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Volume 13
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Int. J. Financial Stud., Volume 13, Issue 1 (March 2025) – 47 articles

Cover Story (view full-size image): Inflation remained quiescent for several decades before surging in 2021 and 2022. Inflation subsequently decelerated in 2023 and 2024. This paper investigates how the increase and decrease in inflation after 2019 affected the U.S. stock market. To this end, a fully specified multi-factor model that measures the exposure of 54 assets to inflation, monetary policy, and other macroeconomic variables over the period from 1994 to 2019 is created. Inflation betas are then used to investigate how investor perceptions of inflation changed between 2020 and 2024. The results indicate that concerns surrounding inflation roiled the stock market over this period. The Fed’s anti-inflationary policies whipsawed markets even further. These findings highlight the dangers that arise when monetary policy allows inflation to accelerate. View this paper
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20 pages, 863 KiB  
Article
The Interplay of Financial Safety Nets, Long-Term Goals, and Saving Habits: A Moderated Mediation Study
by Congrong Ouyang, Mindy Joseph, Yu Zhang and Khurram Naveed
Int. J. Financial Stud. 2025, 13(1), 47; https://doi.org/10.3390/ijfs13010047 - 20 Mar 2025
Viewed by 477
Abstract
Household savings are a long-term financial issue that can undermine the financial well-being of American families if not addressed. This study examines financial planning strategies through the Behavioral Life-Cycle (BLCH) hypothesis, focusing on long-term savings goals, financial safety nets, and foreseeable expenses. Using [...] Read more.
Household savings are a long-term financial issue that can undermine the financial well-being of American families if not addressed. This study examines financial planning strategies through the Behavioral Life-Cycle (BLCH) hypothesis, focusing on long-term savings goals, financial safety nets, and foreseeable expenses. Using data from the 2022 Survey of Consumer Finances, a moderated mediation model explores how financial safety nets, self-control, and mental accounting influence saving habits. The findings show that long-term savings goals significantly mediate the relationship between financial safety nets and saving habits, while foreseeable expenses do not significantly moderate this relationship. These results highlight the importance of goal setting in promoting saving behaviors, regardless of specific financial needs. Policymakers can leverage these findings to design initiatives that encourage structured savings programs, while financial advisors should emphasize goal-setting strategies to help households improve their financial security. This research contributes to a deeper understanding of the behavioral and economic factors that drive personal savings, offering valuable insights for both policymakers and financial practitioners aiming to boost financial well-being in households. Full article
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24 pages, 640 KiB  
Article
Towards Common Prosperity: Accelerated Depreciation Policy of Fixed Assets and Labor Income Share
by Ying Yang and Bing Zeng
Int. J. Financial Stud. 2025, 13(1), 46; https://doi.org/10.3390/ijfs13010046 - 17 Mar 2025
Viewed by 391
Abstract
While achieving common prosperity necessitates a focus on the efficiency and equity of the primary income distribution, income inequality persists in China. As a critical tax incentive mechanism, China’s Accelerated Depreciation Policy (ADP) of fixed assets not only promotes important changes in corporate [...] Read more.
While achieving common prosperity necessitates a focus on the efficiency and equity of the primary income distribution, income inequality persists in China. As a critical tax incentive mechanism, China’s Accelerated Depreciation Policy (ADP) of fixed assets not only promotes important changes in corporate productivity and production methods but also significantly influences the primary income distribution within enterprises. However, current research offers a limited understanding of the importance of the ADP in the primary income distribution. Given that the core of the primary distribution lies in adjusting the labor income share, we regard 2014’s ADP as an exogenous “quasi-natural experiment”. After theoretically analyzing this policy’s effect on the labor income share of enterprises, our use of difference in differences (DID) validates our theoretical expectations with respect to China’s A-share listed companies during 2010–2022. The results show that the ADP can significantly increase enterprises’ labor income share; all hypotheses proved to be robust. The analysis of mechanisms shows that the ADP mainly affects the labor income share as it upgrades the corporate human capital structure as well as rent-sharing. Analyzing for heterogeneity, we find that positive effects due to the ADP affecting the labor income share are more prominent among private enterprises, medium and small-sized firms, companies with high financing constraints, capital-intensive industries, manufacturing enterprises, and those with a high level of skilled labor. The conclusions of this study contribute to uncovering the impacts of the ADP on income distribution, offering a clearer identification of particular mechanisms explaining the ADP’s effect on the labor income share. It holds significant theoretical value for understanding the micro-mechanisms of economic impacts generated by relevant policies. Furthermore, it provides policy insights in achieving common prosperity. Full article
(This article belongs to the Topic The Multidimensional Synergy Measures to Achieve Sustainable Regional Socio-Economic Development)
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30 pages, 1249 KiB  
Article
Profitability, Efficiency, and Market Structure in the Meat and Milk Processing Industry: Evidence from Central Europe
by Zdeňka Žáková Kroupová and Gabriela Trnková
Int. J. Financial Stud. 2025, 13(1), 45; https://doi.org/10.3390/ijfs13010045 - 10 Mar 2025
Viewed by 673
Abstract
This study aims to investigate the impact of the market structure and efficiency on firm performance in the meat and milk processing industry in Poland, Czechia, and Slovakia. Using stochastic frontier analysis and a profitability regression model applied to data from 2015 to [...] Read more.
This study aims to investigate the impact of the market structure and efficiency on firm performance in the meat and milk processing industry in Poland, Czechia, and Slovakia. Using stochastic frontier analysis and a profitability regression model applied to data from 2015 to 2021, the results indicate no evidence of collusive behavior in the examined markets. Instead, profitability is significantly driven by efficiency, supporting the hypothesis of an efficient market structure. Companies with higher market shares do not exploit their market power to set higher prices and increase profitability. The findings highlight efficiency as a critical determinant of performance in unconcentrated markets, offering valuable insights for stakeholders in the food processing industry and policymakers. Full article
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19 pages, 323 KiB  
Article
The Effects of Financial Knowledge, Skill, and Self-Assessed Knowledge on Financial Well-Being, Behavior, and Objective Situation
by Nathan Phelps and Adam Metzler
Int. J. Financial Stud. 2025, 13(1), 44; https://doi.org/10.3390/ijfs13010044 - 6 Mar 2025
Viewed by 785
Abstract
The effects of certain abilities on financial outcomes have been debated for several years. Some argue that financial knowledge is key to financial success, while others have found financial skill and self-assessed knowledge are more important. This study contributes to this debate by [...] Read more.
The effects of certain abilities on financial outcomes have been debated for several years. Some argue that financial knowledge is key to financial success, while others have found financial skill and self-assessed knowledge are more important. This study contributes to this debate by providing a descriptive analysis, whereby regression is used to study the simultaneous effects of financial knowledge, financial skill, and self-assessed knowledge on financial well-being, financial behavior, and objective financial situation. Although our methodology does not allow us to determine if relationships are causal, we show that self-assessed knowledge has little to no relationship with financial well-being, may have contrasting relationships with components of objective financial situation, and is weakly associated with good financial behaviors. Financial skill has the strongest relationship with financial well-being and financial behaviors, as well as some components of objective financial situation. Despite having a relatively weak (compared to financial skill) association with financial well-being and financial behaviors, financial knowledge has the strongest relationship with many components of objective financial situation. Full article
(This article belongs to the Special Issue Advance in the Theory and Applications of Financial Literacy)
16 pages, 304 KiB  
Article
Capital Structure Decisions in Swedish Biotechnology Firms: The Role of Intellectual Capital and Innovation Activities
by Kritthana Kimuam, Björn Berggren and Ida Ayu Agung Faradynawati
Int. J. Financial Stud. 2025, 13(1), 43; https://doi.org/10.3390/ijfs13010043 - 5 Mar 2025
Viewed by 627
Abstract
Biotechnology firms operate in a highly innovative and capital-intensive environment, characterized by high levels of R&D, long product development periods, significant regulations, and high levels of uncertainty. These firms rely heavily on intangible assets, such as intellectual capital and innovation. Consequently, intellectual capital [...] Read more.
Biotechnology firms operate in a highly innovative and capital-intensive environment, characterized by high levels of R&D, long product development periods, significant regulations, and high levels of uncertainty. These firms rely heavily on intangible assets, such as intellectual capital and innovation. Consequently, intellectual capital and innovation activities play a crucial role in financial strategies and capital structure decisions. This study aims to examine how intellectual capital and innovation activity influence capital structure decisions of biotech firms in Sweden. In this paper, financial data of 1528 companies from 2012 to 2022 were analyzed. Using logistic regression modeling, the results showed that biotech firms with higher intellectual capital are more likely to issue equity whereas those with greater innovation activity tend to rely more on debt financing. These findings underscore the complexities of financial strategy in the biotech sector, emphasizing the need for flexible capital structure management. Moreover, policymakers should focus not only on equity availability but also on ensuring access to debt financing, as both are crucial for sustaining biotech innovation and growth. Full article
19 pages, 510 KiB  
Article
Pricing the Audit Risk of Innovation: Intangibles and Patents
by Daqun Zhang, Donald R. Deis and Hsiao-Tang Hsu
Int. J. Financial Stud. 2025, 13(1), 42; https://doi.org/10.3390/ijfs13010042 - 4 Mar 2025
Viewed by 751
Abstract
The economic literature documents that the investment rate in intangible assets, including intellectual property (IP), has far outpaced that of tangible assets for several decades. In this context, our research delves into the impact of self-created intangible assets on the auditor’s risk assessment. [...] Read more.
The economic literature documents that the investment rate in intangible assets, including intellectual property (IP), has far outpaced that of tangible assets for several decades. In this context, our research delves into the impact of self-created intangible assets on the auditor’s risk assessment. We present compelling evidence that, on average, research and development (R&D) knowledge capital is associated with higher audit fees. Using patent-based metrics as the proxies for innovation outcomes, we reveal that the number of patents (quantity), patent citations (quality-adjusted quantity), and patent technology classes (scope) all positively correlate with audit fees. Additional analyses show that innovation efficiency is negatively associated with audit fees. Furthermore, firms with a higher intensity of knowledge capital are more likely to receive going concern opinions than those with significant innovation outcomes. These findings provide valuable insights into the complex relationship between intangible assets and audit risk assessment. Full article
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21 pages, 585 KiB  
Article
Financial Bootstrapping: A Case of Women Entrepreneurs in Context of Digital Economy
by Saeed Alhammadi and Syed Abidur Rahman
Int. J. Financial Stud. 2025, 13(1), 41; https://doi.org/10.3390/ijfs13010041 - 4 Mar 2025
Viewed by 873
Abstract
Women entrepreneurs in the Middle Eastern region, particularly in the United Arab Emirates (UAE), face several challenges (e.g., cultural) coupled with the recent transformation of the digital economy. This issue poses a significant challenge for financing the business operations. Thus, this study aims [...] Read more.
Women entrepreneurs in the Middle Eastern region, particularly in the United Arab Emirates (UAE), face several challenges (e.g., cultural) coupled with the recent transformation of the digital economy. This issue poses a significant challenge for financing the business operations. Thus, this study aims to find the relationship between prior family business exposure, growth intention, motivation, and financial bootstrapping with the mediating role of prior experiences among women entrepreneurs in the UAE. A quantitative survey questionnaire method was used to collect responses from 318 women business owners in different regions of the UAE. The findings of the study suggest that there is a positive relationship between prior family business exposure and financial bootstrapping and growth intention and financial bootstrapping, and prior experience plays a mediating role among all exogenous variables. The study offers a unique perspective on the intersection between prior family business exposure, growth intention, motivation, and financial bootstrapping, highlighting the mediating role of prior experience in a demographical and geographic context (e.g., UAE) that is under-researched regarding financial strategies. Full article
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18 pages, 386 KiB  
Article
Do Financial Market Openness and Stock Market Returns Drive Economic Growth in GCC Countries? New Investigation from Panel Structural Breaks
by Hichem Saidi, Houssem Rachdi, Abdelaziz Hakimi and Khalil Alnabulsi
Int. J. Financial Stud. 2025, 13(1), 40; https://doi.org/10.3390/ijfs13010040 - 4 Mar 2025
Viewed by 780
Abstract
This paper revisits the effects of financial market openness and stock market returns on economic development in the Gulf Cooperation Council countries over the period 1993–2022. We performed the panel stationarity test advanced that accommodates the presence of multiple structural breaks and exploits [...] Read more.
This paper revisits the effects of financial market openness and stock market returns on economic development in the Gulf Cooperation Council countries over the period 1993–2022. We performed the panel stationarity test advanced that accommodates the presence of multiple structural breaks and exploits the cross-section variations. Empirical results from several panel tests provide strong support for the long-run positive effect of financial market openness on economic growth and a long-run negative association between stock market returns and growth. Findings of the robustness checks reveal that the effect of both financial market openness and stock market returns on economic growth differs across countries. Full article
18 pages, 425 KiB  
Article
The Impact of CEO Narcissism on Corporate Financialization
by Linan Wang, Rixin Li and Ruotong Zhao
Int. J. Financial Stud. 2025, 13(1), 39; https://doi.org/10.3390/ijfs13010039 - 4 Mar 2025
Viewed by 642
Abstract
This paper empirically examines the impact of CEO narcissism on corporate financialization using Shanghai and Shenzhen A-share listed companies from 2009–2022. The results find that CEO narcissism leads to corporate financialization, and the promotion is more significant in lower cash flow, smaller company [...] Read more.
This paper empirically examines the impact of CEO narcissism on corporate financialization using Shanghai and Shenzhen A-share listed companies from 2009–2022. The results find that CEO narcissism leads to corporate financialization, and the promotion is more significant in lower cash flow, smaller company size, and non-Big Four audited firms. The impact mechanism test finds that CEO narcissism leads to inefficient investment behaviors, increases agency costs, and thus, exacerbates corporate financialization. By exploring the relationship between CEO narcissism and corporate financialization in depth, this paper provides new perspectives and ideas for research in related fields. This study conducts an in-depth analysis of the underlying mechanisms through which CEO narcissism influences corporate financialization. It highlights that inefficient investment behavior and increased agency costs serve as key transmission channels, providing new theoretical support for understanding the complex drivers of corporate financialization. Therefore, this research not only expands the scope of studies on the relationship between CEO characteristics and corporate financial decision making but also offers new perspectives for explaining the phenomenon of corporate financialization and formulating governance strategies. Full article
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18 pages, 781 KiB  
Article
Robust Portfolio Selection Under Model Ambiguity Using Deep Learning
by Sadegh Miri, Erfan Salavati and Mostafa Shamsi
Int. J. Financial Stud. 2025, 13(1), 38; https://doi.org/10.3390/ijfs13010038 - 4 Mar 2025
Viewed by 743
Abstract
In this study, we address the ambiguity in portfolio optimization, particularly focusing on the uncertainty related to the statistical parameters governing asset returns. We propose a novel method that combines robust optimization with artificial neural networks (ANNs). Our approach effectively handles both the [...] Read more.
In this study, we address the ambiguity in portfolio optimization, particularly focusing on the uncertainty related to the statistical parameters governing asset returns. We propose a novel method that combines robust optimization with artificial neural networks (ANNs). Our approach effectively handles both the randomness inherent in asset prices and the ambiguity in their governing parameters. Through our method, we consider both simulated data, using the Exponential Ornstein–Uhlenbeck process, and real-world stock price data. The results showcase that our ANN-based method outperforms traditional benchmark methods such as equally weighted portfolio and adaptive mean–variance portfolio selection. Full article
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36 pages, 6451 KiB  
Article
Cryptocurrency Taxation: A Bibliometric Analysis and Emerging Trends
by Georgiana-Iulia Lazea, Maria-Roxana Balea-Stanciu, Ovidiu-Constantin Bunget, Anca-Diana Sumănaru and Ana-Maria Georgiana Coraș
Int. J. Financial Stud. 2025, 13(1), 37; https://doi.org/10.3390/ijfs13010037 - 3 Mar 2025
Viewed by 1560
Abstract
This article conducts a comprehensive bibliometric analysis of 182 papers to trace the progression of research on cryptocurrency taxation. The study highlights prevailing patterns, influential contributors, and collaborative networks by utilising data from Scopus and the Web of Science Core Collection from 2002 [...] Read more.
This article conducts a comprehensive bibliometric analysis of 182 papers to trace the progression of research on cryptocurrency taxation. The study highlights prevailing patterns, influential contributors, and collaborative networks by utilising data from Scopus and the Web of Science Core Collection from 2002 to 2023. The findings underscore an interdisciplinary character, encompassing studies in legal frameworks, fiscal policy, economics, and technology. By employing analytical tools such as VOSviewer 1.6.20, Bibliometrix 4.0 and Microsoft Excel, the study identifies key themes and concepts focused on four main themes: international tax frameworks and regulatory variations, classification and reporting of crypto-related income, tax implications for emerging crypto segments, and issues surrounding compliance and enforcement. Tax treatment differs based on jurisdiction. Direct taxation may be levied as capital gains, income, or profit tax. Although cryptocurrency exchanges are not subject to value-added tax, intermediary services offered by platforms might incur this indirect tax. The insights generated are valuable for policymakers, scholars, and professionals aiming to comprehend the relationship between cryptocurrency and tax regulation. A limitation of the study is its exclusion of sources beyond the established timeframe. Given the fast-paced changes in cryptocurrency tax regulation, ongoing updates are crucial to capturing the full scope of this evolving field. Full article
(This article belongs to the Special Issue Cryptocurrency Markets, Centralized Finance and Decentralized Finance)
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18 pages, 642 KiB  
Article
AI in Banking: What Drives Generation Z to Adopt AI-Enabled Voice Assistants in Saudi Arabia?
by Rotana S. Alkadi and Salma S. Abed
Int. J. Financial Stud. 2025, 13(1), 36; https://doi.org/10.3390/ijfs13010036 - 3 Mar 2025
Viewed by 1058
Abstract
The aim of this study is to examine the factors that drive Saudi Arabian Generation Z’s intention to use voice assistants (VAs) in banking. The Technology Acceptance Model (TAM) was extended by incorporating three additional constructs: subjective norms, which capture the social influence [...] Read more.
The aim of this study is to examine the factors that drive Saudi Arabian Generation Z’s intention to use voice assistants (VAs) in banking. The Technology Acceptance Model (TAM) was extended by incorporating three additional constructs: subjective norms, which capture the social influence of close relationships, including family and friends; personal innovativeness, which reflects the openness to new technologies that is characteristic of Generation Z; and perceived trust, which addresses concerns related to security and reliability that are critical in financial contexts, thereby enhancing our understanding of this phenomenon among Generation Z. A survey of 292 Generation Z respondents was collected and structural equation modeling (SEM) was employed for data analysis. The findings of the study reveal that factors such as perceived usefulness, attitude, subjective norms, personal innovativeness, and perceived trust all have a significantly positive impact on Generation Z’s intention to use AI-enabled VAs in banking. Additionally, the results indicate that perceived usefulness is influenced by ease of use, while attitude is affected by ease of use, perceived usefulness, personal innovativeness, and trust. Despite the Saudi government’s support and initiatives for the development of the AI-fintech industry, there is still a lack of understanding about consumer behavioral intention toward AI-enabled VAs in Saudi Arabia and, particularly among Generation Z. This study contributes to the existing literature and provides valuable recommendations for policymakers and fintech service providers seeking to implement effective AI-enabled VAs that enrich consumers’ engagement and experience. Full article
(This article belongs to the Special Issue Advancing Financial Stability and Performance Through AI and Digital Transformation)
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32 pages, 1014 KiB  
Article
Uncertainty, Risk, and Opaque Stock Markets
by José Gabriel Astaíza-Gómez
Int. J. Financial Stud. 2025, 13(1), 35; https://doi.org/10.3390/ijfs13010035 - 3 Mar 2025
Viewed by 741
Abstract
This study examined how uncertainty and global risk affect financial markets in emerging economies, focusing on foreign investment, CDS spreads, exchange rates, and stock return volatility. Using over 8.6 million ticker transaction observations and structural vector autoregression (VAR) models, the research found that [...] Read more.
This study examined how uncertainty and global risk affect financial markets in emerging economies, focusing on foreign investment, CDS spreads, exchange rates, and stock return volatility. Using over 8.6 million ticker transaction observations and structural vector autoregression (VAR) models, the research found that increases in Economic Policy Uncertainty (EPU) significantly reduce foreign net buys, more than global market volatility (VIX). While global volatility drives CDS spreads, these spreads influence exchange rates, causing currency depreciation. The findings highlight the interconnectedness of uncertainty, global risk, and market instability, offering insights for managing risks in opaque markets and improving financial stability. Full article
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22 pages, 356 KiB  
Article
How Foreign and Domestic Ownership Influenced Risk-Taking in GCC Banks
by Abdullah Aldousari, Ahmed Mohammed and Sarah Lindop
Int. J. Financial Stud. 2025, 13(1), 33; https://doi.org/10.3390/ijfs13010033 - 2 Mar 2025
Viewed by 743
Abstract
This study investigates the relationship between ownership structure (foreign and domestic) and bank risk-taking over the period 2014–2022. The analysis includes 66 banks operating in the GCC, divided into 44 domestically owned, and 22 foreign-owned banks. The research examines the relationship across two [...] Read more.
This study investigates the relationship between ownership structure (foreign and domestic) and bank risk-taking over the period 2014–2022. The analysis includes 66 banks operating in the GCC, divided into 44 domestically owned, and 22 foreign-owned banks. The research examines the relationship across two distinct periods: the pre-pandemic and the COVID-19 pandemic era, using the two-stage least squares (2SLS) method, and panel data techniques for robust analysis. The findings reveal that, in both periods, foreign-owned banks exhibited lower credit risk, greater cost efficiency, and less risk-taking compared to domestic counterparts. Domestic banks, while maintaining profitability, relied heavily on capital absorbency, which resulted in elevated credit risk and operational inefficiencies. These inefficiencies, observed among domestic banks, stem from inadequate monitoring of borrowers’ information and the occurrence of moral hazard. Foreign banks played a crucial role in supporting banking sector stability, as their presence enhanced the GDP growth. The results are in line with the “global advantage hypothesis”. Full article
(This article belongs to the Special Issue Emerging Trends in Global Foreign Direct Investment)
22 pages, 436 KiB  
Article
Strategic Impacts of RSUs on Company Performance: Insights into EPS and Profitability Growth
by Won (Albert) Park, Elena Sernova and Cheong-Yeul Park
Int. J. Financial Stud. 2025, 13(1), 34; https://doi.org/10.3390/ijfs13010034 - 1 Mar 2025
Viewed by 829
Abstract
Restricted stock units (RSUs) are a key component of executive compensation schemes, aligning executive incentives with the long-term goals of the company and compensating for the limitations of traditional stock options. This study empirically analyzes the impact of RSUs on corporate performance, particularly [...] Read more.
Restricted stock units (RSUs) are a key component of executive compensation schemes, aligning executive incentives with the long-term goals of the company and compensating for the limitations of traditional stock options. This study empirically analyzes the impact of RSUs on corporate performance, particularly earnings per share (EPS) and operating profit. S&P 500 companies’ 27 years of data from 1997 to 2023 were used to evaluate the change in performance before and after the introduction of RSUs, and a paired t-test and hierarchical regression analysis were applied. The research results show that the introduction of RSUs has a stronger performance improvement effect in the 6th to 10th year after the introduction, suggesting that over time, even if RSUs cause short-term cost burdens, they increase the company’s financial stability in the long term and contribute to sustainable growth. In addition, the same analysis was conducted by setting not only EPS but also operating profit as an alternative variable, and it was confirmed that RSUs also have a positive impact on actual profitability improvement. This study emphasizes the need for companies to design RSUs as a strategic compensation system for long-term value creation, not as a short-term performance reward, and suggests the need for a further analysis of the effects of RSUs in various industries and regions. Full article
30 pages, 736 KiB  
Article
Navigating Uncertainty in an Emerging Market: Data-Centric Portfolio Strategies and Systemic Risk Assessment in the Johannesburg Stock Exchange
by John W. M. Mwamba, Jules C. Mba and Anaclet K. Kitenge
Int. J. Financial Stud. 2025, 13(1), 32; https://doi.org/10.3390/ijfs13010032 - 1 Mar 2025
Viewed by 583
Abstract
This study investigates systemic risk, return patterns, and diversification within the Johannesburg Stock Exchange (JSE) during the COVID-19 pandemic, utilizing data-centric approaches and the ARMA-GARCH vine copula-based conditional value-at-risk (CoVaR) model. By comparing three investment strategies—industry sector-based, asset risk–return plot-based, and clustering-based—this research [...] Read more.
This study investigates systemic risk, return patterns, and diversification within the Johannesburg Stock Exchange (JSE) during the COVID-19 pandemic, utilizing data-centric approaches and the ARMA-GARCH vine copula-based conditional value-at-risk (CoVaR) model. By comparing three investment strategies—industry sector-based, asset risk–return plot-based, and clustering-based—this research reveals that the industrial and technology sectors show no ARCH effects and remain isolated from other sectors, indicating potential diversification opportunities. Furthermore, the analysis employs C-vine and R-vine copulas, which uncover weak tail dependence among JSE sectors. This finding suggests that significant fluctuations in one sector minimally impact others, thereby highlighting the resilience of the South African economy. Additionally, entropy measures, including Shannon and Tsallis entropy, provide insights into the dynamics and predictability of various portfolios, with results indicating higher volatility in the energy sector and certain clusters. These findings offer valuable guidance for investors and policymakers, emphasizing the need for adaptable risk management strategies, particularly during turbulent periods. Notably, the industrial sector’s low CoVaR values signal stability, encouraging risk-tolerant investors to consider increasing their exposure. In contrast, others may explore diversification and hedging strategies to mitigate risk. Interestingly, the industry sector-based portfolio demonstrates better diversification during the COVID-19 crisis than the other two data-centric portfolios. This portfolio exhibits the highest Tsallis entropy, suggesting it offers the best diversity among the types analyzed, albeit said diversity is still relatively low overall. However, the portfolios based on groups and clusters of sectors show similar levels of diversity and concentration, as indicated by their identical entropy values. Full article
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25 pages, 4215 KiB  
Article
A Real Option Approach to the Valuation of the Default Risk of Residential Mortgages
by Angela C. De Luna López, Prosper Lamothe-López, Walter L. De Luna Butz and Prosper Lamothe-Fernández
Int. J. Financial Stud. 2025, 13(1), 31; https://doi.org/10.3390/ijfs13010031 - 1 Mar 2025
Viewed by 632
Abstract
A significant share of many commercial banks’ portfolios consists of residential mortgage loans provided to individuals and families. This paper examines the default and rational prepayment risk of single-borrower (residential) mortgage loans based on an option pricing model that captures the skewness and [...] Read more.
A significant share of many commercial banks’ portfolios consists of residential mortgage loans provided to individuals and families. This paper examines the default and rational prepayment risk of single-borrower (residential) mortgage loans based on an option pricing model that captures the skewness and kurtosis of the house prices returns’ distribution via the shifted lognormal distribution. Equilibrium option-adjusted credit spreads are obtained from the implementation of the model under plausible values of the relevant parameters. The methodology involves numerical experiments, using a shifted binomial tree model by Haathela and Camara and Chung, to evaluate the effects of the loan-to-value (LTV) ratio, asset volatility, interest rates, and recovery costs on mortgage valuation. Findings indicate prepayment risk significantly influences loan value, as it limits upside potential, while LTV and volatility directly impact default risk. The shifting parameter (θ) in the asset distribution proves essential for accurate risk assessment. Conclusions emphasize the need for mortgage underwriting to consider specific asset characteristics, optimal loan structures, and prevailing risk-free rates to avoid underestimating risk. This model can aid in the more robust pricing and management of mortgage portfolios, especially relevant in regions with substantial mortgage-backed exposure, such as the European banking system. Full article
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22 pages, 329 KiB  
Article
Digital Transformation and the Quality of Accounting Information Systems in the Public Sector: Evidence from Developing Countries
by Arafat Hamdy, Ahmed Diab and Aref M. Eissa
Int. J. Financial Stud. 2025, 13(1), 30; https://doi.org/10.3390/ijfs13010030 - 28 Feb 2025
Viewed by 2082
Abstract
This study explores how digital transformation affects the accounting and auditing profession and the quality of the accounting information system in governmental units in two developing contexts in the Middle East and North African (MENA) region—Egypt and Saudi Arabia. We collected data by [...] Read more.
This study explores how digital transformation affects the accounting and auditing profession and the quality of the accounting information system in governmental units in two developing contexts in the Middle East and North African (MENA) region—Egypt and Saudi Arabia. We collected data by electronically surveying governmental units’ employees in the two countries and analyzed them using linear regression analyses. Interestingly, we found a negative effect of digital transformation on the quality of accounting information systems, which could be interpreted concerning the premature status of digital technologies in emerging markets. However, the negative effect of digital transformation was lower in Egypt compared to Saudi Arabia. This study contributes to the literature by focusing on the governmental sector and investigating a new context—the MENA region—which has rarely been examined in previous studies. Further, it has implications for regulators in the public sector for developing governmental financial reports by supporting the digital transformation process. Full article
(This article belongs to the Special Issue Advancing Financial Stability and Performance Through AI and Digital Transformation)
19 pages, 293 KiB  
Article
Economic Growth in Rural Areas, Resource Agglomeration, and Stock Market Performance: Evidence from China
by Guojing Geng
Int. J. Financial Stud. 2025, 13(1), 29; https://doi.org/10.3390/ijfs13010029 - 27 Feb 2025
Viewed by 373
Abstract
This study aims to explore the potential association between the performance of the stock market and the growth of the rural economy in China. It examines the impact of regional market volatility on rural macroeconomic indicators, which functions through the equity price fluctuations [...] Read more.
This study aims to explore the potential association between the performance of the stock market and the growth of the rural economy in China. It examines the impact of regional market volatility on rural macroeconomic indicators, which functions through the equity price fluctuations of locally listed firms. The analysis utilizes financial performance data from publicly traded companies across 283 prefecture-level cities within 31 provinces in China, spanning from 1996 to 2021. This research documents a resource agglomeration effect, which is induced by the inflow of various resources by listed companies into their respective regional areas, and which emerges as the key driver for the development of the rural economy in those regions. Additionally, this study uncovers the advantages of the risk diversification effect that arises from the aggregation of resources. These findings have three significant implications. First, both effects are identified as concurrent mechanisms without any evidence of a crowding-out effect. Secondly, multiple avenues are presented through which financial capital can affect the rural economic development of a region. Lastly, this study suggests specific strategies for assessing the equity market’s role in ensuring the sustainable development of the Chinese rural economy. Full article
(This article belongs to the Special Issue New Quality Productive Forces: The Role of Green Finance and Artificial Intelligence in Finance)
36 pages, 892 KiB  
Review
Towards Economic Sustainability: A Comprehensive Review of Artificial Intelligence and Machine Learning Techniques in Improving the Accuracy of Stock Market Movements
by Atoosa Rezaei, Iheb Abdellatif and Amjad Umar
Int. J. Financial Stud. 2025, 13(1), 28; https://doi.org/10.3390/ijfs13010028 - 25 Feb 2025
Cited by 2 | Viewed by 1619
Abstract
Accurately predicting stock market movements remains a critical challenge in finance, driven by the increasing role of algorithmic trading and the centrality of financial markets in economic sustainability. This study examines the incorporation of artificial intelligence (AI) and machine learning (ML) technologies to [...] Read more.
Accurately predicting stock market movements remains a critical challenge in finance, driven by the increasing role of algorithmic trading and the centrality of financial markets in economic sustainability. This study examines the incorporation of artificial intelligence (AI) and machine learning (ML) technologies to address gaps in identifying predictive factors, integrating diverse data sources, and optimizing methodologies. Employing a systematic review, recent advancements in ML techniques like deep learning, ensemble methods, and neural networks are analyzed, alongside emerging data sources such as traders’ sentiment and real-time economic indicators. Results highlight the potential of unified datasets and adaptive models to enhance prediction accuracy while overcoming market volatility and data heterogeneity. The research underscores the necessity of integrating diverse predictive factors, innovative data sources, and advanced ML techniques to develop robust and adaptable forecasting frameworks. These findings offer valuable insights for academics and financial professionals, paving the way for more reliable and real-time predictive models that can enhance decision-making in dynamic market environments. This study contributes to advancing economic sustainability by proposing methodologies that align with the complexities and rapid evolution of modern financial markets. Full article
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24 pages, 3902 KiB  
Article
Modeling a Sustainable Decision Support System for Banking Environments Using Rough Sets: A Case Study of the Egyptian Arab Land Bank
by Mohamed A. Elnagar, Jaber Abdel Aty, Abdelghafar M. Elhady and Samaa M. Shohieb
Int. J. Financial Stud. 2025, 13(1), 27; https://doi.org/10.3390/ijfs13010027 - 17 Feb 2025
Viewed by 570
Abstract
This study addresses the vast amount of information held by the banking sector, especially regarding opportunities in tourism development, production, and large residential projects. With advancements in information technology and databases, data mining has become essential for banks to optimally utilize available data. [...] Read more.
This study addresses the vast amount of information held by the banking sector, especially regarding opportunities in tourism development, production, and large residential projects. With advancements in information technology and databases, data mining has become essential for banks to optimally utilize available data. From January 2023 to July 2024, data from the Egyptian Arab Land Bank (EALB) were analyzed using data mining techniques, including rough set theory and the Weka version 3.0 program. The aim was to identify potential units for targeted marketing, improve customer satisfaction, and contribute to sustainable development goals. By integrating sustainability principles into financing approaches, this research promotes green banking, encouraging environmentally friendly and socially responsible investments. A survey of EALB customers assessed their interest in purchasing homes under the real estate financing program. The results were analyzed with GraphPad Prism version 9.0, with 95% confidence intervals and an R-squared value close to 1, and we identified 13 units (43% of the total units) as having the highest marketing potential. This study highlights data mining’s role in enhancing marketing for the EALB’s residential projects. Combining sustainable financing with data insights promotes green banking, aligning with customer preferences and boosting satisfaction and profitability. Full article
(This article belongs to the Special Issue Investment and Sustainable Finance)
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33 pages, 1788 KiB  
Article
Forecasting Financial Literacy Levels with Respect to Consumer Shopping Behaviour
by Eva Kicova, Lucia Svabova, Olga Ponisciakova and Zuzana Rosnerova
Int. J. Financial Stud. 2025, 13(1), 26; https://doi.org/10.3390/ijfs13010026 - 14 Feb 2025
Viewed by 937
Abstract
Contemporary consumer society is deeply intertwined with the concepts of money and shopping, which are closely related yet often studied separately. Despite their interconnectedness, there is a notable gap in research that simultaneously addresses financial literacy as a tool for effective money management [...] Read more.
Contemporary consumer society is deeply intertwined with the concepts of money and shopping, which are closely related yet often studied separately. Despite their interconnectedness, there is a notable gap in research that simultaneously addresses financial literacy as a tool for effective money management and informed shopping decisions. This study investigates the relationship between these concepts through theoretical analysis and an empirical survey conducted in the Slovak Republic. Given the similarities in business environments across V4 countries, we posit that our findings may have broader applicability. Survey results were analysed using selected statistical methods, including the chi-square test of independence, to test hypotheses related to financial literacy. Where dependencies were identified, contingency coefficients were used to quantify their strength. Additionally, predictive models of financial literacy levels of two types were developed. Firstly, models were created for both predictive and explanatory purposes using the CHAID classification tree and logistic regression demonstrating high performance, clarity, and interpretability. Secondly, several prediction models using advanced machine learning techniques were created for highly precise predictions of financial literacy levels. Full article
(This article belongs to the Special Issue Advances in Behavioural Finance and Economics 2nd Edition)
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19 pages, 870 KiB  
Article
Exploring the Roles of IPOs and Main Bank Relationships on Debt Maturity: The Case of Japan
by Jieting Chen and Jinbin Fan
Int. J. Financial Stud. 2025, 13(1), 25; https://doi.org/10.3390/ijfs13010025 - 12 Feb 2025
Viewed by 591
Abstract
The choice between short- and long-term debt impacts a firm’s financial flexibility and its capacity for sustainable investment. This study examines how Initial Public Offerings (IPOs) and main bank relationships shape debt maturity structures, focusing on Japanese firms listed on the Tokyo Stock [...] Read more.
The choice between short- and long-term debt impacts a firm’s financial flexibility and its capacity for sustainable investment. This study examines how Initial Public Offerings (IPOs) and main bank relationships shape debt maturity structures, focusing on Japanese firms listed on the Tokyo Stock Exchange between 2002 and 2015. Using panel fixed effects and difference-in-differences (DID) analysis, we find a temporary extension in debt maturity (i.e., a reduction in the short-term debt ratio) one year post-IPO. Our findings partially support the hypothesis under signaling theory, which states that firms can mitigate asymmetric information problems through IPOs, facilitating the issuance of long-term debt, and thus allowing firms to allocate resources for sustainability projects. Notably, Japanese firms without a main bank relationship experience a more significant and lasting impact, while those with a main bank relationship display minimal changes in debt structure. These findings highlight the critical role of Japanese institutional factors in alleviating information asymmetry and enabling access to long-term financing. Additionally, the findings enlighten studies on financial mechanisms that enable firms to align their strategies with Sustainable Development Goals (SDGs) in the long run. Full article
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19 pages, 2175 KiB  
Article
Financial Markets Effect on Cryptocurrency Volatility: Pre- and Post-Future Exchanges Collapse Period in USA and Japan
by Faizah Alsulami and Ali Raza
Int. J. Financial Stud. 2025, 13(1), 24; https://doi.org/10.3390/ijfs13010024 - 11 Feb 2025
Cited by 1 | Viewed by 1883
Abstract
This study is the first to scientifically investigate stock indices and currency exchanges that affect crypto price volatility pre and post the FTX (Future Exchanges) collapse event. Weekly series from 1 January 2020 to 31 December 2024 were utilized for the analysis. The [...] Read more.
This study is the first to scientifically investigate stock indices and currency exchanges that affect crypto price volatility pre and post the FTX (Future Exchanges) collapse event. Weekly series from 1 January 2020 to 31 December 2024 were utilized for the analysis. The ARDL model suggests positive symmetric short- and long-term effects of USA stock indices on Bitcoin and Ethereum prices (p < 0.10), while Japanese stock indices and currency exchanges have negative symmetric short- and long-term effects on Bitcoin and Ethereum price volatility (p < 0.10). The global index MSCI has no symmetric effect. The asymmetric approach NARDL suggests positive and negative asymmetric short- and long-term effects of USA and Japanese stock indices and currency exchanges on Bitcoin and Ethereum price volatility (p < 0.05). This research helps exchange brokers and crypto traders diversify their holdings, reduce stock index and currency exchange risk, and accurately predict Bitcoin and Ethereum price variations. Full article
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30 pages, 375 KiB  
Article
Interplay of Alternative Energy Sub-Sectors, Oil Prices, and Oil Volatility: Exploring Simultaneous Relationships
by Minh Thi Hong Dinh
Int. J. Financial Stud. 2025, 13(1), 23; https://doi.org/10.3390/ijfs13010023 - 6 Feb 2025
Viewed by 1107
Abstract
This study examines the simultaneous relationships among oil prices, oil volatility, and two sub-sectors within alternative energy stocks: renewable energy equipment (REE) and alternative fuels (AF). The results confirm the existence of a bidirectional relationship. While most alternative energy stocks with a long [...] Read more.
This study examines the simultaneous relationships among oil prices, oil volatility, and two sub-sectors within alternative energy stocks: renewable energy equipment (REE) and alternative fuels (AF). The results confirm the existence of a bidirectional relationship. While most alternative energy stocks with a long history on the stock exchange exhibit a bidirectional positive correlation with oil prices, they demonstrate a bidirectional negative correlation with oil volatility. In particular, a majority of REEs, as opposed to a minority of AFs, demonstrate a bidirectional positive correlation with oil prices. Conversely, the majority of REEs, contrasted with a minority of AFs, exhibit a bidirectional negative correlation with oil volatility. Notably, newly listed alternative energy stocks show no significant relationship with either oil prices or oil volatility. This suggests that these emerging entities may be influenced by factors beyond traditional energy market dynamics, such as technological innovation, regulatory frameworks, or investor sentiment. Furthermore, the findings highlight that REEs tend to have a more substantial relationship with both oil prices and oil volatility compared to AFs. Recognizing the distinct sensitivities and market behaviours of these sub-sectors can enable more informed decision-making and resource allocation. Full article
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17 pages, 250 KiB  
Article
Financial Literacy and Credit Card Payoff Behaviors: Using Generalized Ordered Logit and Partial Proportional Odds Models to Measure American Credit Card Holders’ Likelihood of Repaying Their Credit Cards
by Christos I. Giannikos and Efstathia D. Korkou
Int. J. Financial Stud. 2025, 13(1), 22; https://doi.org/10.3390/ijfs13010022 - 5 Feb 2025
Viewed by 934
Abstract
According to the Federal Reserve of the United States, in the second quarter of 2024, American credit card debt reached USD 1.14 trillion, the highest balance ever recorded. In an age of high-interest, complex credit cards, how does financial literacy affect credit card [...] Read more.
According to the Federal Reserve of the United States, in the second quarter of 2024, American credit card debt reached USD 1.14 trillion, the highest balance ever recorded. In an age of high-interest, complex credit cards, how does financial literacy affect credit card debt repayment? Also, how could financial literacy and education stop the rise in credit card debt in America? To answer these questions, we use microdata from the latest wave of the Survey of Consumer Finances for 2022. We aim to capture the likelihood of credit card repayment behaviors related to the monthly balances owed by 3865 credit card holders. We consider three categories of self-reported credit card payoff behavior: hardly ever, sometimes, and always or almost always. Given the ordinal nature of our outcome variable, we perform a series of likelihood-ratio and Brant tests to assess the assumption of the proportionality of odds across response categories. Following the failure of the tests, we conclude with the selection of a generalized ordered logit/partial proportional odds model that allows us to relax the parallel lines constraint for those variables for which it is not justified. In our logistic regressions, we account for a comprehensive set of demographic characteristics, and from our results, we highlight the following: For credit card holders with low financial literacy, we find that the odds of moving to a higher category of payoff behavior are 21% and significantly lower than those of high financial literacy respondents. Further, for college-educated card holders, the odds of paying off always or almost always versus sometimes and hardly ever are 2.49 times and significantly greater than the odds for credit card holders without a college education. Credit card holders who are minority group members, female, under 45, have dependents, or earn less than USD 50,000 demonstrate a tendency for poor credit card payoff behavior. In our conclusion, we discuss how to improve credit card repayments. We stress the importance of monitoring people closely. We also aim to provide better financial advice to certain groups. Lastly, we present a more realistic approach to building and sustaining financial literacy. Full article
38 pages, 3049 KiB  
Article
The Impact of Artificial Intelligence Adoption on the Quality of Financial Reports on the Saudi Stock Exchange
by Abdulkarim Hamdan J. Alhazmi, Sardar M. N. Islam and Maria Prokofieva
Int. J. Financial Stud. 2025, 13(1), 21; https://doi.org/10.3390/ijfs13010021 - 4 Feb 2025
Viewed by 2830
Abstract
The aim of this study was to explore how artificial intelligence (AI) impacts the quality of financial reporting, providing insights into new opportunities in this field for the Saudi context. This study employed the UTAUT theory to examine the adoption of AI technology [...] Read more.
The aim of this study was to explore how artificial intelligence (AI) impacts the quality of financial reporting, providing insights into new opportunities in this field for the Saudi context. This study employed the UTAUT theory to examine the adoption of AI technology in auditing practices. This study also utilized bibliometric analysis techniques through an academic literature review and content analyses of the documentary evidence. The implication of this study is that non-Big 4 audit firms should adopt AI-powered drones, which consequently enhance decision making, decrease audit fees, and enhance the quality of financial reports, and the efficiency and accuracy of audits. Furthermore, this paper recommends that non-Big 4 audit firms adopting AI should foster a culture of change to ensure quality audits and consistency, overcome resistance to the change, and support the integration of technologies such as AI-driven audit automation. Our study also indicated the importance of integrating AI with the IFRS, developing a new framework for AI in auditing practices, incorporating AI into auditing courses, and modernizing auditing using AI. These implications lead to financial reports of enhanced quality. The results indicated four clusters, with artificial intelligence being the most significant keyword occurrence. This study has limitations, such as the lack of consideration of cyber-attack risks on drones, which may reduce the reliability of financial reports. Based on the findings of this research, audit companies and regulatory agencies in Saudi Arabia, like the Saudi Capital Market Authority (CMA), may evaluate the integration of AI to improve the quality of financial reporting. Implementing AI is expected to enhance the quality of audits, automate reporting, and support regulatory compliance to foster confidence and transparency in the financial industry. Full article
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18 pages, 306 KiB  
Article
The Varying Impact of Cryptocurrency Investments on a Company’s Liquidity in Korean Companies
by Namryoung Lee
Int. J. Financial Stud. 2025, 13(1), 20; https://doi.org/10.3390/ijfs13010020 - 4 Feb 2025
Viewed by 862
Abstract
This study investigates whether cryptocurrency investments have a distinct impact on corporate liquidity depending on when they are held and the stage of a firm’s life cycle at the time of holding, using a sample of Korean companies. The empirical findings first show [...] Read more.
This study investigates whether cryptocurrency investments have a distinct impact on corporate liquidity depending on when they are held and the stage of a firm’s life cycle at the time of holding, using a sample of Korean companies. The empirical findings first show that cryptocurrency investments affect a company’s liquidity differently depending on when they are held. The findings demonstrate that, three years prior, labeled as t-1, t-2, and t-3, the two-year-old cryptocurrency investments appear to have greatly increased the company’s financial liquidity. Second, this study discovers that cryptocurrency investments have a different effect on a company’s liquidity based on the four stages of its life cycle, which comprise Introduction, Growth, Maturity, and Decline, at the time of holding. According to the findings, cryptocurrency investments at the Mature stage appear to contribute significantly and positively to the company’s financial liquidity. When the coefficients of interaction terms between each year and each life cycle are examined, it is observed that the holding of cryptocurrencies at the Mature stage in year t-2 has the most favorable influence on the company’s financial liquidity in year t. Although the findings do not conclude that the company’s cryptocurrencies held in year t-2 and at the Mature life cycle stage are the only ones that improve financial liquidity, they do suggest that a corporation may profit if it makes astute cryptocurrency investments at the appropriate time to suit its specific set of circumstances. Full article
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20 pages, 331 KiB  
Article
Drivers of Merger and Acquisition Activities in Vietnam: Insights from Targets’ Perspectives and Deal Characteristics
by Khoa Bui, Tu Le and Thanh Ngo
Int. J. Financial Stud. 2025, 13(1), 19; https://doi.org/10.3390/ijfs13010019 - 3 Feb 2025
Viewed by 1601
Abstract
This study empirically examines the determinants of merger and acquisition (M&A) activities in Vietnam from 2005 to 2020, which has not been examined before, using a fixed-effects model for a sample of 674 completed M&A deals. The results indicate that targets’ corporate governance [...] Read more.
This study empirically examines the determinants of merger and acquisition (M&A) activities in Vietnam from 2005 to 2020, which has not been examined before, using a fixed-effects model for a sample of 674 completed M&A deals. The results indicate that targets’ corporate governance and deal characteristics have mixed effects on M&A decisions. More specifically, the independent member of the board and CEO duality of the target is negatively associated with most M&A types, except for cross-border mergers. However, the impact of targets’ blockholders is consistently positive regardless of M&A types. When observing the deal characteristics, mixed evidence is also found in the case of M&A payment form, industry-relatedness between the bidder and the target, the bidder’s stake in the target, and foreign ownership in the bidder’s stake. More interesting, our study emphasizes that voluntary agreement is seemingly critical to M&A decisions regardless of different types. Our results suggest several important implications, including balancing independent directors on the board, accounting for CEOs’ and other blockholders’ interests and influence, considering the types of M&A payments, and involving foreign investors in M&A activities. By understanding these implications, firms can better navigate the complexities of M&A transactions, enhancing their decision-making processes and ultimately contributing to improved shareholder value. Full article
26 pages, 354 KiB  
Article
Debt Capital and Dividend Policy as Complementary Indicators of Firm Valuation
by Okechukwu Enyeribe Njoku and Younghwan Lee
Int. J. Financial Stud. 2025, 13(1), 18; https://doi.org/10.3390/ijfs13010018 - 2 Feb 2025
Viewed by 1635
Abstract
This study investigates the interdependencies between debt capital and dividend policy as complementary factors influencing firm value among corporations listed on the Korea Composite Stock Price Index (KOSPI). Using Tobin’s Q as a firm value metric and employing robust econometric techniques (OLS, 2-SLS, [...] Read more.
This study investigates the interdependencies between debt capital and dividend policy as complementary factors influencing firm value among corporations listed on the Korea Composite Stock Price Index (KOSPI). Using Tobin’s Q as a firm value metric and employing robust econometric techniques (OLS, 2-SLS, and GMM), the analysis reveals that while debt and dividend policies independently reduce firm value, their interaction produces a synergistic effect that increases value. The findings further indicate the dual role of Chaebol ownership structures, which, despite their association with lower firm value, mitigate the negative effects of financial policies. Additionally, firm size is found to negatively impact value, whereas free cash flow has a significant positive effect. By disentangling the complex dynamics of capital structure, dividend strategies, and ownership configurations, this study offers actionable insights for managers, investors, and policymakers. It emphasizes the importance of balanced financial practices and governance reforms tailored to concentrated ownership environments. Full article
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