul 2025
Viewed by 345
Abstract
This study compares two risk tolerance scales used in the Survey of Consumer Finances (SCF), namely the long-standing 4-point scale and the newer 11-point scale, to determine which better captures an individual’s investment risk preferences. The analysis includes exploring how each scale relates [...] Read more.
This study compares two risk tolerance scales used in the Survey of Consumer Finances (SCF), namely the long-standing 4-point scale and the newer 11-point scale, to determine which better captures an individual’s investment risk preferences. The analysis includes exploring how each scale relates to household demographics, socioeconomic factors, and ownership of risky versus conservative investments. By utilizing prospect theory, the findings reveal that while both scales effectively measure risk tolerance, the 11-point scale provides a more detailed understanding of differences in asset ownership across risk levels. For financial professionals, these results highlight the value of using a more granular risk assessment tool to better align investment strategies with client preferences, leading to improved client relationships and outcomes. Full article
(This article belongs to the Section Risk)
31 pages, 1822 KiB  
Article
Banking Supervision and Risk Management in Times of Crisis: Evidence from Greece’s Systemic Banks (2015–2024)
by Georgios Dedeloudis, Petros Lois and Spyros Repousis
J. Risk Financial Manag. 2025, 18(7), 386; https://doi.org/10.3390/jrfm18070386 - 11 Jul 2025
Viewed by 500
Abstract
This study examines the role of supervisory frameworks in shaping the risk management behavior of Greece’s four systemic banks during the period of 2015–2024. It explores how regulatory reforms under Capital Requirements Regulation II, Basel III, and European Central Bank oversight influenced capital [...] Read more.
This study examines the role of supervisory frameworks in shaping the risk management behavior of Greece’s four systemic banks during the period of 2015–2024. It explores how regulatory reforms under Capital Requirements Regulation II, Basel III, and European Central Bank oversight influenced capital adequacy, asset quality, and liquidity metrics. Employing a quantitative methodology, this study analyzes secondary data from Pillar III disclosures, annual financial reports, and supervisory statements. Key risk indicators (capital adequacy ratio, non-performing exposure ratio, liquidity coverage ratio, and risk-weighted assets) are evaluated in conjunction with regulatory interventions, such as International Financial Reporting Standards 9 transitional relief, the Hercules Asset Protection Scheme, and European Central Bank liquidity measures. The findings reveal that enhanced supervision contributed to improved resilience and regulatory compliance. International Financial Reporting Standards 9 transitional arrangements were pivotal in maintaining capital thresholds during stress periods. Supervisory flexibility and extraordinary European Central Bank support measures helped banks absorb shocks and improve risk governance. Differences across banks highlight the impact of institutional strategy on regulatory performance. This study offers a rare longitudinal assessment of supervisory influence on bank risk behavior in a high-volatility Eurozone context. Covering an entire decade (2015–2024), it uniquely links institutional strategies with evolving regulatory frameworks, including crisis-specific interventions such as International Financial Reporting Standards 9 relief and asset protection schemes. The results provide insights for policymakers and regulators on how targeted supervisory interventions and transitional mechanisms can enhance banking sector resilience during protracted crises. Full article
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14 pages, 296 KiB  
Article
Determinants of Capital Structure: Does Growth Opportunity Matter?
by Ndonwabile Zimasa Mabandla and Godfrey Marozva
J. Risk Financial Manag. 2025, 18(7), 385; https://doi.org/10.3390/jrfm18070385 - 11 Jul 2025
Viewed by 394
Abstract
This study explores the impact of growth opportunities on the capital structure of South African banks, utilising panel data from registered banking institutions covering the period from 2014 to 2023. While a substantial body of literature examines the relationship between growth prospects and [...] Read more.
This study explores the impact of growth opportunities on the capital structure of South African banks, utilising panel data from registered banking institutions covering the period from 2014 to 2023. While a substantial body of literature examines the relationship between growth prospects and corporate leverage, limited attention has been paid to this interaction within the banking sector, particularly in emerging economies. By employing the dynamic panel Generalised Method of Moments (GMM) estimator to address endogeneity concerns, the analysis reveals a statistically significant positive relationship between growth opportunities and both the total debt ratio (TDR) and the long-term debt ratio (LTDR). In contrast, a significant negative association is found between growth opportunities and the short-term debt ratio (STDR). The findings suggest that banks with stronger growth prospects are more inclined to utilise long-term financing, possibly reflecting shareholder preferences for institutions with favourable future outlooks and lower refinancing risks. These results highlight the importance of aligning capital structure decisions with an institution’s growth trajectory, while indicating that this relationship shifts depending on the maturity of the debt considered. This study contributes to the existing literature by contextualising capital structure decisions within the framework of growth opportunities. Structure theory within the context of the banking sector in a developing market offers practical insights for strategic financial planning and regulatory policy. Full article
(This article belongs to the Section Financial Markets)
25 pages, 1164 KiB  
Article
The Information Content of the Deferred Tax Valuation Allowance: Evidence from Venture-Capital-Backed IPO Firms
by Eric Allen
J. Risk Financial Manag. 2025, 18(7), 384; https://doi.org/10.3390/jrfm18070384 - 11 Jul 2025
Viewed by 269
Abstract
This study examines the deferred tax valuation allowance disclosures of a sample of venture-capital-backed IPO firms that incurred a net operating loss (NOL) in the period prior to their public offering (IPO). I find that 82 percent of these firms record an allowance [...] Read more.
This study examines the deferred tax valuation allowance disclosures of a sample of venture-capital-backed IPO firms that incurred a net operating loss (NOL) in the period prior to their public offering (IPO). I find that 82 percent of these firms record an allowance that reduces the associated deferred tax asset to zero, that the choice to record the allowance is largely driven by a firm’s history of losses, and that the allowance is associated with lower future book income. I further propose a new explanation for the presence of the allowance: the Section 382 ownership change limitation, which can cause firms to record an allowance independent of their past profitability or expectations about future earnings. I find that firms consider this limitation when recording the allowance, and that controlling for it can enhance the signal regarding future income. Full article
(This article belongs to the Special Issue Tax Avoidance and Earnings Management)
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23 pages, 504 KiB  
Article
Non-Performing Loans and Their Impact on Investor Confidence: A Signaling Theory Perspective—Evidence from U.S. Banks
by Richard Arhinful, Bright Akwasi Gyamfi, Leviticus Mensah and Hayford Asare Obeng
J. Risk Financial Manag. 2025, 18(7), 383; https://doi.org/10.3390/jrfm18070383 - 10 Jul 2025
Viewed by 643
Abstract
Bank operations are contingent upon investor confidence, particularly during periods of economic distress. If investor confidence drops, a bank faces difficulties obtaining money, higher borrowing costs, and lower stock values. Non-performing loans (NPLs) potentially jeopardize a bank’s long-term viability and short-term profitability, and [...] Read more.
Bank operations are contingent upon investor confidence, particularly during periods of economic distress. If investor confidence drops, a bank faces difficulties obtaining money, higher borrowing costs, and lower stock values. Non-performing loans (NPLs) potentially jeopardize a bank’s long-term viability and short-term profitability, and investors are naturally wary of institutions that pose a high credit risk. The purpose of the study was to explore how non-performing loans influence investor confidence in banks. A purposive sampling technique was used to identify 253 New York Stock Exchange banks in the Thomson Reuters Eikon DataStream that satisfied all the inclusion and exclusion selection criteria. The Common Correlated Effects Mean Group (CCEMG) and Generalized Method of Moments (GMM) models were used to analyze the data, providing insight into the relationship between the variables. The study discovered that NPLs had a negative and significant influence on price–earnings (P/E) and price-to-book value (P/B) ratios. Furthermore, the bank’s age was found to have a positive and significant relationship with the P/E and P/B ratio. The moderating relationship between NPLs and bank age was found to have a negative and significant influence on price–earnings (P/E) and price-to-book value (P/B) ratios. The findings underscore the importance of asset quality and institutional reputation in influencing market perceptions. Bank managers should focus on managing non-performing loans effectively and leveraging institutional credibility to sustain investor confidence, particularly during financial distress. Full article
(This article belongs to the Special Issue Financial Markets and Institutions and Financial Crises)
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16 pages, 357 KiB  
Article
Socially Responsible Investing: Is Social Media an Influencer?
by Mindy Joseph, Congrong Ouyang and Joanne DeVille
J. Risk Financial Manag. 2025, 18(7), 382; https://doi.org/10.3390/jrfm18070382 - 9 Jul 2025
Viewed by 368
Abstract
As digital connectivity transforms financial decision-making, this study offers one of the first empirical investigations into the relationship between social media use and socially responsible investing (SRI). Using data from the 2021 National Financial Capability Study, multinomial regression analysis was used to explore [...] Read more.
As digital connectivity transforms financial decision-making, this study offers one of the first empirical investigations into the relationship between social media use and socially responsible investing (SRI). Using data from the 2021 National Financial Capability Study, multinomial regression analysis was used to explore whether people who rely on social media for investment decisions were more likely to invest in ways that reflect their values. The results show that investors who use social media for investment information are more likely to value being socially responsible as an important reason for investing. Younger, less experienced, and more risk-tolerant investors were especially likely to follow SRI strategies, and certain platforms like Twitter were more associated with SRI interest than others. These findings suggest that social media is not just a platform for sharing information; it may also shape how people think about investing and the role their money can play in making a societal difference. As online platforms continue to influence financial behavior, understanding their impact on values-based investing becomes increasingly important. This research contributes novel insights to the emerging intersection of social media, behavioral finance, and values-driven investing. Full article
(This article belongs to the Section Financial Markets)
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17 pages, 445 KiB  
Article
From Boom to Bust: Unravelling the Cyclical Nature of Fiji’s Money Demand
by Nikeel Nishkar Kumar, Kulsoom Bibi and Rajesh Mohnot
J. Risk Financial Manag. 2025, 18(7), 381; https://doi.org/10.3390/jrfm18070381 - 9 Jul 2025
Viewed by 325
Abstract
This study investigates cyclical asymmetries in money demand models considering the moderating effect of financial development. Prior research has overlooked this issue in the money demand literature within the Fijian context, where research is outdated. Using annual data from 1983 to 2023, we [...] Read more.
This study investigates cyclical asymmetries in money demand models considering the moderating effect of financial development. Prior research has overlooked this issue in the money demand literature within the Fijian context, where research is outdated. Using annual data from 1983 to 2023, we find that income elasticity is about positive unity, irrespective of recessions or expansions. In expansions, an increase in interest rates reduces money demand. An increase in interest rates reduces money demand nine times more strongly in recessions. These effects are accentuated with financial development. Declining interest rates do not impact money demand. The findings suggest that stable money demand could be achievable, but only once the impact of structural breaks is accounted for. Under ideal conditions—without such breaks—money demand exhibits stability, and its connection to income and interest rates appears predictable. However, in reality, structural disruptions complicate this relationship, making money demand less consistent with its key drivers and undermining the reliability of money supply as a monetary policy instrument. The findings align with the pulling on a string hypothesis that monetary contractions control inflation, but expansions may not impact output. Full article
(This article belongs to the Special Issue Advances in Macroeconomics and Financial Markets)
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23 pages, 1305 KiB  
Systematic Review
Biological Assets in Agricultural Accounting: A Systematic Review of the Application of IAS 41
by Priscila Campos-Llerena, Mauricio Arias-Pérez, Cecilia Toscano-Morales and Carlos Barreno-Córdova
J. Risk Financial Manag. 2025, 18(7), 380; https://doi.org/10.3390/jrfm18070380 - 9 Jul 2025
Viewed by 609
Abstract
The valuation of biological assets represents a crucial component for the generation of accounting information, especially in the context of the agricultural sector, where assets subject to continuous transformation processes predominate. This study aims to analyze, through a systematic review of the literature, [...] Read more.
The valuation of biological assets represents a crucial component for the generation of accounting information, especially in the context of the agricultural sector, where assets subject to continuous transformation processes predominate. This study aims to analyze, through a systematic review of the literature, how the measurement methods established by International Accounting Standard 41 (IAS 41) affect the quality, accuracy, and usefulness of accounting reports. The results show that the correct valuation of biological assets significantly improves strategic and financial decision-making by providing more reliable and representative data on the economic reality of the sector. Finally, the study highlights the main practical challenges in the application of IAS 41, including fair value volatility, the subjectivity of estimates, the limited availability of reliable data, and the need for more flexible accounting frameworks that consider the cultural, climatic, and productive realities of each environment. Based on these findings, the importance of strengthening transparency and accounting disclosure and adapting measurement methods to the particularities of the agricultural sector in order to improve the quality of information and the confidence of external users is highlighted. Full article
(This article belongs to the Special Issue Financial and Sustainability Reporting in a Digital Era, 2nd Edition)
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23 pages, 395 KiB  
Article
What Is Green Fintech?
by Daniel Broby and Zhenjia Yang
J. Risk Financial Manag. 2025, 18(7), 379; https://doi.org/10.3390/jrfm18070379 - 8 Jul 2025
Viewed by 392
Abstract
This paper addresses the definitional ambiguity surrounding the term “green fintech” and its distinction from related concepts such as green finance and sustainable finance. We argue that the lack of clarity impedes accountability and facilitates greenwashing. To resolve this, we develop a conceptual [...] Read more.
This paper addresses the definitional ambiguity surrounding the term “green fintech” and its distinction from related concepts such as green finance and sustainable finance. We argue that the lack of clarity impedes accountability and facilitates greenwashing. To resolve this, we develop a conceptual framework grounded in a six-step “litmus test” that specifies the necessary conditions for an initiative to qualify as green fintech. These include demonstrable environmental objectives, the application of innovative financial technologies, and regulatory alignment. The test functions as a diagnostic tool, enhancing verifiability and reducing the risk of misrepresentation. We illustrate its practical use and integrate the Dynamic Integrated Model of Climate and the Economy (DICE) to support the analysis. Green fintech is defined as the implementation of green climate objectives through the medium of financial technology. This contribution provides both definitional precision and a means to assess the credibility of green fintech initiatives, offering clarity in an increasingly complex and contested area of sustainable finance. Full article
(This article belongs to the Special Issue Financial Technology (Fintech) and Sustainable Financing, 3rd Edition)
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27 pages, 363 KiB  
Article
CEO Dynamics and Real Earnings Management: A Gender Diversity Perspective from Sub-Saharan Africa
by Onyinyechi Precious Edeh, Ovbe Simon Akpadaka, Musa Adeiza Farouk and Musa Inuwa Fodio
J. Risk Financial Manag. 2025, 18(7), 378; https://doi.org/10.3390/jrfm18070378 - 8 Jul 2025
Viewed by 381
Abstract
Sub-Saharan Africa’s (SSA) corporate environment, like many emerging markets, is marked by institutional voids, weak oversight structures, and patriarchal leadership norms, which heighten the risk of real earnings management (REM). This study examines how CEO characteristics and audit committee gender diversity influence REM [...] Read more.
Sub-Saharan Africa’s (SSA) corporate environment, like many emerging markets, is marked by institutional voids, weak oversight structures, and patriarchal leadership norms, which heighten the risk of real earnings management (REM). This study examines how CEO characteristics and audit committee gender diversity influence REM among listed manufacturing firms in 12 SSA countries from 2012 to 2023. Anchored in agency theory and Upper Echelon Theory, this study draws on 1189 firm-year observations and employs Pooled OLS, Random Effects, Fixed Effects, Feasible Generalised Least Squares (FGLS), and System GMM estimators. Findings show that female CEOs are consistently associated with lower REM, underscoring the ethical conservatism linked to gender-inclusive leadership. CEO ownership shows a positive and significant association with REM in System GMM, though findings vary across models, indicating potential institutional effects. The firm size is negatively and significantly related to REM in Pooled, RE, and FGLS models, but becomes nonsignificant in FE and System GMM, suggesting the role of external scrutiny may be sensitive to model dynamics. Leverage exhibits a positive and significant relationship with REM in most models, but turns negative and nonsignificant under System GMM, pointing to endogeneity concerns. Interaction effects and country-specific regressions affirm that governance impacts differ across contexts. Policy reforms should prioritise gender-diverse leadership and tailored oversight mechanisms. Full article
(This article belongs to the Section Business and Entrepreneurship)
25 pages, 548 KiB  
Article
Does Sustainability Pay Off? Examining Governance, Performance, and Debt Costs in Southeast Asian Companies (A Survey of Public Companies in Indonesia, Malaysia, Singapore, and Thailand for the 2021–2023 Period)
by Fransisca Fransisca, Arie Pratama and Kamaruzzaman Muhammad
J. Risk Financial Manag. 2025, 18(7), 377; https://doi.org/10.3390/jrfm18070377 - 7 Jul 2025
Viewed by 370
Abstract
Sustainability performance is an important criterion for investors and lenders when making financing decisions. This study aims to analyze whether sustainability governance influences sustainability performance and the extent to which sustainability performance affects a company’s cost of debt. This study analyzed 209 publicly [...] Read more.
Sustainability performance is an important criterion for investors and lenders when making financing decisions. This study aims to analyze whether sustainability governance influences sustainability performance and the extent to which sustainability performance affects a company’s cost of debt. This study analyzed 209 publicly listed companies in Indonesia, Malaysia, Singapore, and Thailand. Sustainability governance was measured using two proxies from the Refinitiv Eikon database: (1) the existence of a sustainability committee and (2) the existence of sustainability assurance. Sustainability performance and the cost of debt were assessed using scores obtained from the same database. Quantitative analysis was performed using descriptive statistics, ANOVA, and structural equation modeling (SEM) with path analysis. The results showed that sustainability governance has a strong positive impact on sustainability performance. However, the results also show that higher sustainability performance leads to a higher cost of debt. This finding suggests that companies that integrate sustainability into their core business strategies face challenges in obtaining funding to support sustainability initiatives. This research implies that a well-developed sustainable ecosystem needs to be established before companies can realize a lower cost of debt. Full article
(This article belongs to the Section Sustainability and Finance)
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16 pages, 692 KiB  
Article
Exchange Rate Volatility and Its Impact on International Trade: Evidence from Zimbabwe
by Iveny Makore and Chisinga Ngonidzashe Chikutuma
J. Risk Financial Manag. 2025, 18(7), 376; https://doi.org/10.3390/jrfm18070376 - 7 Jul 2025
Viewed by 1629
Abstract
Zimbabwe’s economy has experienced extreme exchange rate fluctuations over the past decades, driven by persistent macroeconomic instability and episodes of hyperinflation. The instability in exchange rates can significantly impact trade balances, inflation rates, and overall economic resilience. Understanding the impact of exchange rate [...] Read more.
Zimbabwe’s economy has experienced extreme exchange rate fluctuations over the past decades, driven by persistent macroeconomic instability and episodes of hyperinflation. The instability in exchange rates can significantly impact trade balances, inflation rates, and overall economic resilience. Understanding the impact of exchange rate volatility (ERV) on international trade is crucial in such a context. This study investigates the impact of exchange rate volatility (ERV) on international trade in Zimbabwe, addressing a literature gap related to its unique economic challenges and hyperinflation. Using the Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model on data from 1990 to 2023, the study finds a negative relationship between ERV and international trade. The analysis suggests that inflation reduces imports, but foreign direct investment (FDI) and balance of payments (BOP) increase export uncertainties. This study recommends optimal fiscal and monetary management to mitigate ERV and enhance trade stability, offering insights for policymakers to strengthen Zimbabwe’s trade resilience amid exchange rate fluctuations. Full article
(This article belongs to the Section Financial Markets)
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